Here are the key news updates for investors to start their trading day:
1. Positive Momentum for Dow:
As the week begins, stocks are riding a wave of positivity. Although the S&P 500 and the Nasdaq experienced minor declines on Friday, all three major U.S. indices closed the week on a strong note. The Dow Jones Industrial Average had its best week since March, with gains recorded for all five days. With June's job numbers showing strength and improving inflation figures, investors are eagerly awaiting the Federal Reserve's policy-setting meeting later this month. Market expectations lean towards the central bank resuming its rate-hiking agenda after last month's pause. However, with solid economic indicators, the question arises as to how long the Fed will continue to raise rates. Stay updated with live market updates.
2. Earnings Season Commences:
Last week, investors received a glimpse of the new earnings season with reports from PepsiCo, JPMorgan Chase, and Delta Air Lines. This week promises even more activity, with prominent companies such as Netflix and Tesla scheduled to report. Wall Street anticipates a potentially bumpy ride this quarter, as analysts expect a more than 7% decline in earnings for S&P 500 companies compared to the previous year, according to FactSet. Here are some major companies to watch this week:
3. Resolution in Call of Duty Standoff:
Just days before Microsoft's acquisition of Activision Blizzard, the game maker behind Call of Duty, was set to close, Sony resolved its concerns and halted its opposition. Sony, the manufacturer of the PlayStation console, had previously expressed worries about the deal's anti-competitive nature, potentially granting Microsoft exclusive control over the lucrative Call of Duty franchise. However, both parties recently announced a long-term agreement to ensure Call of Duty remains available on PlayStation following the completion of the Activision deal. While the outcome is not yet certain, Microsoft's chances have significantly increased after federal courts rejected the Federal Trade Commission's attempts to block the acquisition. Microsoft and Activision aim to finalize the deal on Tuesday.
4. Turmoil in the Media Industry:
The U.S. media industry faces significant challenges due to striking writers and actors causing production shutdowns, declining advertising revenues, persistent streaming losses, underperforming blockbusters, and the decline of traditional TV. The road ahead appears daunting for the industry, with no clear solutions in sight. Netflix, a disruptive force in the industry, will kick off media earnings this Wednesday. Although Netflix has rebounded from last year's slump and can rely on international productions during the strikes, its rivals are grappling with existential crises. Disney's CEO, Bob Iger, recently put the company's TV assets, including ABC, up for sale after revealing worse-than-expected performance in the television business. Will industry consolidation and fire sales be the answer? CNBC's Lillian Rizzo delves into the details.
5. Russia's Grain Deal Fallout:
Russia withdrew from a grain deal in the Black Sea region just hours before it was set to expire, posing a threat to food security for millions of people. The agreement, initially reached a year ago, allowed Ukraine to export grain to several markets. Russia's decision came after Turkey, a crucial facilitator of the grain pact, dropped its opposition to Sweden joining NATO, which angered Russia. Additionally, Russia claimed that Ukraine destroyed a bridge connecting Russia to Ukraine's illegally annexed Crimean peninsula, an event that occurred nine years ago under Vladimir Putin's forces.
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