by Geoffrey Smith
Investing.com — JPMorgan has kicked second-quarter earnings season into gear, while productive price inflation data and jobless claims numbers will add to Wednesday’s inflation drama. Stocks are set to open lower, although overnight earnings from sector bellwethers Uniqlo and Taiwan Semiconductor were better than expected. Italy’s stocks and bonds fall as Mario Draghi threatens to step down as prime minister, and Celsius Network eventually files for bankruptcy protection. Here’s what you need to know about the financial markets on Thursday, July 14.
1. Bank Earning Season Begins
Earnings season in the US is in full swing with JPMorgan’s (NYSE:) results released. The statement from America’s largest bank will have a lot to unpack, which is usually a bellwether for the fate of the broader economy.
Investors will want to see how far CEO Jamie Dimon’s apocalyptic warnings for the world economy translate into new provisions and a real write-down against bad debts. However, depending on how well the bank navigated the unusually volatile quarter, the bank’s trading results could turn watery. Analysts expect earnings to fall about 23% over last year to $2.94 per share.
Also reporting later would be Morgan Stanley (NYSE:), which doesn’t have the same kind of Main Street loan portfolio.
2. PPI will add twist to the inflation narrative
More economic data could add to speculation of a further move from the Federal Reserve – or perhaps calm –.
Wednesday’s 41-year high of 9.1% has put market participants on alert for a possible 1 percent rise when they meet the end of the month, sparked by the Bank of Canada’s decision to go for a full point hike, just a few of the US numbers. hours later.
A further 0.8% increase is expected in June, indicating that there is no easing of pipeline inflation pressures, even if the base should remain ticked by impacts. The weekly will show whether the labor market is cooling down, or whether people who are losing their jobs are still moving directly to new ones. Both are due at 8:30 AM ET.
3. Stocks set to open lower despite strong overnight reports
After holding surprisingly well in the face of another shocking inflation report on Tuesday, US stock markets are set to open lower again. However, JPMorgan’s earnings and economic data have a big impact on actual opening levels.
As of 6:20 a.m. ET it was down 316 points of 1.0%, while 1.1% were down, and were down 0.9%.
Overnight, Uniqlo owner Fast Retailing (TYO:) and Taiwan Semiconductor (NYSE:), the world’s largest contract silicon chip maker, posted better-than-expected earnings. Swedish telecommunications network equipment maker Ericsson (BS:) however disappointed.
Other stocks that have come into focus later include Netflix (NASDAQ:) and Microsoft (NASDAQ:) following news of their involvement in putting ads on some of the streaming giant’s content.
4. Draghi faces major confidence vote as Italian yields surge
Europe’s energy crisis is turning into an economic crisis and in some places a political one.
Italian bond yields rose and Prime Minister Mario Draghi threatened to step down if the 5 Stars Movement (M5S) left his coalition government. Draghi’s presence at the helm of Italian politics has been a calming factor for markets, while first the pandemic then the Ukraine war hit an economy troubled by high debt and chronically low growth. Then there is the threat of higher interest rates from the European Central Bank, which is set to make access to public finance even more difficult.
The M5S is set to abstain from the government’s trust vote that takes place in the Senate from 8 a.m. ET. Draghi has threatened to resign if he does so. If he does, the ball will once again be in the court of aging President Sergio Mattarella.
5. Bankruptcy Protection for Celsius Network Files
Celsius Network, one of the world’s largest cryptocurrency lenders, succumbed to the inevitable and was unable to recover the debt to the collapsed hedge fund 3 Arrow Capital.
The news leaves Celsius’ 1.7 million users, who have nothing compared to the deposit insurance received by customers of regulated banks, in a poor position to recover any of their money.
Celsius is by far the highest profile casualty of the selloff in crypto. Celsius’ own, already effectively worthless, fell 18% as a speculative short squeeze. The more established crypto asset was largely unchanged, however, trading flat at $19,798 and up 1.5% at $1,087.