Shares fall for second day as investors weigh tensions in China, new earnings figures

Bill Ackman calls for further rate hikes

Hedge fund manager Bill Ackman said on “Squawk Box” that the Federal Reserve needs to raise interest rates to about 4% or higher to fight inflation.

“I think for the foreseeable future — 12 to 18 months or so — rates need to stay 4% plus to kill this inflation. And maybe they need to raise rates,” Ackman said. “The biggest risk to the markets is that people won’t price that in.”

Ackman’s Pershing Square has interest rate hedges that would benefit from short-term interest rates and higher yields on 30-year Treasury bonds, he said.

Watch the full interview here.

— Jesse Pound

Vacancies plunge in June

The June Job Openings and Labor Turnover Survey, released Tuesday morning by the Bureau of Labor Statistics, found the number of job openings fell to 10.7 million. That was much lower than economists’ expectation of a printout of 11.14 million.

The largest declines in job openings have been in retail, wholesale, and state and local government education.

— Carmen Reinicke

Stocks open lower, led by Dow’s 266-point drop

Shares opened lower Tuesday as traders consumed tensions with China over House Speaker Nancy Pelosi’s visit to Taiwan, a new round of earnings reports and economic data coming later in the day.

The Dow fell more than 260 points and was plagued by Caterpillar, which fell more than 4% on weaker-than-expected gains. The S&P 500 fell 0.53% and the Nasdaq Composite lost 0.30%.

— Carmen Reinicke

CNBC’s Jim Cramer says inflation has peaked, citing the drop in oil prices

The economy has reached peak inflation, as evidenced by the recent drop in oil prices, according to a tweet from CNBC’s Jim Cramer on Tuesday.

“I think the rate of oil decline disproves the lie, again, that we haven’t had peak inflation,” Cramer wrote. “Inflationaries simply refuse to believe that it could have peaked, regardless of the evidence.”

Data pointing to a global production slowdown caused oil prices to fall further from their highs this week, though they have recovered somewhat since then.

—Sarah Min

Shares May Rise After Pelosi Lands in Taiwan, Says JPMorgan

Stock markets could shake off house speaker Nancy Pelosi’s visit to Taiwan on Tuesday, especially if there’s no immediate response from China, JPMorgan wrote in a note dated Tuesday.

“Senators from both sides of the aisle have visited Taiwan this year, including Democrats Duckworth and Menendez and Republicans Graham and Scott,” analysts wrote. “Some of the Chinese responses to those visits have been military exercises in the Taiwan Strait and military aircraft over Taiwan.”

So the parallels with Russia/Ukraine and the potential to cut off parts of the global supply chain cannot be right, according to the note.

“Today, Pelosi’s plane is scheduled to land about an hour after the US opens; if there’s no immediate response, you may see markets soar,” JPMorgan analysts wrote.

— Carmen Reinicke

Don’t lose sight of the JOLTS data, says El-Erian:

According to Mohamed El-Erian, Allianz’s chief economic adviser, investors focused on House Speaker Nancy Pelosi’s trip to Taiwan, the key economic data coming today that could affect the Federal Reserve’s progress, should not. overlook.

“There is so much focus on the US-China issue, don’t lose sight of the JOLTS data,” El-Erian said on CNBC’s “Squawk Box” on Tuesday, referring to the Job Openings and Labor Turnover survey released later in the year. morning is expected.

That data is important to the Fed, he added, as it charts their path of potential rate hikes.

— Carmen Reinicke

Bank of America says customers have been buying stocks for five weeks in a row

Bank of America customers were net buyers of U.S. stocks last week, the fifth consecutive week of positive inflows, according to a note from strategist Jill Carey Hall. Total inflow was $4 billion, according to the note.

“All client groups were buyers this week. The purchase was led by institutional clients after selling the week before, while hedge funds and retail clients were net buyers for the second and fifth consecutive week, respectively,” Hall wrote.

Positive net purchases were seen in nine of the 11 sectors, with Bank of America customers leaning towards cyclical sectors, according to the note.

— Jesse Pound

Pinterest Shares Still Raised After Elliott Management Announced Interest

Shares of Pinterest rose more than 18% in premarket trading, holding on to gains Monday night after activist investor Elliott Management announced it had taken a stake in the company and was the largest investor.

The image-sharing company also reported earnings on Monday that disappointed in both revenue and revenue, but showed better-than-expected user numbers.

Uber skyrockets on profits

Shares of Uber rose more than 10% in premarket trading after the company reported quarterly results that beat Wall Street’s revenue expectations.

The company also reported a net loss of $2.6 billion for the quarter, part of which was attributed to investments in Aurora, Grab and Zomato.

Impact of Pelosi Journey on Markets

Mona Mahajan, senior investment strategist to Edward Jones, spoke on Tuesday about the impact of Pelosi’s potential visit to Taiwan on the markets in a “Squawk Box” appearance from CNBC:

“Geopolitical tension is a theme that we’ve seen all year that is weighing on the markets. … The risk and the concern is that we have a Russia-Ukraine 2.0, something even more serious coming out of China. I think “It’s a tail risk for now. I don’t think the trip will lead to any real economic disruption, but of course the rhetoric and headlines are starting to intensify and it’s something we need to keep an eye on going forward.”

John Melloy

Caterpillar Drops After Earnings Report

Shares of Caterpillar fell more than 1% after the industrial giant released mixed quarterly results. The company earned $3.18 per share, beating the Refinitiv consensus forecast of $3.01 per share. However, Caterpillar’s revenue of $14.25 billion was just below its estimate of $14.35 billion.

Fred Imbert

Treasury yields fall in early trading

Treasury yields fell in early trading Tuesday ahead of House Speaker Nancy Pelosi’s expected trip to Taiwan. The benchmark 10-year yield fell more than 5 basis points to 2.548%, while the 2-year yield fell to 2.856%.

Fred Imbert

Oil giant BP raises dividend as quarterly profits soar on high commodity prices

British oil giant BP raised its dividend on Tuesday as it posted record profits in the second quarter, benefiting from a surge in commodity prices.

Underlying replacement cost gain in the second quarter, used as a proxy for net income, came in at $8.5 billion. The skyrocketing profit allowed BP to increase its quarterly shareholder dividend by 10%, raising it to 6,006 cents per common share.

European equities are retreating, following global risk-off sentiment

European markets retreated slightly on Tuesday, tracking risk-off sentiment globally as investors assess whether last month’s rally should continue.

The pan-European Stoxx 600 fell 0.6% in London mid-morning, with technology stocks losing 2.1%, pushing nearly all sectors and major exchanges into the red. Telecom won 0.6%.

Earnings continue to be an important driver of individual price movements. BP, Ferrari, Maersk and Uniper were among the major European companies to report before the bell on Tuesday.

Chinese stocks plunge as tensions rise over Pelosi . visit

Stock futures open flat

Stock futures opened flat in overnight trading Monday.

Futures linked to the Dow Jones Industrial Average were up 0.06%, or 21 points. S&P 500 futures and Nasdaq 100 futures fell 0.06% and 0.01%, respectively.

— Samantha Subin

The benefit from here is limited in the coming months, says Truist’s Lerner

Investors overly focused on equities should consider using current market conditions to shorten their positions, as the advantage to equities going forward is limited, said Keith Lerner, Truist’s co-chief investment officer.

According to Lerner, the upside potential for the market in the coming months is likely to be limited in the 3% to 5% range, but the downside could exceed that amount.

“The market has undoubtedly been very resilient and maybe it will stay that way for a bit, but we don’t see the risk reward as compelling here,” he said.

This is by no means an indication of the top of the market and stocks could rise, but it is an opportunity to reassign exposure after last month’s strong market rally, Lerner added.

Samantha Subin

Pinterest shares 21% pop as Elliott Management reveals top investor position

Pinterest shares rose more than 21% after the company posted stronger-than-expected user numbers and Elliott Management revealed it is the largest shareholder in the image-sharing company.

Activist investor Elliott said in a statement it is “convinced of the ability to create value” at Pinterest, calling the social media company a “highly strategic company with significant growth potential.”

“As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next growth phase,” wrote Elliott.

Despite the stock move, Pinterest missed second-quarter estimates on the top and bottom lines. Monthly active users for the period came in 2 million higher than estimates.

— Samantha Subin

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