Markets edge higher after a sharp 2 decline late last week

Dow went up 129, advancers over decliners better than 3-2 & NAZ gained 234. The MLP index stayed in the 296s & the REIT index added 2+ to 403.  Junk bond funds inched higher & Treasuries had limited buying which lowered yields slightly (more below).  Oil slid back to the high 79s & gold dropped 9 to 2389.

Dow Jones Industrials 

Treasury yields were lower as investors awaited key economic data slated for the week & markets considered the latest US political developments.  The 10-year Treasury was down by over 2 basis point at 4.215% & the 2-year Treasury yield was a basis point higher at 4.517%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Fed officials have in recent weeks continued to indicate that they are looking for more data to show inflation is easing before deciding to ease monetary policy.  The central bank is set to meet later this month & is now in the blackout period, meaning officials cannot publicly remark on monetary policy & economic topics again until after the meeting.  Investors are widely expecting interest rates to be left unchanged this month.  According to CME Group's FedWatch tool, traders were last pricing in an around 96% chance of a Sep rate cut.  Markets also assessed the latest developments in US politics after Pres Biden dropped out of the race for the White House yesterday & endorsed VP Kamala Harris as the Dem nominee.

10-year Treasury yield falls as investors look to key data

Pres Biden's announcement that he will withdraw as the Dem Party's 2024 presidential nominee could reignite a debate between progressives & more centrist liberals over the party's economic platform.  Biden boasted that "America has the strongest economy in the world" & touted his administration's "historic investments in rebuilding our nation, in lowering prescription drug costs for seniors, and in expanding affordable health care to a record number of Americans."  4 years ago, Biden secured the Dem Party's nomination by campaigning on relatively mainstream liberal policies in comparison to the more ambitious spending plans favored by progressive candidates.  While in office, Biden enacted several major spending bills, including the American Rescue Plan Act & the Inflation Reduction Act that Dems passed along party lines, while also pursuing policies like his student loan debt handout through exec orders.  He also signed into law several bipartisan spending bills & the Fiscal Responsibility Act, a modest deficit reduction law that temporarily suspended the debt limit.  In his withdrawal announcement, Biden endorsed VP Harris to be the Dem Party's presidential nominee.  Harris has been a staunch advocate for the administration's economic policies despite having past positions that were further left than Biden on issues such as raising taxes & favoring sweeping Medicare for All-style reforms to the health care system.  During her 4 years in the Senate, Harris introduced a bill known as the LIFT the Middle Class Act that would have reversed most of the Trump tax cuts & replaced them with a $3K refundable tax credit per person for most middle- & working -class Americans.  The plan was projected to cost $3T over a decade, according to the nonpartisan Committee for a Responsible Federal Budget.

Biden's withdrawal from race could put Democrats' economic platform in a state of flux

Verizon (VZ), a Dow stock, missed quarterly revenue estimates due to slow phone upgrades in the US, taking the shine off strong growth in wireless subscribers.  Price-conscious customers are holding on to their old phones for longer durations than they did previously, which has hurt upgrade rates for telecom companies that offer promotional plans with new mobile phone lines.  2nd-qtr revenue was $32.8B, compared with the estimate of $33.0B.  Analysts have said VZ is reeling from a historically low number of people upgrading their phones, although that could change when Apple (AAPL), a Dow stock, releases its latest iPhones with artificial intelligence (AI) features, later this year.  Generative AI smartphones will be the next driver of growth for the smartphone market in the 2nd ½ of the year after 5G & foldables, research firm IDC said last week.  It added 148K net monthly bill-paying wireless phone subscribers from Apr-Jun, above the estimate of 128K additions.  It had lost 68K subscribers in the prior qtr.  The consumer business reported net losses of 8K wireless retail postpaid phone subscribers in the latest qtr, compared with 136K losses a year earlier.  Excluding items, EPS was $1.15, in line with expectations.  The stock fell 2.66 (6%).

Verizon misses quarterly revenue estimates on slow phone upgrades

Dow had a brutal decline in the last 2 trading days, as shown in the chart above.  Q2 earnings this week will get a lot of attention by traders.  And the goings on in the presidential race has become important for traders.