<h2>Wall Street Gears Up for Crucial Test of Big Tech Stocks Amidst Fed Meeting</h2> The earnings report due of Microsoft and Alphabet could prove to be an indicator of the extraordinary rise of Big Tech shares this year.&nbsp;While Federal Reserve officials commence their two-day policy conference, Wall Street is closely following the report and anticipating the impact they will have on the markets. <h2>Chinese Stocks Recover, Bolstering Global Markets</h2> In the wake of a misguided announcement from the ruling Politburo that praised the "tortuous" growth of the economy in China Monday, weak Chinese stocks saw a delayed however much-needed bounce.&nbsp;Hong the Hong Kong's Hang Seng index (HSI) saw a snapback of 4 which was partially fueled by a significant 12% rise in the struggling housing industry (HSMPI).&nbsp;The wider blue chip CSI 300 Index (CSI300) was also up, ending the losing streak of six days by gaining 3 due to the purchase of the support of state-owned banks which supported the Chinese yuan. <h2>European Markets Subdued Amid Tightening Credit Conditions</h2> Contrary to the ebullient market sentiment however, the mood of the market in Europe was a bit more restrained.&nbsp;Recent surveys of large banks, conducted by the European Central Bank revealed a decrease in the demand of business loans in the 2nd quarter.&nbsp;Credit conditions were tighter, which resulted in the lowest level of demand for loans over the course of 20 years in the survey's history.&nbsp;Furthermore, German business confidence displayed declines this month in addition to the general skepticism. <h2>Diverging Global Demand Pulse</h2> The divergent reports can cause confusion regarding the pulse of global demand in the days leading up to our Fed meeting.&nbsp;The report shows declining U.S. business sentiment in July. However, it indicates overall increases in activity and activity, in contrast to the euro zone where there is a slowdown.<img src="https://cdn.forexoverflow.io/images/1690288854119-hza7ct06iz4nh38-global-business-activity-1.png">Sources form Reuters <h2>Euro/Dollar Exchange Rate Impacted by Reports</h2> In the wake of these reports that the exchange rate between dollars and euros decreased, as did an enduring uncertainty regarding the pace of demand across the globe in the lead-up to next week's Federal Reserve meeting.&nbsp;Although there were reports of decreasing U.S. business sentiment in July, there was general growth in the economy, as opposed the euro zone that was experiencing a decline. <h2>Oil Prices and Treasury Yields Experience Volatility</h2> The price of crude oil jumped into three-month records because of a major U.S. refinery outage and expectations of a stimulus package from China.&nbsp;But a tepid auction resulted in a 10- basis point increase in the 2-year Treasury yields, resulting in an uncertain financial environment.&nbsp;In the aftermath, oil prices as well as Treasury yields have retraced some their gains. Year-on-year oil price drops were apparent at greater than 21 percentage.&nbsp;The gauges of volatility, VIX (VIX) were also down from their previous two week highs. <h2>Nasdaq 100 Index Rebalances with No Major Market Impact</h2> Rebalancing the Nasdaq 100 index didn't lead to any noticeable market reactions.&nbsp;Although weightings of some big caps were pared down to reduce "over-concentration," it didn't cause significant disturbances in the market. <h2>Investors Anticipate Mega Caps' Earnings Reports</h2> The earnings season is now underway Investors are anxiously waiting for the post-hours earnings reports of technology majors Microsoft (MSFT.O) as well as Alphabet (GOOGL.O).&nbsp;Markets are focusing on these reports, specifically due to the massive rises in the market for AI-related stocks as well as the record-breaking valuations this year. <h2>Fed Decision Looms Large</h2> The market's movements leading on Wednesday's Fed decision could be limited in the meantime as investors wait in anticipation of the result.&nbsp;The futures market is currently scheduled for another quarter-point hike in the rate, which would set the price between 5.25-5.50 percent.&nbsp;The market is indicating that this could be the last rate hike in this period and the likelihood of a second hike later on in the year falling to less than 50 percent.&nbsp;But, expectations of easing for the next 12 months is gradually being reined into.<img src="https://cdn.forexoverflow.io/images/1690288883085-rx1luuqzl2261ah-the-fedd-2023-u-trun-1.png">Sources from Reuters <h2>﻿Events to Watch on Tuesday</h2> Alongside the above-mentioned market events The investors must be aware of the following developments on the eve of Tuesday:<ul><li>U.S. Corporate Earnings: Microsoft, Alphabet, Texas Instruments, NextEra Energy, Visa, Invesco, GE, GM, Dow, Danaher, Corning, Kimberly-Clark, Biogen, Verizon, Moody's, EQT, 3M, Universal Health, Chubb, Dover, Nucor, Paccar, Sherwin-Williams, Archer-Daniels-Midland, etc.</li><li>U.S. July Consumer Confidence, Richmond Fed July Business Survey, Philadelphia Fed July Service Sector, May House Prices.</li><li>The Federal Reserve's Federal Open Market Committee starts the two-day meeting, with the scheduled decision set on Wednesday.</li><li>International Monetary Fund updates World Economic Outlook.</li><li>U.S. Treasury auctions 5-year notes.</li></ul>

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Explore the morning market bid with the focus on Big Tech as investors await the Federal Reserve's meeting and its implications.

Morning Bid Analysis: Federal Reserve and Tech

Morning Market Update: Federal Reserve and Big Tech

<h2>Asian Equities Set for Record-Breaking Week Amid US Inflation Slowdowns</h2> Asian markets are poised to end the week on a high note, marking their most successful week of the year. The latest data indicating a deceleration in US inflation has fueled optimism that the Federal Reserve will halt rate hikes, sparking a robust rally across global markets. <h2>Encouraging Signs of Inflation Deceleration</h2> Investors welcomed the smallest increase in US factory gate inflation in almost three years. This positive development follows a 12-month slowdown in US consumer price inflation, bringing it to its lowest annual rate in over two years. <h2>Anticipating a Smooth Economic Transition</h2> While the full impact of the 500 basis points of rate hikes implemented by the Federal Reserve since March of last year is yet to be fully realized, the prevailing optimism surrounding a "soft landing" scenario has driven down the value of the US dollar and propelled asset prices upward. <h2>Asia's Economic Indicators and Market Impact</h2> Despite the release of key Asian economic indicators on Friday, such as Singapore's GDP, Japanese industrial production, and Indian wholesale price inflation, market sentiments remain largely unaffected. The prevailing bullish outlook appears to overshadow any potential disappointments. <h2>Global Market Conditions Benefit from Weaker Dollar and Lower Bond Yields</h2> The decline in the value of the US dollar, coupled with decreasing US bond yields, has created favorable financial conditions for global markets, particularly emerging economies. As a result, MSCI's World stock index surged by more than 1% on Thursday, reaching its highest point since April of last year. Additionally, both the S&amp;P 500 and Nasdaq reached fresh 15-month highs, while the MSCI Asia ex-Japan index experienced a notable jump of over 2%. <h2>Asia-Pacific Shares' Impressive Performance</h2> The broadest index of Asia and Pacific shares has witnessed a remarkable 5% increase this week, positioning it for the most outstanding performance since November. Notably, this surge compensates for the relatively lacklustre year-to-date gains, emphasizing the significant gap between these markets and their US, European, and Japanese counterparts. <h2>China's Struggles Impacting Global Markets</h2> China's economic woes, including sluggish growth, deflation, and a complex interplay between a devaluing exchange rate and widespread financial market sell-offs, have significantly weighed down Asia-Pacific shares. The latest economic signals from China continue to dampen market sentiment, with a 12.4% slump in exports in June—the most significant decline in three years—and a 6.8% drop in imports, both exceeding analysts' expectations. <h2>Positive Market Response to Beijing's Tech Sector Reassurance</h2> Despite the prevailing challenges, Chinese shares managed to rally over 1% following an announcement from Beijing signaling the end of its tech sector crackdown. Premier Li Qiang held discussions with leading tech firms, urging them to take greater measures to support the economy. <h2>Ongoing Dialogue Between China and the US</h2> High-level talks between Chinese and US officials persist, addressing various issues, including trade. This ongoing dialogue is expected to mitigate geopolitical risks, albeit to a limited extent.<h2> </h2><h2>Key Developments for Friday's Market Direction</h2>﻿Market participants eagerly await several key developments that could shape Friday's market trends, including:<ul><li>Singapore's Q2 GDP report</li><li>Japan's May industrial production figures</li><li>India's June wholesale price inflation data</li></ul>As these reports are released, market dynamics may experience shifts based on the outcomes, potentially influencing investor sentiment and asset valuations. In summary, Asian equities are experiencing their best week of the year, driven by positive market sentiment following signs of slowing U.S. inflation. The weakening dollar and falling U.S. bond yields have created favorable financial conditions globally. However, China continues to face economic challenges, while ongoing dialogue between Chinese and U.S. officials may help reduce geopolitical risks. Investors should closely monitor key developments such as Singapore's GDP, Japan's industrial production, and India's WPI inflation figures for further insights into market trends.

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Morning Market Update: Federal Reserve and Big Tech

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