Morning Bid: China chip champ
By Mike Dolan
July 27 (Reuters) –
What matters in US and global markets today
Written by: Mike Dolan, Editor-in-Chief, Finance and Markets
A pause in the Iran conflict and a significant decline in crude oil prices from $100 per barrel provide some relief at the start of what will be another turbulent week for markets.
The calendar is absolutely full; One-third of the S&P 500 will report earnings at the Fed meeting on Wednesday. AppleAmazon, MicrosoftMeta and Qualcomm – and second-quarter US GDP forecasts will also be released.
I’ll talk about this and more below.
But first, listen to the latest episode of the Morning Bid daily podcast, where we examine the week ahead and oil’s latest pullback.
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CHINA CHIP CHAMPION
Despite the recent drop in oil prices, there is still at least a one in four chance that the Fed will raise interest rates in futures on Wednesday. The Bank of Japan and the Bank of England will also meet this week; The first will take into account the weakness in the yen, while the second will hold the meeting just as the new British prime minister takes office.
However, oil prices determined the course of this week first. Brent crude oil began falling from triple-digit levels on Friday, and then the US announced that it was pausing its attacks on Iran after 13 days of attacks. Iran has indicated that it will reciprocate, and now we have to wait to see if some mediation will continue.
There were some reports that the US side was running low on ammunition, but many in the market will now assume that $100 oil is a pain point that focuses minds, at least in Washington.
Brent fell to around $89/bbl early Monday. Shares in Asia strengthened and Wall Street futures rose sharply before the bell.
Earnings hyperscalers will be forensically scrutinized again after Alphabet’s second-quarter cash burn saw shares fall last week despite a big earnings decline.
Elsewhere in the AI world, the Wall Street Journal reported that Nvidia is in talks to provide around $250 billion in backing for OpenAI as part of a data center project. This points to both intensifying cross-funding in the industry and OpenAI’s efforts to build its own infrastructure.
On the other side of the world, Chinese chipmaker CXMT held a massive IPO on Monday, seeing its shares soar nearly 500% at its debut in Shanghai.
Chart of the day
New chip on the block? This year’s frenzy for global chipmaker stocks added another name on Monday, as China’s CXMT soared nearly 500% in its debut in Shanghai. This makes it China’s most valuable stock, surpassing the Industrial and Commercial Bank of China.
