Asian markets face tough act to follow

NEW YORK, July 31 (Reuters) – Goodbye, July.

Asian stocks could be in for a bumpy start to the week if they expect to outdo robust gains enjoyed the week prior, under the power of potential stimulus in China, Japan’s biggest-ever minimum wage hike, and the flickering optimism that the global economy might avoid recession.

Chinese stocks face the challenge of topping last week’s 4.5% gain in the CSI 300, the index’s biggest weekly jump since November.

The week also saw the Hang Seng and the Nikkei 225 gaining 4.4% and 1.4%, respectively, while MSCI’s index of Asia Pacific shares outside of Japan advanced 2.5%.

Markets were rocked at the tail-end of the week when the Bank of Japan took its first step away from its decades-long monetary stimulus policy, allowing interest rates more freedom to move in harmony with inflation and economic growth.

The move coincided with a decision to implement Japan’s biggest minimum wage hike in history in an effort to jolt the world’s third-largest economy out of the doldrums.

Market participants are also scrutinizing the other side of the Sea of Japan for signs of life in the Chinese economy.

On July 24, Beijing pledged to adjust its policies to jump-start the nation’s lackluster post-COVID recovery, a move which helped solidify the yuan’s near two-week high against the dollar, sending the CSI 300 leaping nearly 3% and the HSI surging 4.1%.

In the coming week in the United States, second-quarter earnings season gallops along, and a spate of high-profile results in the coming days are expected to shed additional light on the global demand picture, particularly as it relates to China.

Megacaps Apple Inc (AAPL) and Amazon.com (AMZN), along with chipmaker Western Digital Corp (WDC), construction and mining equipment manufacturer Caterpillar Inc (CAT), globally ubiquitous coffee chain Starbucks Corp (SBUX), and wireless tech firm Qualcomm Inc (QCOM) are all on deck.

Earnings from Marriott International (MAR), MGM Resorts International (MGM) and Host Hotels & Resorts (HST) will help illuminate the state of global travel and tourism demand.

Potentially market-moving US indicators next week include manufacturing and services PMI. Beyond that, job openings, private payrolls, jobless claims, and planned layoffs will set the stage for the closely watched July employment report on Friday.

Here are key developments that could provide more direction to markets on Monday:

– China’s Caixin manufacturing PMI expected

– Japan to unveil consumer confidence, housing starts, and unemployment data for June

– Australia due to release July manufacturing PMI, June building approvals

– South Korea on deck with July import/export growth report

(Reporting by Stephen Culp; editing by Diane Craft)

Hopes of ‘Goldilocks’ economy, rate peak buoy US stocks

NEW YORK, July 28 (Reuters) – A resilient US economy and expectations of a nearing peak in the Federal Reserve’s monetary policy tightening cycle are emboldening stock investors, even as worries persist over rising valuations and the potential for inflation to rebound.

The S&P 500 is up nearly 19% this year after gaining around 1% in the past week. It has risen nearly 10 percentage points since June 1, over which time the US government avoided a debt ceiling default and consumer prices cooled, while growth stayed resilient.

One key factor driving stocks higher has been the view that the economy is moving towards a so-called Goldilocks scenario of ebbing consumer prices and strong growth which many believe is a healthy backdrop for stocks.

That view gained further traction in the past week, when Chair Jerome Powell said the central bank’s staff no longer forecasts a US recession and that inflation had a shot of returning to its 2% target without high levels of job losses.

Policymakers raised rates by another 25 basis points to their highest level since 2007 at the central bank’s July 26 meeting and left the door open to another increase in September.

“The market has fully accepted the narrative that it wanted, which is Goldilocks. Until we see some set of data that scares them it’s hard to see how that changes,” said Bob Kalman, senior portfolio manager at Miramar Capital.

At the same time, investors believe the Fed is unlikely to deliver much more of the monetary policy tightening that shook markets last year. Futures markets on Friday priced a nearly 73% chance that rates don’t rise above current levels through the end of the year, according to CME’s FedWatch tool, up from 24% a month ago.

A test of the economy comes next week, when the US reports employment numbers for July. While comparatively strong employment data has been a driver of this year’s stock rally, signs that the economy is growing at too rapid a pace could spark worries that the Fed will need to raise rates more than expected.

“For markets to continue to trade higher, the soft landing must be a soft landing, not a reacceleration, because if housing and consumer spending accelerate from here, the Fed will have to raise rates a lot more,” wrote Torsten Slok, chief economist at Apollo Global Management.

Kalman, of Miramar Capital, believes there’s a growing chance the Fed may need to raise rates beyond their current 5.50% threshold and hold them there for longer than expected, an outcome he worries could dampen the economy and hurt risk assets.

“It’s a 50-50 chance that we’ll get Goldilocks or we’ll get a stronger downturn,” he said.

Many are also assessing the durability of a rally in tech stocks, which has been fueled in part by excitement over developments in artificial intelligence. The tech-heavy Nasdaq 100 is up nearly 44% year-to-date, while the S&P 500 information technology sector has gained nearly 46%.

Optimistic forecasts from Meta Platforms (META) and results from Alphabet (GOOGL) earlier this week bolstered the case for those who believe megacaps’ lofty valuations are justified. Some smaller companies have delivered as well, with shares of streaming device maker Roku Inc (ROKU) soaring on Friday after it gave an upbeat quarterly revenue forecast.

Still, some investors have been looking outside of tech stocks for further gains, wary of rising valuations. The S&P 500 tech sector now trades at 28.2 times forward earnings, from 19.6 at the start of the year.

Burns McKinney, senior portfolio manager at NJF Investment Group, owns shares of Apple and Microsoft but has been adding to dividend-paying positions in healthcare, financials, and energy in anticipation that megacap names start to falter.

For megacap stocks, “the risk-reward is not as good as it was a quarter ago,” he said.

Others believe the rally in equities is due for a pause. Randy Frederick, managing director of trading and derivatives for the Schwab Center for Financial Research, said he wouldn’t be surprised to see the S&P 500 fall 5% or more in the next month or two as investors take profits on recent gains.

Yet he also believes stocks are in the “early stages” of their recovery after falling into a bear market last year.

“There’s always a concern with too much optimism, but longer term a sort of consolidation here speaks to a positive market going out,” he said.

(Reporting by David Randall; Editing by Ira Iosebashvili and Deepa Babington)

Bank of Japan’s opaque policy shift means stronger, wilder yen

LONDON/SINGAPORE, July 28 (Reuters) – The Japanese yen is on a bumpy path towards strengthening after Friday’s central bank policy change, threatening to upend the carry trade, one of this year’s most popular strategies, as the currency inevitably becomes more expensive.

The BOJ kept its short-term interest rate target below zero, but shook markets by adjusting a policy that had effectively capped the 10-year government bond yield at 0.5%.

The wild swings in the yen, which saw its most volatile trading day for months, reflect the initial confusion among traders and investors about what this might mean.

But two things are already clear: trading in the yen will be choppy, and have a knock-on impact on markets beyond Japan.

A rocketing yen has major implications for risk assets that have been at least in part supported by the trillions of dollars in global liquidity the BOJ has effectively exported.

In what is known as a carry trade, investors have borrowed cheaply in yen to fund bets in higher-yielding currencies like the dollar or the Mexican peso, making money on the difference.

“All these markets are linked together in terms of global liquidity flows. People borrow in yen to buy dollars, dollars sit around looking for something to do, people say we might buy Treasuries or Apple,” Simon Edelsten, global equities fund manager at Artemis, said.

“All this liquidity creation out of cheap Japanese money feeds into risk assets – at the margin, but enough to move prices.”

In a sign of what might be to come, on Friday the yen JPY=EBS strengthened by as much as 1.2% on the day against the dollar, then weakened 1%, before settling not far from flat around 139 per dollar.

The currency has been under heavy pressure in the past 12 months, as other central banks raised rates while the BOJ kept borrowing costs on a tight leash. But the broad direction of travel for the yen is now thought to be towards strength.

The BOJ’s shift “underscores a strengthening bias in the yen. I wouldn’t be surprised to see it go to a low to mid 130s area because we are looking at yields compressing,” said Aninda Mitra, head of Asia macro and investment strategy at BNY Mellon Investment Management.

RISKIER GOLD SEAM

Japan’s low yields relative to those elsewhere – a gap which widened significantly in 2022 – has caused both domestic and foreign investors to dump Japanese assets in favour of higher-yielding alternatives overseas.

The yen has been an obvious base for carry trades – in the last 12 months it has lost 25% in value against the Mexican peso and 10% against the pound, for example – but that trend might be about to change.

Mitra said carry trades would “probably come under pressure if the yen appreciates from here by 2-4%. If your carry expectation was 5-6% return versus yen then clearly that starts to erode”.

The yen isn’t finished as a funding currency just yet, as Japanese yields remain much lower than those elsewhere.

“The carry trade is going to become less profitable. You’re mining the riskier a bit of the of the seam of gold,” said Kit Juckes head of FX strategy at Societe Generale, who expects any yen appreciation to be gradual.

“But for now you kind of feel it’s still worth it.”

MUDDLING THROUGH

A further difficulty when predicting what the BOJ’s shift in stance will mean for markets is whether investors understand the new policy.

“They’re essentially digging themselves a deeper hole in terms of making it very, very difficult for the market to take away simple things. They’re trying to control too many variables,” said James Malcolm, head of FX strategy at UBS investment bank.

“You know, still having a 50-basis point ceiling but saying that you’re not going to police it and you’re going to have a hard ceiling above there that you will police,” he said. “It’s a very difficult concept to get across to anybody who’s not willing to spend an awful lot of time and effort following it.”

(Reporting by Alun John and Naomi Rovnick in London, and Ankur Banerjee and Tom Westbrook in Singapore; Editing by Amanda Cooper and Catherine Evans)

US money market funds draw huge inflows in the week to July 26

July 28 (Reuters) – US investors turned to money market funds ahead of the Federal Reserve’s policy decision, uncertain about the future path of the central bank’s monetary policy amid solid economic data.

Investors placed a net USD 24.62 billion in US money market funds in the seven days to July 26, their first weekly net purchase since July 5, data from Refinitiv Lipper showed.

The Fed on Wednesday delivered its eleventh rate hike since March 2022, raising its benchmark policy rate by 25 basis points to a 5.25%-5.50% range. The accompanying statement left the door open for another potential increase.

Meanwhile, US equity funds gained a net USD 2.14 billion in inflows during the week, after recording a weekly outflow of USD 3.06 billion a week ago.

Investors purchased US large-, mid-, and small-cap funds of USD 2.48 billion, USD 612 million, and USD 675 million, respectively, while withdrawing about USD 995 million from multi-cap funds.

By sector, tech funds saw their first weekly outflow in five weeks, amounting to a net USD 1.96 billion. Meanwhile, metals and mining, and financial sector funds received about USD 600 million each in inflows.

Investors purchased US bond funds for the fourth successive week, recording USD 2.56 billion in net buying.

US short/intermediate government and treasury, and short/intermediate investment-grade funds received USD 2.04 billion and USD 595 million, respectively. Inflation-protected funds drew USD 737 million, their first weekly inflow in 15 weeks.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathyin Bengaluru; Editing by Shilpi Majumdar)

US bank preferred capital issuance makes a tentative comeback

July 28 (Reuters) – Investor appetite for a type of debt issued mostly by banks to boost their capital is showing early signs of revival, just as interest rates on an estimated USD 120 billion of such securities are due to reset to much higher levels.

So-called preferred securities, which are one of the riskiest forms of debt but also have some characteristics of stocks, are popular among banks as a way to boost their capital for regulatory purposes.

Typically, these securities have no maturity date, but they can be redeemed, or called, in five or 10 years from the date they were issued. If they are not called, the rate resets to a new fixed or floating rate.

More than USD 160 billion of preferreds were issued in 2020 and 2021 each, when rates were low. Volume dropped last year to USD 70 billion as the US Federal Reserve embarked on an interest rate hiking cycle. Then, in March, the US regional banking crisis and the collapse of Credit Suisse effectively shut the market. In the sale of the Swiss lender to rival UBS Group UBSG.S, the European equivalent of preferreds was fully written down.

The market since has been reopening. When Wells Fargo & Co WFC.N issued a new public preferred security earlier this month, investor demand far outweighed supply. That came on the heels of improving investor sentiment about the debt.

Spreads – or difference between the yields of these securities and Treasury bonds – have tightened by 60 basis points from the height of the banking crisis in March.

Some bankers now expect more deals, primarily from US banks, which have billions of dollars of preferreds coming up for redemption.

“There is a better understanding of the risk entailed in these preferred structures after Credit Suisse and recent regional bank failures, so investors are showing more appetite for these securities,” said Daniel Botoff, global head of debt capital markets syndicate at RBC Capital Markets.

Allie Quine, a vice president and portfolio specialist at fund manager Cohen & Steers, one of the biggest investors in preferreds, said they saw buying opportunities, with prices more attractive than their long-term averages.

The revival of this market is key ahead of new capital requirements being imposed on banks. On Thursday, US regulators unveiled details of an overhaul of capital rules that would direct banks to set aside billions more to guard against risk.

To be sure, some analysts said uncertainty about the Fed’s interest rate outlook and continued caution among investors would keep a lid on new supply, which is unlikely to reach levels seen in 2020 and 2021. The impact of new regulations, which are being finalized, will also take time to be felt.

“Any new issuance will likely be targeted towards refinancing more expensive floating-rate securities within their call windows,” Quine said. “Net new issuance will generally remain limited depending on need.”

WELLS DEAL

Earlier this month, Wells Fargo sold the first public preferreds since the regional banking crisis. The USD 1.725 billion deal received orders of over USD 6 billion, bringing total issuance for the year to USD 37 billion.

If Wells Fargo had not redeemed its outstanding securities, it would have had to pay a coupon of almost 9% for life on its older preferreds, up from just 5.85% until they became callable. Its new preferreds pay a fixed coupon of 7.625%.

In the next six months, some USD 119 billion of preferreds are reaching their call date, according to data from Informa Global Markets. That tally includes those issued by not just US and European banks but also finance, insurance firms, and other companies.

It also includes securities that have already passed their call dates and were paying a spread of as much as 400 basis points over a floating rate benchmark, like the Secured Overnight Financing Rate, which could keep increasing as the Fed hikes rates further.

RBC’s Botoff said many of the large US banks have as much as USD 20 billion of old preferred deals that need to be redeemed or extended into more expensive floating rate coupons. “The tone and support for refinancing have improved substantially over the last few weeks,” he added.

(Reporting by Shankar Ramakrishnan in New York; Editing by Paritosh Bansal and Matthew Lewis)

Oil on track for fifth week of gains

LONDON, July 28 (Reuters) – Oil prices were steady on Friday, but on track for a fifth straight week of gains with investors optimistic healthy demand and supply cuts will keep prices buoyant.

Risk appetite in wider financial markets has been fuelled by growing expectations that central banks such as the Fed and European Central Bank are nearing the end of policy tightening campaigns, boosting the outlook for global growth and energy demand.

Bolstered by supply cuts from the OPEC+ alliance announced earlier this month, both oil benchmarks are on track for a 3.6% weekly increase – a fifth straight week of gains.

By 0918 GMT, Brent crude slipped 28 cents to USD 83.96 a barrel, while US West Texas Intermediate (WTI) crude dipped 18 cents to USD 79.91 a barrel.

Bullish demand expectations were boosted on Thursday after US second quarter gross domestic product grew at a forecast-beating 2.4%, supporting Federal Reserve Chairman Jerome Powell’s view that the economy can achieve a so-called “soft landing.”

Investors are warming up to the idea of peak rates getting ever closer, while it is looking increasingly probable that the United States will avoid recession, said PVM analyst Tamas Varga.

Fresh data released on Friday showed some of the euro zone’s top economies displayed unexpected resilience in the second quarter even as a raft of indicators pointed to renewed weakness ahead, as manufacturing ails and services slow.

Meanwhile, policymakers in China have pledged to step up stimulus measures to invigorate the post-COVID recovery after the world’s second-largest economy grew at a frail pace in the second quarter.

“Apart from the sanguine economic backdrop and healthy demand, the production cuts from the OPEC+ alliance helped push Brent to highs not seen since April,” Varga said.

It would “take a brave man to bet against re-visiting the 2023 summit set at USD 89.09″ a barrel for Brent oil in January, Varga added.

(Reporting by Natalie Grover in London; Additional reporting by Laura Sanicola in Washington and Andrew Hayley in Beijing; Editing by Lincoln Feast, Sonali Paul and Susan Fenton)

Over to you, Bank of Japan

NEW YORK, July 28 (Reuters) – Could this be a landmark day for the Bank of Japan?

Asian markets are likely to come under pressure on Friday, backing down from five-month highs as the Bank of Japan opens the door to allow long-term interest rates to rise beyond the 0.5% cap as it discusses potential amendments to its yield curve control (YCC) program.

A Nikkei report on Thursday pointing in that direction coincided with a downturn for US stocks, a fall that snapped the Dow Jones Industrial Average’s 13-day winning streak, its longest since 1987.

The news was “the biggest driver of today’s performance,” according to Michael Green, portfolio manager and chief investment strategist at Simplify Asset Management.

It also prompted the dollar to fall against the yen.

The BoJ’s tentative step away from its ultra-loose monetary policy inches it closer in line with its global peers, which have tightened their monetary policies to combat inflation.

On Wednesday, the US Federal Reserve implemented another 25-basis-point interest rate hike as widely expected, and the European Central Bank followed suit on Thursday, even as central banks around the world have assumed a more cautious posture amid signs that inflation is in a cooling pattern.

Earlier in the day, US stocks were buoyed and fears of a global economic slowdown were abated by upbeat earnings reports and a raft of better-than-expected US economic data.

Topping that list was the US Commerce Department’s robust initial take on second-quarter GDP – coming in at 2.4%, blasting past the 1.8% consensus – supporting US Federal Reserve Chairman Jerome Powell’s view that the economy can achieve a so-called “soft landing.”

The Commerce Department is due to release its broad-ranging and hotly anticipated Personal Consumption Expenditures (PCE) report on Friday, which will cover income, spending, and crucially, inflation.

Here are key developments that could provide more direction to markets on Friday:

– Japan is scheduled to issue its Tokyo CPI report

– Australia expected to post June retail sales, Q2 PPI

– South Korea is due to release industrial output and retail sales for June

(Reporting by Stephen Culp; Additional reporting by Carolina Mandl; Editing by Marguerita Choy)

Global equities fall, dollar rises after strong US data, rate hikes

NEW YORK, July 27 (Reuters) – Global equity markets fell while the US dollar gained on Thursday following news of stronger-than-expected US economic growth despite consecutive interest rate hikes from the Federal Reserve and European Central Bank.

US gross domestic product (GDP) increased 2.4% in the second quarter, Commerce Department data on Thursday showed, beating estimates from economists polled by Reuters and dampening concerns of a recession due to the Fed’s aggressive rate-tightening cycle. A Labor Department report also beat expectations as fewer people sought to claim unemployment benefits, indicating labor market resilience.

The Fed on Wednesday delivered its 11th consecutive rate hike, raising its benchmark policy rate by 25 basis points to a 5.25%-5.50% range.

The European Central Bank followed on Thursday with a 25-basis-point hike, its ninth increase in a row, taking its main reference rate to 3.75% to contain high consumer prices.

“Because there’s no risk in the market in the near term and everything looks so positive, everybody thinks this is going to be a soft landing and that’s what is being priced in the market currently,” said Aash Shah, senior portfolio manager at Summit Global Investments in Utah.

The MSCI world equity index, which tracks shares in nearly 50 countries, pulled back from a 15-month high and was down 0.27%.

On Wall Street, the Dow and benchmark S&P 500 reversed earlier gains and finished lower, snapping a 13-day winning streak, driven by losses in financials, healthcare, technology, and consumer discretionary stocks.

The Dow Jones Industrial Average fell 0.67% to 35,282.72, the S&P 500 lost 0.64% to 4,537.46 and the Nasdaq Composite dropped 0.55% to 14,050.11.

European stocks added 1.35%, with Italian and Spanish shares hitting their highest levels since 2008 and 2020 respectively.

The dollar rose against a basket of its major peers after the rate hikes. The dollar index rose 0.682%, while the euro reversed gains to drop 1.05% to USD 1.0967 after ECB President Christine Lagarde told a press conference the central bank was determined to cool high consumer prices.

“We are not out of the woods yet. There’s a lot of euphoria because everyone thinks we’re not going to have a recession but lots of indicators still point towards a recession, including the yield curve,” Shah added.

US Treasury yields rose on the GDP data, to 4.010% for the benchmark 10-year note and 4.9368% for the two-year note.

Oil prices settled higher, supported by supply tightness following OPEC+ production cuts and renewed bullishness on the outlook for Chinese demand and global growth.

Brent crude settled up 1.6% to USD 84.35 a barrel while US West Texas Intermediate (WTI) crude settled up 1.7% to USD 80.09.

Gold prices slipped more than 1% to a two-week low on a stronger dollar and uptick in bond yields. Spot gold dropped 1.4% to USD 1,943.89 an ounce, while US gold futures fell 1.36% to USD 1,943.40 an ounce.

(Reporting by Chibuike Oguh in New York; Editing by Richard Chang)

Gold hits 2-week low as upbeat US data lifts dollar, yields

July 27 (Reuters) – Gold prices slipped more than 1% to a two-week low on Thursday, weighed down by a stronger dollar and an uptick in bond yields after better-than-expected US economic data.

Spot gold dropped 1.2% to USD 1,948.69 per ounce by 01:53 p.m. EDT (1753 GMT), its lowest since July 12. US gold futures settled 1.2% lower to USD 1,945.70.

“There was a one and two punch on gold with better-than-expected initial claims numbers showing that the strength of the US labor market is resilient,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

“Then also that surprise upside expectation in GDP data as well shows you that if there is any recession, it’s just that no one is seeing it right now. So it paves the way for higher for longer interest rates.”

Data showed the US economy grew faster than expected in the second quarter as labor market resilience underpinned consumer spending.

A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 221,000 for the week ended July 22.

Following the data, the dollar index jumped 0.8% against its rivals, making gold more expensive for other currency holders. The benchmark US 10-year yield climbed to a two-week high.

On Wednesday, the US Federal Reserve raised interest rates by 25 basis points as expected. Markets priced in 57% odds of the Fed holding rates for the rest of the year, according to the CME FedWatch tool.

Meanwhile, the European Central Bank (ECB) raised interest rates for the ninth consecutive time on Thursday and kept the door open to further tightening.

Rising interest rates increase the opportunity cost of holding non-yielding bullion.

Spot silver was down 2.8% to USD 24.20 per ounce, platinum fell 2.7% to USD 935.26 while palladium dropped 1.4% to USD 1,240.99.

(Reporting by Brijesh Patel in Bengaluru; editing by Jonathan Oatis and Krishna Chandra Eluri)

Nasdaq futures rise after Meta results, Fed optimism

July 27 (Reuters) – Nasdaq futures rose on Thursday, supported by a surge in Meta Platforms after its strong third-quarter revenue forecast lifted megacap growth and technology stocks, and hopes that the US Federal Reserve’s July rate hike was the last this year.

Meta Platforms gained 7.6% in premarket trading after it also reported a jump in advertising revenue, topping Wall Street financial targets for the second quarter. The stock is set to add about USD 60 billion to its market value.

The Facebook parent’s results followed a strong performance by Alphabet earlier this week, which show that consumers, and advertisers eager to reach them, are spending despite broad economic concerns.

The US Federal Reserve on Wednesday raised interest rates by 25 basis points as expected.

Fed Chair Jerome Powell said the economy still needed to slow and the labor market to weaken for inflation to “credibly” return to the US central bank’s 2% target.

“We continue to expect that today’s hike will be the last of the cycle. Powell said that the FOMC will be particularly focused on the inflation data, and we expect the next few CPI reports to be soft,” said David Mericle, chief U.S. economist at Goldman Sachs, in a note.

“As a result, we expect that the FOMC will skip September in order to slow the pace and will then conclude in November that inflation has slowed enough to make a final hike unnecessary.”

Traders expect only a slim 20% chance that the US central bank could surprise with a quarter-point increase in September.

On tap on the economic front, the Commerce Department is set to report that the US gross domestic product increased at a 1.8% annualized rate last quarter, in its advance estimate of second-quarter GDP growth.

At 04:42 a.m. ET, Dow e-minis were up 45 points, or 0.13%, S&P 500 e-minis were up 23.75 points, or 0.52%, and Nasdaq 100 e-minis were up 172.5 points, or 1.11%.

While Nasdaq has led the charge on Wall Street so far this year supported by outsized gains in megacap growth stocks, Dow is catching up as investors bet on sectors beyond technology.

The blue-chips Dow is on track for its 14th straight day of gains after a scorching rally that saw it log its longest winning streak since 1987 in the previous session.

Netflix climbed 1.0% after report that it was restructuring its advertising partnership with Microsoft for its lower-priced ad-supported subscription plan and also cutting ad prices.

EBay forecast third-quarter profit below market expectations as the e-commerce platform spent more to bolster categories such as auto parts, refurbished goods and collectibles, sending its shares down 5.3%.

Intel McDonald’s Corp, Mastercard, Ford Motor, and T-Mobile US are among some of the companies expected to report their quarterly results during the day.

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Shinjini Ganguli)

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