A look at the day ahead in European and global markets from Wayne Cole.
Asian stocks are mostly firmer, following Friday's Wall Street rally, though European share futures are off as oil rises amid much confusion over the Strait of Hormuz.
Treasury Secretary Scott Bessent over the weekend claimed the strait would become "irrelevant" as oil would eventually be redirected through pipelines, giving analysts the impression the White House was trying to wash its hands of the whole affair.
Iran said on Sunday that a deal with Oman defining new shipping lanes in the Strait was in its final stages but reiterated that the waterway would only reopen once the United States met other conditions, which seems unlikely.
Brent crude added 1% to $84.38 a barrel as shipping through the SoH remains at a trickle with just two tankers on Friday, while U.S. crude rose 0.7% to $78.75.
The soft U.S. payrolls number has markets pricing in a 44% chance of a Federal Reserve hike in September, but that could change depending on what the consumer price data shows on Wednesday. Median forecasts are for an increase of 0.1% in the headline and 0.2% for the core.
July retail sales are out on Friday and forecasts favour a modest rise of 0.2%, though there is some downside risk given Amazon moved their Prime Day sale to June from July this year.
Wall Street futures were a shade lower after a record closes on Friday, with upbeat earnings reports giving the Nasdaq a 5% gain for the week.
Analysts at BofA noted that with nearly 90% of S&P 500 results in, earnings per share were up 30% on the year after excluding investment gains at Alphabet and Amazon. A 76% EPS beat rate matched the strongest level since 2021.
They added AI was the standout, with median EPS growth of 28% versus 12% for non-AI-related stocks, though consensus expects AI to slow to 16% next quarter.
Earnings are lighter this week but include semiconductor company Applied Materials (AMAT.O), networking equipment maker Cisco (CSCO.O) and cloud infrastructure technology company CoreWeave (CRWV.O).
Key developments that could influence markets on Monday:
- EU Sentix investor confidence for August
- Federal Reserve Bank of Cleveland President Beth Hammack appears
