From bank reports to the heat in Europe-what moves the markets)
The world recovery rally continues thanks to growing hopes that the Fed will not become more aggressive next week. China's regulation has told banks to open credit taps for real estate companies to avoid damage from boycotting home buyers' payments.
Bank of America, Goldman Sachs and computing giant IBM will publish their financial statements. Oil prices rose after the failure of US President Joe Biden's visit to Saudi Arabia to provide an immediate response.
Here's what you need to know in the financial markets on Monday, July 18.
1. The recovery rally continues, believing that the Fed will raise the interest rate by only 75 basis points
The growth of capital markets continued after the publication of economic data on Friday.
The University of Michigan consumer sentiment index showed that the Fed is winning the battle to end expectations of continued high inflation. Meanwhile,
The Wall Street Journal reported that Fed officials are aiming to raise interest rates by just 75 basis points next week, compared with 100 basis points.
The improvement in risk sentiment is being felt in the global equity and bond markets and even in the cryptocurrency market, where the price of bitcoin has soared to more than $22,000.
2. China instructs banks to lend keys to real estate
The Chinese authorities have taken measures to prevent an uprising by home buyers who refuse to pay their mortgages in protest against the refusal of real estate giants.
The regulation of China's banks has instructed lenders to provide credit for the appropriate keys to real estate to complete unfinished houses.
The Bank of China's real estate lending ceiling last year became one of the main factors in the wave of insolvency that arose after the ceiling was placed in the sector of 20% of China's GDP.
The mortgage boycott, which spread like wildfire last week, threatened to drain one of the last sources of liquidity left in the sector.
3. US stock markets are expected to open with rising rates; banks' financial reports are back in the spotlight.
US stock markets are expected to open on the upswing, and all attention is focused on the financial reporting season next week.
As of Monday afternoon, Dow Jones futures were up 261 points, or 0.8%, while S&P 500 contracts were up 0.9% and Nasdaq 100 contracts were up 1.1%.
Today, major financial reports will come from banks of Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS) and Charles Schwab (NYSE:SCHW) before the opening of trading, and the financial reports of the computing giant (NYSE: SCHW) will be in the spotlight after the opening.
Elsewhere, the U.S. National Association of Home Builders (NAHB) housing Market index is expected to be published. The main NAHB activity index fell to its lowest level in almost two years last month.
4. The heat wave adds to the misery in Europe
Many crises in Europe show no signs of improvement, and the mood is unlikely to improve due to record temperatures on the continent. In the UK, 40 °C will be recorded for the first time, and huge fires wreaked havoc in Portugal, Spain, France and Greece over the weekend.
While broader energy security remains in question, gas supplies from Russia remain strictly and artificially limited.
German energy giant Uniper (ETR:UN01) said it pulled the last two billion euros from its emergency loan from the State Development Bank KfW, exhausting one of the last remaining sources of liquidity.
Meanwhile in Italy, Prime Minister Mario Draghi seems no closer to resolving the impasse between the country's political parties, which led him to resign last week.
5. Oil prices are rising amid Biden's disregard for Saudi Arabia
The price of crude oil rose after the visit of US President Joe Biden to Saudi Arabia.
The market was disappointed by the words of Saudi Arabia's Foreign Minister Prince Faisal bin Farhan Al Saud, who said that the issue of oil was not discussed at the US-Arab summit on Saturday.
As of Monday afternoon, the price of crude oil in the United States rose by 1.9% to $96.39.
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