(Bloomberg) — Stocks were volatile in early July, with traders bracing for a deluge of economic reports as they weighed the impact of France’s election on markets.
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In the countdown to Friday’s all-important U.S. jobs report, data showed U.S. factory activity contracted slightly for a third straight month in June, while a measure of prices fell by the most in more than a year . Traders are also reviewing their strategies after last week’s presidential debate. Morgan Stanley strategists say equity investors “must remain selective.” In a separate note, the firm said the growing prospect of a Donald Trump victory is making yield curve risers attractive.
*US ISM JUNE MANUFACTURING INDEX falls to 48.5; BIRTH. 49.1
“With the eternal question of whether rising debts and deficits matter to the interest rates and funding costs a government has to pay, maybe we’re getting a taste of what it does now?” said Peter Boockvar in the Boock Report. “Regardless of who wins in November, we know that the US financial situation will worsen, especially if current federal spending as a percentage of GDP at 23-24% remains well above the historical trend of around 20%.
European shares snapped a four-day losing streak and the euro rose after French election results suggested there is less likelihood of extreme policies coming from the far right.
The S&P 500 hovered near 5,470. Nvidia Corp. sank 2.5%, leading to losses in technology. Chewy Inc. grew after Keith Gill – known online as “Roaring Kitty” – revealed a passive stake in the online retailer of pet food and products. 10-year Treasury yields advanced four basis points to 4.43%.
France’s CAC 40 index jumped 2.8% before giving back some gains. Bank stocks led the advance in Europe, as French lenders Societe Generale SA, BNP Paribas SA and Credit Agricole SA all rose at least 4%. The euro rose to its strongest level since mid-June.
Corporate America faces its highest earnings bar in nearly three years as it prepares to report second-quarter results, according to Goldman Sachs Group Inc.’s David Kostin.
“The amount of earnings per share growth is likely to moderate as consensus estimates set a higher bar than in previous quarters,” Kostin said. “We expect the ‘reward’ of outperformance for stock outperform ratings to be smaller than average again this quarter.”
Corporate Highlights:
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Boeing Co. agreed to buy back Spirit AeroSystems Holdings Inc. for $37.25 a share in a stock deal that values ​​the supplier at $4.7 billion, smoothing a two-decade split as the U.S. plane maker tries to fix its manufacturing woes.
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Meta Platforms Inc. has been hit with a warning over its subscription model for ad-free services on Instagram and Facebook, risking potentially heavy fines in the European Union’s latest crackdown on Big Tech under tough new rules.
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AP Moller-Maersk A/S withdrew its bid for DB Schenker, the logistics unit of Deutsche Bahn AG that was reported to be valued at more than 15 billion euros ($16.1 billion).
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Air France-KLM is experiencing pressure on projected unit revenue this summer at French units because passengers are avoiding Paris in the summer months to avoid potential disruptions and high prices during the Olympics.
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BYD Co sold a record number of electric and hybrid cars in the second quarter, sales data compiled by Bloomberg News showed, as price cuts and new technology spurred consumer purchases.
This week’s highlights:
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Eurozone CPI, unemployment, Tuesday
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US job opening, Tuesday
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Jerome Powell and Christine Lagarde speak at the ECB forum in Portugal on Tuesday
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China Caixin services PMI, Wednesday
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S&P Eurozone Global Eurozone Services PMI, PPI, Wednesday
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US Fed Minutes, ADP Employment, ISM Services, Factory Orders, Initial Jobless Claims, Durable Goods, Wednesday
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Fed John Williams of the Fed, on Wednesday
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UK general election on Thursday
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US Independence Day holiday, Thursday
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Retail sales in the Eurozone on Friday
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US jobs report, Friday
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Fed of Fed John Williams, Friday
Some of the main movements in the markets:
INVENTORY
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The S&P 500 was little changed as of 10:12 a.m. New York time
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Nasdaq 100 fell 0.3%
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The Dow Jones Industrial Average rose 0.4%
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Stoxx Europe 600 rose 0.7%
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MSCI World Index rose 0.1%
currencies
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The Bloomberg Dollar Spot Index is little changed
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The euro rose 0.3% to $1.0750
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The British pound rose 0.3% to $1.2678
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The Japanese yen fell 0.3% to 161.38 per dollar
Cryptocurrencies
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Bitcoin rose 1.1% to $62,577.91
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Ether rose 1.1% to $3,452.26
BONDS
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The 10-year Treasury yield advanced five basis points to 4.45%
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Germany’s 10-year yield advanced eight basis points to 2.58%
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Britain’s 10-year yield advanced eight basis points to 4.25%
wares
This story was produced with the help of Bloomberg Automation.
–With assistance from Lynn Thomasson, Julien Ponthus, John Viljoen, Catherine Bosley, Matthew Burgess, Vildana Hajric and Sagarika Jaisinghani.
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