TRADING DAY-Blockades are back
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By Jamie McGeever
ORLANDO, Florida, July 13 (Reuters) - Oil prices surged, Treasury yields spiked, and stocks fell on Monday after President Donald Trump said the U.S. was reinstating its blockade of Iranian shipping in the Gulf, while the slide in tech shares continued as investors awaited U.S. bank earnings on Tuesday.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Trump says US reinstates blockade of Iranian shipping in Strait of Hormuz after new clashes
SK Hynix plunges after Nasdaq debut amid diminishing earnings optimism
Global pension funds pull back on FX hedges as dollar woes ease
Japan has no plans to overhaul pension funds' asset allocation, sources say
China aims to spur consumption in first five-year blueprint
Today's Key Market Moves
STOCKS: South Korea -9%, Nikkei -2%. Europe, UK flat. Major U.S. indices in the red, Nasdaq -1.5%.
SECTORS/SHARES: SK Hynix -15%, TSMC +1%. Volkswagen +1%. U.S. tech -2%, energy +3%. SanDisk-13%, Intel -6%, Nvidia -3.5%.
FX: USD/CNY lowest daily fix since February 2023. USD/JPY back above 162.00. HUF is biggest EM FX loser, -1%.
BONDS: U.S. yields rise broadly, +6 bps at the short end to bear flatten the curve. September Fed hike fully priced.
COMMODITIES/METALS: Oil +9%, gold -3%.
Today's Talking Points
* Buy — or sell — the chip
The AI bull/bear debate is intensifying, and positions are becoming more entrenched. Daily price swings and single stock volatility are increasing, especially in Asia - South Korea's SK Hynix fell a record 15% on Monday, and realized volatility in the benchmark KOSPI remains extremely elevated. Meanwhile, Taiwan's TSMC on Monday announced record revenue in Q2. The U.S. turbulence is less severe, for now, but Wall Street is wobbling.
* Off the Waller
Fed Governor Christopher Waller struck a hawkish tone on Monday, saying interest rates may need to be raised. Soon. His comments come a day before June CPI inflation data are released, and Chair Kevin Warsh is grilled by U.S. lawmakers. Waller is one of the most influential voices on the Fed's 19-strong rate-setting committee — an upside surprise in core CPI on Tuesday will surely strengthen markets' already firming rate hike expectations for later this year.
* Banking on it
Wall Street financial giants JPMorgan, Goldman Sachs, BofA and Citi report on Tuesday, setting the tone for what analysts expect will be a bumper Q2 earnings season, even by the exceptionally high bar set by recent quarters. S&P 500 earnings are expected to jump nearly 24% year on year, according to LSEG IBES, with tech still expected to do the heavy lifting. Banks' conference calls will be closely monitored for commentary on AI and wider macro outlook.
What could move markets tomorrow?
China trade (June)
U.S. CPI inflation (June)
U.S. 'TIC' flows data (May)
U.S. Federal Reserve Chair Kevin Warsh's 'Humphrey-Hawkins' testimony to Congress
U.S. earnings, including JPMorgan, Goldman Sachs, Citi, Bank of America, Wells Fargo
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