Global Markets React Calmly to Biden's Withdrawal, Focus Shifts to Earnings and Interest Rates

Markets remained steady after Joe Biden's withdrawal from the U.S. presidential race, shifting focus to earnings and interest rates. Key developments include Tesla and Alphabet earnings, Google’s reversal on cookie removal, and mixed performances in luxury stocks affected by Chinese demand and profit warnings.

Markets mostly took Joe Biden's withdrawal from the U.S. presidential race in their stride, shifting focus back to earnings and interest rates. In the U.S., a September rate cut is all but guaranteed, while Europe expects a 25 basis-point cut in October. Key economic indicators due on Tuesday include Euro zone consumer confidence figures and U.S. existing home sales.

Stock markets stabilized after a sharp selloff in chipmaking companies' shares, with earnings from Tesla and Alphabet set to guide trader sentiment. Tesla's profit margins are expected to have declined, while Alphabet aims for a fourth consecutive quarter of double-digit revenue growth due to an advertising market uptick.

Google on Monday reversed its decision to remove user-tracking cookies from Chrome, under pressure from advertisers. Also reporting earnings are Texas Instruments and Visa after the U.S. market close, while Coca-Cola, General Electric, General Motors, and UPS will report before trading begins. In Europe, Thales reports in the Paris morning, and Louis Vuitton earnings will provide insight into Chinese demand. Despite recent rate cuts in China, luxury stocks are struggling due to a prolonged downturn, with earnings from Burberry, Hugo Boss, and Richemont reflecting ongoing challenges.

Key developments to watch on Tuesday include Euro zone consumer confidence, U.S. existing home sales, Richmond Fed manufacturing index, and earnings from Thales, LVMH, Coca-Cola, General Electric, General Motors, UPS, Tesla, and Google.