US Futures Rise as Traders Look Beyond Biden Exit: Markets Wrap

　　(Bloomberg) -- US tech stocks were poised to rebound from their worst week since April as investors looked beyond Joe Biden ending his presidential reelection campaign and mainly focused on earnings.

　　Market reaction to Bidens decision to quit the race and endorse Kamala Harris has so far been fairly muted, with a Bloomberg gauge of dollar strength slipping 0.1%, while the 10-year Treasury yield dropped two basis points. Democrats face the task of uniting around a new nominee just weeks before their convention, and must rapidly make up ground against Republican frontrunner Donald Trump.

　　Investors have been wagering on Trump‘s return to the White House for weeks, trimming holdings of long-term US bonds and buying Bitcoin, among other things. Now, they’re considering whether the “Trump Trade” is still on. The uncertainty may translate into volatility for markets, though for now, much attention is on earnings and the outlook for monetary policy.

　　“We are more focused on the cadence of the business cycle than on the outcome of the election,” said Morgan Stanley strategist Michael Wilson. “While markets have been digesting the rising odds of a Trump win, cyclical upside from here will likely be dependent on growth.”

　　S&P futures contracts climbed 0.5%, while rising Nasdaq 100 futures signaled a partial recovery from last week‘s 4% slump. Europe’s Stoxx 600 index rose more than 1%, snapping a five-day losing streak.

　　Investors have their hands full dealing with major earnings this week. Tesla Inc. and Alphabet Inc. will be the first of the “Magnificent Seven” to report on Tuesday. Analysts will likely press Elon Musk‘s electric-vehicle giant on the progress of its plans for robotaxis. And investors will delve into the details of Google’s parent revenue boost from artificial intelligence.

　　“Its a good reporting season so far, but you have to wonder what are the catalysts for the market to keep on rising further？” said Andrew Pease, global head of investment strategy at Russell Investments Ltd. “A lot of the hope is that we get this rotation away from the Mag Seven to the S&P 493 and the equal-weighted index starts to catch up with the cap-weighted. Asymmetry is still the watchword right now.”

　　Strategists at Morgan Stanley said companies in Europe have made a positive start to the second-quarter reporting season, with 29% beating profit expectations.

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　　Ryanair Holdings Plc failed to boost that track record Monday, however, falling as much as 16% after the Irish budget carrier cut its outlook for ticket prices in the crucial summer travel period. Rivals EasyJet Plc and IAG SA also fell.

　　In US premarket trading, CrowdStrike Holdings Inc. fell as much as 4.4% as Guggenheim Securities cut the rating on the stock to neutral from buy, after a faulty software update from the cybersecurity firm affected 8.5 million devices that rely on Microsoft Corp.s Windows operating system.

　　In Asia, stocks continued to be dragged lower by a weak tech sector. Chinese bonds were a highlight, gaining after the central bank cut a policy interest rate. The countrys stocks fell, as investors continued to express disappointment at a lack of strong stimulus measures from a recent major Communist Party meeting.

　　Elsewhere this week, traders will be focused on economic activity data in Europe, US second-quarter growth and a Bank of Canada rate decision.

　　Key events this week:

• Mexico retail sales, Monday
• Israeli Prime Minister Benjamin Netanyahu embarks on visit to Washington, Monday
• EU foreign ministers meet in Brussels, Monday
• Singapore CPI, Tuesday
• Taiwan industrial production, Tuesday
• Indias budget for fiscal year through March 2025, Tuesday
• Turkey rate decision, Tuesday
• Eurozone consumer confidence, Tuesday
• Alphabet, Tesla, LVMH earnings, Tuesday
• Malaysia CPI, Wednesday
• South Africa CPI, Wednesday
• Eurozone HCOB PMI, Wednesday
• UK S&P Global PMI, Wednesday
• Canada rate decision, Wednesday
• IBM, Deutsche Bank earnings, Wednesday
• ECB Vice President Luis de Guindos speaks, Wednesday
• Hong Kong trade, Thursday
• South Korea GDP, Thursday
• US GDP, initial jobless claims, durable goods, merchandise trade, Thursday
• G-20 finance ministers and central bankers meet in Rio de Janeiro, Thursday through Friday
• Bitcoin 2024 conference in Nashville, Thursday through July 27
• Japan Tokyo CPI, Friday
• US personal income, PCE price index, University of Michigan consumer sentiment, Friday
• Mexico trade, Friday

　　Some of the main moves in markets:

　　Stocks

• S&P 500 futures rose 0.5% as of 7:22 a.m. New York time
• Nasdaq 100 futures rose 0.8%
• Futures on the Dow Jones Industrial Average rose 0.1%
• The Stoxx Europe 600 rose 1.1%
• The MSCI World Index rose 0.1%

　　Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro was little changed at $1.0885
• The British pound rose 0.2% to $1.2935
• The Japanese yen rose 0.5% to 156.73 per dollar

　　Cryptocurrencies

• Bitcoin fell 0.5% to $67,387.57
• Ether fell 0.2% to $3,491.01

　　Bonds

• The yield on 10-year Treasuries declined two basis points to 4.22%
• Germanys 10-year yield declined one basis point to 2.46%
• Britains 10-year yield was little changed at 4.12%

　　Commodities

• West Texas Intermediate crude fell 0.5% to $79.72 a barrel
• Spot gold rose 0.1% to $2,403.57 an ounce