EARNINGS KICK OFF WITH SKY-HIGH FORECASTS, RECORD STOCK MARKET — WSJ’s Karen Langley: “Wall Street is heading into earnings season this week with high expectations after strong profits fueled a stock market rally in the first half of the year. Money managers will be watching whether companies will again trounce Wall Street’s forecasts for earnings. “The S&P 500 has gained 16 percent this year and notched 38 record closes, most recently on Friday. With stock valuations sitting above long-term norms, investors will also be looking to executives for clues on what the future holds for company profits.” CHINA VOWS RETALIATION AFTER U.S. BLACKLISTS COMPANIES — AP: “China on Sunday said it will take “necessary measures” to respond to the U.S. blacklisting of Chinese companies over their alleged role in abuses of Uyghur people and other Muslim ethnic minorities. "The Commerce Ministry said the U.S. move constituted an ‘unreasonable suppression of Chinese enterprises and a serious breach of international economic and trade rules.’ China will ‘take necessary measures to firmly safeguard Chinese companies’ legitimate rights and interests,’ the ministry’s statement said.” GLOBAL BOOM IN HOUSE PRICES CREATES DILEMMA FOR CENTRAL BANKS — Bloomberg’s Enda Curran: “Surging house prices across much of the globe are emerging as a key test for central banks’ ability to rein in their crisis support. Withdrawing stimulus too slowly risks inflating real estate further and worsening financial stability concerns in the longer term. Pulling back too hard means unsettling markets and sending property prices lower, threatening the economic recovery from the Covid-19 pandemic.” BIDEN STAKES OUT POSITION IN DEBATE OVER POWER OF BIG COMPANIES — WSJ’s Jon Hilsenrath: “Behind President Biden’s executive order seeking to curb the power of companies that dominate their markets is a body of academic research that finds the U.S. economy has become less competitive in the past two decades as power swells in large firms. “The decline in competition has had big implications for the broader economy, this research finds, including fewer thriving startup companies, a less-dynamic job market, stagnant worker wages and restrained economywide productivity.” YELLEN: COMPETE ON ECONOMIC STRENGTHS, NOT LOW TAX RATES — AP’s David McHugh: “U.S. Treasury Secretary Janet Yellen said Sunday that deterring the use of tax havens will let countries compete on economic fundamentals — instead of by offering ever-lower tax rates that deprive governments of money for infrastructure and education. “Yellen spoke after finance ministers from the Group of 20 major economies endorsed a global minimum corporate tax of at least 15 percent, a measure aimed at putting a floor under tax rates and discouraging companies from using low-rate countries as tax havens. ‘This deal will end the race to the bottom,’ she said at a news conference after the end of the meeting in Venice.” Yellen also plans to push development banks to step up climate financing efforts — Reuters’ David Lawder: “U.S. Treasury Secretary Janet Yellen on Sunday signaled she will push multilateral development banks further away from fossil fuel projects, saying she would ask them to ‘increase their climate ambition’ to support the Paris Agreement on carbon emissions reductions. “Yellen told a news conference that development lenders including the World Bank needed to boost efforts to encourage more private-sector climate-friendly investment. ‘I plan to shortly convene the heads of the MDBs to articulate our expectations that the MDBs align their portfolios with the Paris Agreement and net-zero goals as urgently as possible,’ Yellen said in remarks to a G20 climate forum.”” BANKS ARE IN THE ECONOMY’S WAITING ROOM — WSJ’s Telis Demos: “Banks have done a lot to put themselves in a position to benefit from higher rates. Now investors just have to wait. Second-quarter earnings by the biggest banks in the country will start coming out Tuesday with reports from JPMorgan Chase and Goldman Sachs, followed by more over the course of the week. "The flow of news overall was good for banks in the second quarter. The results of the Federal Reserve’s stress test paved the way for big capital returns. Credit metrics continue to look very strong, as the slowing of stimulus hasn’t so far led to a surge in defaults. The Fed’s tweak to its overnight reverse repo rate helped relieve some pressure on banks’ bulging balance sheets.” TRANSITIONS — Sarah Gadsden is now a senior consultant at Booz Allen Hamilton. She most recently was a senior associate at Eagle Hill Consulting and is also an NBC News alum. | 
