Andrew Kelly | Reuters Here are the most important news investors need to start their trading day:
1. Stocks are looking for momentum
US stock markets were on track to open higher on Monday morning after three consecutive winning weeks for the S&P 500, which is recovering from its worst first half in more than 50 years. The Nasdaq also had a profitable week as investors digested the latest jobs report, which was much stronger than expected, as well as the chances of future rate hikes from the Federal Reserve, which is in inflation-fighting mode. Markets will also get a fresh reading on inflation this week: The latest consumer price index is due out on Wednesday, and economists expect it to show a slight slowdown in the tepid inflation rate. Watch live stock market updates here.
2. Senate passes climate and health care package
U.S. Vice President Kamala Harris smiles during her speech at the NAACP National Convention in Atlantic City, New Jersey, U.S., July 18, 2022. Hannah Beier | Reuters Senate Democrats, riding on Vice President Kamala Harris’ tie amid unanimous Republican opposition, eventually approved a reconciliation package that includes provisions to fight climate change and strengthen health care. The $430 billion bill ended up far short of what President Joe Biden and Democratic leaders were seeking, but the party is touting it as a huge victory ahead of this fall’s midterm elections. The party in power tends to lose seats in Congress during a president’s first term, and with inflation raging and Biden’s approval ratings low, Democrats risk ceding control of both houses. The House is set to vote on the legislation and send it to Biden later this week. Read the NBC News report here.
3. Fed governor sees more big rate hikes
Federal Reserve Bank Governor Michelle Bowman makes her first public remarks as a Federal policymaker at an American Bankers Association conference in San Diego, California, February 11, 2019. Ann Sapphire | Reuters The Fed is relatively fresh off its second consecutive three-quarter rate hike, but we expect more, according to Fed Governor Michelle Bowman. “My view is that similar increases should be on the table until we see inflation coming down in a consistent, meaningful and sustained way,” she said in remarks over the weekend. Bowman, a voting member of the central bank’s rate-setting Federal Open Market Committee, said high inflation is a bigger threat to the economy than slowing growth. If prices continue to rise as they have in recent months, he said, “it could lead to further easing of the economy, risking a prolonged period of economic weakness combined with high inflation, as we experienced in the 1970s.”
4. Huge loss for SoftBank
SoftBank founder Masayoshi Son said there was “confusion in the world” and markets due to a number of factors including Russia’s invasion of Ukraine, high inflation and central bank moves to raise interest rates. Those factors contributed to a record annual loss at SoftBank’s Vision Fund. Kentaro Takahashi | Bloomberg | Getty Images High interest rates have weighed on tech risk stocks this year, and SoftBank’s tech-focused Vision Fund is feeling the pinch. The Japanese conglomerate said on Monday that the Vision Fund posted a loss of 2.93 trillion yen ($21.68 billion) in the most recent quarter – the second-biggest quarterly loss for the fund. Overall, the company posted a record quarterly loss after turning a profit in the same quarter last year. SoftBank founder Masayoshi Son had already warned during the spring that the company would be more “conservative” with its investments after a huge loss in the previous financial year.
5. China sets new military drills near Taiwan
A video screenshot shows a missile fired by the Chinese People’s Liberation Army PLA’s Eastern Theater Command missile force, targeting designated sea areas east of Taiwan Island, Aug. 4, 2022. Xinhua News Agency | Xinhua News Agency | Getty Images China is not done with its offensive exercises near Taiwan. China’s military said on Monday it would conduct new air and sea operations near the self-ruled island, which China claims as its own. China’s military has just completed several days of drills – its largest ever, according to Reuters – to protest House Speaker Nancy Pelosi’s visit to Taiwan. The drills included the launch of 11 short-range ballistic missiles, while warships, fighter jets and drones made several maneuvers around the island. – CNBC’s Yun Li, Jeff Cox and Arjun Khrapal contributed to this report. — Join the CNBC Investing Club now to follow Jim Cramer’s every stock move. Follow the broader market action like a pro on CNBC Pro.
