Morning Bid: Earnings overload

August 4 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

World markets turned quieter on Tuesday after yesterday's equity rally and oil price decline, with Asian stock markets steady and Wall Street futures pointing up slightly.

Well over halfway through the booming U.S. corporate earnings season, attention today will turn to the first earnings report of Elon Musk's SpaceX.

I'll get into that and more below.

But first, check out my latest column on the overstimulated U.S. economy and what the bond market may do about it.

And give us your thoughts on the corporate earnings outlook in ROI's latest LinkedIn poll.

Finally, listen to today's episode of the Morning Bid daily podcast, where we discuss the latest sign of U.S. economic resilience.

EARNINGS OVERLOAD

The earnings season continues to generate significant price moves. Palantir beat estimates overnight, largely thanks to large government contracts, lifting the tech group's stock more than 10% in extended trading.

The broad picture of U.S. manufacturing last month was similarly impressive, with yesterday's latest surveys showing factory growth running at its fastest pace in four years, despite sky-high input prices.

Oil ticked up slightly on Tuesday after dropping 7% yesterday, amid confusion about what could happen next in the Gulf. President Donald Trump's claim that talks with Iran would take place on Monday was denied by Tehran, which said the only talks underway were with Oman over the Strait of Hormuz.

Another ship was attacked near this critical waterway on Monday. Traffic through Hormuz and the Bab el-Mandeb strait has remained minimal and largely unchanged recently.

Meantime, the yen story went somewhat quiet after Tokyo and Washington's heavy joint intervention to lift the ailing Japanese currency last week. The yen eased slightly against the dollar early on Tuesday but stayed well above recent 40-year lows.

We may now be entering a period in which markets and authorities play something of a cat-and-mouse game to test Tokyo's resolve to draw a line under the currency. But for now, things are calmer.

Elsewhere, results season saw HSBC profits jump and the bank resume buybacks, echoing the bumper quarter enjoyed by the world's other big banks.

Later today, SpaceX's earnings, due after the bell, will shed light on Starlink profits and how far they can bankroll the rocket maker's growing AI capex.

And, finally, the week's U.S. labor market releases will kick off later today with job openings data for June, ahead of the July employment report on Friday.

Chart of the day

SpaceX's first earnings report since its IPO will provide an early gauge of whether Starlink's profits can sustain the company's rapidly growing spending on AI and space ventures.

The results will give SpaceX's limited pool of public investors their first chance to judge whether the financial case behind the company's lofty valuation supports CEO Elon Musk's vision of creating a powerhouse spanning AI, space and telecommunications.

SpaceX shares have pulled back sharply since the company's $86 billion IPO in June, as investors questioned whether its pricing at 77 times forecast revenue can be justified.

Today's events to watch

• U.S. June JOLTS job openings (10 a.m. EDT), June factory orders (10 a.m. EDT), June trade balance (8:30 a.m. EDT)

• 30-year TIPS auction (1 p.m. EDT)

• Kansas Fed's Jeffrey Schmid speaks (8:15 p.m. EDT)

• U.S. corporate earnings: SpaceX, AMD, Pfizer, Merck, Apollo, Caterpillar

Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Mike Dolan)