Brace for a flurry of speeches from Fed officials

Donald Trump's assassination attempt and weak Chinese growth data dominate the headlines this morning, along with a much-anticipated speech by Jerome Powell.

The accumulation of weak macro data in the United States strengthened the case for a first Fed rate cut at the September 18 meeting, with a 96% probability according to CME's FedWatch tool. US investors returned to last week's sectors (small caps, real estate, industrials), but are still struggling to let go of their beloved big tech stocks.

The US political landscape is even more uncertain than expected, even if Donald Trump's assassination attempt has clearly boosted his chances of being elected, according to specialists. Financially, this has translated into a carry on the dollar and bitcoin. The effect on US Treasuries is harder to pin down.

Mid-July coincides with the acceleration of second-quarter earnings reports. After Friday's disappointing results from US banks (Wells Fargo in particular), a number of major announcements are expected in the coming days. The Goldman Sachs Group, BlackRock, today. UnitedHealth, Bank of America, Morgan Stanley and Rio Tinto on Tuesday. Johnson & Johnson, ASML and BHP on Wednesday. TSMC, Netflix and Novartis on Thursday.

On the weekly economic agenda: Jerome Powell's speech at noon today, US retail sales on Tuesday, the UK inflation on Wednesday and the ECB rate decision on Thursday.

There will be many comments from Fed officials this week before they enter a period of silence ahead of the July 30-31^st meeting. Powell's speech is due today at 12:30 pm ET at the Economic Club of Washington. Fed Governor Adriana Kugler will speak on Tuesday, Fed Governor Chris Waller Richmond and Fed President Thomas Barkin on Wednesday, while New York Fed President John Williams will speak on Friday.

Focus is also on China this morning, with fresh data and the launch of the Plenum, a summit that takes place every five years and is used to give major orientations, notably in fiscal matters. Incentive policies will also be needed, as the latest indicators are poor: GDP grew by just 4.7% year-on-year in Q2, less than expected (5.1%), due to weak consumption. The announcement was made overnight. At the same time, Beijing announced that property prices continued to fall, albeit at a slower pace than before, in June. In China, recovery is still some way off.

In Europe, the market is less afraid of the future French government, even if the degree of uncertainty is high and it's hard to see how the ship can be steered (or badly steered, to put it mildly). Nevertheless, we'll be keeping a close eye on the French debt market, which can spiral out of control instantly, as was the case during the infamous "Truss Moment" when the UK Prime Minister had to resign under pressure from the market after announcing a set of unfunded measures.

In Asia-Pacific this morning, the Japanese stock market is closed for a public holiday. China is divided between slight gains in Shanghai and losses in Hong Kong. South Korea and India made modest gains. Australia is slightly more vigorous (+0.6%). Leading indexes are bearish in Europe, while futures on Wall Street are in the green.

Economic highlights:

European industrial production and the Empire Manufacturing index are on the agenda. The full agenda is here. 

The dollar is worth EUR 0.9170 and GBP 0.7709. The ounce of gold is trading at USD 2415. Oil is firm, with North Sea Brent at USD 84.95 a barrel and US light crude WTI at USD 81.17. The yield on 10-year US debt is standing at to 4.24%. Bitcoin is trading at USD 62,8900.

In corporate news:

• BlackRock - Assets under management reached a record $10.650 billion in the second quarter, with the group reporting a 9% earnings increase on Monday, driven by strong growth in management revenues due to rising stock markets.
• Goldman Sachs is set to publish its results before the stock market opens. The company is also reportedly seeking to raise $2 billion in its first Asia-Pacific-focused private equity fund to increase exposure to some of the world's fastest-growing economies.
• Alphabet - Google's parent company is reportedly in advanced talks to purchase cybersecurity startup Wiz for approximately $23 billion, which would mark the tech giant's largest acquisition to date.
• Microsoft - The Microsoft-backed startup OpenAI, known for the ChatGPT conversational robot, is developing a new approach to artificial intelligence models in a project codenamed "Strawberry."
• Meta - The social networking group announced it would lift certain restrictions on former U.S. President Donald Trump's Facebook and Instagram accounts, including the additional monitoring put in place when the accounts were recovered in early 2023.
• Apple - Apple's sales in India surged 33% to nearly $8 billion in the year to March. Morgan Stanley has added Apple to its list of favorite stocks, resulting in a 2% increase in the stock price ahead of the opening.
• Walmart, Target, Amazon - Deloitte estimates indicate that back-to-school spending in the U.S. is expected to be flat or lower this year, with consumers cutting back on expensive electronics.
• Paramount - Gabelli Funds is seeking more details on the valuation of National Amusements' assets, the Redstone family holding company with a majority stake in Paramount, which is to be acquired by Skydance Media.
• Southwest Airlines and Archer Aviation have agreed to develop operational plans for Archer-built electric air cab networks at California airports where Southwest operates.

Analyst recommendations:

• Carrier Global Corporation: Baird upgrades to outperform from neutral with a price target raised from USD 64 to USD 75.
• Cintas Corporation: RBC Capital downgrades to sector perform from outperform with a target price of USD 725.
• Electronic Arts Inc.: Citi downgrades to neutral from buy with a price target raised from USD 148 to USD 161.
• TD Synnex Corporation: RBC Capital upgrades to outperform from sector perform with a price target raised from USD 135 to USD 140.
• Broadcom Inc.: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from USD 2100 to USD 210.
• Cirrus Logic, Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 115 to USD 150.
• Fair Isaac Corporation: Jefferies maintains its buy recommendation and raises the target price from USD 1450 to USD 1850.
• Godaddy Inc.: Morgan Stanley maintains its equal weight rating and raises the target price from USD 137 to USD 178.
• KLA Corporation: Citigroup maintains its buy recommendation and raises the target price from USD 760 to USD 980.
• Lennox International Inc.: Baird maintains its neutral recommendation with a price target raised from USD 505 to USD 610.
• Teradyne Inc.: Citigroup maintains its buy recommendation and raises the target price from USD 112 to USD 185.
• Williams-Sonoma, Inc.: TD Cowen maintains its buy recommendation and reduces the target price from USD 340 to USD 170.
• Aptiv Plc: Barclays maintains its overweight recommendation and reduces the target price from USD 110 to USD 105. HSBC initiates a hold recommendation with a target price of USD 76.
• Equinix, Inc.: Jefferies maintains its buy recommendation and reduces the target price from USD 1000 to USD 950.
• Sentinelone, Inc.: Baird initiates an outperform recommendation with a target price of USD 25.
• Glencore Plc: BMO Capital Markets upgrades to market perform from restricted with a target price of GBP 5.40.
• Ocado Group Plc: Bernstein downgrades to underperform from outperform with a price target reduced from GBX 1000 to GBX 260.
• Canadian Natural Resources Limited: Jefferies maintains a hold recommendation with a target price reduced from CAD 110 to CAD 55.