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Morning Briefing: July 12, 2023

Market Overview

Stock futures are in positive territory this morning, as traders prepare for the June Consumer Price Index report, set to be released at 8:30 a.m. ET. The optimism in the market has been bolstered by a decline in market rates and an encouraging performance by the broader market over the last two sessions. As we speak, the 2-yr note yield is down four basis points at 4.85% and the 10-yr note yield has dipped three basis points to 3.95%. The U.S. Dollar Index also fell slightly, down 0.2% at 101.49.

Economic Data

In addition to the anticipated CPI data, today will also feature the release of the weekly EIA Crude Oil Inventories report, which is due at 10:30 a.m. ET, and the Fed’s Beige Book for July, which is scheduled for 2:00 p.m. ET.

This follows the weekly MBA Mortgage Applications Index, which saw a 0.9% increase following last week’s 4.4% decline. This is a welcome sign for potential homeowners and real estate investors.

International News

Overseas, the Reserve Bank of New Zealand kept its official cash rate unchanged at 5.50%, which was largely expected. Meanwhile, equity indices in the Asia-Pacific region ended the session with a mixed performance.

Major European indices trade in positive territory. STOXX Europe 600: +0.8%, Germany’s DAX: +0.9%, U.K.’s FTSE 100: +1.2%, France’s CAC 40: +0.7%, Italy’s FTSE MIB: +1.1%, Spain’s IBEX 35: +0.5%.

Corporate News

There are some notable headlines in the corporate world today:

  1. VMware (VMW 155.00, +3.47, +2.3%): The European Commission has given Broadcom (AVGO) conditional approval to complete its acquisition of VMW.
  2. Walt Disney (DIS 89.61, +0.12, +0.1%): Disney is exploring potential joint ventures or sales for its Star India business, as per the WSJ.
  3. Illumina (ILMN 184.45, -0.37, -0.2%): The EU commission has fined ILMN and GRAIL for proceeding with their acquisition without prior merger control approval.
  4. Netflix (NFLX 441.67, +1.46, +0.3%): UBS has raised its price target for NFLX to $525 from $390.
  5. Coinbase Global (COIN 89.40, +0.25, +0.3%): Atlantic Equities has downgraded COIN to Neutral from Overweight.
  6. NVIDIA (NVDA 425.83, +1.78, +0.4%): NVDA is reportedly in talks to become the anchor investor in Arm’s IPO, according to the FT.
  7. Coty (COTY 13.50, +0.49, +3.8%): Kim Kardashian is reportedly in talks to buy back the 20% stake of SKKN she sold to Coty, as per the WSJ.
  8. Stellantis (STLA 18.33, +0.33, +1.8%): BofA Securities upgraded STLA to Buy from Neutral.

Inflation Fears and Market Reaction

The US dollar weakened while stocks rose, and Treasury yields dipped, indicating expectations of slowing US inflation that may weaken the case for more rate hikes. A survey indicates expectations for both core and headline inflation continuing to moderate, despite the Federal Reserve’s monetary policy onslaught.

This trend of slowing inflation could be pivotal for policymakers in the coming months. While a 25-basis-point increase is nearly confirmed for July 26, the policy path afterward remains open-ended. An unexpected surge in core inflation could, however, unsettle investors and lead to more market volatility.

Asian Market Recap

Asian shares displayed a mixed performance, with declines in Japan but gains in Australia and India. Hong Kong stocks saw an uplift after data pointed to a robust credit expansion in China. Despite the positivity in Hong Kong, China’s domestic benchmark CSI 300 index dipped by 0.4%. The yen’s upward momentum, going beyond the key 140 level, could also impact the Bank of Japan’s policy decision later this month.

Commodities Update

Oil remained stable following indications that Russian crude production is dropping, hinting that the market’s supply glut may be nearing an end. Iron ore and industrial metals also gained ground, driven by optimism that new liquidity will boost China’s construction sector.


Today’s market is teeming with activity, from corporate news to inflation concerns, commodity prices, and central bank decisions. As the day unfolds, it will be interesting to see how these factors interplay and shape the market direction. Be sure to stay tuned for more updates.




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