CNBC Daily Open: Markets appear to have gotten over the July jobs report — unlike Trump
Markets, however, seem to have shrugged off their worries for now — U.S. stocks rebounded Monday from the sell-off on Friday after the report was released. But the move could be more of an instinctive reflex than a reflection of what's really driving markets.
"Today is sort of a bounce-back day," said Sam Stovall, chief investment strategist at CFRA Research. "Stocks tend to pop after a drop, so that's what's happening."
"We have to wait and see what happens tomorrow, because there could be a possibility that investors think, 'You know what, we really need to take some money off the table to digest some of these gains,'" he added.
Trump's new tariffs come into force on Aug. 7, so there's a possibility investors could seize this opportunity, when markets have recovered slightly from Friday's losses, to take profit first — and before any further slowdown, as suggested by July's jobs report, is potentially "rigged" and strikes the U.S. economy.
Trump will 'substantially' raise tariffs on India. The South Asian country's oil purchases from Russia is the cause behind Trump's threat. In response, India said it was being "targeted" by the U.S. and EU, and criticized them as "indulging in trade with Russia."
The EU will suspend its planned U.S. tariffs for six months. The countermeasures, which would have taken effect on Aug. 7, were delayed to allow the bloc to "further negotiate" with the U.S. and "finalise a Joint Statement" on their trade deal.
U.S. stocks rebound from Friday's losses. Major U.S. indexes rose Monday, with the S&P 500 snapping a four-day losing streak. Asia-Pacific markets traded higher Tuesday, though India's Nifty 50 fell as it began trading for the day.
Palantir's quarterly revenue exceeds $1 billion. Wall Street had expected the software provider to hit that milestone only in the fourth quarter of the year. But a 48% year-over-year jump in second-quarter revenue helped Palantir beat forecasts.
[PRO] The 'Magnificent Seven' are powering earnings growth. Year on year, Mag 7 earnings have increased by 26%. The other S&P 500 companies posted a combined 4% growth — a disparity that could be problematic for investors, according to an analyst.
How an obscure SEC proposal could boost listings on European stock exchanges
The Securities and Exchange Commission is in the early stages of a proposal to tighten the rules for foreign companies that trade on U.S. exchanges. It's a move that could inadvertently prompt dozens of stocks to seek a secondary listing in London or another major financial center.
The plan targets the definition of a "Foreign Private Issuer." One of the key changes being floated would require FPIs to have an active listing on a "major" non-U.S. exchange to qualify for exemptions from some regulatory requirements.
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25 minutes ago
- Yahoo
Michigan Gov. Whitmer makes another White House visit to meet with Trump
WASHINGTON (AP) — Michigan Gov. Gretchen Whitmer met with President Donald Trump at the White House on Tuesday to discuss the toll tariffs are taking on the auto industry and the potential effects of his tax and spending bill on Medicaid. It's the latest in a string of meetings between the Democratic governor and the Republican president after the two frequently clashed during his first term. In his second term, Whitmer has adopted a more diplomatic approach, drawing some backlash from fellow Democrats. But it's also resulted in multiple wins for Whitmer's state, including Trump's approving $50 million in storm relief and awarding a new fighter jet mission for an Air National Guard base in the state. 'I've always said that I'll work with anyone to get things done for Michigan,' Whitmer, a potential 2028 presidential candidate, said in a statement Tuesday. 'That's why I've continued to go to Washington, D.C., to make sure that Michiganders are front and center when critical decisions are being made.' The private meeting between Whitmer and Trump — which a White House official would not confirm but did stress Trump's continued focus on Michigan — marks a rare instance of the president sitting with a leading Democratic figure. In recent weeks, Trump attacked Senate Democratic leader Chuck Schumer, telling him to 'go to hell," while also taking aim at other high-profile Democratic governors who have pushed back on some of his policies, including California's Gavin Newsom and Illinois' JB Pritzker, also considered possible 2028 candidates. Pritzker has aided Texas Democrats in leaving their state to stay in Illinois to block Republicans from their needed quorum to pass a new congressional map backed by Trump. Early Tuesday, Trump called Pritzker 'probably the dumbest of all governors' in a television interview. Whitmer has been more careful, criticizing some of Trump's policies rather than the president himself. She issued an executive directive last week to assess the impact of tariffs that she said have led to 'massive economic uncertainty' — without mentioning Trump's name once. Tuesday's appearance ended with far less controversy than her trip to the White House in April. Whitmer was unexpectedly ushered into the Oval Office during that visit, standing awkwardly nearby as the Republican president signed executive orders and assailed his political opponents during a photo opportunity. In their White House meeting Tuesday, Whitmer said that she told Trump and 'his team about the impact tariffs are having on Michigan's economy, especially our auto industry.' She also discussed 'changes in the Medicaid program, and ongoing recovery efforts following the ice storm in Northern Michigan this year." Whitmer also saw Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and chief of staff Susie Wiles while at the White House. Trump announced last month that he had spoken with Whitmer to inform her that he was appproving $50 million in federal funds for Michigan to support repairs and recovery from a March ice storm. In April, Trump traveled to Michigan to announce a new mission for Selfridge Air National Guard Base, which Whitmer has sought for years.
Yahoo
25 minutes ago
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Trading Day: Stagflation-ISM
By Jamie McGeever ORLANDO, Florida (Reuters) -TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist Wall Street bucked the positive global equity trend and closed mostly lower on Tuesday, as U.S. service sector data rekindled stagflation fears and shined a light on the difficult position the Federal Reserve may find itself in next month. More on that below. In my column today I look at the tumult of the last few days that has seen the worlds of U.S. politics, policy, and company earnings collide, exposing the big divergences that run through the country's equity and bond markets. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. Trump rules out Bessent for Fed chair 2. Easy to lose, hard to restore: US data trust on the line 3. EU still expects turbulence in trade relations with US 4. Markets struggle to price smoke and mirrors: Mike Dolan 5. Brazil's economy ready to ride out Trump's 50% tariff Today's Key Market Moves * FX: Dollar index is flat. The yen is the big mover inG10 FX, slipping around 0.3% vs dollar and euro. * STOCKS: S&P 500, Nasdaq and Dow fall, Russell 2000rises. Benchmark Asian, Chinese, European, emerging indexes allrise. * SHARES/SECTORS: Seven S&P 500 sectors fall, led byutilities -1%; materials index +0.8%. Palantir shares +7.8%. * BONDS: U.S. yields creep higher, up 4 bps at the shortend, flattening the curve. 3-year auction is on the weak side. * COMMODITIES: Oil falls 1.7%, Brent crude futures hit afive-week low of $67.52/bbl. WTI nudges $65/bbl. Stagflation-ISM The stagflation red flags raised by U.S. service sector activity figures on Tuesday are a reminder that the world's largest economy and most important central bank face significant challenges in the months ahead. Investors took their cue more from the bubbling price pressures in the ISM services report than the signs of softening activity. Treasury yields crept up and rate cut expectations were trimmed as a result. Still, it's a curious one. Wall Street's slump on Friday went hand in glove with plunging yields and a dramatic surge in rate cut bets. Today, a hawkish tilt in the bond and rates futures markets was accompanied by a broad-based equity selloff. There are other factors at play, not least the barrage of Q2 earnings, tariff headlines, and a renewed spike in policy uncertainty. But these moves are a reminder that there can be good and bad reasons driving yields up or down, and that the correlation with stocks can flip from one day to the next. The ISM report showed service sector activity in June flatlined while the prices paid index rose to its highest in nearly three years. Tariffs, inflation pressures, growth fears are all in the mix. Contrast this with China's services activity data released on Tuesday, which showed the fastest pace of expansion in July in 14 months. U.S. corporate earnings have generally been strong. Of the 330 companies in the S&P 500 that had reported through last Friday, 80.6% reported consensus-beating profits, compared with the long-term average of 67.1%, according to LSEG data. But Caterpillar warned on Tuesday that tariffs pose significant challenges and could cost the firm up to $1.5 billion this year. Meanwhile, U.S. President Donald Trump told CNBC on Tuesday that he will not nominate Treasury Secretary Scott Bessent for a position on the Fed's Board of Governors, thus ruling him out as a candidate for Fed chair. Trump said he will announce Governor Adriana Kugler's replacement "very shortly." Trump also said the U.S. is "very close" to a trade deal with China and that he would meet his Chinese counterpart Xi Jinping before the end of the year if an agreement is struck. Looking ahead to Wednesday, there are two highlights in the Asian calendar for investors to home in on - the latest Chinese trade figures, and an interest rate decision from the Reserve Bank of India. The RBI is expected to keep its benchmark repo rate on hold at 5.50%. But in light of the steep tariffs recently imposed on Indian exports by the U.S., traders are putting a near one-in-six chance of a rate cut. Likely RBI intervention on Tuesday kept the rupee from hitting new lows through 88.00 per dollar. China's trade figures, meanwhile, will be closely watched after official U.S. data on Tuesday showed America's trade deficit with its Asian rival shrank in June to its lowest in more than 21 years. In light of the contrasting PMI figures on Tuesday, this will be worth keeping an eye on. Navigating US markets' split personalities During an extraordinary few days when the worlds of U.S. politics, policy, economics and company earnings collided, the divergences that run through the country's equity and bond markets have come into sharp relief. For the bond market, the split separates short-dated Treasuries that price off the Fed's policy rate and longer maturities that are more sensitive to U.S. debt and deficit concerns. For the benchmark S&P 500, that line is between the 'Magnificent Seven', along with a few other tech and artificial intelligence-focused megacaps, and everyone else. These types of divides have always existed to some extent, but they have become more apparent this year given the historic concentration on Wall Street and rapid deterioration in the U.S. fiscal outlook. The dramatic moves in U.S. assets over the last few days serve as a microcosm of these deeper divergences. LONG AND SHORT OF IT The split in the bond market burst open on Friday. Triggered by surprisingly weak jobs figures and Trump's shock decision to fire a senior official in the agency responsible for collecting the data, the two-year Treasury yield plunged 25 basis points and the 2s/30s yield curve steepened by 20 basis points. These were the biggest moves in one year and two and a half years, respectively. The slump in yields, especially at the short end of the curve, indicates that investors' supposed concerns about fiscal indiscipline quickly evaporate as soon as growth-sapping cracks in the labor market appear. So much for the bond vigilantes. Tellingly, there was no pullback on Monday. Indeed, Treasury prices climbed even higher, pushing the two-year yield as low as 3.66%, its nadir since May. Long-dated yields have declined too, but not as aggressively, resulting in Friday's dramatic steepening of the 2s/30s curve to levels that, with the exception of April's brief tariff tantrum, haven't been seen for more than three years. Investors may wince at the size of the federal debt and the Treasury's funding needs but still want to load up on two-year bonds when they think rate cuts are coming. This parallel thinking isn't new, but the stark difference in the narratives driving the front and back ends of the curve is notable. STAY NIMBLE The U.S. equity market concentration story is familiar to everyone by now, but the last few days underscore how jaw-dropping - and seemingly entrenched - it is. Blockbuster earnings reports from 'Mag 7' constituents Meta, Microsoft and Apple juiced another wave of outperformance in Big Tech stocks, reviving debate about concentration risk, bubbles and the long-term benefits of AI. By some measures, a few Big Tech firms now account for as much as 40% of the total U.S. stock market cap. Tech is more expensive relative to the broader S&P 500 index than ever, even compared to the dotcom bubble, according to Bank of America. Wall Street's average valuations and earnings growth are therefore increasingly being driven by Big Tech. Strip out the top 10 firms, and the rump S&P 490 has barely registered any earnings growth in the last three years, according to SocGen's Andrew Lapthorne. Again, there are multiple narratives at work here. It may be true that overseas investors want to reduce their U.S. equity exposure, but don't want to miss out on the Big Tech boom. So even if foreign investors start shedding some U.S. assets – and that's debatable – they aren't apt to be jettisoning the likes of Nvidia and Microsoft. This is a delicate juncture for investors. Wall Street is at record highs, but concentration risk has also rarely been higher. The outlook for long-dated bonds is worrying given current fiscal and inflation dynamics, yet the short end looks much more attractive, though even that is complicated by the economic and unique political pressures bearing down on the Fed. The divergences in U.S. markets may narrow, gradually or suddenly, or they may continue unabated for some time. Without a crystal ball, it's tough to know exactly what the catalyst for mean reversion would be. One thing is likely guaranteed though: in this environment, it will pay to be nimble. What could move markets tomorrow? * China trade (July) * India interest rate decision * Taiwan inflation (July) * UK PMI (July) * Germany industrial production (June) * Euro zone retail sales (June) * U.S. Treasury auctions $42 bln of 10-year notes * U.S. earnings including McDonald's, Disney, Uber, DoorDash * U.S. Fed officials speak: Governor Lisa Cook and BostonFed President Susan Collins at the same event; San Francisco FedPresident Mary Daly Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Jamie McGeever; Editing by Bill Berkrot) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Hill
26 minutes ago
- The Hill
Palantir gets boost from blockbuster earnings
The company posted a 48 percent year-over-year increase in revenue for the three-month period between April and June, crossing $1 billion for the first time. 'As usual, I've been cautioned to be a little modest about our bombastic numbers, but honestly there's no authentic way to be anything but have enormous pride and gratefulness about these extraordinary numbers,' Palantir CEO Alex Karp said on a Monday evening earnings call. U.S. commercial revenue nearly doubled, rising 93 percent to $306 million, while U.S. government revenue ticked up a strong 53 percent to $426 million. In the U.S. overall, the company saw 68 percent year-over-year growth. 'This is a perfect time for a revolution in the United States of America,' Karp added. 'We are very, very bullish on America. We have some really crucial and important clients internationally … but this is an American revolution.' Palantir expects another $1 billion in revenue next quarter for an anticipated $4.1 billion in revenue for the full year. The strong earnings call marks the latest in a series of wins for the company, which recently scored a contract with the U.S. Army worth $10 billion over the next decade.
