US STOCKS: Equity Roundup: Extend Gains Into Midday, IT Leads
Stocks firmer, near highs heading into midday, Information Technology and Communication sectors helping SPX eminis trade +39 (0.93%) at 4248.5; DJIA +233.77 (0.7%) at 33568.3; Nasdaq +153 (1.2%) at 12932.46. Modest buying outweighed sellers following deflationary data: Import (-1.4%)/Export (-13.3%) prices come out weaker than expected, UMich sentiment gains and mixed comments from Richmond Fed Barkin on CNBC.
- Technicals: Carry-over bid reinforces short-term bullish conditions and the extension maintains the positive price sequence of higher highs and higher lows. The focus is on 4272.35 next, a Fibonacci projection. On the downside, initial trend support is at 4080.50, the Aug 2 low. The 50-day EMA intersects at 4023.83 - a key support.
- SPX leading/lagging sectors: As noted, Information Technology sector +1.21%, lead by semiconductor and hardware makers, Communication Services +1.11% lead by Dish Network (DISH) +3.10% and Disney (DIS) +2.35% after midweek profit surge. Laggers: Energy (-0.42%), Consumer Staples (+0.42% and Industrials (+0.63%).
- Dow Industrials Leaders/Laggers: United Health (UNH) +8.72 at 541.58, Apple (AAPL) +2.46 at 170.95, McDonalds (MCD) + 2.40 at 261.68. Laggers: Chevron (CVX) -2.22 at 157.40, Johnson and Johnson (JNJ) -0.94 at 166.20, Visa (V) steady at 211.08.
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CANADA: Front-Loading Helps Trim GoC Post-BoC Sell-Off
- With “front-loaded” in vogue at the press conference, GoCs have unwound a large part of the initial lurch higher, with 2Y yields 3bps higher than after US CPI had been digested for +11.5bps on the day.
- The 10Y yield meanwhile sits almost unchanged on the day, having initially increased 4bps on the announcement before falling 8bps from a combination of the move in Tsys (now -2.5bps on the day) and BoC communication.
- 2s5s and 2s10s continue to sit near pre-pandemic lows at -15bp and -13bp respectively.
UK: Six Conservative Candidates Through To Next Round; Hunt, Zahawi Eliminated
Six candidates have made it through to the second round of the Conservative Party leadership contest, with Chancellor Nadhim Zahawi and former Foreign Secretary Jeremy Hunt being eliminated. The eventual winner is set to replace Prime Minister Boris Johnson on 5 September.
- The second round is due to take place tomorrow on Thursday 14 July.
- Badenoch 40, Braverman 32, Hunt 18, Mordaunt 67, Sunak 88, Truss 50, Tugendhat 37, Zahawi 25
EU: EU Foreign Policy Chief Borrell: EU Must Take Control Of Own Security
The EU's head of Foreign Policy, Josep Borrell has published a blog post calling on the EU to continue the transformation of the bloc's approach to security precipitated by Russia's invasion of Ukraine.
- Borrell says the EU "needs more deployable and inter-operable forces, ready to address the full spectrum of threats and risks. This means Europeans should spend more on defence... The fact that EU member states have said they will increase defence spending, by a total of around €200 billion, is most welcome."
- Borrell says "as important as procuring the necessary capabilities is the need to demonstrate our willingness to use them and act as a security provider."
- He concludes by saying there are a range of complex security threats facing the EU. He says the Strategic Compass will be central to the future of EU security.
- Borrell: "The overall point is clear: in a dangerous world, Europeans must assume their strategic responsibility, both within the EU and NATO – and give themselves the means and agility to do so."
- The full note can be read here: https://www.eeas.europa.eu/eeas/what-next-eu-secur...
