Stocks gain ahead of big bank and tech earnings

  • Dollar wavers post Chinese data
  • 10-year Treasury yield down 2.3 points to 3.809%
  • JPMorgan extends gains post Friday’s earnings

US stocks are slightly higher after some disappointing Chinese GDP data raised concerns about the global economy but supported the argument that disinflation pressures are firmly in place.  The disinflation story won’t be going away after Ford announced some big cuts with their electric F-150 truck prices.  The disinflation process should remain intact and that should support calls that the Fed will be done after one more rate hike at the end of this month. 

Wall Street is bracing for some big bank earnings that might not mirror what JPMorgan said last week. The key to the stock market remains the mega-cap tech trade and many traders won’t do any major positioning until we hear from Netflix and Tesla.

China’s slowdown dragged European stocks.  Another record high for China’s youth unemployment won’t do any favors for demand for European goods in the coming months.  China still expects growth around 5% to be reached but that will be hard unless the PBOC delivers more stimulus. 

US Data

The first Fed regional survey showed that NY state factory activity managed to stay in expansion territory, while prices paid fell to the lowest levels since August 2020.  The headline general business conditions index dropped 6 points to 1.1. The manufacturing sector is expected to rebound here despite a slight rise with new orders and as shipments expanded.  The report noted that optimism remained subdued and that capital spending will remain soft. 

The rest of the Fed regional surveys will likely show overall weakness in the manufacturing sector, along with optimism that pricing pressures are easing.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya