(Bloomberg) — U.S. technology stocks were poised to rebound from their worst week since April as investors looked beyond the end of Joe Biden’s reelection campaign and focused primarily on earnings.
Most read articles on Bloomberg
Market reaction to Biden’s decision to drop out of the race and endorse Kamala Harris has so far been fairly muted, with the Bloomberg dollar index falling 0.2% and the 10-year Treasury yield dropping 1 basis point. Democrats face the challenge of fielding a new nominee just weeks before their convention and must quickly close the gap with Republican front-runner Donald Trump.
Investors have been betting for weeks that Trump will return to the White House, reducing their holdings of long-term U.S. Treasuries and buying Bitcoin. Now, investors are considering whether the “Trump trade” is still on. Uncertainty could lead to market volatility, but for now, much of the focus is on the outlook for earnings and monetary policy.
“We’re more interested in the rhythm of the business cycle than the election outcome,” said Michael Wilson, a strategist at Morgan Stanley. “The market is pricing in the increasing likelihood of a Trump victory, but any cyclical upturn from here will be growth-dependent.”
Nasdaq 100 futures rose 0.7%, signalling a partial recovery from last week’s 4% drop. S&P futures rose 0.5%. Europe’s Stoxx 600 index rose 1%, snapping a five-day losing streak.
Investors have their hands full with major earnings reports this week. Tesla and Alphabet are the first of the “Magnificent Seven” to report results on Tuesday. Analysts will likely press Elon Musk’s electric-car giant on the progress of its robotaxi program. Investors will also be scrutinizing details of parent company Google’s growing revenue from artificial intelligence.
Morgan Stanley strategists said European companies were off to a strong start to the second-quarter earnings season, with 29 percent beating profit estimates.
But Ryanair Holdings Plc failed to improve on its performance on Monday, sending shares in the Irish budget airline tumbling 13% after it cut its ticket price outlook for the key summer travel season amid growing consumer caution. Rivals easyJet and IAG SA also fell, dragging down the travel and leisure sub-index.
In Asia, stocks continued to fall on weakness in the technology sector. Chinese government bonds were a hot topic, rising after the central bank cut interest rates. Chinese stocks fell as investors continued to express disappointment over the lack of any strong stimulus measures in place at a recent key meeting of the Chinese Communist Party.
This week traders will be focusing on European economic activity data, U.S. second-quarter growth and the Bank of Canada’s interest rate decision.
Major events this week:
-
Mexican retail sales Monday
-
Israeli Prime Minister Benjamin Netanyahu will visit Washington on Monday.
-
EU foreign ministers meet in Brussels on Monday
-
Singapore CPI, Tuesday
-
Taiwan Industrial Production, Tuesday
-
India’s budget for the fiscal year ending March 2025, Tuesday
-
Turkey interest rate decision on Tuesday
-
Eurozone consumer confidence on Tuesday
-
Alphabet, Tesla, LVMH earnings Tuesday
-
Malaysia CPI, Wednesday
-
South African Consumer Price Index, Wednesday
-
Eurozone HCOB PMI, Wednesday
-
UK S&P Global PMI, Wednesday
-
Canada interest rate decision Wednesday
-
IBM, Deutsche Bank Earnings Wednesday
-
ECB Vice President Luis de Guindos to speak on Wednesday
-
Hong Kong Trade, Thursday
-
South Korea GDP on Thursday
-
US GDP, initial jobless claims, durable goods, merchandise trade, Thursday
-
G20 finance ministers and central bank governors meet in Rio de Janeiro from Thursday to Friday
-
Bitcoin 2024 Conference to be held in Nashville from Thursday through July 27
-
Japan Tokyo Consumer Price Index, Friday
-
U.S. Personal Income, PCE Price Index, University of Michigan Consumer Confidence, Friday
-
Mexico Trade, Friday
Some of the key market developments:
stock
-
S&P 500 futures were up 0.5% as of 6:10 a.m. New York time.
-
Nasdaq 100 futures rose 0.7%
-
Dow Jones Industrial Average futures up 0.2%
-
The Stoxx Europe 600 index rose 1.1%
-
The MSCI World Index rose 0.1%.
currency
-
The Bloomberg Dollar Spot Index fell 0.1%.
-
The euro was little changed at $1.0886
-
The British pound rose 0.1% to $1.2929.
-
The Japanese yen rose 0.6% to 156.58 yen to the dollar.
Cryptocurrency
-
Bitcoin fell 0.5% to $67,409.37.
-
Ether fell 0.2% to $3,491.2.
Bonds
-
The yield on the 10-year Treasury note fell 1 basis point to 4.23%.
-
German 10-year government bond yields were little changed at 2.47%
-
UK 10-year government bond yields rose 2 basis points to 4.14%.
merchandise
-
West Texas Intermediate crude oil was little changed
-
Spot gold rose 0.2% to $2,405.29 an ounce.
This story was produced with assistance from Bloomberg Automation.
–With assistance from Farah Elbahrawy and Catherine Bosley.
(An earlier version of this story corrected the spelling of Kamala in the second paragraph.)
Most read articles on Bloomberg Businessweek
©2024 Bloomberg LP
