A Reuters Open Interest newsletter
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What matters in U.S. and global markets today
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A pause in the Iran conflict and a sizeable retreat in crude oil prices away from $100 per barrel offer some relief at the start of what's set to be another turbulent week for markets.
The calendar is certainly packed, with the Federal Reserve meeting on Wednesday, a third of the S&P 500 set to report earnings - including Apple, Amazon, Microsoft, Meta and Qualcomm - and second-quarter U.S. GDP estimates also due.
I'll get into that and more below.
But first, listen to the latest episode of the Morning Bid daily podcast, where we break down the week to come and oil's latest retreat.
Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
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- Oil prices tumbled on Monday after the U.S. and Iran paused strikes over the weekend after two weeks of attacks, raising hopes of a diplomatic solution that would de-escalate the conflict.
- Shares of Chinese chipmaker CXMT surged 466% on their Shanghai trading debut on Monday, catapulting it to the top of China's stock market by valuation despite a recent selloff in global tech stocks.
- Ship traffic through Bab el-Mandeb fell on Sunday after Yemeni Houthis attacked Saudi oil installations along the Red Sea coast, while transit through the Strait of Hormuz stayed low over the weekend, shipping data from Kpler showed on Monday.
- Europe is heading into winter with alarmingly fragile energy supplies as the conflicts in the Middle East and Russia tighten global markets for LNG and heating oil, writes ROI Energy Columnist Ron Bousso.
- As crude prices retreat again, the market may be pricing adaptability rather than peace, betting that flows can be rerouted and alternative sources of supply ramped up, argues ROI Asia Commodities Columnist Clyde Russell.
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There's still at least a one-in-four chance of a Fed rate hike on Wednesday priced into futures, despite the latest retreat in oil prices. The Bank of Japan and Bank of England are also set to meet this week, with the former eyeing fresh yen weakness and the latter meeting just as a new UK prime minister takes office.
But oil prices set the tone first thing this week. Brent crude began falling from the triple-digit level on Friday, and the U.S. then said it was pausing strikes on Iran after 13 straight days of attacks. Iran indicated it would reciprocate and we now have to wait to see if some mediation resumes.
There were some reports of the U.S. side running low on munitions, but many in the market will now assume that $100 oil is a pinch point that focuses minds - at least in Washington.
Brent fell further to around $89/bbl early on Monday. Shares in Asia firmed and Wall Street futures were up sharply before the bell.
In earnings, the hyperscalers will be forensically examined again after Alphabet's second-quarter cash burn saw its stock fall last week despite a big earnings beat.
Elsewhere in the AI world, the Wall Street Journal reported that Nvidia was in talks to provide a roughly $250 billion backstop for OpenAI as part of a data center project. That speaks to both the intensifying cross-financing in the sector and OpenAI's efforts to build out its own infrastructure.
On the other side of the world, Chinese chipmaker CXMT had a blowout IPO on Monday that saw its stock soar nearly 500% in its Shanghai debut.
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Graphics are produced by Reuters.
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New chip on the block? This year's global frenzy over chipmaker stocks added another name on Monday as China's CXMT soared almost 500% on its market debut in Shanghai. This makes it China's most valuable stock, overtaking the Industrial and Commercial Bank of China.
Asia's biggest IPO of the year raised about $8.6 billion, giving it a valuation of more than half a trillion dollars. Only 6.73% of CXMT's enlarged share capital was freely tradable at listing, as most shares are locked up. The small initial float likely magnified the price swings and attracted strong turnover.
But given U.S. restrictions on Chinese chips, CXMT is likely to be a pivotal part of China's development of its own tech and AI ecosystem, making it a strategic firm globally.
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- U.S. June durable goods (8:30 a.m. EDT)
- U.S. 2-year and 5-year note auctions
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