Here are five things you need to know this morning
U.S. inflation cools
U.S. consumer prices declined in June for the first time in six years. The consumer price index fell 0.4% from May and was up 3.5% from a year earlier. Excluding food and energy, the index was flat from May and up 2.6% from a year earlier. The report suggests a slide in prices at the pump in June offered consumers some relief as the worst of the Iran war energy shock started to fade. The data takes some pressure off the Federal Reserve to raise interest rates at its next policy announcement at the end of the month.
IBM earnings warning
Shares in IBM plunged by more than 20% in the pre-market after its preliminary second-quarter report. The tech giant missed analyst expectations on profit and revenue. It blames the shortfall on weaknesses in its software and infrastructure business because clients shifted money toward memory chips and AI. Ceo Arvind Krishna says IBM faltered in adapting quickly enough to the market.
Record results by big U.S. banks
Earnings season kicked off this morning with reports from several big U.S. banks. So far the results are better-than-expected, with several lenders posting records. Citigroup’s profit rose 45%, JP Morgan 41%, and Goldman Sachs a whopping 78%. Bank of America and Wells Fargo also posted healthy returns.
U.S. Fed chair to testify
Investors will be closely watching testimony today by U.S. Federal Reserve Chair Kevin Warsh before the House of Representatives’ Financial Services Committee. Members of Congress are expected to try to find out Warsh’s outlook for interest rates and other Fed policy. However, the new Fed chair has made it clear he believes central bankers should speak out only when they have something of value to put forward. Instead, he will likely highlight the five task forces he has appointed to examine various aspects of Fed operations.
Thomson Reuters selling print stake
Thomson Reuters is selling a 51% stake in its Global Print business to KKR for about US$500M in gross proceeds, forming a joint venture while retaining a 49% equity interest. KKR will hold majority control; Toronto-based Thomson retains 49% equity in the joint venture. The joint venture will hold an exclusive license to distribute content in print and via ProView eBook platform.
