Equities rise, dollar slips as all eyes on US inflation

US equities rose for a second straight day Tuesday, as investors prepared for an inflation update expected to show price pressures are easing, though probably not by enough to ward off another interest rate increase at the Federal Reserve meeting later this month. The Dow Jones finished over 316 points higher, the S&P 500 gained nearly 0.7%, while the Nasdaq added 0.5%. Energy companies led sector gainers yesterday as oil futures extended a rally, with the benchmark WTI contract rising more than 2.5% and touching a 2 ½ month high on signs of lower Russian production. Retail and transportation shares were also among the strongest sectors, while the healthcare and semiconductor sectors slipped. European equities also closed higher yesterday, with the Euro Stoxx 50 index up another 0.7%, to 4,287 points. 

Summary for 12.07.2023 

• Most Asian equities rose on Wednesday amid speculation over peak US interest rates ahead of key inflation data, while weak economic readings spurred a heavy dose of profit-taking in Japanese markets. Hong Kong shares were the key outliers for the day, with investors remaining heavily biased towards Chinese technology giants on bets that the country was easing its harsh rhetoric against its biggest internet companies.  
• European and US shares are set to edge higher as traders await US inflation data that will help shape the outlook for Fed rates.  
• Oil prices rose this morning, with Brent coming close to bullish levels as the dollar sank ahead of key inflation data, while Chinese stimulus measures and a potential build in US stockpiles were also in focus.  
• The Reserve Bank of Australia will slash the number of times it meets in a year to set interest rates while making the meetings longer as part of a sweeping overhaul into how the central bank decides the country’s monetary policy, governor Philip Lowe said in a speech Wednesday. From 2024, the board will meet eight times a year, rather than eleven. Those meetings will now run over two days, notably longer than the current ones. 
• Microsoft moved closer to finalising its $69 billion bid for Activision, winning a court fight with US regulators as well as an unprecedented reconsideration from the UK’s Competition and Markets Authority for the largest gaming deal ever. The FTC is leaning toward appealing, a person familiar said. Separately, there were reports that Microsoft will eliminate additional jobs after cutting about 10,000 earlier this year. 
• JPMorgan Chase shares rose 1.7% yesterday after Jefferies upgraded the equity to “buy” from “hold,” citing a stable earnings outlook and an outlook for strong returns on equity. 
• Daimler Truck raised its profit and revenue guidance due to an easing of supply chain constraints, stronger demand in its core markets and the after-sales business. The company has updated its guidance for adjusted returns on sales in its industrial business to a range of 8.5% to 10% from 7.5% to 9% previously for the financial year 2023.