Good morning,
Markets in the U.S. and Europe are looking much brighter Tuesday after China averted another completely disastrous day of trading. The STOXX Europe 600 is up 1.32%. The S&P 500 futures are trending 0.6% higher ahead of the Federal Reserve’s two-day policy meeting, which starts Tuesday. After five straight days of losses, the markets are ready for a bit of recovery. China’s Internet search giant Baidu will not be taking part in the rally: The company reported disappointing 2Q earnings after the close and traded 8% lower.
Shanghai Composite manages to lose only 1.68% overnight after falling as much as 5%. Word is the pull back from the abyss was thanks to the China Finance Securities Corp., which has government approval to funnel money to brokerages. All on the Q.T. Shenzhen meanwhile also recouped some of its losses, ending the session down only 2.2%, while Hong Kong had a much better day as the Hang Seng Index managed to eke out a 0.62% gain. Over in Japan, the Nikkei Average slipped 0.1%.
On board Tuesday: Twitter earnings! The microblogging platform is trading about one-third below its peak and it needs a CEO. Wall Street is expecting earnings of $0.05/share on revenues of $487.38 million. Also reporting today: Ford, Gilead Sciences, Yelp, Panera, Pfizer, Merck, and U.S. Steel, UPS, and Anadarko Petroleum.
The S&P/Case-Shiller House Price Index should show a solid gain for May. The report comes at 9:00 a.m. ET. Bill McBride explains how to read the report and what to expect: “Although this is the May report, it is really a 3 month average of March, April and May prices. The consensus is for a 5.6% year-over-year increase in the Comp 20 index for April. The Zillow forecast is for the National Index to increase 4.0% year-over-year in May.” Calculated Risk
BP posts loss on Gulf settlement, lower oil prices, reduced production in the Gulf of Mexico. The oil giant posted a $5.8 billion loss in the second quarter. Operating profits slumped to $494 million from $4.7 billion a year earlier. BP also wrote off $432 for exploration in Libya, where political instability has upended many businesses. New York Times (paywall)
Consultant tells clients to pull money from Carlyle Group hedge fund. Cliffwater LLC has told clients who account for $800 million, or 14%, of funds in Claren Road Asset Management to ask for their money back. The $4.9 billion unit of the private equity firm has had poor performance: It was down 4.9% in June and lost 10% in 2014. It’s not clear that Cliffwater clients will follow the advice. The next withdrawal date is September 30. Wall Street Journal (paywall)
Start-up payments honey Stripe raises funds at $5 billion valuation. Investors include Visa and venture capital firm Kleiner Perkins Caufield. & Byers. Stripe helps businesses process their ecommerce transactions and is facilitating the buy button for advertisers on Facebook, Twitter, and Pinterest. The company raised less than $100 million. Wall Street Journal (paywall)
Apple Watch coming to Best Buy. We guess this means that exclusivity is no longer part of the marketing push for the iconic tech company. The No. 1 electronics retailer in the U.S. becomes the first to offer the timepiece outside an Apple Store. Reuters
Yanis Varoufakis defends “Plan B.” Adding to all the craziness around him lately, Yanis Varoufakis, or the Drachma Queen as Politico calls him, wrote an op-ed piece in the FT detailing how his secret hacking plans “could have eased Greece’s chronic liquidity shortage.” Financial Times (paywall)
The definitive list of Chinese government intervention in the markets. Twelve public moves. Who knows how many behind the scene. Quartz
Macau gamers head home to cover margin calls. Currency swings and the Chinese stock market have apparently hit the former Portuguese colony pretty hard. Barron’s
China lifts 14-year console ban. Rejoice, mainland console players, you can now legally play with your Xbox or Playstation to your heart’s content. Thought it might be a little too late for those guys to compete there, though. SCMP (paywall)
Photo: Thomas Hawk