Here is what you need to know.
The Bank of Japan says there won’t be “helicopter money.” Bank of Japan Governor Haruhiko Kuroda says the central bank won’t use “helicopter money” in its battle against deflation, Reuters reports, citing the BBC. While it was later revealed the interview took place in mid-June, Reuters says the comments are similar to those made last week by a senior advisor to prime minister Shinzo Abe. . The Japanese yen is stronger by 0.5% at 106.34 per dollar.
The ECB meets. The European Central Bank is expected to hold its key interest rate unchanged at 0.00%. Market participants will be looking for clues as to what the central bank plans to do about both the bank troubles in Italy and the UK’s decision to exit the European Union. “Draghi will likely nurse market concerns about the ECB’s monetary policy by using a dovish tone and possibly pointing to further action later this year,” Florian Hense, an economist at Berenberg, told Reuters. “For the ECB it is important to keep its options open.” The ECB’s decision will cross the wires at 7:45 a.m. ET and Mario Draghi’s press conference will begin at 8:30 a.m. ET. The euro is unchanged at 1.1017.
The Dow has a nine-day winning streak. For only the seventh time since 1980, the Dow Jones Industrial Average has gained in nine straight sessions. So what does it mean for the performance over the next six months? The past six occurrences all led to even higher prices with an average gain of 10.41%. The biggest gain was an additional 22.05% and the smallest gain was 4.72%.
Britain’s retail sales disappointed. Retail sales fell 0.9% month-over-month in June, according to data from the Office for National Statistics. The drop was the biggest in nine months with officials fingering the weather, not the Brexit vote, as the reason for the disappointment. Data was collected from the five-week period ending July 2, so it’s too early to tell what impact, if any, was a result of the UK voting to exit the European Union. The British pound is down 0.1% at 1.3194.
Elon Musk reveals his “master plan.” Musk’s plan is aimed at speeding up the end of the fossil fuel era. He wants Tesla to build solar roofs that have integrated battery storage. Additionally, he sees Tesla moving into “all major segments” of the auto market, and cars with self-driving technology that is “ten times safer” than manual driving. Musk also envisions a car-sharing program that allows Tesla owners to earn money by lending out their vehicles. No timeline to implement the ideas was given.
American Express had a big quarter thanks to Costco. The financial services company earned an adjusted $2.10 per share on revenue of $8.2 billion. While adjusted EPS beat the $1.95 that Wall Street was expecting, revenue was a bit below the $8.46 billion that analysts were looking for. American Express’ profit climbed 37% year-over-year thanks in part to the sale of its Costco co-brand portfolio to Citi for $1.1 billion. “With our completion of the Federal Reserve’s annual stress test, we now plan to increase the quarterly dividend by 10 per cent to 32 cents per share and repurchase up to an additional $3.3 billion shares over the next four quarters,” American Express CEO Kenneth Chenault said in the earnings statement. Amex sees EPS of between $5.19 to $5.49 for 2016, the high end of the range.
Intel’s biggest driver of growth is slowing. The company announced earnings of $0.59 per share, topping the $0.53 that analysts were expecting. Revenue edged up 3% YoY to $13.53 billion, which was a whisker shy of the $13.54 billion Bloomberg consensus. The big news in the report was that Intel’s data group center saw growth slow to 5% YoY. It expects growth of 15% for the full year. “I think that investors are a little spooked by the data center numbers. Intel’s sticking to double-digit growth for the year, but it only showed 5% growth this quarter,” Patrick Moorhead, principal analyst of Moorhead Insights & Strategy, told Business Insider. Intel shares were down about 3% in after-hours trade.
Stock markets around the world are mixed. Japan’s Nikkei (+0.8%) paced the gains in Asia and Britain’s FTSE (-0.3%) leads markets lower in Europe. S&P 500 futures are down 1.25 points at 2166.25.
Earnings reporting is turned up a notch. Domino’s Pizza, DR Horton, Dunkin Brands, General Motors, Pulte Group, and Southwest Airlines are among the names reporting ahead of the opening bell. AT&T, Aetna, Chipotle Mexican Grill, Schlumberger, Starbucks, and Visa highlight the names releasing their quarterly results after markets close.
US economic data picks up. Initial jobless claims and the Philly Fed will be released at 8:30 a.m. ET before existing home sales are announced at 10 a.m. ET. Natural gas inventories are due out at 10:30 a.m. ET. The US 10-year yield is up one basis point at 1.59%.