Who wants a boring Monday, anyway? Chinese shares saw the biggest daily fall since 2007 overnight, partly on fears that officials may be trying to pull back on supporting the market. And that means things got ugly all over again — unless you’re a gold bug. The metal’s closing in on $1,100 an ounce.
Check out our chart of the day, which offers one theory why sellers aren’t yet done with Shanghai.
China’s worries have spread to oil, which is adding to last week’s 5% drop. With commodity prices lower, some say it looks less worrying on the inflation front, reducing the chances of a near-term Fed hike. The CME Group’s FedWatch finds a 17% chance of a hike in September, a 34% chance in October and 54% by December.
We may or may not know more when the Fed meets this week. But IG’s Chris Weston says don’t expect a “smoking gun” that provides clear evidence the Fed will hike in September. That is something that could present another headache for dollar bulls, with the currency under pressure this morning.
That brings us to our call of the day, a contrarian stance that rides against the everything-is-going to-be-A-OK-with-the-U.S.-economy camp — chiefly, those betting against the dollar.
While Monday’s earning’s calendar looks pretty subdued, rest up, because more than 150 S&P companies are on deck to report this week. Several of those will be energy companies like Exxon Mobil and Chevron, in a sector that has failed to help boost the stock market so far.
“This sector is also the largest contributor to the year-over-year decline in both earnings and revenues for the S&P 500 as a whole,” said John Butters, senior earnings analyst at FactSet. More on that here.
Key market gauges
Wall Street is set to struggle against a sea of red. Futures on the Dow YMU5, -0.06% and the S&P ESU5, -0.04% are down, along with the Stoxx Europe 600 SXXP, -2.21% Again, the ugliness started in Asia ADOW, -0.45% with an 8.5% loss for the Shanghai Composite, SHCOMP, -4.09% while the Nikkei NIK, -1.20% also lost nearly a full 1%. China ETFs are looking wobbly too. The IMF also says it wants more overhauls out of China ahead of a recommendation over the yuan as a reserve currency.
By the way, this audio is making the round. Greece had a secret plan to go back to the drachma.
Crude CLU5, -0.68% is inching further away from $48 a barrel. Gold GCQ5, -0.26% and silver SIU5, -0.38% are in a sweet spot this morning, helped by the dollar DXY, -0.01% pullback. Contrarian signal? Hedge funds are at a gold-hating high.
The economy
Durable goods orders showed a 3.4% rise in June, due to strong bookings for airline passengers, but business investment was still soft.
The buzz
Israeli-based Teva TEVA, +16.41% will pay $40.5 billion for Allergan Generics AGN, +6.09% and has withdrawn its proposal to buy Mylan MYL, -14.51% Teva and Allergan are moving up, but Mylan is selling hard.
Apple AAPL, -1.39% plans to start selling the Apple Watch at Best Buy BBY, -1.23% stores in August. It’ll be the first big U.S. retailer to sell the smartwatch, reports The Wall Street Journal.
Who wants a boring Monday, anyway? Chinese shares saw the biggest daily fall since 2007 overnight, partly on fears that officials may be trying to pull back on supporting the market. And that means things got ugly all over again — unless you’re a gold bug. The metal’s closing in on $1,100 an ounce.
ReplyDeleteCheck out our chart of the day, which offers one theory why sellers aren’t yet done with Shanghai.
China’s worries have spread to oil, which is adding to last week’s 5% drop. With commodity prices lower, some say it looks less worrying on the inflation front, reducing the chances of a near-term Fed hike. The CME Group’s FedWatch finds a 17% chance of a hike in September, a 34% chance in October and 54% by December.
We may or may not know more when the Fed meets this week. But IG’s Chris Weston says don’t expect a “smoking gun” that provides clear evidence the Fed will hike in September. That is something that could present another headache for dollar bulls, with the currency under pressure this morning.
That brings us to our call of the day, a contrarian stance that rides against the everything-is-going to-be-A-OK-with-the-U.S.-economy camp — chiefly, those betting against the dollar.
While Monday’s earning’s calendar looks pretty subdued, rest up, because more than 150 S&P companies are on deck to report this week. Several of those will be energy companies like Exxon Mobil and Chevron, in a sector that has failed to help boost the stock market so far.
“This sector is also the largest contributor to the year-over-year decline in both earnings and revenues for the S&P 500 as a whole,” said John Butters, senior earnings analyst at FactSet. More on that here.
Key market gauges
Wall Street is set to struggle against a sea of red. Futures on the Dow YMU5, -0.06% and the S&P ESU5, -0.04% are down, along with the Stoxx Europe 600 SXXP, -2.21% Again, the ugliness started in Asia ADOW, -0.45% with an 8.5% loss for the Shanghai Composite, SHCOMP, -4.09% while the Nikkei NIK, -1.20% also lost nearly a full 1%. China ETFs are looking wobbly too. The IMF also says it wants more overhauls out of China ahead of a recommendation over the yuan as a reserve currency.
By the way, this audio is making the round. Greece had a secret plan to go back to the drachma.
Crude CLU5, -0.68% is inching further away from $48 a barrel. Gold GCQ5, -0.26% and silver SIU5, -0.38% are in a sweet spot this morning, helped by the dollar DXY, -0.01% pullback. Contrarian signal? Hedge funds are at a gold-hating high.
The economy
Durable goods orders showed a 3.4% rise in June, due to strong bookings for airline passengers, but business investment was still soft.
The buzz
Israeli-based Teva TEVA, +16.41% will pay $40.5 billion for Allergan Generics AGN, +6.09% and has withdrawn its proposal to buy Mylan MYL, -14.51% Teva and Allergan are moving up, but Mylan is selling hard.
Apple AAPL, -1.39% plans to start selling the Apple Watch at Best Buy BBY, -1.23% stores in August. It’ll be the first big U.S. retailer to sell the smartwatch, reports The Wall Street Journal.