Five things you should know about Monday, August 1:
Stock Futures Fall As Cloudy Earnings and Economic Outlook Dominate
Stock index futures in the United States fell overnight after Wall Street had its best month since 2020, amid ongoing uncertainty about the economy's direction and whether earnings will continue to exceed expectations despite persistent inflation and rising interest rates.
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The price of West Texas crude fell by $1.30 a barrel, while bitcoin and other major cryptocurrencies fell by about 2%.
The Dow Jones Industrial Average gained 315.50 points, or 1%, to close at 32,845.13, marking the third day in a row; the S&P 500 gained 57.86 points, or 1.4 percent, to 4,130.29, marking the third day in a row; and the Nasdaq Composite gained 228.09 points, or 1.9 percent, to close at 12,390.69, marking the seventh day in a row.
According to Dow Jones Market Data, the Dow increased by 3%, the S&P 500 increased by 4.3 percent, and the tech-heavy Nasdaq increased by 4.7 percent. For July, the Dow improved 6.7 percent, the S&P 500 increased 9.1%, and the Nasdaq increased 12.3%, and the Nasdaq's best month since April 2020.
Following the gloomy first-quarter forecast, investors are penning bets on another massive Fed rate rise in September. CME Group's FedWatch predicts a near 80% probability of a 50-basis-point increase.
Treasury bond rates climbed a bit, with the 10-year benchmark Treasury trading up 0.02% at 2.661%. The U.S. dollar index, which tracks the greenback against a basket of six world currencies, was marked 0.43% lower at 105.909.
European markets were quiet on Monday as investors digested a fresh round of corporate earnings.
The region-wide Stoxx 600 index was 0.83% higher in early trading, putting the benchmark on pace for a July increase of around 7%.
Oil Futures Have Falled Ahead of a Key OPEC Meeting
Oil prices fell early on Monday as investors prepared for the OPEC and other major producers' representatives to meet on supply adjustments. This week
Brent crude futures fell by 63 cents, or 0.6 percent, to $103.34 a barrel in overnight trading. West Texas Intermediate crude in the United States was down 75 cents, or 0.7 percent, after falling to a session low of $97.55 in Asia.
Both contracts recovered more than $2 a barrel on Friday as risk appetite improved among investors. However, both Brent and WTI ended July with their second consecutive monthly losses for the first time since 2020, as soaring inflation and rising interest rates raise worries about a sluggish economy that would reduce fuel demand.
Analysts at ANZ report that gasoline sales to drivers in the United Kingdom are declining, and gasoline demand is still below its five-year average for this time of the year. For the first time since April, analysts have reduced their forecasts for average Brent prices to $105.75 a barrel and $101.28 for WTI.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, will meet on Wednesday to discuss September output.
OPEC+ has completely unwound record output cuts since the Covid-19 epidemic began in 2020.
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The new secretary general of the groups, Haitham al-Ghais, reiterated on Sunday that Russia's participation in OPEC+ is critical for the success of the agreement, according to Kuwait's Alrai publication.
According to Baker Hughes data, oil production in the United States continued to rise. In July, the number of rigs increased by 11 for a record 23 months in a row.
Alibaba is trying to keep its US listing intact.
Alibaba, a Chinese e-commerce behemoth, has announced that it will comply with US regulations and continue to maintain its listings in New York and Hong Kong.
Alibaba said on Monday that it has been added to the SECs list, indicating that its audits for the fiscal year ended March 31, 2022 would not be fully reviewed by the US Public Company Accounting Oversight Board.
If the PCAOB cannot fully inspect a U.S.-listed corporation's financial statements for three consecutive non-inspection years, the SEC must prohibit the company's securities from being traded on U.S. markets.
Alibaba said in a statement to the Hong Kong Stock Exchange on Monday that it would continue to monitor market developments, comply with applicable laws and regulations and maintain its listing status on both the NYSE and the Hong Kong Stock Exchange.
Alibaba was added to the SEC's list of Chinese enterprises at risk of being delisted for failing to meet auditing requirements on Friday. As a result, Alibaba's stock fell 11% in the Friday trading session.
The stock was down more than 5% on Monday in Hong Kong, but it recovered to trade around 2.2 percent.
The SEC recognizes public companies that have retained a registered public accounting company to prepare an audit report where the firm has a branch or office under the Holding Foreign Companies Accountable Act.
Starbucks is expected to report solid second-quarter earnings.
Starbucks (SBUX) - The Get Starbucks Corporation Report will release earnings on Tuesday that are expected to show second-quarter revenue of $8.1 billion and per-share earnings of $9.76.
The latest from the coffee chain on store closings, a growing unionization push, and the analysis on consumer demand at the higher price levels are all seen as key points that may have a ripple effect on the consumer sector.
Evercore ISI is optimistic ahead of the report, citing a faster-than-expected rebound in China during the quarter that will aid guidance for the rest of the year. The business believes the chain has some pricing leverage that will help boost the bottom line.
Starbucks has stated that it remains a significant transaction growth opportunity, according to previewed analyst David Palmer. Palmer and his colleagues anticipate further improvements in transaction trends in 2023 as the company improves its bar configuration and technology in order to increase production capacity.
Google Launches a "Simplicity Sprint" in an Effort to Increase Worker Productivity
In an effort to boost employee concentration, Google is launching a new effort called Simplicity Sprint.
Get Alphabet Inc. Report-ownedcompany had its regular all-hands last Wednesday, and the tone was somewhat urgent as employees expressed concern about layoffs and CEO Sundar Pichai asked employees for input, according to attendees and related internal documentation viewed by CNBC.
Even with the amount of employees, Googles CEO Sundar Pichai told employees during the meeting.
Pichai opened, referring to the company's second-quarter earnings report released last Tuesday. It's clear we are facing a challenging macro environment with additional uncertainty ahead.
For the amount of employees, there are real concerns that our productivity as a whole isn't where it should be. We should think about how we can reduce distractions and elevate the bar on both product excellence and productivity.
The company reported disappointing earnings and revenue for the second consecutive quarter in a row. The revenue increase slowed to 13% in the quarter, compared to 62% the year before, as the company was benefiting from the post-pandemic reopening and consumer spending was increasing.
Pichai announced recently that it would slow the pace of hiring and investments until 2023, urging employees to work with greater urgency and hunger than they normally would on cooler days.