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Stocks rise, bitcoin rally slows as Biden bows out

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China trims key short-term rate, yuan slips

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Earnings season to test lofty tech valuations

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U.S. inflation data seen reinforcing case for Sept rate

cut

(Updates prices at 1133 GMT)

By Amanda Cooper

LONDON, July 22 (Reuters) - Global shares steadied on

Monday, after President Joe Biden's decision to bow out of the

election race at the weekend injected a degree of optimism into

the markets, while a surprise rate cut by China's central bank

failed to give Asian markets any pep.

Biden announced on Sunday he would drop out of the election

race and endorsed Vice President Kamala Harris for the

Democratic ticket.

Online betting site PredictIT showed pricing for a victory

by Donald Trump had fallen 4 cents to 60 cents, while Harris

climbed 12 cents to 39 cents.

Markets took the news in their stride, with S&P 500 stock

futures up 0.5%, while Nasdaq futures rose 0.8%.

The MSCI All-World index, which fell 2.1%

last week in its worst weekly performance since April, edged

into positive territory, up 0.04%.

The dollar held steady against a basket of currencies

, while crypto - which has tended to be a beneficiary of

the growing chances of a return of Trump to the White House -

steadied after having fallen on Sunday following Biden's

announcement.

"There's been a bit of a unwinding of that 'Trump trade',

those fears we saw last week that lifted the dollar and

pressurised European stocks at least and an overall, a bit of an

upbeat mood on the news," Fiona Cincotta, senior market analyst

at City Index, said.

"What has been interesting has been crypto. It's like the

Trump barometer and that is off slightly. So that does suggest

that, potentially, there is a little bit more of a challenge

presented from Kamala Harris," she said.

Bitcoin, which hit six-week highs last week in its

strongest weekly rally since February, traded on a more even

keel on Monday, up 0.5% at $67,356.

U.S. Treasuries strengthened, pushing yields on

the benchmark 10-year note down 1.6 basis points to 4.221%.

Yields rose last week as investors priced in the prospect that a

Trump administration would likely favour big increases in

spending that would further undermine the United States' already

stretched fiscal position.

EARNINGS DOMINATE

A packed week of corporate earnings will see Tesla

and Google-parent Alphabet kick off the season for the

"Magnificent Seven" megacap group of stocks.

The tech sector is projected to increase year-over-year

earnings by 17%, while profit for the communication services

sector is seen rising about 22%.

Such gains would outpace the 11% estimated rise for the S&P

500 overall, according to LSEG IBES.

"The majority of the Magnificent Seven release their

earnings results over the next couple of weeks and this will be

critical in determining whether, near term at least, this

rotation has further to run," Rupert Thompson, chief economist

at IBOSS, part of Kingswood Group, said.

"The U.S. earnings season is of course far from unimportant

for the market overall and is well underway."

Europe's biggest banks also report this week, with eyes on

whether the gains from higher interest rates have run out of

steam and if recent political drama is weighing on sentiment.

The STOXX 600 was up 1%, reversing some of last

week's 2.6% drop.

In Asia, MSCI's broadest index of Asia-Pacific shares

outside Japan lost another 0.7%, having shed 3%

last week.

The People's Bank of China cut short-term rates by 10 basis

points, which pulled down long-term borrowing costs and bond

yields. The move follows Beijing's release of a policy document

on Sunday outlining its ambitions for the economy.

Investors seemed underwhelmed with the move, in part as it

only emphasised how weak the economy was, and Chinese blue chips

closed 0.6% lower, while the yuan weakened 0.1% to

7.2923 in offshore trading.

The macro calendar is fairly packed this week too, with the

Federal Reserve's favoured inflation measure out on Friday and a

reading for advance U.S. gross domestic product.

Markets are fully pricing in the prospect of a rate cut in

September, which has helped underpin risk appetite.

In commodity markets, gold rose 0.2% to $2,404 an ounce

, shy of last week's record high of $2,483.60.

Oil prices eased, with scant sign of progress on a ceasefire

deal in Gaza as Israeli forces battled Palestinian fighters in

the southern city of Rafah on Sunday.

Brent fell 0.5% to $82.22 a barrel, as did U.S.

futures, down 0.5% at $79.72.

(Additional reporting by Wayne Cole in Sydney; Editing by

Jacqueline Wong, William Maclean and Andrew Heavens)