Five things you need to know before the market opens on Monday, July 24:
1. -- Stock Futures Extend Rally, But Global Stocks Sputter
U.S. equity futures moved higher Monday, while the dollar extended gains and global stocks sputtered, as investors looked to weakening activity data in economies around the world and ahead to a crucial week of data and earnings on Wall Street.
PMI data from Australia, Japan, Germany, Europe and Britain all showed their manufacturing sectors sliding into contraction in July, with activity in the United Kingdom falling to the lowest levels in 38 months, according to figures from S&P Global.
With central banks around the world -- apart from Japan and China -- still committed to higher interest rates in order to fight inflation, the moves suggest a greater likelihood of recession for many economies over the second half of the year.
S&P Global will publish its composite reading of U.S. economic activity for the month of June at 9:45 am Eastern time.
Markets will also key on policy decisions from the European Central Bank and the Bank of Japan this week, as well as a meeting of China's powerful Politburo, which is expected to discuss and possibly implement a large-scale stimulus to kick-start growth in the world's second-largest economy.
Growth remains solid in the U.S., however, with the Atlanta Fed's GDPNow forecasting tool suggesting a current rate of around 2.4%, a firm enough pace, when matched against the rapid decline in headline inflation, suggests the Federal Reserve will be able to execute a so-called 'soft landing' for the world's biggest economy.
That will still require at least one more quarter point rate hike, however, which markets expect will come later this week in Washington, a move that would take the Fed Funds rate to between 5.25% and 5.5%. After that, interest rate traders are only pegging the chances of a follow-on hike at 16% in September and 26.5% in November.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.15% higher at 101.219 in overnight dealing while benchmark 2-year Treasury note yields were holding at 4.837%.
Earnings will also be in focus this week as the reporting season kicks-in to high gear with a host of big tech, industrial and energy sector updates.
With around 89 S&P 500 companies reporting so far, collective earnings are on pace to fall 7.9% from last year to a share-weighted $429.8 billion, with a modest 0.8% rebound forecast for the three months ending in September.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is up 18.15% for the year, were indicating a 10.5 point opening bell gain while those linked to the Dow Jones Industrial Average -- amid its longest winning streak since 2017 -- were priced for another 60 point move to the upside. Nasdaq futures were up 45 points.
The Europe-wide Stoxx 600 was marked 0.15% higher in early Frankfurt trading while Britain's FTSE 100 gained 0.1% in London.
Overnight in Asia, the region-wide MSCI ex-Japan index fell 0.46% into the close of trading, while the Nikkei 225 was marked 1.23% higher in Tokyo at 32,700.94 points.
2. -- Week Ahead: Wall Street Faces Fed, Tech Earnings and Key Data Tests
A wave of big-tech earnings, a crucial Federal Reserve rate decision, a key inflation reading and the first estimate of U.S. second quarter GDP will highlight an exceptionally busy week for Wall Street as investors look to extend the year's impressive -- and surprising -- S&P 500 rally.
Around 173 companies listed on the benchmark will post June quarter earnings this week, including four of the so-called 'Magnificent Seven' big tech stocks that have powered much of the market's gains so far this year.
Microsoft (MSFT) -) and Google parent Alphabet (GOOGL) -) will report second quarter earnings after the close of trading Tuesday, with Meta Platforms (META) -) following Wednesday and Amazon (AMZN) -) reporting Thursday.
General Electric (GE) -), General Motors (GM) -), Boeing (BA) -), AT&T (T) -), Honeywell (HON) -) and Exxon (XOM) -) are just a handful of the other bluechip names expected to update this week in an earnings season that has thus far topped Street forecasts .
The Fed's Wednesday rate decision, however, is likely to be the market's key focus as traders look to commentary from Chairman Jerome Powell on the central bank's expected rate path now that inflation is moving quickly towards its 2% target and unemployment is holding at 3.6%, near the lowest levels in five decades.
The Commerce Department will also publish its first estimate of second quarter GDP growth at 8:30 am Eastern time Thursday, with forecasters looking for an annualized growth rate of between 1.8% and 2%, following on from 2% pace recorded over the first three months of the year.
3. -- Chevron Moves Higher After Q2 Earnings Preannouncement
Chevron (CVX) -) shares edged higher in pre-market trading after the second-largest U.S. oil major posted 'highlights' of its second quarter earnings and announced the retirement of CFO Pierre Breber.
Chevron said adjusted net income for the three months ending in June came in at $5.8 billion, or $3.80 per share, down 47% from the same period last year but topping the Street consensus forecast of $2.97 per share. The group also noted that production at the Permian Basin hit a record 772,000 barrels of oil equivalent, a quarterly record.
Chevron, which will publish its full second-quarter earnings statement on Friday, also said that Breber, who has served as CFO since 2019, will retire in 2024 and will be replaced by current CTI Eimear Bonner.
“Pierre is a world class finance executive and has been an outstanding business leader throughout his career at Chevron,” said CEO Mike Wirth. "Eimear has a proven track record leading large, complex organizations. I am confident that her deep business expertise and engaging leadership approach will enable her to build upon Chevron’s strong foundation and drive further value for shareholders."
Chevron shares were marked 0.2% higher in pre-market trading to indicate a Monday opening bell price of $159.00.
4. -- Elon Musk Rebrands Twitter As 'X', Removes Bird Logo
Elon Musk unveiled plans for a major overhaul of Twitter, the micro-blogging website he purchased last year for $44 billion, vowing over the weekend to change the platform's name to "X" over the coming days.
Musk, who used a company called X Corp. to complete the Twitter purchase in October of 2022, said he would "bid adieu to the twitter brand and, gradually, all the birds", in a reference to the current Twitter logo, and replace it with an 'X'.
The billionaire Tesla (TSLA) -) CEO polled his 149 Twitter followers in order to chose a version of the "X" logo that would replace the Twitter bird, with the graphic eventually displayed by light projection on the side of Twitter's main San Francisco headquarters.
The move follows both the launch of Twitter's most-serious rival, Threads, by Meta Platforms earlier this month, as well as his recent admission that a rebound in advertising revenues under his tenure has failed to materialize, adding earlier this month that "(we) need to reach positive cash flow before we have the luxury of anything else."
Musk told a 'Twitter Spaces' discussion over the weekend that the logo change "should have been done a long time ago”, adding that “we’re cutting the Twitter logo off the building with blowtorches."
5. -- 'Barbenheimer' Delivers 'Phenomenal' Weekend For American Movie Theaters
Summer blockbusters Barbie and Oppenheimer combined to amass the biggest box office weekend for U.S. theatres since the pandemic, providing both a shot-in-the-arm for cinema companies and a much-need boost for studios and content creators amid an increasingly bitter Hollywood strike.
'Barbie', the Warner Bros. Discover (WBD) -) film about the eponymous Mattel (MAT) -)-made doll staring Margot Robbie and Ryan Gosling, took in more than $155 million in U.S. and Canadian box office receipts from 4,243 locations over the weekend, according to Comscore data, as well as a studio-estimated $182 million in international markets.
Oppenheimer, a film about the making of the atomic bomb set at the tail end of the Second World War, generated around $80.5 billion, from 3,610 cinemas, in U.S. and Canada ticket sales on its debut weekend. The film was produced by Universal Pictures, a division of Comcast (CMCSA) -).
An estimated 200,000 people, in fact, purchases tickets for both films on the same day, according to AMC Entertainment (AMC) -), the world's biggest cinema chain. which dubbed the double-header 'Barbenheimer'.
Collectively, the box office tally was the highest since April of 2019, according to Comscore, when 'Avengers: Endgame' debuted in cinemas worldwide. So far this year, North American theaters have taken in $5.4 billion in box office receipts a 16% increase from the same period in 2022.
“This was a phenomenal experience for people who love movies on the big screen,” said National Association of Theatre Owners CEO Michael O’Leary. “It was a truly historic weekend and continues the positive box office momentum of 2023. More importantly, it proves once again that America loves going to the movies to see great films."
