The news shaping the markets today

Although Russia’s Gazprom tightened its gas squeeze on Europe, supplies through the Nord Stream 1 pipeline are expected to decline by only 20% of capacity. The news provided support to WTO crude oil prices this morning.

South Korea’s economy grew 0.7% during the three months to June, compared to 0.6% growth in the prior quarter. The latest reading also topped market expectations of 0.4% growth, lending support to the KRW/USD forex pair.

Morocco’s annual inflation rate accelerated to 7.2% in June, from 5.9% in each of the prior two months. Although the inflation rate surged to the highest level since 2008, the MAD/USD pair rose in forex trading this morning.

Brazil’s current account deficit narrowed to $2.8 billion in March, from $5.2 billion in the year-ago period. However, the BRL/USD forex pair traded flat after the news.

Mexico’s economic activity rose 2.1% year-over-year in May, following a 1.4% increase in the previous month. The figure also came in higher than market expectations of 1.7% growth, which sent the MXN/USD pair higher in forex trading this morning.

What’s happening: Shares of Whirlpool Corporation gained in after-hours trading on Monday, after the company reported upbeat earnings for its second quarter.

What happened: Although the company reported lower sales in most of its regions, sales in some of its major regions grew during the quarter.

Despite the upbeat earnings, the US home appliance company lowered its outlook for the full year.

How were the results: The Benton Harbor, Michigan-based company swung to a loss in the second quarter, but the figure still topped market views.

• Revenues declined 4.3% to $5.097 billion, from $5.324 billion in the year-ago quarter, and missed market expectations of $5.23 billion.
• Whirlpool reported a quarterly loss of $371 million, or $6.62 per share, versus a year-ago profit of $581 million, or $9.15 per share.
• On an adjusted basis, earnings stood at $5.97 per share, down from $6.64 per share in the previous year, but came in higher than the consensus estimate of $5.24 per share.

Why it matters: On June 27, the company agreed to sell its Russian business to Turkey’s Arcelik, projecting to record a loss of $300-$400 million in the second quarter.

The ongoing supply chain disruptions and easing demand also resulted in lower sales for the company.

Demand in Europe, the Middle East and Africa fell 10% from a year ago, with EBIT (Earnings Before Interest and Taxes) margins shrinking to 0.2%, from 2.5% in the previous year. Margins in the North America segment also narrowed to 14.1%, from 18.3% in the year-earlier quarter.

The company’s sales in North America declined 2.6%, while sales from Europe, the Middle East and Africa tumbled by 19.4%. However, sales in Asia surged by 25.7% and in Latin America grew by 3.1%.

“We delivered 9% ongoing EBIT margins globally and 14% in North America – this is further proof of our more profitable and agile business model. Moreover, long-term fundamentals of demand remain strong and we continue to progress our portfolio transformation to position ourselves to drive long-term value,” CEO Marc Bitzer said during the earnings call.

Management guided to an approximately 6% decline in full-year revenues to around $20.7 billion, versus the earlier projection of 2%-3% growth. They also lowered the adjusted earnings guidance from $24-$26.00 per share to $22-$24 per share.

How shares responded: Whirlpool’s shares gained 2% to $168.00 in after-hours trading, following the release of quarterly results, after declining 1.9% during the regular trading session. The stock has lost more than 20% over the past six months.

What to watch: Investors will continue monitoring the supply chain issues and the company’s performance across regions.

The markets today

The Canadian dollar will be in focus today ahead of the wholesale sales report from the country

Context: The CAD/USD forex pair recorded gains on Monday on optimism around the Canadian economy.

Details: The loonie started the week on a strong note after Canada released better-than-expected data on retail sales on Friday.

The country’s retail sales grew 2.2% to $62.2 billion in June, versus 0.7% growth in the previous month.

The Bank of Canada had recently surprised markets by increasing its main interest rate by 100 basis points to combat inflation. Following the hike, the country’s central bank became the first bank among the G7 countries to announce a big hike in the current economic cycle.

The policy rate was raised from 1.5% to 2.5%, representing the BoC’s biggest hike in 24 years. With the next policy meeting scheduled for September 7, the central bank has enough time to assess economic reports and announce its next move.

Meanwhile, Canada’s annual inflation rate climbed to 8.1% in June, from 7.7% in the previous month. Markets are widely expecting the BoC to hike interest rates again in September.

A rise in the price of crude oil, one of Canada’s largest exports, also provided support to the loonie. WTI crude oil for September delivery climbed $2 to $96.70 per barrel on Monday.

The CAD/USD forex pair rose by around 0.6% to $1.2848 on Monday.

What to watch: Traders await the release of wholesale sales data from Canada today. The country’s wholesale sales had grown by 1.6% in May, following a 0.5% decline in the prior month.

Other Markets: European trading indices mainly closed higher on Monday, with the FTSE 100, CAC 40 and STOXX Europe 600 up by 0.41%, 0.33% and 0.13%, respectively, and the DAX 40 down by 0.33%.

Support & resistances for today

Market snapshot

What else to watch today

South Africa’s leading business cycle indicator, Spain’s producer inflation, UK’s CBI distributive trades survey’s retail sales balance, Brazil’s IPCA-15 consumer price index, US Redbook index, S&P CoreLogic Case-Shiller 20-city home price index, FHFA house price index, new home sales, CB consumer confidence, Richmond Fed composite manufacturing index, and Dallas Fed services index, China’s foreign direct investment as well as Argentina’s retail sales.

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