US stocks were choppy as participants digested data, earnings and tech-related headlines - Newsquawk Asia-Pac Market Open

US stocks were mixed in choppy trade as participants digested soft economic data, various stock stories and the latest earnings releases, while the Nasdaq peaked at midday in New York as Apple surged to ATHs after a report that it was racing to develop its own generative AI tools to catch OpenAI, but the details were thin and the news ultimately had a negative effect on the tape with competitors.
USD strengthened in which the DXY gained a firmer footing after having recently reclaimed the 100.00 level and was unfazed by the softer-than-expected US Building Permits and Housing Starts data.
Looking ahead, highlights include Japanese Trade Data, New Zealand NAB Quarterly Business Confidence, Australian Employment Change & Unemployment Rate & PBoC Loan Prime Rate.

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Highlights include Japanese Trade Data, New Zealand NAB Quarterly Business Confidence, Australian Employment Change & Unemployment Rate & PBoC Loan Prime Rate.

US TRADE

US stocks were mixed in choppy trade as participants digested soft economic data, various stock stories and the latest earnings releases, while the Nasdaq peaked at midday in New York as Apple surged to ATHs after a report that it was racing to develop its own generative AI tools to catch OpenAI, but the details were thin and the news ultimately had a negative effect on the tape with competitors.
SPX +0.24% at 4,565, NDX -0.09% at 15,826, DJIA +0.31% at 35,061, RUT +0.45% at 1,984.
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NOTABLE HEADLINES

Apple (AAPL) created an internal ChatGPT-style bot for employees and is building a large language model AI framework dubbed ‘Ajax’ with the Co. racing to develop its own generative AI tools to catch OpenAI, according to Bloomberg.

AFTER-MARKET EARNINGS

IBM (IBM) Q2 2023 (USD): Operating EPS 2.18 (exp. 2.01), Revenue 15.48bln (exp. 15.57bln)
Tesla (TSLA) Q2 2023 (USD): Adj. EPS 0.91 (exp. 0.82), Revenue 24.93bln (exp. 24.48bln)
United Airlines Holdings (UAL) Q2 2023 (USD): Adj. EPS 5.03 (exp. 4.04), Revenue 14.18bln (exp. 13.91bln)
Netflix (NFLX) Q2 2023 (USD): EPS 3.29 (exp. 2.86), Revenue 8.19bln (exp. 8.29bln); Streaming paid net additions +5.89mln (exp. +2.07mln).

DATA RECAP

US Building Permits Number (Jun) 1.44M vs. Exp. 1.49M (Prev. 1.496M)
US Housing Starts Number (Jun) 1.434M vs. Exp. 1.48M (Prev. 1.631M, Rev. 1.559M)

US Treasuries bull-flattened in choppy trade with softer UK CPI data and falling US Housing Starts the data highlights, while a weak 20yr auction failed to cap the afternoon recovery.

USD strengthened in which the DXY gained a firmer footing after having recently reclaimed the 100.00 level and was unfazed by the softer-than-expected US Building Permits and Housing Starts data.
EUR was marginally pressured against the firmer dollar and struggled to hold on to the 1.1200 status despite the hawkish-leaning rhetoric from ECB's Nagel and Simkus.
GBP underperformed its G10 counterparts with GBP/USD sliding beneath the 1.3000 handle in the aftermath of the softer-than-expected inflation data from the UK.
JPY gave up ground to the strengthening dollar which lifted USD/JPY to within a whisker of the 140.00 territory where it then hit resistance.

Crude was choppy and ultimately settled lower with initial strength unwound into the NY afternoon after bearish inventory data and amid a firmer dollar.
US EIA Weekly Crude Stocks w/e -0.7M vs. Exp. -2.5M (Prev. 5.9M)
Russian oil exports for July are set at 370k BPD below the quarterly plan for the month as Russia tightens supply even before the pledged 500k BPD reduction in August alongside Saudi action, according to Reuters citing sources.

Russian President Putin said Russia showed miracles of tolerance when it renewed the grain deal and that Western grain deal partners did not intend to implement the deal, while he added if all conditions are met, Russia will immediately return to the grain deal and stated that a continuation of the grain deal in the form which it existed had lost all meaning.
Russian Defence Ministry said it will consider all ships travelling to Ukrainian ports in the Black Sea as potential carriers of military cargoes from July 20th and some areas of the Black Sea have been temporarily declared dangerous for navigation, according to RIA.
South African government announced that Russian President Putin will not attend the BRICS summit.
South Korean President Yoon said North Korea's nuclear provocation will lead to the regime’s end.
US sanctioned 14 Iraqi banks in a crackdown on Iran’s dollar trade after uncovering information that they engaged in money laundering and fraudulent transactions in which some may have involved sanctioned individuals, according to WSJ.

NOTABLE APAC HEADLINES

China's Commerce Ministry said China's foreign trade faces an extremely severe situation in H2 and they are continuing to attract foreign investment on policies.
China's State Council issued guidelines for the promotion of the private economy and vowed to boost the private economy and protect businesses. China will continue to break down barriers to market access, while it will set up traffic lights for capital and improve the rules of capital behaviour systems. Furthermore, it will support share listings and bond sales of private firms, as well as support private enterprises in expanding overseas business.
US Climate Envoy Kerry said the US and China had long and detailed talks, while there were lots of agreed issues, but others will take more time and they are to work intensively in the weeks ahead.

NOTABLE HEADLINES

BoE's Ramsden said the MPC will continue to monitor closely indications of persistent inflationary pressures in the economy and if there is evidence of further persistent pressures then more tightening would be required, while he noted CPI inflation has begun to fall significantly but remains too high. Ramsden also commented that they cannot rule out that the next interest rate cycle will get back to the zero lower bound and need headroom for new QE.
UK proposed draft rules forcing big companies to demonstrate they have enough profits to pay dividends and other payouts. UK business and trade department said the draft rules, which need approval from parliament, would come into force at the start of 2025 and will apply to companies with at least 750 employees and an annual turnover of GBP 750mln or more.
ECB's Nagel said inflation is a greedy beast and it would be a mistake to ease up on the fight too soon and cut interest rates again prematurely, according to RND.
ECB's Simkus said there is a clear need to hike in July and the option for a hike should be discussed in September and would not be surprised if the ECB continues to hike in September, while he added the risk of doing too little is still higher than the risk of doing too much.

DATA RECAP