1542 ET - Treasury yields change little to start a week light in economic indicators, and amid a lull in war-related headlines. Oil prices decline on expected increased supply, likely easing inflation fears. Fed fund futures keep pricing at least one Fed rate hike this year. The ISM purchasing managers index for services providers was slightly lower in June, at 54, roughly in line with WSJ consensus and still in expansionary territory. Investors are likely to scrutinize Fed minutes Wednesday to better understand the central bank's latest hawkish tilt. The 10-year yield rises 0.002 percentage point to 4.479%. The two-year falls 0.006 p.p. to 4.124%. (paulo.trevisani@wsj.com; @ptrevisani)
1536 ET - The strength of semiconductor stocks during the second quarter may make it challenging for companies to impress the market with their second quarter financial results, Goldman Sachs analysts say in a note. "We see upside to estimates across most sub-sectors of the semiconductor ecosystem heading into 2Q earnings," the analysts write. "But following dramatic outperformance for the sector in 2Q (SOX up 88% vs. SPX up 14%), we see a more challenging trading setup ahead of earnings." Still, the analysts see upside for companies that serve artificial-intelligence hyperscalers, the industrial and defense sectors, and memory technology manufacturers. (elias.schisgall@wsj.com)
1523 ET - U.S. natural gas futures post moderate gains with summer weather providing support against an abundant supply situation. On the bullish side is the recent heat wave which will be accounted for in the next two storage reports, while the coming 15-day weather pattern "is rather hot overall," with with implied cooling demand above normal most days, NatGasWeather.com says in a note. Light wind energy generation expected in the next few days will also likely give gas a greater share of the fuel used for power generation, the forecaster adds. Nymex natural gas settles up 1.5% at $3.245/mmBtu. (anthony.harrup@wsj.com)
1515 ET - Bitcoin and some other major cryptocurrencies, like ethereum and XRP, are higher in afternoon trading. The crypto complex is seen as treading water to start the third quarter, as investors watch how the world inflation picture, and the next moves of the Kevin Warsh-led Federal Reserve, proceed. "Fed messaging and spot ETF flows remain key watchpoints, with markets likely to consolidate until institutional investors return," Binance Research says in a note. The firm adds that in June, cryptocurrency market capitalization fell 16.9% to $2.13T, "reflecting weak institutional positioning which exposed its dependence on ETF inflows that never materialized." Selling of altcoins--crypto tokens outside of bitcoin or stablecoins--rose to a five-year high, Binance says. (kirk.maltais@wsj.com)
1506 ET - The World Cup is boosting spending in host cities as the tournament's knockout round continues, according to a Bank of America Institute report. Consumer spending in host cities is up 5.4% year over year over during the tournament's full group stage, according to the report, which cites credit and debit card spending data. Tourists visiting host cities for matches have been driving that growth, with their spending up 17%, the report says. During the group stage, the U.S. team played in Seattle and Los Angeles, where overall spending rose 5% and 6.8%, respectively, during the first stage of the tournament, the report says. (kelly.cloonan@wsj.com)
1456 ET - Oil futures settle lower while largely shrugging off two developments that would usually be bearish for prices--OPEC+ agreed to a fifth straight monthly increase in output targets and Saudi Arabia slashed its official August selling price for light crude to Asia by $11, from a $9.50 premium to a $1.50 discount against Oman-Dubai. "It is increasingly looking like the Gulf producers are gearing up for a price war," Mizuho's Robert Yawger says in a note. Added to that was a Ukrainian strike on Russia's largest refinery, "which will likely push more crude oil away from another damaged Russian refinery and into what is quickly becoming an oversupplied global market," he says. WTI settles down 0.2% at $68.55 a barrel and Brent ends down 0.2% at $71.99 a barrel. (anthony.harrup@wsj.com)
1454 ET - Livestock futures concluded trading on Monday a mixed bag, with live cattle finishing the day up 0.1% to $2.39375 a pound, and lean hogs settling down 0.2% to 98.55 cents a pound. Live cattle futures are getting pressured due to lower boxed beef prices, says Naomi Blohm of Total Farm Marketing in a note. "Now that holiday demand is behind, and summer weather impacts beef demand, further weakness in boxed beef prices may continue," says Blohm. Cutout prices through midday today were lower, according to USDA data. (kirk.maltais@wsj.com)
1245 ET - The findings from the Bank of Canada's 2Q business-outlook survey don't reflect the current economic backdrop, says Desjardins Group economist Tiago Figueiredo. The survey showed a sharp increase in inflation expectations among Canadian firms. However, the data were collected in May, or before the US and Iran struck a deal to restart oil-tanker traffic through the Strait of Hormuz. "Unfortunately, the majority of responses may look very different today than when the survey was conducted," he says. (paul.vieira@wsj.com; @paulvieira)
1242 ET - The results from the Bank of Canada's 2Q business-outlook survey underscore the dilemma that policymakers faced at the height of the US-Iran conflict, says Robert Kavcic, economist at BMO Capital Markets. The survey results capture responses from May, and indicated that inflation expectations shot upward amid higher energy prices. "Lower oil prices should help dial these concerns back in 3Q," Kavcic says, adding a survey gauge of business activity still pointed to an economy stuck below potential. Kavcic says the firm still expects no change in the BOC main interest rate in 2026. (paul.vieira@wsj.com; @paulvieira)
1237 ET - Federal Reserve Governor Christopher Waller says that communicating the Fed's reaction function is important. "Be clear about what your objectives are---how are you going to respond to the data," Waller says while taking questions at a conference in Rome, Italy. "You reduce uncertainty in the markets and for households," he adds. Waller's comments follow Fed chairman Kevin Warsh's previous statement after June's meeting that markets perform best when they react to incoming data--and less efficiently when they ask how the Fed will react to that incoming information.(jessica.coacci@wsj.com)
1111 ET - Federal Reserve governor Christopher Waller says that forward guidance could be a useful tool for the central bank, but could also impair policy transmission if the guidance is too strong or rigid. "Forward guidance is also problematic when there are potentially different economic scenarios confronting policymakers, each with a significant probability of occurring and requiring different policy paths," Waller says at a conference in Rome, Italy. "One cannot simply take a weighted average of these scenarios as the 'base case' and use it to give forward guidance," according to published text of his remarks. Waller says restrictive guidance tied the hands of the FOMC in 2021 and unnecessarily delayed rate increases. (jessica.coacci@wsj.com)
1109 ET - Federal Reserve governor Christopher Waller says forward guidance could be a valuable tool that at times significantly strengthened policymaking. Speaking at a conference in Rome, Italy, Waller says forward guidance "will continue to be useful," for the central bank, although there have been times when it has hindered, rather than helped policymaking. "When it works, forward guidance can change economic conditions more quickly than adjusting the policy rate alone," according to published text of his remarks. Waller's comments come as Fed chairman Kevin Warsh has a preference for no forward guidance from the central bank.(jessica.coacci@wsj.com)