Today’s Big Picture
Asia-Pacific equity indexes showed modest gains today except for South Korea’s KOSPI which declined 0.67%.Australia’s ASX All Ordinaries gained 0.26%, Taiwan’s TAIEX rose 0.29%, China’s Shanghai Composite and Hong Kong’s Hang Seng advanced 0.45% and 0.46%, respectively while India’s Sensex finished up 0.70%.Japan’s Nikkei jumped 1.23% on news of higher-than-expected export results from July.By mid-day trading, European equity indices are down across the board following UK inflation crossing 10%, and U.S.futures point to a tough open later this morning.
The July Retail Sales report, released this morning, showed that retail activity was essentially flat .Online shopping saw a jump thanks to Amazon’s ( AMZN ) 2022 Prime Day and competing efforts from other retailers.According to CNBC , “While advance retail sales were unchanged, total receipts excluding autos rose 0.4%.
Economists surveyed by Dow Jones had been looking for a 0.1% increase in the topline number and a flat total ex-autos.”
While that report will influence how equity markets open, at 2 PM, the monetary policy minutes from the Fed’s July meeting could sway how stocks end the day.investors will be looking for insight into the Fed’s thinking about how it would weigh ensuing data ahead of its September monetary policy meeting.That said, last week’s rash of July inflation data has already shifted monetary policy expectations for that meeting toward a 50-basis point interest rate hike.
Even though we have several Fed heads making the rounds today, odds are a good portion of investors are looking to see what the Fed may say at the annual monetary policy symposium at Jackson Hole, Wyoming that runs Aug.25-27.
Data Download
International Economy
Private-sector machinery orders in Japan, excluding volatile ones for ships and those from electric power companies, rose 0.9% MoM in June compared to the 5.6% drop in May but fell short of the expected 1.3% gain.On a YoY basis, Machinery Orders rose 6.5%, slower than the 7.4% YoY increase recorded for June.
Exports from Japan rose 19% YoY in July, marking the 17th consecutive month of gains led by gains in semiconductor equipment, transport equipment and autos.Imports to Japan jumped 47.2% YoY topping market estimates calling for a 45.7% increase and the 46.1% gain in June.Among the top import categories were mineral fuels, petroleum, coal, electrical machinery, and semiconductors.
The annual inflation rate in the UK increased to 10.1% in July from June’s 9.4%, coming in slightly above market forecasts of 9.8% percent.The July figure was the highest reading since February 1982.
Core consumer prices in the UK increased 6.2% YoY while the Retail Price Index jumped 12.3% in July, up from 11.8% YoY the prior month.
Seasonally adjusted GDP in the Eurozone for 2Q 2022 was revised to 0.6% down from the initial reading of 0.7%.On an annual basis, the 2Q 2022 figure also ticked lower to 3.9% vs.the initial reading of 4.0%.
Domestic Economy
Once again investors will dig into the latest weekly data published today for MBA Mortgage Applications as well as the Energy Information Administration’s Crude Oil Inventory Data.The former will be scrutinized following the disappointing July Housing Starts report and declines in the July Building Permits data, while the latter will influence how oil prices trade today.
With Walmart’s ( WMT ) inventory moving modestly lower exiting its July quarter compared to levels at the end of April, the 10 AM Business Inventories report for June is likely to be out under the investor microscope with an emphasis on Retail Inventories.
U.S.natural gas futures closed yesterday at 14-year highs influenced by natural gas prices in Europe that have climbed to their highest levels since Russia’s invasion of Ukraine.Shell ( SHEL ) announced that in September it will close a key crude oil pipeline in Gulf of Mexico that supplies oil to Louisiana refineries due to planned maintenance.
Markets
Markets were mixed yesterday with Consumer Staples and Discretionary sectors leading the way.Bright spots also included Take-Two Interactive Software ( TTWO ) and Electronic Arts ( EA ) which combined to account for 128% of Communications Services sector returns.Overall, small caps were essentially flat with the Russell 2000 declining a mere 0.04% while the S&P 500 and the Nasdaq Composite offset each other with a 0.19% gain and a 0.19% loss, respectively.
The Dow rose 0.71% on the day.
Here’s how the major market indicators stack up year-to-date:
Dow Jones Industrial Average: -6.02% S&P 500: -9.67% Nasdaq Composite: -16.25% Russell 2000: -10.01% Bitcoin (BTC-USD): -50.21% Ether (ETH-USD): -50.21% Stocks to Watch
Before trading kicks off for U.S.-listed equities, Analog Devices ( ADI ), Krispy Kreme ( DNUT ), Lowe’s ( LOW ), Target ( TGT ), The Children’s Place ( PLCE ), and TJX Companies ( TJX ) will be among the companies issuing their latest quarterly results and guidance.
IPOs
As of now, no IPOs are slated to be priced this week.Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page .
After Today’s Market Close
Bath & Body Works ( BBWI ), Cisco ( CSCO ), Synopsys ( SNPS ), and Wolfspeed ( WOLF ) are expected to report their quarterly results after equities stop trading today.Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar .
On the Horizon
Thursday, August 18
Eurozone: CPI – July US: Weekly Initial & Continuing Jobless Claims US: Philadelphia Fed Index – August US: Existing Home Sales – July US: Weekly EIA Natural Gas Inventories Friday, August 19
Japan: CPI – July UK: Retail Sales – July Germany: PPI – July Thought for the Day
“Knowledge isn’t power until it’s applied.” ~ Dale Carnegie
Disclosures
Cisco (CSCO) is a constituent of the Tematica BITA Digital Infrastructure & Connectivity Index Lowe’s (LOW), Target (TGT), Walmart (WMT) are constituents of the Tematica Research Thematic Dividend All-Stars Index .
