Update

 equities extended Tuesday’s gains as the pullback in the bond market eased fears over slowing growth.

*U.S. Highlights*

Dow 34798.00 0.83%

S&P 4358.69 0.82%

Nasdaq 14631.95 0.92%

VIX 17.91 -9.22%

o U.S. markets extended Tuesday’s rally as solid corporate earnings eased concerns over slower growth and a pullback in the bond market seeming to confirm that thought process.

o The S&P recorded its best set of back to back gains in two months pushing the index to within 1% of yet another fresh all-time high.

o Energy shares led on the sharp bounce in crude. Cyclicals were once again featured to the upside with Financials, Materials and Industrials accounting for 3 of the 4 best GICS groups.

o Small caps continued to claw back on recent losses with the Russell 2,000 adding another 1.8% bringing its two day gain to just under 5%.

o Sen Maj Leader Schumer: Lawmakers are 'close' on infrastructure bill; Will move forward with Weds procedural vote on bipartisan infrastructure plan.

o Fed Chair Powell reportedly has wide support among top Biden aides to be re-nominated for a second term, but issue not yet discussed; reappointment decision expected in Sept.

*European Highlights*

STOXX 600 454.0 1.65%

DAX 15422.5 1.36%

FTSE 100 6998.3 1.70%

CAC 40 6464.5 1.85%

o European markets posted solid returns with most closing near highs as they played catch-up to strong gains registered in the U.S. yesterday that were extended this morning. All twenty Stoxx 600 sectors finished in the green led by Travel and Leisure +3.7%, Energy +3.2% and Banks +2.9%.

o UK Spending data showed that the Treasury paid £8.7B in interest in June (record) as inflation helping to drive interest payments on government debt to unprecedented levels (**Note: A quarter of government debt is linked to inflation indexes).

*Stock Highlights*

o Netflix(NFLX -3.3%) post Tuesday Q2 $2.97 v $3.16e, Rev $7.34B v $7.31Be. Guide Q3 $2.55 v $2.14e, Rev $7.5B v $7.5Be; stream paid change 3.5M v 5.86Me. To further expand games.

o Alphabet's (GOOGL +1.1%) YouTube to begin pilot for new feature to allow viewers to shop for products directly from livestream creators.

o Microsoft (MSFT +0.7%) Acquires cloud permissions management platform CloudKnox Security, no terms disclosed.

o Pfizer (PFE -0.1%) and BioNTech (BNTX +2.2%) collaborate with South African Biovac to manufacture and distribute COVID-19 vaccine doses within Africa.

o United Continental (UAL +3.9%) CEO: Bookings are getting stronger every day, not seeing any impact from Delta variant; Confident United to be profitable in Q3 and Q4.

o Johnson & Johnson (JNJ +0.5%) reports Q2 $2.48 v $2.28e, Rev $23.3B v $22.3Be; Raises FY21 $9.60-9.70 v $9.51e; State attorneys confirm $5B settlement over 9 years for opioid role.

o Coca-Cola (KO +1.3%) reports Q2 $0.68 v $0.57e, Rev $10.1B v $9.49Be; Raises FY21 EPS +13-15%, Organic Rev +12-14%; Affirms Capex ~$1.5B.

*Notable ADR & Asia News*

o China Cabinet reiterates stance to keep CNY currency (Yuan) basically stable; Reiterates pledge to deepen its financial opening up and to set up systemic financial risk warning system.

o Tencent, Alibaba are among several tech companies fined by the Cyberspace Administration of China for allowing "soft child porn" emojis and "sexually suggestive underage" videos to lure traffic.

o Sinopec (SNP +1.6%) reports H1 oil & gas production 235.3Mboe +4.2% y/y; Refinery throughput 126.1Mt, +13.7% y/y.

o Xpeng(XPEV +7.6%) Alibaba Group (BABA +2.2%) discloses 14.97% stake in Xpeng.

o Taiwan Semi(TSM +1.3%) is finalizing a decision to build its first chip plant in Japan into operation as soon as 2023, according to Nikkei reports citing people with knowledge of the plan.

o Infosys(INFY +1.

8%) subsidiary EdgeVerve Systems' Infosys Finacle and Santander UK launch the financial services provider's international cash management platform, Santander Global Connect.

o Oil rallied despite the larger than expected inventory report with Monday’s sizable selloff seen as somewhat excessive leading to continued covering in the futures market.

o Palm Oil: recovered from early weakness to close little changed. The early pullback was driven by a report Malaysia’s palm oil exports declined almost 8% in the first20 days of July m-m, according to AmSpec Agri.

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