Pre Market update for 26 July 2022

*Namaste!!!* 

*US Markets in Detail...*

*SGX: 16,609 (-10) (-0.06%)*

*Provisional Cash Rs. In Crs. (25nd July)* 

FIIs -845 (13,602 – 14,447)

DIIs -73 (5,271 – 5,343)

*Today’s Major Corporate Earnings:* 

ABSLAMC, ASIANPAINT, BAJAJ-AUTO, INDIGRID, JK AGRI, LT, RAMCOSYS, RELAXO, SANOFI, SHOPERSTOP, SIS, SOUTHBANK, SUVEN, SYMPHONY, TATAPOWER, TTKHEALTH, UJJIVANSFB, UNIONBANK, UNITDSPR, UTIAMC, ZIMLAB, etc

Sensex: 55,766 (-306) (-0.55%)

Nifty: 16,631 (-88) (-0.53%)

BankNifty: 36,726 (-13) (-0.03%)

NiftyIT: 28,216: +48: +0.17%

MIDCAP: 23,666: +6: +0.03%

Dow: 31,990: +91: +0.28%

S&P: 3,967: +5: +0.13%

Nas: 11,783 (-51) (-0.43%)

Brazil: 100,270: +1,345: +1.36%

Ftse: 7,306: +30: +0.41%

Dax: 13,210 (-43) (-0.33%)

Cac: 6,238: +21: +0.33%

MOEX: 2,129: +32: +1.54% 

WTI Oil: $96.7: +2.11%

Brnt: $104.92: +1.67%

Gold: $1,737 (-8) (-0.47%) 

Silver: $18.33 (-1.55%)

Copper: $335: flat

Copper (LME): $7,453: +131: +1.78%

Alluminum (LME): $2,475: +55: +2.27%

Zinc (LM): $2,993: +57: +1.92%

Tin (LME): $24,947: +106: +0.43%

Eur-$: 1.0220

GBP-$: 1.2046

Jpy-$: 136.66

Re: 79.7363 (-0.15%)

USD- RUB: 58.3281: +0.59%

US10yr: 2.80%

GIND10YR: 7.391 (-0.31%)

$ Index: 106.4750 (-0.24%)

US Vix: 23.36: +1.43%

India Vix: 17.68: +6.19%

BalticDry: 2,146: +28: +1.32%

*ADR/GDR*

Cogni (-1.27%)

Infy (-1.69%)

Wit: +0.78%

IciciBk: +0.00%

HdfcBk: +0.92%

DrRdy (-1.88%)

TataMo (-0.64%)

TatSt: +2.98%

Axis (-1.96%)

SBI: +0.31%

RIGD (-2.02%)

INDA (-0.12%) (IShares MSCI INDIA ETF)

INDY (-0.15%) (IShares MSCI INDIA 50 ETF)

EPI (-0.06%) (Wisdom Tree India Earning)

PIN (-0.29%) (Invesco India Etf)

*Stock futures fall after Walmart cuts forecast, says inflation hit consumer spending*

*U.S. stock futures fell on Monday night after Walmart cut its profit forecast, sending retail stocks tumbling after hours*

*Dow Jones Industrial Average futures fell by 133 points, or 0.4%. S&P 500 and Nasdaq 100 futures declined 0.3% and 0.4%, respectively.*

A late Monday announcement from Walmart, which cut its quarterly and full-year profit estimates because of rising food inflation, alarmed investors who deliberated the implications for other retail stocks. The big-box retailer said higher prices are spurring consumers to pull back on general merchandise spending, particularly in apparel.

Walmart plunged nearly 9% in extended trading, and dragged other retailers with it. Target dropped 5% and Amazon fell 4%. Macy’s and Dollar General each declined 3%, while Costco shed 2%.

*Dow, S&P 500 eke out gains as investors await earnings and Wednesday’s Fed decision*

*U.S. stocks finished mixed on Monday, after flipping between modest gains and losses, as investors contemplate a week stuffed with monster earnings and await a Federal Reserve policy meeting that’s expected to include another outsize rate hike*

The S&P 500 was little changed after last week’s rally, while the technology-heavy Nasdaq 100 underperformed. Treasury 10-year yields topped 2.8% and a dollar gauge slipped. Oil climbed.

*Investors are betting on another Fed hike of at least 75 basis points this week, which will probably inflict more pain on the economy as officials try to get inflation under control. The decision, along with earnings from the likes of Google’s parent Alphabet Inc. and Apple Inc., will help clarify the outlook for a sustained rebound in stocks.*

It dose’nt seem that this bear market is going to end until there’s some evidence of nearing a bottoming of economic data or a pivot by the Fed toward a more dovish stance.

Dow industrials and the S&P 500 finished higher for the fourth time out of the past five trading days, while the Nasdaq Composite ended lower.

*The Fed is expected to announce a 75 basis-point rate hike at the end of its two-day monetary policy meeting on Wednesday, effectively ending pandemic-era support for the U.S. economy.*

*Comments by Fed Chairman Jerome Powell following the announcement will be key, as some investors worry that aggressive rate hikes could tip the U.S. economy into recession*

Last week, the Dow rose 2%, while the S&P 500 gained 2.6% and the Nasdaq Composite advanced 3.3%

*Volume on U.S. exchanges was 9.34 billion shares, compared with the 11.0 billion average for the full session over the last 20 trading days.*

*What drove markets*

Traders generally held steady on Monday and appeared reluctant to build bold positions before a big batch of corporate earnings, which could shape market sentiment in the short term.

For the new week, there will be 175 S&P 500 companies reporting, including big beasts like Apple (-0.74%), Alphabet (-0.36%), Microsoft ( -0.59%) and Amazon (-1.05%), though the action doesn’t pick up again until Tuesday.

“Earnings optimism is overshadowing recession fears that dragged stocks lower on Friday

*The S&P 500 is down 16.8% for the year to date as of Monday, but has climbed back by 8.2% from the 52-week low it hit in mid-June, with sentiment underpinned of late by a corporate reporting season that has proved better than some had feared.*

*With 21% of S&P 500 companies having reported, the second quarter blended earnings growth rate for the benchmark index is 4.8%.*

*If 4.8% is the actual growth rate for the quarter, it will mark the lowest earnings growth rate reported by the index since Q4 2020 (4.0%). However, “68% of S&P 500 companies have reported a positive EPS surprise and 65% of S&P 500 companies have reported a positive revenue surprise.*

*The market’s forward 12-month P/E ratio is 16.7, below the 10-year average of 17.0, according to FactSet, a pullback that is supporting valuations.*

The looming Federal Reserve rate decision on Wednesday provided another reason for caution. The central bank is expected to raise borrowing costs by 75 basis points to a range of 2.25% to 2.50%, but investors will be keen to hear about how the Fed sees the pace of future hikes.

The pace of hikes remains uncertain as we get into the fall. If labor market data starts to soften we can expect the Fed’s attention to once again switch to its dual mandate. But if inflation remains stubbornly high, then the Fed may continue to hike even if a recession is imminent.

This uncertainty is likely to keep volatility elevated. The stock market is likely to remain range bound until the Fed pivots, or we get a reacceleration in business activity.

*Tuesday brings reports on two housing indicators - the S&P Case-Shiller's 20-city composite (USSHPQ=ECI) and the Commerce Department's new home sales number.*

*S&P 500 earnings are expected to have climbed 6.1% for the second quarter from the year-ago period, according to IBES data from Refinitiv. Along with inflation and rising interest rates, investors have been concerned about the impact of currency headwinds and lingering supply chain issues for companies this earnings season.*

*Elsewhere, wheat climbed as commodity markets evaluated a Russian missile strike on Odesa’s sea port that threatened to test a fledgling agreement to unblock Ukrainian grain exports from the Black Sea.*

*Companies in focus*

• Around 2,500 *Boeing Co.* workers were expected to go on strike Aug. 1 at three plants in the St. Louis area after they voted to reject a contract offer from the plane maker. Boeing shares finished down by 1%.

• *Newmont Corp. shares ended down by 13.2%* after the gold miner reported second-quarter profit that fell well short of expectations.

• Shares of *Weber Inc. finished lower by 12.7%* after the grill maker issued a sales warning for its third quarter and announced the departure of its chief executive, Chris Scherzinger.

• *Tesla Inc.* disclosed in its latest 10-Q filing Monday that it received a second subpoena from the Securities and Exchange Commission asking the company to provide information on its “governance processes around compliance with the SEC settlement” related to Chief Executive Elon Musk’s 2018 tweet about taking the company private at $420 a share. Tesla shares ended down by 1.5%.

*The 10-year Treasury yield rose 3.8 basis points to 2.819%, the largest one-day gain in almost a week. Yields and debt prices move opposite each other.*

Bitcoin dropped 2.8% to trade near $22,122.

*European markets close mixed in a big week for earnings and a key monetary policy decision from the U.S. Federal Reserve.; Philips down 7%*

Much of this week’s focus will center around the U.S. Federal Reserve’s two-day policy meeting, concluding on Wednesday, with economists broadly expecting a 75 basis point hike to interest rates by the central bank.

The European Central Bank last week kick-started its own hiking cycle with a 50 basis point increase, larger than previously suggested.

Hawkish ECB policymaker Robert Holzmann told an Austrian broadcaster on Sunday that the Governing Council will consider the economic landscape across the euro zone before determining whether another big rate hike will be feasible in September.

Philips shares plunged 7% after the Dutch medical equipment company missed second-quarter core earnings expectations by a significant margin and cuts full-year and mid-term profit outlook.

*On the data front, a key business climate index for July from Germany’s Ifo Institute came in at 88.6 on Monday, its lowest level for more than two years, as business morale plunged as a result of spiraling energy prices and impending gas shortages.*

*Goldman Sachs has cut its forecast for the MSCI China index due to a worsening slump in China’s property market as many homebuyers stopped mortgage payments.*

*They complained the cash-strapped developers were too slow to finish constructing apartments, which had been bought before completion, as is common in China.*

Beijing has tried in the last few years to crack down on developers’ high reliance on debt for growth. As big names like Evergrande defaulted late last year, investors worried about spillover to the rest of China’s economy.

The investment bank slashed its earnings outlook for the index to zero growth for the year, down from 4% previously, according to a report published late Thursday.

The analysts also cut their MSCI China price target over the next 12 months to 81, down from 84. MSCI China tracks more than 700 China stocks listed globally, including Tencent, BYD and Industrial and Commercial Bank of China.

*Here are some key events to watch this week:* 

# Alphabet, Apple, Amazon, Microsoft, Meta earnings due this week Bank of Japan minutes, Tuesday 

# IMF’s world economic outlook update, Tuesday 

# EU energy ministers emergency meeting, Tuesday 

# Fed policy decision, briefing, Wednesday 

# Australia CPI, Wednesday US GDP, Thursday 

# Euro-area CPI, Friday 

# US consumer income, University of Michigan consumer sentiment, Friday

*Currencies* 

# The Bloomberg Dollar Spot Index fell 0.3% 

# The euro rose 0.3% to $1.0243 

# The British pound rose 0.6% to $1.2074 

# The Japanese yen fell 0.3% to 136.52 per dollar

*Bonds* 

# The yield on 10-year Treasuries advanced seven basis points to 2.82% 

# Germany’s 10-year yield advanced four basis points to 1.07% 

# Britain’s 10-year yield advanced two basis points to 1.96% 

*Commodities* 

# West Texas Intermediate crude rose 1% to $95.66 a barrel 

# Gold futures fell 0.4% to $1,738.10 an ounce.