Five things you need to know before the market opens on Tuesday, July 11:
1. -- Stock Nudge Higher As Inflation Signals Ease
U.S. equity futures edged higher Tuesday, while Treasury bond yields extended recent declines and the dollar slipped lower on foreign exchange markets, as investors looked to supportive moves from China, as well as dovish central bank signaling, ahead of tomorrow's key inflation reading.
The S&P 500 snapped a three-day losing streak Monday with a modest 0.24% gain, powered in part by a pullback in Treasury yields linked to encouraging comments from Federal Reserve officials that suggested the central bank was near to the end of its rate hiking cycle.
Data from the New York Fed also indicated consumer inflation expectations fell to the lowest in more than two years, matching figures from recent PCE releases, suggesting that tomorrow's June inflation report could provide a further cooling of consumer price pressures in the world's biggest economy.
Benchmark 2-year Treasury note yields, the most sensitive to interest rate changes, fell to 4.830% in overnight trading, while 10-year paper was pegged at 3.952%.
The U.S. dollar index, which tracks the greenback against a % basket of six global currencies, was marked 0.18% lower at 101.788.
CME Group's FedWatch, meanwhile, continues to suggest a 92.4% chance of a 25 basis point rate hike later this month in Washington, with the odds of a follow-on move in November slipping to around 33%.
On Wall Street, futures contracts tied to the S&P 500 were indicating a 7 point opening bell gain while those linked to the Dow Jones Industrial Average were priced for a 33 point advance. Nasdaq futures were up 38 points.
In overnight trading, the MSCI ex-Japan index rose 1.43% into the close of trading following moves by China's central bank to extend support for the nation's property sector for another year, while encouraging banks to extend outstanding loans until 2025, in an effort to revive the country's post-Covid growth prospects.
The Europe-wide Stoxx 600 was marked 41% higher in early Frankfurt trading, and largely tracking Wall Street futures, while Britain's FTSE 100 slipped 0.14% in London.
2. -- Amazon Prime Day Kicks Off With Steep Consumer Discounts
Amazon (AMZN) -) shares edged higher in pre-market trading as the online retail giant kicked-off its two-day "Prime" shopping event with steeper discounts on a range of goods amid a pullback in consumer demand.
Amazon, which hauled in more than $12 billion in overall sales revenue from last year's 48-hour event, continues to face both elevated levels of inflation and muted consumer spending, linked in part to concerns for a near-term recession. Rival retailers such as Walmart (WMT) -), which began its own "Plus Week" offerings on Monday, as well as electronics retailer Best Buy (BBY) -) are also pressuring Prime spending.
Earlier this year, Amazon forecast operating income of between $2 billion $5 billion on revenues in the range of $127 billion to $133 billion for the three months ending in June, with official earnings figures expected in late July.
Amazon shares were marked 0.4% higher in pre-market trading to indicate an opening bell price of $127.65 each.
3. -- Uber Shares Edge Lower on Reports of CFO Departure
Uber Technologies (UBER) -) shares moved lower in premarket trading following reports that group CFO Nelson Chai will step down from the ride-sharing group over the coming months.
Bloomberg reported that Chai, who joined the group in 2018 and helped managed its $82.4 billion IPO the following year, has told CEO Dara Khosrowshahi that he intends to leave the group, but has not set a firm date for his departure.
Chai is seen as a steady hand at Uber, which has only just begun generating consistent positive cash flows, despite ongoing operating losses, and hinted earlier this year that could consider buying back some of its shares, or even paying a dividend, as its business growth advances.
"Over the next few quarters, we will evaluate returning excess capital to shareholders as our cash flows ramp, and with any potential further monetization of our equity stakes over the long term," Chai told investors in Uber's quarterly letter to shareholders on May 1.
Uber shares were marked 0.65% lower in pre-market trading to indicate an opening bell price of $42.50 each.
4. -- Meta Shares Higher As Threads Looks To Monetization
Meta Platforms (META) -) shares nudged higher in pre-market trading following a report that suggested the social media group would allow branded content onto its fast-growing Threads platform.
Axios reported that Meta is planning to bring branded content tools to Threads, the microblogging platform it launched last week, a move that would give advertisers that chance to pay for promotion on the app itself, which doesn't allow for direct ad sales.
Meta CEO Mark Zuckerberg said Monday that Threads topped 100 million users this week, just five days after its launch, beating the all-time record for new sign-ups previously set by Microsoft (MSFT) -)-backed OpenAI's ChatGPT.
Monetization of those subscriber gains, however, remains a challenge, and analysts have differed in their assumptions as to how the app's growth will ultimately benefit Meta's top and bottom lines.
Meta shares were marked 0.3% higher in pre-market trading to indicate an opening bell price of $294.99 each.
5. -- President Biden Repeats 'Unwavering' NATO Commitment Ahead of Summit
President Joe Biden said the U.S. commitment to NATO 'has not wavered' as he prepared for a two-day summit with alliance leaders amid intense debate over the potential membership of Ukraine.
NATO leaders are gathering in the Lithuanian capital of Vilnius for two days of meetings focused on European security, and ultimately expansion of the 74-year-old alliance, following Russia's invasion of Ukraine in February of last year.
Biden, however, has expressed reservations over Ukraine's membership, linked to concerns it could draw the U.S. into armed conflict with Russia under existing security guarantees.
Sweden's membership, however, looks assured following support from Turkey and President Tayyip Erodogan, who agreed to forward the Nordic nation's bid to his parliament for formal approval.
Turkey's decision also opens the door for the sale of around $20 billion in Lockheed Martin (LMT) -)-made fighter jets, pending the ultimate backing of the bi-partisan Senate Foreign Relations Committee.
