US index futures are all up about 0.5% to start the trading week as investors consider what the failed assassination attempt on former US President Trump over the weekend could mean for the November Presidential Election result and the prospects of political unrest between now, then and beyond. The Republicans are holding their National Convention this week from today through Thursday.
Overseas markets, meanwhile, are selling off in the wake of disappointing economic news out of China where Q2 GDP (4.7% vs street 5.1% and previous 5.3%) and June retail sales (2.0% vs street 3.3%) came in well below expectations. Chinese industrial production beat the street but still slowed from last month as well. The Hang Seng dropped 1.5% on this news, while the Nikkei fell 2.4%. China sensitive Copper and US Crude Oil are down 0.7% and 0.3% respectively. Natural Gas is down 2.40%. Gold is up 0.2%. Cryptocurrencies are bouncing back with Bitcoin and Ether both up more than 4% this morning.
The US 10-year treasury note yield is up slightly ahead of today’s speech by Fed Chair Powell. Speculation on a September Fed rate cut ramped up last week following a slightly improved US inflation report. Investors may look to Powell today for hints on whether this is an increasing possibility or not. Tomorrow brings US retail sales. The rest of the week is dominated by retail sales and inflation reports for Canada and the UK, US housing market data, and a European Central Bank meeting on Thursday.
Earnings season got off to a rough start with several big US banks and Delta Air Lines selling off in the wake of mixed earnings reports. This suggests that the market rally of recent months has built high expectations and we may see some profit-taking against news this earnings season. Today, Goldman Sachs and Blackrock are both up less than 1.0% in premarket action despite both companies beating expectations. Later this week, earnings reports are due from Netflix*, Bank of America, American Express*, Morgan Stanley, and others.
*Shares of Netflix and American Express are held in portfolios managed by SIA Wealth Management.