Tech Rebound and ECB Decision: Key Factors Driving Global Markets

Tech rebound, Netflix, TSMC, ECB decision - what's moving markets By Investing.com

Investing.com -- Wall Street looks set to rebound Thursday after the tech sector's battering during the previous session. TSMC has reported strong results, while Netflix is due to release its latest numbers after the close. The European Central Bank is expected to stand pat at its latest policy-setting meeting. U.S. stock futures traded largely higher Thursday, rebounding after the tech-heavy Nasdaq Composite's worst session since 2022 as investors grow wary of the elevated valuations of the big tech stocks. All eyes will remain on the tech sector, although the strong results from TSMC [see below] could generate some confidence. There are more earnings to digest Wednesday, including from Domino's Pizza (NYSE:DPZ) and Alaska Air (NYSE:ALK) before the open, while streaming giant Netflix (NASDAQ:NFLX) is expected to post results after the close (see below). On the economic front, jobless claims for the week ending July 13 are due later in the session, as investors look for clues about the health of the country's labor market with the Federal Reserve seeking more guidance before cutting interest rates. Taiwan Semiconductor Manufacturing (NYSE:TSM) may face choppy waters ahead, but there's no doubt the Taiwanese chipmaker is thriving at the moment. The world's largest contract chipmaker posted a hefty 36% rise in second-quarter net profit earlier Thursday, riding the surge in demand for semiconductors used in artificial intelligence applications. TSMC posted a net profit of T$247.85 billion ($7.6 billion), compared with Reuters expectations for a profit of T$236.1 billion. It is the world's main producer of advanced chips found in everything from smartphones to AI applications, counting companies like Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) among its clientele. The surge in AI demand over the past year, as a slew of tech giants raced to roll out their own offerings after the success of OpenAI's ChatGPT, has resulted in the firm's American Depository Receipts reaching a total market capitalization of over $1 trillion. The firm is considered as a bellwether for the global chipmaking industry, given that it has the highest capacity for producing advanced chips in the industry. That said, TSMC stock slumped on Wednesday on heightened geopolitical tensions, after Republican Presidential candidate Donald Trump said Taiwan should pay the U.S. for defense supplies, putting the spotlight on the island's most important company. On top of this, reports emerged that the Biden administration was considering more export curbs on China, particularly in chipmaking technology, which could herald lower sales in China, which is a major consumer of chips. Netflix releases its latest results after the close Thursday, with the streaming giant having already guided for lower net subscriber additions in the second quarter than in the first three months of the year. LSEG forecasts that the company will have added an estimated 4.82 million subscribers in the second quarter, which would be the lowest additions since the first quarter of 2023 and about half the 9.3 million it added in the previous three months. This dropoff follows sharp gains in the wake of a crackdown on password sharing and as viewer attention moved to summer sporting events including the European Championships soccer tournament. The company added an estimated 4.82 million subscribers in the second quarter, according to LSEG data. That would be the lowest additions since the first quarter of 2023 and about half the 9.3 million it added in the previous three months. That said, JPMorgan (NYSE:JPM) believes Netflix may spring a few upside surprises, supported by an impressive content slate, price hikes and ongoing benefits from efforts to crackdown on password sharing. "We remain positive on Netflix shares heading into 2Q earnings, analysts at JPMorgan said, in a note published last week, "while also recognizing high expectations." Industry data suggests rising demand, JPMorgan said, citing Sensor Tower's data showing global download and daily active user trends improved in 2Q. The European Central Bank holds its latest policy-setting meeting later in the session, and is widely expected to keep interest rates unchanged having lowered rates from record highs last month. The focus, thus, is likely to be on ECB President Christine Lagarde's accompanying press conference, with investors looking for clues over the future path of interest rates. Lagarde will likely attempt to strike a balance, acknowledging that regional growth is weak, but domestic inflation and wage growth remains stubbornly high. Markets are pricing in almost two rate cuts over the rest of the year, with the next move lower widely expected to be in September. "The ECB will keep rates on hold in July," said analysts at Morgan Stanley (NYSE:MS), in a note. "From its perspective, more data is needed to confirm the assumed (and projected) timely return of inflation to target." Warner Bros Discovery (NASDAQ:WBD) has discussed a plan to split its digital streaming and studio businesses from its legacy TV networks, the Financial Times reported on Thursday, as it looks to generate greater value for its shareholders. The report said that CEO David Zaslav is examining several strategic options for the media and entertainment conglomerate, ranging from selling assets to separating its Warner Bros movie studio and Max streaming service into a new company. Warner Bros' stock has fallen nearly 27% so far this year, and nearly 70% since the merger between Discovery and AT&T (NYSE:T) spin-off Warner Media in 2022. In May, the company reported a bigger-than-expected quarterly loss due to slumping advertising sales at its cable TV unit and as the studio segment contended with the fallout of last year's Hollywood strikes. "While several financial assumptions behind the combination of Warner Media and Discovery have not materialized, we still believe several of WBD's assets are best in class with tremendous unrecognized value," analysts at Bank of America (NYSE:BAC) said, in a note earlier this week. The company could create more value for its shareholders if it explored strategic options, including a potential sale, the bank added.

Tech rebound, Netflix, TSMC, ECB decision - what's moving markets By Investing.com

Investing.com -- Wall Street looks set to rebound Thursday after the tech sector's battering during the previous session. TSMC has reported strong results, while Netflix is due to release its latest numbers after the close. The European Central Bank is expected to stand pat at its latest policy-setting meeting. U.S. stock futures traded largely higher Thursday, rebounding after the tech-heavy Nasdaq Composite's worst session since 2022 as investors grow wary of the elevated valuations of the big tech stocks. All eyes will remain on the tech sector, although the strong results from TSMC [see below] could generate some confidence. There are more earnings to digest Wednesday, including from Domino's Pizza (NYSE:DPZ) and Alaska Air (NYSE:ALK) before the open, while streaming giant Netflix (NASDAQ:NFLX) is expected to post results after the close (see below). On the economic front, jobless claims for the week ending July 13 are due later in the session, as investors look for clues about the health of the country's labor market with the Federal Reserve seeking more guidance before cutting interest rates. Taiwan Semiconductor Manufacturing (NYSE:TSM) may face choppy waters ahead, but there's no doubt the Taiwanese chipmaker is thriving at the moment. The world's largest contract chipmaker posted a hefty 36% rise in second-quarter net profit earlier Thursday, riding the surge in demand for semiconductors used in artificial intelligence applications. TSMC posted a net profit of T$247.85 billion ($7.6 billion), compared with Reuters expectations for a profit of T$236.1 billion. It is the world's main producer of advanced chips found in everything from smartphones to AI applications, counting companies like Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) among its clientele. The surge in AI demand over the past year, as a slew of tech giants raced to roll out their own offerings after the success of OpenAI's ChatGPT, has resulted in the firm's American Depository Receipts reaching a total market capitalization of over $1 trillion. The firm is considered as a bellwether for the global chipmaking industry, given that it has the highest capacity for producing advanced chips in the industry. That said, TSMC stock slumped on Wednesday on heightened geopolitical tensions, after Republican Presidential candidate Donald Trump said Taiwan should pay the U.S. for defense supplies, putting the spotlight on the island's most important company. On top of this, reports emerged that the Biden administration was considering more export curbs on China, particularly in chipmaking technology, which could herald lower sales in China, which is a major consumer of chips. Netflix releases its latest results after the close Thursday, with the streaming giant having already guided for lower net subscriber additions in the second quarter than in the first three months of the year. LSEG forecasts that the company will have added an estimated 4.82 million subscribers in the second quarter, which would be the lowest additions since the first quarter of 2023 and about half the 9.3 million it added in the previous three months. This dropoff follows sharp gains in the wake of a crackdown on password sharing and as viewer attention moved to summer sporting events including the European Championships soccer tournament. The company added an estimated 4.82 million subscribers in the second quarter, according to LSEG data. That would be the lowest additions since the first quarter of 2023 and about half the 9.3 million it added in the previous three months. That said, JPMorgan (NYSE:JPM) believes Netflix may spring a few upside surprises, supported by an impressive content slate, price hikes and ongoing benefits from efforts to crackdown on password sharing. "We remain positive on Netflix shares heading into 2Q earnings, analysts at JPMorgan said, in a note published last week, "while also recognizing high expectations." Industry data suggests rising demand, JPMorgan said, citing Sensor Tower's data showing global download and daily active user trends improved in 2Q. The European Central Bank holds its latest policy-setting meeting later in the session, and is widely expected to keep interest rates unchanged having lowered rates from record highs last month. The focus, thus, is likely to be on ECB President Christine Lagarde's accompanying press conference, with investors looking for clues over the future path of interest rates. Lagarde will likely attempt to strike a balance, acknowledging that regional growth is weak, but domestic inflation and wage growth remains stubbornly high. Markets are pricing in almost two rate cuts over the rest of the year, with the next move lower widely expected to be in September. "The ECB will keep rates on hold in July," said analysts at Morgan Stanley (NYSE:MS), in a note. "From its perspective, more data is needed to confirm the assumed (and projected) timely return of inflation to target." Warner Bros Discovery (NASDAQ:WBD) has discussed a plan to split its digital streaming and studio businesses from its legacy TV networks, the Financial Times reported on Thursday, as it looks to generate greater value for its shareholders. The report said that CEO David Zaslav is examining several strategic options for the media and entertainment conglomerate, ranging from selling assets to separating its Warner Bros movie studio and Max streaming service into a new company. Warner Bros' stock has fallen nearly 27% so far this year, and nearly 70% since the merger between Discovery and AT&T (NYSE:T) spin-off Warner Media in 2022. In May, the company reported a bigger-than-expected quarterly loss due to slumping advertising sales at its cable TV unit and as the studio segment contended with the fallout of last year's Hollywood strikes. "While several financial assumptions behind the combination of Warner Media and Discovery have not materialized, we still believe several of WBD's assets are best in class with tremendous unrecognized value," analysts at Bank of America (NYSE:BAC) said, in a note earlier this week. The company could create more value for its shareholders if it explored strategic options, including a potential sale, the bank added.

EMEA Morning Briefing : Stock Futures Broadly Higher Ahead of ECB Rate Decision

ECB rate decision; U.K. unemployment, consumer confidence survey; trading updates from Novartis, Publicis Groupe, ABB, 3i Group, EQT AB, Volvo, SKF, Telia, Nokia, Telenor, Anglo American, Anglo American Platinum, SSE Opening Call: European stock futures broadly gained as traders focus on European Central Bank rate decision. Asian stock benchmarks were lower; the dollar and Treasury yields steadied; while oil futures and gold gained. Equities: Stock futures broadly advanced early Thursday ahead of the ECB rate decision. Eurozone interest rates are expected to remain on hold but market participants are awaiting clues on the timing of future rate cuts. ECB President Christine Lagarde won't commit to a rate cut after the summer break at Thursday's meeting but she is also unlikely to categorically reject it, said Felix Schmidt, chief economist at Berenberg. Berenberg continues to expect a rate cut of 25 basis points in September, followed by a pause until the first quarter of 2025. "Investors are choosing to remain cautious, likely waiting for stronger evidence that the ECB will cut rates rather than buying the rumour," said Pierre Veyret technical analyst at ActivTrades. Meanwhile, U.S. technology shares plunged Wednesday, sending the Nasdaq Composite to its worst day in more than a year. "Following sharp semiconductor sector outperformance in the first half, we've seen some investors rebalance AI-linked semi [semiconductor] exposure to large-cap platform names and profitless tech," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "Tech is really overstretched," said Don Calcagni, chief investment officer at Mercer Advisors. "This is investors just taking profits off the table." Forex: The U.S. dollar was steady in Asia, underpinned by higher Treasury yields, which increase the allure of U.S. fixed-income assets and demand for the greenback. However, the USD Index could be weaker in July on a seasonal basis before strengthening in August and September, Maybank analysts said. Wednesday's price movements in other currencies also seem to have dragged the USD Index lower, the analysts said, noting a sharp drop in USD/JPY overnight. Bonds: Yields on U.S. government debt finished slightly lower on Wednesday after a pair of Federal Reserve officials suggested the time to cut interest rates may be approaching. Investors expect that if Republicans win both the White House and the Congress in this year's elections it would cause longer-dated Treasury yields to rise faster than short-dated yields, a phenomenon known as 'bear steepening,' rates strategists at TD Securities said. This trend has already begun as victory for former President Donald Trump is widely expected, they said. Trump is expected to implement tariff and immigration policies which wouldn't require Congressional approval. These would likely push inflation sharply higher in 2025 and growth lower in 2026, TD said. Energy: Oil futures gained after official U.S. data revealed a third weekly drop in a row for commercial crude inventories. The crude-oil inventory decline, geopolitical tensions in the Middle East, solid seasonal demand and late-summer Fed rate-cut expectations have been catalysts for higher crude prices, said TD Securities. Metals: U.S. interest rate movements will likely be the most significant catalyst for gold prices in the near term, said Shaw & Partners. "The long-term relationship between gold and rates suggests that for every 100 basis points drop in U.S. 10-year real rates, gold rallies by 11%," said analyst Andrew Hines. Shaw now tips gold to reach US$3,000/oz next year, up some 33% on its prior forecast and expects it to remain at the level in 2026, rather than pull back slightly. -- Copper edged lower. Despite media reports that China was planning to cut its copper output, recent government data showed that refined copper production rose in June compared with May, the ANZ Research team said. This has raised concerns about weak demand as China's economic growth remains slow, they added. -- Iron ore prices declined amid high inventories. With current iron-ore stockpiles at Chinese ports close to 150 million tons, iron-ore supply is abundant and weighing on investor sentiment, Huarong Rongda Futures said. Meanwhile, demand for end products is relatively weak, it said. Investors are looking to see if more supportive economic policies come from China's Third Plenum, which ends today. TODAY'S TOP HEADLINES ECB Is Watching the Fed. Why Another Rate Cut Won't Come. The European Central Bank is expected to leave interest rates unchanged on Thursday after delivering the first reduction since the Covid-19 pandemic last month. The ECB forged ahead of the Federal Reserve in June with a quarter-point cut even though the inflation rate in the 20 countries sharing the euro remains higher than the 2% target. While investors expect the Fed to start cutting soon, the ECB won't want to get too far ahead of its U.S. counterpart because it might weaken the euro too much and drive up inflation again. Trump's Taiwan Comments Caused a Selloff in Chips. The Real Risk Is a Global Depression. This article is from the free weekly Barron's Tech email newsletter. Sign up here to get it delivered directly to your inbox. No Hyperbole. Former President Donald Trump is spooking investors with his latest comments about Taiwan. While chip stocks took the brunt of the pain on Wednesday, investors need to recognize that the entire global economy-not just chips-could crumble if Taiwan's security situation deteriorates significantly. Prospect of Trump's Return to Dominate European Security Summit The coming U.S. presidential election, with the growing prospect of a return of Donald Trump to the White House, promises to have profound repercussions for Europe's security, future trans-Atlantic relations and the conflict in Ukraine-changes with which European leaders are starting to grapple. Trump's pick of Sen. JD Vance (R., Ohio) as his running mate on Monday reinforced a sense in Europe that the former president's return to office could mean a dramatic drop in U.S. aid for Ukraine and a push to force Kyiv into peace talks with the Kremlin. It could also mean a U.S. pivot in defense priorities toward Asia to deter China that would leave Europe to increasingly fend for itself. Beyond Meat Engages Bondholders for Restructuring Talks Beyond Meat, the purveyor of plant-based meat substitutes, has engaged with a group of bondholders to initiate discussions about a balance-sheet restructuring, according to people familiar with the matter. The Los Angeles-based company's liquidity has diminished over the past several quarters as it continues to burn cash. The group of bondholders, which has interests in Beyond Meat's $1.1 billion of convertible notes, is working with the law firm Akin Gump Strauss Hauer & Feld, the people familiar with the matter said. The company is represented by Latham & Watkins. TSMC Heads Into Earnings. Politics Loom in the Background. Taiwan Semiconductor Manufacturing is thriving on rising demand for artificial-intelligence chips, but geopolitics may drive investor sentiment in the short term. On Wednesday, TSMC shares and chip stocks fell after former President Donald Trump seemed to waver about the U.S.'s current relationship with Taiwan. "They did take about 100% of our chip business," Trump told Bloomberg Businessweek in an interview published on Tuesday. "Taiwan should pay us for defense." 06:00/EU: Jun New Passenger Car Registrations in Europe statistics (EU27 + EFTA3) All times in GMT. Powered by Onclusive and Dow Jones. Write to us at newsletters@dowjones.com We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions. This article is a text version of a Wall Street Journal newsletter published earlier today.

MORNING BID AMERICAS-TSMC steadies the chips, ECB and Netflix eyed

A look at the day ahead in U.S. and global markets from Mike Dolan Another impressive earnings beat from Taiwan's chipmaking giant TSMC may help calm this week's tech stock rout, as the earnings season turns toward wobbly megacaps with an update from Netflix on Thursday - just as the European Central Bank meets. An increasingly volatile week on Wall Street has seen a wild rotation from pricey tech giants to re-invigorated small caps . As Deutsche Bank notes, the out-performance of the Russell 2000 over the Nasdaq in the past five trading days has been the biggest since the former index began in 1979. But nerves about the chip giants were jangled further by reports of new U.S. curbs on the sector and White House hopeful Donald Trump's doubt about U.S. military defence of Taiwan. Wall Street's semiconductor index lost more than $500 billion in value on Wednesday in its worst session since 2020 after a report said the United States was mulling tighter restrictions on exports of advanced chip technology to China. Artificial Intelligence heavyweight Nvidia fell almost 7% during the session. Although Dutch chipmaking equipment provider ASML, which slumped 13% yesterday, continued to struggle in Europe, TSMC's update may help steady the ship. U.S. listed shares of TSMC rebounded 3% on Thursday after the firm - a major Apple and Nvidia supplier - beat profit forecasts and said its revenue in the current quarter will increase by as much as 34%. That, in turn, has seen a rebound in related U.S. stocks, with Nasdaq futures up 0.5% ahead of today's bell and S&500 futures up too. The VIX volatility gauge has ebbed from its highest level since May. Streaming bellwether Netflix tops another packed earnings diary later. Stocks around the world were similarly in foment, with tech-heavy Japanese and South Korean benchmarks falling overnight - with the Nikkei the standout loser with a drop of 2.2%, exaggerated by the week's yen surge. On the back of a weaker dollar more generally, which sent the DXY index to four-month lows before stabilising today, dollar/yen skidded to its lowest in over a month amid jitters around another suspected round of yen-buying Bank of Japan intervention on Wednesday. BOJ data suggests it may have bought nearly 6 trillion yen ($38.37 billion) last week and traders said this week's moves bore the hallmarks of further intervention - or at least of markets easily spooked by that prospect. Chinese equities held in positive territory and the yuan froze, however, as details of the ruling Communist party's "Third Plenum" started to emerge in the wake of another big miss in second-quarter Chinese GDP growth earlier this week. A communique issued on Thursday after the meeting said China will enhance the role of market mechanisms in the economy, create a fairer and more dynamic market environment and optimise the efficiency of resource allocation. European stocks also got a foothold, with Britain's FTSE100 outstripping the rest, helped by news of slowing UK wage growth in the three months to May and as the pound slipped from 1-year peaks back under $1.30. European macro markets now await the ECB's rate decision, where the central bank is expected to keep policy unchanged while signalling its next move is set to be a cut. Markets bet the ECB's second rate cut of the year will come in September and the euro retreated slightly from Wednesday's four-month peak. A September ECB cut would match where futures markets now firmly place the Federal Reserve's first move, with top Fed officials on Wednesday signalling it's "closer" to cutting rates given inflation's improved trajectory and a labor market in better balance. In an interview with the Wall Street Journal, New York Fed boss John Williams said: "We're actually going to learn a lot between July and September." The comments came as U.S. retail and industry readouts for June this week came in better than forecast, pushing the Atlanta Fed's closely-watched "GDPNow" estimate up another couple of notches to 2.7%. But helped by decent demand at Thursday's 20-year Treasury bond auction, 10-year yields fell to four-month lows at 4.14%. Key developments that should provide more direction to U.S. markets later on Thursday: * European Central Bank policy decision, press conference from ECB President Christine Lagarde; South Africa Reserve Bank policy decision * Philadelphia Federal Reserve's July manufacturing survey, U.S. weekly jobless claims, May TIC data on Treasury holdings and flows * US corporate earnings: Netflix, Blackstone, M&T Bank, Textron, Snap-On, Cintas, Marsh & McLennan, Abbott Laboratories, KeyCorp, DR Horton, Domino's Pizza, PPG, Intuitive Surgical * Fed Board Governor Michelle Bowman, San Francisco Fed President Mary Daly and Dallas Fed chief Lorie Logan all speak * Donald Trump speaks to the Republican National Convention * European Parliament votes on new European Commission President * European political leaders meet at EPC summit in Oxford * US Treasury auctions 10-year inflation-protected securities, 4-week bills

European Midday Briefing : China Worries Continue to Drag on Stocks

European stocks traded lower again on Wednesday as investors worried that companies will face rising economic headwinds in China and after the latest U.K. inflation data raised doubts about an August rate cut by the Bank of England. UBS said China's economic weakness is increasingly a challenge for European companies and the continent's economic recovery from the energy crisis and Covid-19 disruptions. "China's domestic weakness has been a multi-year drag but was overshadowed by strength in the U.S. Now that both regions appear to be slowing, the nascent European recovery is vulnerable, again, to external forces," UBS said. ASML shares fell sharply after its upbeat results were overshadowed by a report that the Biden administration was considering new restrictions on the chip maker's China business. Stocks to Watch Consensus expectations for how much miners BHP and Glencore will pay out to shareholders this results season seem too high, while estimates for Anglo American look too low, UBS said. It expects BHP, Rio Tinto, Anglo and Glencore to report combined capital returns of roughly $8 billion alongside their upcoming profit numbers, down from a payout around $9 billion last reporting period. The second-quarter performance of U.S. banks bodes well for their European peers , Deutsche Bank said. Analysts expect a positive read-across in particular for French banks and partially for Swiss lender UBS. U.S. Markets: Index futures traded lower, a day after the Dow industrials and S&P 500 hit new records. Earnings season rolls on, with results due from J&J, United Airlines and Elevance Health, among others. Also on deck was data on housing starts and industrial production. Stocks to Watch In premarket trading, Nvidia fell more than 3% as investors continued to move away from the big tech stocks that have dominated markets this year. Shares of Micron and Advanced Micro Devices also retreated. Forex: Sterling extended earlier gains, rising to a one-year high above $1.30 against the dollar and a two-year peak against the euro, after U.K. inflation data threw prospects of an interest-rate cut in August "into yet more doubt," Monex said. "A cut next month is likely to be a difficult sell having seen overall disinflation progress appear to stall this month." The dollar could perform well over the summer as bets on Donald Trump winning the election offset prospects of interest-rate cuts, ING said. Above-forecast retail sales data on Tuesday hasn't dented the chances that the Federal Reserve will cut rates in September, with money markets fully pricing this in, it added. "The reason why the dollar has been resilient despite the rise in dovish [rate-cut] bets is undoubtedly the emergence of 'hedges' for higher inflation, tariffs, and geopolitical risks ahead of a Trump re-election." Periods of dollar outperformance this summer are therefore more likely, ING said. Bonds: Bonds continued their summer recovery and were shrugging off better-than-expected U.S. economic data, Commerzbank Research said. "Rate-cut hopes continue to revive with markets now almost fully discounting 25 basis-point cuts at the upcoming European Central Bank 'staff projection' meetings in September, December and March." For the Fed, 65 basis points of cuts are priced in until the end of the year, despite upbeat retail sales data, Commerzbank said. Energy: Oil edged higher, rebounding from earlier losses, as reports that U.S. crude stockpiles fell last week countered concerns over the demand outlook in China. Prices were also supported by growing expectations that the Federal Reserve will start cutting rates in September, with the latest U.S. retail sales figures also damping fears of a slowdown in the economy. Metals: Gold futures reached a new all-time high as rate-cut hopes grew, Treasury yields fell and geopolitical tensions mounted. Precious metals were gaining momentum as the market became increasingly certain that the end of this quarter will bring the first interest rate cuts from the Fed, Sucden Financial said. Comex gold futures are likely to extend recent gains to test year-to-date resistance at $2,477/oz, based on the daily chart, RHB Retail Research said. Rio Tinto/Iron Ore The final approvals for Rio Tinto's Simandou iron-ore project in Guinea provide confidence it will start producing iron ore there next year as planned, Macquarie said. However, it reckons it will take the company and its partners longer than they say to ramp up the operation. "We believe the market would gradually price in the additional high-grade, low-costs iron ore supply from West Africa and [it] could weigh on iron ore market sentiment." HSBC Holdings named Georges Elhedery as its new chief executive after the bank's current leader unexpectedly announced his retirement earlier this year. Elhedery, HSBC's chief financial officer, will start his new position on Sept. 2, the bank said Wednesday. The 50-year-old, who was educated in France, has spent almost two decades at the bank and has experience working in Asia, the Middle East and Europe. Roche Obesity Pill Achieves Positive Results in Early-Stage Trial Roche Holding said an oral GLP-1 drug candidate for the treatment of people with obesity achieved positive results in an early-stage clinical trial, bolstering the company's efforts to enter the booming market after another drug showed weight-loss efficacy in May. The Swiss pharmaceutical company is trying to get a slice of the market for drugs to treat obesity and diabetes currently dominated by Novo Nordisk and Eli Lilly. It entered the race through its $3-billion-plus purchase of Carmot Therapeutics, which gave Roche access to both oral and injectable drug candidates. EssilorLuxottica to Buy Supreme Brand From VF for $1.5 Billion Ray-Ban maker EssilorLuxottica agreed to buy streetwear brand Supreme from VF Corp. for $1.5 billion in a move aimed at helping it expand further beyond eyewear. U.S. apparel brand VF, which owns the footwear brand Vans, said the sale follows a portfolio review, which found limited synergies with Supreme. The company paid $2.1 billion for Supreme in 2020. Allianz to Buy 51% Share in Singapore's Income Insurance for $1.64 Bln Allianz is buying a 51% stake in Singapore insurance company Income Insurance for 2.2 billion Singapore dollars ($1.64 billion) as it expands in the region. The German insurer said Wednesday that it is offering to buy each Income Insurance share for S$40.58. Daimler Truck Writes Down China Joint Venture, Puts Guidance Under Review Daimler Truck Holding said it took a hit from a write-down of its China joint venture Beijing Foton Daimler Automotive due to a persistently weak market and that its full-year guidance is currently under review. The German truck and bus maker said late Tuesday that it fully wrote down the book value of its China joint venture BFDA, resulting in a one-time hit of 120 million euros ($130.8 million). The company said the noncash charge will have a negative impact on second-quarter adjusted earnings before interest and taxes of its Asian trucks segment and its industrial business. Adidas Raises Full-Year Guidance After Strong Quarter Adidas upgraded its sales and earnings guidance for the year after posting better-than-expected results for the second quarter as customers bought more products despite less promotional activity. The German shoe and sportswear company said it now expects currency-neutral revenue to increase at a high single-digit rate this year, compared with a mid-to-high single-digit rate previously. Meanwhile, it said it also expects roughly EUR1 billion ($1.09 billion) in operating profit, up from a previous forecast of around EUR700 million. Handelsbanken Net Profit Beat Forecasts Despite Falling on Year Svenska Handelsbanken's second-quarter earnings fell as costs rose faster than income, but net profit still landed ahead of expectations. The Swedish bank on Wednesday reported net profit of 6.79 billion Swedish kronor ($641.3 million), down from SEK7.1 billion a year earlier but above a FactSet consensus forecast of SEK6.2 billion. GLOBAL NEWS The S&P 500 Is the World's Safest Equity Asset. The Trump Shooting Proves It. Go long America. Our industrial, technological, and financial innovation inspires the world far more than our dangerous political divisions could damage our role as the world's most important nation. Asia Economic Growth Outlook Steady But Risks Persist, ADB Says Asia's economies seem to be on track for a solid year, as growth holds steady and inflation slows, even with risks tilted to the downside, the Asian Development Bank said in its latest report. Resilient demand at home and strong exports are helping offset risks from trade and geopolitical tensions for Asia's developing economies, the multilateral bank said Wednesday. It nudged up its forecast for the year, projecting gross domestic product growth of 5.0% versus the 4.9% predicted in April. That compares with an expansion of 5.1% last year. Musk Turbocharges Silicon Valley Support for Trump Big names in tech are turning Donald Trump's way, a shift likely to be accelerated by excitement over Elon Musk's nine-figure commitment and former venture capitalist JD Vance joining the ticket. Those two developments have punctuated a brewing cultural change in traditionally liberal Silicon Valley, as investors and executives announce their support for Trump over issues including the Biden administration's stance on artificial-intelligence regulation and crackdowns on acquisitions by big tech. Some say following Biden's poor debate performance and Trump's response to this weekend's assassination attempt, there is more momentum and permission to support the Republican.

North American Morning Briefing: Tech Lower Again as Rotation Continues

Stock futures were falling on Wednesday with tech down sharply as investors continued to move away from stocks like Nvidia and into beaten-down smaller companies. The small-cap Russell 2000 Index has risen for five straight sessions, and confidence that the Federal Reserve will cut rates as soon as September has underpinned the rotation. Falls in equity futures helped underpin demand for U.S. government paper, though overall moves were meagre as traders awaited further guidance on the chances of Fed rate cuts in coming months. Overseas Markets Overseas stocks were mostly lower. Indexes fell in Europe, the U.K. and Japan. Hong Kong's Hang Seng Index was up 0.1%. Premarket Movers ASML 's upbeat results were overshadowed by a Bloomberg News report that the Biden administration is considering new restrictions on ASML's China business. Shares in ASML and Japan-listed rival Tokyo Electron both fell. Five Below replaced its longtime chief executive and cut its outlook for the second quarter amid slower consumer spending. Shares fell more than 10%. J.B. Hunt Transport Services reported a drop in quarterly profit due to lower freight revenue and higher insurance and equipment costs. Shares fell 2.9%. Nvidia fell more than 3% as investors continued to move away from the big tech stocks that have dominated markets this year. Shares of Micron and Advanced Micro Devices also retreated. Spirit Airlines fell 5.4% after the carrier reduced its sales forecast for the second quarter, saying it expects revenue of about $1.28 billion, below previous expectations, "due to lower-than-expected non-ticket revenue." Post Close Movers Aehr Test Systems said it is taking over Incal Technology, a manufacturer of computer peripheral equipment. Shares of Aehr rose 14%. Bloom Energy partnered with CoreWeave, a cloud-infrastructure platform, to generate power at an artificial-intelligence-enabled data center. Shares rose 14%. Watch For: Housing Starts for June; Industrial Production and Capacity Utilization for June; EIA Weekly Petroleum Status Report; Johnson & Johnson earnings Today's Top Headlines/Must Reads: - Top Official Suggests Fed Is Closer-But Not Yet Ready-to Cut - A New York City Pension Makes Renters' Rights an Investment Priority - Wall Street Wants In on America's Battery Storage Boom The dollar could perform well over the summer as bets on Donald Trump winning the election offset prospects of interest-rate cuts, ING said. The above-forecast retail sales data hasn't dented the chances that the Federal Reserve will cut rates in September, with money markets fully pricing this in, ING said. "The reason why the dollar has been resilient despite the rise in dovish [rate-cut] bets is undoubtedly the emergence of 'hedges' for higher inflation, tariffs, and geopolitical risks ahead of a Trump re-election." Periods of dollar outperformance this summer are therefore more likely, ING added. Sterling extended earlier gains, rising to a one-year high above $1.30 against the dollar and a two-year peak against the euro, after U.K. inflation data threw prospects of an interest-rate cut in August "into yet more doubt," Monex said. "A cut next month is likely to be a difficult sell having seen overall disinflation progress appear to stall this month." U.K. annual inflation remained at 2% in June, against expectations for a slight fall, while core and services inflation stayed elevated. Bonds: Weak demand is likely for Wednesday's 20-year Treasury bond auction due to political uncertainties, lower liquidity, and less favorable yield curve positioning, while Thursday's 10-year Treasury Inflation-Protected Securities auction is expected to be more balanced due to attractive real yields and potential interest-rate cuts, Saxo said. "Political uncertainty, particularly the potential for a Trump victory reigniting inflation fears, could deter investors." If demand for the 20-year bonds increases, it could signal the onset of a short-term bond rally ahead of the Fed's anticipated interest rate cuts, despite continuing economic and political uncertainties, Saxo said. Energy: Oil edged higher, rebounding from earlier losses, as reports that U.S. crude stockpiles fell last week countered concerns over the demand outlook in China. Prices were also supported by growing expectations that the Federal Reserve will start cutting rates in September, with the latest U.S. retail sales figures also damping fears of a slowdown in the economy. Metals: Gold futures reached a new all-time high as rate-cut hopes grew, Treasury yields fell and geopolitical tensions mounted. Precious metals were gaining momentum as the market became increasingly certain that the end of this quarter will bring the first interest rate cuts from the Fed, Sucden Financial said. Comex gold futures are likely to extend recent gains to test year-to-date resistance at $2,477/oz, based on the daily chart, RHB Retail Research said. HSBC Holdings named Georges Elhedery as its new chief executive after the bank's current leader unexpectedly announced his retirement earlier this year. Elhedery, HSBC's chief financial officer, will start his new position on Sept. 2, the bank said Wednesday. The 50-year-old, who was educated in France, has spent almost two decades at the bank and has experience working in Asia, the Middle East and Europe. Roche Obesity Pill Achieves Positive Results in Early-Stage Trial Roche Holding said a new weight-loss pill under development achieved positive results in an early-stage clinical trial, bolstering the company's efforts to enter the booming obesity market after another of its drugs showed weight-loss efficacy in May. The Swiss pharmaceutical company is trying to get a slice of the market for drugs to treat obesity and diabetes currently dominated by Novo Nordisk and Eli Lilly. It entered the race through its $3 billion-plus purchase of Carmot Therapeutics, which gave Roche access to both oral and injectable drug candidates. Charles Schwab Hints It's Time to Fix Its Hurting Bank Business Charles Schwab may be best known for its brokerage platform, but it's the company's bank that is giving investors headaches-again. Shares tumbled 10.2% after second-quarter earnings fell short on key metrics. Bank deposits fell and supplemental borrowings rose during the second quarter, dashing the hopes of investors who were seeking confirmation that Schwab had turned a corner on cash-sorting woes that bedeviled it last year. Asia Economic Growth Outlook Steady But Risks Persist, ADB Says Asia's economies seem to be on track for a solid year, as growth holds steady and inflation slows, even with risks tilted to the downside, the Asian Development Bank said in its latest report. Resilient demand at home and strong exports are helping offset risks from trade and geopolitical tensions for Asia's developing economies, the multilateral bank said Wednesday. It nudged up its forecast for the year, projecting gross domestic product growth of 5.0% versus the 4.9% predicted in April. That compares with an expansion of 5.1% last year. Musk Turbocharges Silicon Valley Support for Trump Big names in tech are turning Donald Trump's way, a shift likely to be accelerated by excitement over Elon Musk's nine-figure commitment and former venture capitalist JD Vance joining the ticket. Those two developments have punctuated a brewing cultural change in traditionally liberal Silicon Valley, as investors and executives announce their support for Trump over issues including the Biden administration's stance on artificial-intelligence regulation and crackdowns on acquisitions by big tech. Some say following Biden's poor debate performance and Trump's response to this weekend's assassination attempt, there is more momentum and permission to support the Republican. Heightened Iranian Threat Against Trump Prompted More Security Ahead of Assassination Attempt WASHINGTON-The Biden administration in recent weeks determined there was an increased threat from Iran against former President Donald Trump that was serious enough to prompt additional security measures for the former president, a U.S. national security official said on Tuesday. The threat had no apparent connection to the attempted assassination of the former president in Pennsylvania on Saturday by a gunman identified as Thomas Matthew Crooks, U.S. officials said. Instead, it was part of ongoing attempts by Iran to retaliate for the January 2020 U.S. drone strike that killed Qassem Soleimani, feared leader of Iran's Quds Force, which is responsible for Iran's covert military operations abroad. Security Detail for Ex-Top Trump Official Denied by Biden Administration WASHINGTON-The Biden administration has declined for almost a year to provide security to Robert O'Brien, a former national security adviser in the Trump White House, despite behind-the-scenes pressure from lawmakers and what they describe as continuing threats against his life. Rep. Mike Turner of Ohio, the Republican chairman of the House Intelligence Committee, wrote two letters to President Biden over the past year or so requesting that the administration reinstate O'Brien's Secret Service protective detail, which was ended with no explanation on Aug. 1, 2023. Turner also met with the Secret Service and national security adviser Jake Sullivan on the matter, to no avail. Chesswood Group: Waiver Under Credit Facility, Which Was to Expire on July 15, Has Been Extended to Aug 2 StorageVault to Buy C$71.5M of Assets; Updates Previously Announced Transactions