TodayEquity futures are up this morning as investors pore through more corporate earnings reports a day after the market failed to sustain a sharp rally. A stock rally in the U.S. lost steam yesterday with all major indexes finishing the day down after hitting session highs of at least 1%. The late-day pullback follows a report that Apple plans to slow hiring and spending on growth next year to deal with a possible downturn. Canadian equities however managed to rise for a second day in a row, led by energy.
Now that the big U.S. banks have reported their earnings, what are they telling us about the state of the economy? Both JP Morgan and Citigroup suspended share buybacks to meet higher capital requirements, allowance for loan losses at Wells Fargo rose, and Goldmans Sachs said yesterday that it would “slow hiring velocity” as part of cost cutting measures. It’s not all gloomy as banks continue to enjoy higher interest margins and loan growth, however it seems they are taking the precautionary route to ready their balance sheets should the economy take a turn. So far, roughly 8% of S&P 500 companies have reported calendar second-quarter earnings. Of those companies, about two-thirds have beaten analyst expectations.
Regulators in China are looking to defuse tensions between property developers and buyers. New guidance from the China Banking and Insurance Regulatory Commission was issued recently in response to mortgage payment boycotts and is aimed at expediting the delivery of homes to buyers. China is looking to address the concerns of buyers following protests at 100 housing projects across 50 cities, threatening to spread the real estate crisis to the banking system. Despite recent protests. the housing market in China has seen signs of stabilizing in recent months, with some analysts calling for a turnaround in the second half of the year.
The federal government released potential designs for an emissions cap on the oil and gas industry yesterday, the next step in the government’s plan to cut emissions by 42% by 2030. A discussion paper outlined two regulatory options, a cap-and-trade system that would see a set number of allowances distributed to all oil and gas facilities and a steeper carbon price to drive down emissions. The second option would require provincial governments with their own carbon pricing systems to make the same changes. Officials stated that both options could include some flexibility to reflect the timelines of major emission reduction projects.
Following a rough second quarter for the asset class, the total market cap for crypto assets climbed above $1 trillion yesterday, after remaining below this level for over five weeks. The rise in crypto comes as three key crypto bankruptcy proceedings get underway and investor expectations around Ethereum's long-awaited upgrade continue to build. The Bitcoin Fear and Greed Index, an indicator crypto traders use to judge market sentiment around crypto’s largest coin has improved three-fold since June 18, when it registered the lowest level seen in the past four years. However, the mood gauge still hovers at extreme fear levels.
The U.K. is bracing for temperatures to hit 40C for the first time this week, with officials urging the public to stay at home. The government declared a national emergency alert as temperatures were forecast to surpass the previous record of 38.7 set in July 2019. This comes as much of Europe bakes in a heatwave that has pushed temperatures into the mid 40s in some regions, with wildfires raging across Portugal, Spain, and France. Similarly, in the U.S. record setting temperatures has hit the Southern parts of the U.S and expected to move eastward. However, higher energy prices have made it more challenging for some residents to stay cool as electricity prices have risen 12% in the last year making air conditioners more expensive to maintain.
Diversion: Spiderman origin story.