Morning Bid: From payrolls to profits

• Samsung Electronics is expected to report an 18-fold profit jump on Tuesday driven by AI memory chip demand, while SK Hynix plans a $28 billion U.S. listing
• S&P 500 companies are projected to deliver robust earnings growth of over 24% in Q2, with early reports from Delta Air Lines and PepsiCo providing insights into consumer health
• Oil prices fell below $72 per barrel as supply concerns eased with increased flows through the Strait of Hormuz and OPEC+ production quota increases, while the Japanese yen weakened toward 40-year lows past 162 per dollar

Market Summary: Focus Shifts from Jobs Data to Earnings Season

Key Market Developments:

Markets opened the week cautiously as investors returned from the U.S. July 4th holiday to digest weaker-than-expected June jobs data and the start of Q2 earnings season. U.S. nonfarm payrolls increased by just 60,000 jobs, significantly missing the 110,000 expected, with April and May figures revised down by a combined 74,000. The soft print prompted investors to scale back Federal Reserve rate hike expectations for September.

Tech and Semiconductor Focus:

Chip stocks remain under scrutiny following a recent tech selloff. Samsung Electronics reports earnings Tuesday, expected to show an 18-fold profit jump driven by AI memory chip demand. Rival SK Hynix is launching its U.S. listing Monday, targeting $28 billion. South Korea's chip-heavy KOSPI index fell 0.5% Monday. The AI boom has propelled both Samsung and SK Hynix into the trillion-dollar market cap club.

Earnings Season Outlook:

S&P 500 companies are projected to deliver robust Q2 earnings growth exceeding 24%. Delta Air Lines and PepsiCo will report later this week, providing insights into U.S. consumer health—particularly important given the weak jobs data.

Other Market Movements:

• Oil prices steadied under $72/barrel amid easing supply concerns and increased OPEC+ production quotas
• The U.S. dollar softened following the jobs report but strengthened Monday
• Gold recouped recent losses but declined Monday on dollar strength
• Japanese yen approached 40-year lows past 162 per dollar, raising intervention concerns

Key Events:

Fed meeting minutes (Wednesday) and U.S. ISM services PMI will provide additional policy direction. The NATO summit in Turkey (Tuesday-Wednesday) will address the ongoing Ukraine conflict.