Good morning! Here’s what you need to know in markets on Wednesday.
1. Fed Chairman Jerome Powell appeared before the Senate Banking Committee on Tuesday as part of his semi-annual testimony before Congress. Powell said the US job market will likely remain strong and inflation should hold below 2%.
2. Gold is at its lowest level in a year as the dollar soars. The yellow metal is down 0.15% to $1,224.41 at the time of writing (7.10 a.m. BST/2.10 a.m. ET), while the greenback is near 2018 highs at 95.17 on the Dollar Index thanks to Powell’s comments.
3. Bitcoin had one of its biggest upswings in recent memory on Tuesday, soaring close to 10% to break through $7,000, according to Markets Insider data. The cryptocurrency is up 2% against the dollar to $7,464.40 at the time of writing (7.15 a.m. BST/2.15 a.m. ET).
4. Asian shares followed Wall Street higher on Wednesday as a bullish outlook from the head of the US central bank lifted Tokyo shares to a one-month top. Japan’s Nikkei closed up 0.52%, while the Hong Kong Hang Seng is down 0.41% at the time of writing (7.23 a.m. BST/2.23 a.m. ET), and the Shanghai Composite is down 0.18%.
5. Inflation numbers are coming. Price growth data for the UK in June is due from the Office for National Statistics at 9.30 a.m. BST (4.30 a.m. ET). EU data from Eurostat follows at 10.00 a.m. BST (5.00 a.m. ET). The figures are expected to show UK inflation running at 2.6%, up from 2.4% in May, and flat at 2% across the eurozone.
6. Google will learn if it faces a record fine over its Android operating system in the coming hours. The BBC reports that the European Commission has claimed the US tech giant’s mobile device strategy unfairly strengthened its dominance of search.
7. For the third time in five months, a trade war topped the ranking of tail risks in Bank of America Merrill Lynch’s fund-manager survey. Michael Hartnett, the chief investment strategist at BAML, offered four trading ideas for contrarian investors who want to bet that trade disputes won’t lead to financial carnage.
8. Watchmaker Swatch reported its highest first-half earnings in three years on Wednesday morning, fueled by growth in Asia and market share gains for its 18 brands. Bloomberg reports that operating profit rose 70% to 629 million Swiss francs ($628 million).
9. An indicator of the so-called smart money on Wall Street has been in free fall for most of this year, and Morgan Stanley’s equity strategists say it’s a bad signal for the market. Last week, Morgan Stanley downgraded the tech sector and urged clients to turn defensive in stocks.
10. Walmart might be taking on some of the biggest names in video streaming with a service of its own – and its price might be lower than Netflix or Amazon. According to The Information, Walmart is considering jumping into the streaming world with an offering that could cost less than $8 a month.