What's moving markets today: July 23, 2019

By CNN Business

Updated 4:59 p.m. ET, July 23, 2019
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4:18 p.m. ET, July 23, 2019

Stocks rally into close

From CNN Business' Anneken Tappe

US stocks closed higher on Tuesday, approaching their record highs.

  • The Dow closed up 0.7%, or 177 points, just 10 points below its most recent record.
  • The S&P 500 finished 0.7% higher, 0.3% off its all-time high.
  • The Nasdaq Composite closed up 0.6%, or 0.1% below its last record.

Coca-Cola (KO) was the best performer in the Dow, closing up 6.1% after beating earnings expectations earlier today.

In the S&P, Hasbro (HAS) led the field and finished up nearly 10%, also following better-than-expected earnings.

Visa (V), Chipotle (CMG) and Snap (SNAP) are reporting after the bell, among others. Visa stock closed 0.2% higher, while shares of Snap added 4.8%. Chipotle closed 0.4% lower.

1:10 p.m. ET, July 23, 2019

Earnings are strong, but the second half of the year will be even better

From CNN Business' Anneken Tappe

Earnings season is in full swing and companies have been beating estimates, setting the stage for an even better second half of the year, according to Krishna Memani, Invesco's vice chairman of investments.

"Expectations were so low that they were easy to beat," he told Julia Chatterley on CNN's digital live show Markets Now.

Market sentiment is helped by expectations that the Federal Reserve will cut interest rates next week and inspire more spending. But whether next week's anticipated rate cut will be quarter-percentage point or half-point cut doesn't really matter, according to Memani.

"What matters is that they're easing, not tightening," he said.

Given the absence of inflation, the central bank has the flexibility to engineer the economic expansion to continue, meaning "the current cycle will last five more years," said Memani. But if inflation resurfaces, things will look differently.

The deal to temporarily remove of debt ceiling "and a little more spending in the near term" is also helping investors stay positive for now, Memani said.

3:46 p.m. ET, July 23, 2019

Why you should diversify into international stocks

From CNN Business' Anneken Tappe

Even though many investors are aware that diversification is key in a well-balanced portfolio, they don't put their money where their mouths are.

"International equities are underrepresented" in investors' portfolios, Keith Denerstein, director of investment products and guidance at TD Ameritrade, told Julia Chatterley on CNN Business' digital live show Markets Now.

According to TD, about two-thirds of investors are aware that they should diversify. But Baby Boomers are more reluctant to invest abroad compared with Millennials.

A lack of information about foreign companies, a perception of instability amid a frenzy of geopolitical headlines and volatility are scaring people off.

11:46 a.m. ET, July 23, 2019

Why the bond market doesn't care about $1 trillion deficits

From CNN Business' Matt Egan

The $1.37 trillion budget agreement reached in Washington was met with a muted response from the bond market.

The 10-year Treasury yield ticked up to 2.05% on Tuesday, compared with 2.04% the day before. That remains near the lowest levels since President Donald Trump’s election in November 2016.

The budget agreement would raise limits on spending by $321 billion over two years, putting further upward pressure on the budget deficit. The deal could add roughly $1.7 trillion to projected debt levels over the next decade, according to the Committee for a Responsible Federal Budget.

The Congressional Budget Office had already been projecting that the federal deficit would climb to nearly $900 billion in 2019 and then top the $1 trillion mark in 2022.

Market analysts say the bond market doesn’t care much about the worsening outlook for the federal budget. Instead, rates are being driven in large part by subdued inflation and central bank policy.

The Federal Reserve, citing concerns about global growth and inflation, has signaled a rate cut is coming as soon as next week. Government debt in France, Germany and Japan are negative, pushed lower by the European Central Bank and Bank of Japan’s negative interest rate policy. That makes US debt look even more attractive by comparison, despite the enormous budget deficit.

Although investors don’t seem very worried about the US fiscal situation now, that could change eventually.

“We can’t know what the inflection point is,” said Guy LeBas, chief fixed income strategist at Janney Capital Management. He pointed to how investors suddenly became obsessed with Greece’s debt in 2009 – despite the fact that it had been rising for a decade.

“Markets don’t care -- until they suddenly do,” LeBas said. 

11:42 a.m. ET, July 23, 2019

The Avengers assemble strong sales for Hasbro

From CNN Business' Paul R. La Monica

It's Christmas in July for toy seller Hasbro. The company reported strong earnings and sales for the second quarter Tuesday that topped forecasts, thanks in large part to solid demand for Avengers and Spider-Man toys.

Hasbro, which also sells the Magic: The Gathering and Monopoly games as well as Play-Doh, has the licenses for several key Disney (DIS) brands, including Marvel's superheroes. The strong box office for "Avengers: Endgame" and "Spider-Man: Far From Home" this summer led to a lot of people buying Black Panther, Captain Marvel and Peter Parker toys.

Shares of Hasbro (HAS) soared 9% on the news. The stock is now up 45% this year, outpacing the 20% gain in shares of its key rival Mattel (MAT).

Hasbro said the live action remake of Disney's Aladdin also helped lift sales. And the company is expecting an even bigger boost around the holidays from Disney franchise toys.

It is gearing up to sell more Elsa, Anna and Olaf toys tied to this November's "Frozen 2" as well as a ton of new Star Wars toys, thanks to the release later this year of the "Fallen Order" video game, "The Mandalorian" TV show that will air on the Disney+ streaming network and, of course, December's "Star Wars: Episode IX: The Rise of Skywalker." So it looks like the Force is strong with Hasbro.

9:36 a.m. ET, July 23, 2019

Stocks rise on busy earnings day

From CNN Business' Anneken Tappe

US stocks opened higher on Tuesday amid a flurry of corporate earnings.

Coca-Cola (KO) reported before the bell and beat expectations. The stock opened 4.4% higher.

Toymaker Hasbro (HAS) also beat expectations and the company’s shares opened nearly 8% higher.

Shares of Harley-Davidson (HOG) more than 4% at the opening bell. The company also reported before the market open, warning that motorcycle sales are slowing.

7:23 a.m. ET, July 23, 2019

£1 = $1? A 'Boris Brexit' might make it happen

From CNN Business' Julia Horowitz

Could the value of the pound drop to just one US dollar?

With Boris Johnson succeeding Theresa May as British prime minister on Wednesday, it's a question investors are beginning to ask as the risks of a chaotic Brexit rise.

Johnson has said the United Kingdom must leave the European Union by October 31 with or without an agreement to protect trade with the country's biggest export market.

A "no deal" Brexit would trigger a recession and cause the pound to nosedive, according to official forecasts. Some experts say the pound and dollar could even reach parity.

It's something that could happen over time," said Lukman Otunuga, a research analyst at currency brokerage FXTM. "It's going to be a long and painful grind all the way to October 31."

Read more here.

7:01 a.m. ET, July 23, 2019

Today on 'Markets Now:' How to avoid a recession

From CNN Business' Paul R. La Monica

The US economy is slowing, but the country might avoid a recession if it doesn't escalate its trade battles with China, Europe and other nations.

The trade truce between the Trump administration and China is one reason why the stock market recently reached record highs. Now investors are hoping that a full-blown trade war can be avoided.

Krishna Memani, vice chairman of investments for Invesco, told CNN's Julia Chatterley last week that President Donald Trump needs a trade deal with China so that the US economy does not slow down precipitously before the 2020 election.

Watch live at 12:45 p.m. ET right here.

6:57 a.m. ET, July 23, 2019

It's earnings-palooza

From CNN Business' Julia Horowitz

A slew of companies report results Tuesday for the three months ending in June.

Before US markets open, investors will get a look at Coca-Cola (KO), Harley-Davidson (HOG), Hasbro (HAS), JetBlue (JBLU), Kimberly-Clark (KMB), Lockheed Martin (LMT) and Stanley Black & Decker (SWJ).

They'll be followed after the close by Chipotle (CMG), Texas Instruments (TXN) and Visa (V).

UBS (UBS) kicked off earnings Tuesday for European banks.

The bank beat profit expectations, even as its investment unit continued to struggle. The Swiss bank also warned that lower interest rates on the horizon would eat into its profits. Shares rose 2% in early trading.