Morning Bid: Markets oddly serene
The new highs for the S&P500 and Nasdaq on Monday were less surprising given all that, even though the daily moves were marginal and futures basically flat ahead of Tuesday's bell.
There's been little new on the trade tariff front, even though European Union warnings late Monday of its willingness to use a range of retaliatory measures if faced with higher levies dampened the equity market mood somewhat on Tuesday.
Relief that weekend Japanese upper house elections did not force an immediate resignation of Prime Minister Shigeru Ishiba saw the yen pop higher on Monday and 10-year Japanese government yields fell sharply as Tokyo markets reopened on Tuesday. The Nikkei lost early gains.
The drop in U.S. and European short- and long-term Treasury yields on Monday was perhaps more surprising, pulling the dollar back down in the process as the focus switched to Japan.
While some of that was given back on Tuesday, the buoyancy of the long end of the U.S. curve was remarkable given Fed independence concerns.
Even though Fed policymakers are in a blackout period on policy statements ahead of next week's meeting, embattled Fed boss Jerome Powell is due to give opening remarks to a Fed regulatory conference on Tuesday.
All of which brings us back to the Fed poser, the political pressure on the central bank to accelerate interest rate cuts and threats to Powell's position over anything from historical Fed policy performance and its involvement in non-monetary issues to how he managed rennovations of the headquarters.
Chart of the day
Reuters is tracking how companies are responding to the threat posed by U.S. President Donald Trump’s tariffs. As of July 22, Reuters has counted 273 companies worldwide that have reacted to the tariffs in some manner. The estimated cost to the companies stood at over $34 billion, as of end May. Our tally is based on various sources, including quarterly financial reports, interviews and statements from company officials.
Today's events to watch
* Richmond Federal Reserve July business survey (10:00 AM EDT)
* Federal Reserve Chair Jerome Powell gives welcome remarks before hybrid "Integrated Review of the Capital Framework for Large Banks" Conference hosted by the Fed
* U.S. corporate earnings: Lockheed Martin, General Motors, Pentair, Paccar, Halliburton, Texas Instruments, Invesco, MSCI, Capital One, Equifax, Synchrony, Pultegroup, Danaher, Philip Morris, Sherwin-Williams, EQT, RTX, CoStar, Chubb, Intuitive Surgical, DR Horton, Interpublic, Baker Hughes, Enphase, Quest Diagnostics, IQVIA, Genuine Parts, KeyCorp
* UK finance minister Rachel Reeves testifies before House of Lords' Economic Affairs Committee
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(by Mike Dolan; editing by Timothy Heritage)
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