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US equity markets weaker ahead of tonight’s AEST June consumer price inflation figures, with losses accelerating in the final hour of trading - Dow fell -193-points or -0.62%. The broader S&P500 lost -0.92%, with the Energy sector (down -2.03%) leading all eleven primary sectors lower. The Nasdaq -0.95%. The small capitalisation Russell 2000 eased -0.22%.

US equity markets retreated following news that China is imposing more COVID-related restrictions and as second quarter corporate earnings and inflation data later this week looms large - Dow fell -164-points or -0.52% after briefly popping into positive territory in early afternoon trade. Walt Disney Co (down -2.32%) and Nike Inc (-2.61%) were at the forefront of the 30-stock indice’s decline. The broader S&P500 shed -1.15%, with the Communication Services (down -2.80%) and Consumer Discretionary (2.76%) both down over >2.5% to lead nine of the eleven primary sectors higher. The more defensive Utilities (up +0.64%) and Real Estate (+0.01%) sectors were the only primary sectors to advance. Casino operators with operations in Macau were under pressure after Macau city officials said casinos there would be shut down for a week to fight a COVID-19 surge. Wynn Resorts Ltd fell -6.46%, Las Vegas Sands Corp, and Melco Resorts & Entertainment Ltd -9.64%. The Nasdaq dropped -2.26%. Apple Inc and Tesla Inc – whose combined market capitalisation of just over >US$3 trillion accounts for over >16% of the Nasdaq’s aggregate market capitalisation – fell -1.5% and -6.6% respectively. Amazon.com Inc fell -3.28% ahead of its annual northern summer savings event Amazon Prime Day, kicking off tonight AEST. Twitter Inc tumbled -11.3% as the fallout continued from Elon Musk’s announcement after the closing bell last Friday (8 July) that he was terminating his deal to buy the social media company, citing contractual breaches. The small capitalisation Russell 2000 lost -2.11%.

Equity Strategist Tom Sartor updates us on commodities in the Australian market, with very healthy prices currently, possible inflation risks, as well as what could be next for the sector.

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We adjust forecasts across our Auto coverage, with broad downgrades driven primarily by an expectation of weakening consumer demand and relatively limited near-term vehicle supply improvement in Australia.

See sector note here: https://morgans.com.au/Blog/2022/July/Auto-And-Parts-CY22-YTD

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US equity markets ended the week on a mixed note as investors pondered the implications of another strong monthly jobs report - Dow slipped -46-points or -0.15%, The broader S&P500 dipped -0.08%, snapping a four session winning streak (the indice’s best winning stretch since late March), with the Materials sector (down -1.00%) leading nine of the eleven primary sectors lower. Healthcare (up +0.27%) and Information Technology (+0.07%) were the only two primary sectors to advance. The Nasdaq added +0.12%, extending the technology-centric index’s rebound into a fifth straight session, its longest winning streak since November. Tesla Inc rose +2.27% after the company shipped a record 78,906 vehicles in China in June, according to China Passenger Car Association data. Tesla’s best month before that was December 2021, when wholesale deliveries topped 70,800. Tesla shipped ~113K vehicles from its Shanghai plant in the second quarter, down ~38% from 182,174 in the first quarter and illustrating the impact COVID-19 has had on recent results. Year to date, Tesla’s share of Chinese wholesale new energy vehicles (NEV) shipments - a category that includes plug-in hybrids and battery-electric vehicles - is down to ~12% from 15% in the first half of 2021. Twitter Inc fell -5.1% (and was down a further -4.81% in extended trading) following a Washington Post report that reported that Elon Musk was planning to back out of his takeover offer for the social media company. Confirmation came after the market close in a filing reporting that the Tesla Chief Executive’s lawyers had sent a letter to Twitter terminating the deal, saying the social media company had “not complied with its contractual obligation” and asserting that it breached terms of the agreement by refusing to provide detailed information about fake accounts on the site. The small capitalisation Russell 2000 dipped -0.01%.

We preview the FY22 results of the five gaming stocks in our universe that report in August.

Read our full Gaming sector preview here: https://morgans.com.au/Blog/2022/July/Gaming-FY22-Reporting-Season-Preview

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US equity markets advanced, with the S&P 500 index and Nasdaq Composite booking a fourth day in a row of gains - their longest unbroken advance since March – ahead of tonight’s June jobs report - Dow gained +347-points or +1.12%, The broader S&P500 +1.50%, with Energy (up +3.51%) returning to the top of the primary sector leaderboard. Chevron Corp rose +1.95%, Exxon Mobil Corp +3.19% and Occidental Petroleum Corp +3.99%. Consumer Discretionary (up +2.48%) and Information Technology (+2.06%) both rose over >2%, with ten of the eleven primary sectors advancing. Utilities (down -0.10%) was the only primary sector to settle in the red. The Nasdaq rallied +2.28%. Chipmaker Micron Technology Inc (up +2.58%), Advanced Micro Devices Inc (+5.24%) and Nvidia Corp (+4.81%) traded strongly, buoyed by South Korea’s Samsung Electronics Co (+3.19%) posting its best April-June profit since 2018, driven by strong memory chip sales to server customers. The small capitalisation Russell 2000 gained +2.43%.

We make one new addition to the list this month, adding AGL Energy (ASX:AGL).

Our best ideas are those that we think offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence. They are our most preferred sector exposures.

Access Morgans Best Ideas for July 2022: https://morgans.com.au/Blog/2022/July/Best-Ideas-July-2022

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US equity markets settled with modest gains as investors digested the minutes from the Federal Reserve’s mid-June monetary policy meeting that saw central bank officials reiterate their resolve to aggressively tackle inflation - Dow added +70-points or +0.23%, The broader S&P500 gained +0.36%, with Utilities (up +1.01%) and Information Technology (+0.88%) leading eight of the eleven primary sectors higher. Energy dropped -1.74% to sit at the foot of the primary sector leaderboard for a second straight session. The Nasdaq rose +0.35%. Microsoft Corp rose +1.28% despite the Associated Press reporting that its acquisition of game publisher Activision Blizzard Inc (down -0.63%) will face antitrust scrutiny in the U.K., after regulators said Wednesday (6 July) they opened an initial inquiry into the US$69B deal. The small capitalisation Russell 2000 lost -0.79%.

The Fed and the RBA are pulling Pandemic support as rapidly as they dare.

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