Here are five things you must know for Wednesday, July 18:
1. -- Stocks Flat Despite Powell's Optimism
U.S. stock futures suggested a somewhat flattish start for Wall Street on Wednesday, July 18, following an upbeat assessment of the U.S. economy from Federal Reserve Chairman Jerome Powell.
Contracts tied to the Dow Jones Industrial Average
The first of two days of testimony by Powell on Capitol Hill helped boost both short-term Treasury bond yields and the U.S. dollar, as investors reset expectations for near-term rate hikes, but continued to fret over the longer-term impact on global economic growth from trade wars currently being waged by Washington and its allies and competitors.
Powell didn't go into too much detail on the impact of trade wars on economic growth, saying only that countries with fewer tariff barriers tend to expand faster. His decision to "stay in our lane," as he put it on Tuesday, July 17, could suggest he's not ready to add a political dimension to his relatively new chairmanship at the Fed. It may also explain why interest rate futures showed only modest increases for expected rate hikes in September and December even after his guidance for at least two more moves this year.
"With appropriate monetary policy, the job market will remain strong and inflation will stay near 2% over the next several years," Powell said.
Powell will testify on Wednesday at 10 a.m. ET before the House of Representatives Financial Services Committee. The economic calendar in the U.S. on Wednesday also includes Housing Starts for June at 8:30 a.m. ET, Oil Inventories for the week ended July 13, at 10:30 a.m., and the Federal Reserve's "Beige Book" at 2 p.m.
2. -- Morgan Stanley, eBay, IBM Report Earnings
Morgan Stanley (MS) reported second-quarter earnings of $1.30 a share, beating estimates of $1.11. The stock rose 4% in premarket trading.
Earnings are also expected Wednesday from eBay Inc. (EBAY) , American Express Co. (AXP) , International Business Machines Corp. (IBM) , Abbott Laboratories (ABT) , T-Mobile US Inc. (TMUS) and U.S. Bancorp (USB) .
3. -- Google Faces a Record $5 Billion Fine From EU
Alphabet Inc.'s (GOOGL) Google was fined a record $5 billion from European antitrust authorities Wednesday, following a lengthy investigation into contracts that tie makers of android-operated smartphones to the exclusive sale of Google's apps.
Bloomberg first reported the news of the EU fine.
Google, which was fined last year a then-record €2.4 billion by the European Competition Commission for denying "other companies the chance to compete on the merits and to innovate" in the market for price comparison searches on its website, was handed the additional levies for allegedly compelling smartphone makers to take Google services, including its web browser, when they want licensing access to the Google Play store.
Alphabet shares fell 0.3% in premarket trading.
4. -- TI CEO Resigns for 'Code of Conduct' Violations
Texas Instruments Inc. (TXN) CEO Brian Crutcher resigned his posts as CEO, president and board member after violating the company's code of conduct with his personal actions, the Dallas-based company best known for its graphing calculators announced on Tuesday.
Crutcher began his stint as CEO on June 1.
Chairman Richard Templeton will resume the added roles of CEO and president "on an ongoing, indefinite basis," the company said.
"For decades, our company's core values and code of conduct have been foundational to how we operate and behave, and we have no tolerance for violations of our code of conduct," Texas Instruments said. "Over the past 14 years, Rich has successfully led TI to become the company it is today, and we have great confidence in his values and ability to continue to lead this company forward."
5. -- Walmart Mulls Streaming Video Service - Report
Walmart is thinking of pricing its service below $8 per month, according to one of the people. Netflix's service now costs between $8 and $14 a month, while Amazon.com Inc. (AMZN) charges $8.99 a month for its Prime Video service.
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