The NZD is the strongest while the USD is the weakest as the NA session begins. The USDs move to the downside comes despite the Fed increasing rates by 25 basis points yesterday. Today, the ECB follows up with an expected 25 basis point hike at 8:15 AM ET to 4.25% from 4.0%, but recent data has been a bit light. ECBs Lagarde will conduct her press conference starting at 8:45 AM ET. Traders will be focused on her views for September. I would anticipate that the ECB and Lagarde will take its clue from the Fed and the Fed Chair Powell.
The Fed increased rates as expected yesterday to 5.5%. The 25 basis point increase has resulted in borrowing costs reaching their highest level in 22 years. Fed Chair Jerome Powell indicated that future policy decisions would be made on a "meeting by meeting" basis but did not confirm whether rates will increase again in September. He added that the full impact of the Fed's aggressive monetary policy hasn't been fully realized yet. Powell also stated that while the tightening cycle has achieved disinflation without significantly impacting the labor market, stronger economic activity could potentially reignite price growth. He emphasized that the Fed will continue to make decisions based on data, reinforcing its commitment to a data-dependent approach.
U.S. stock futures are moving higher in pre-market trading as traders respond favorably to the Fed hike. Meta earnings is also giving big cap tech a boost after better-than-expected earnings after the close. The company reported significant revenue growth for the second quarter, with CEO Mark Zuckerberg stating that the company's heavy investment in artificial intelligence was showing positive returns. Meta shares are trading up 9.8% at $328.07.
The Dow is up for 13 consecutive days equaling the string from 1987. It is currently up in pre-market trading. Is a record on the horizon today?
In the earnings dump this morning, McDonalds and Bristol Myers Squibb are two of the bigger names who have announced this morning. McDonalds beat on the top and bottom line, while Bristol-Myers Squibb missed. McDonald's shares are trading up 1.8% at $297, while Bristol-Myers Squibb shares are trading down -2.7% at $61.70.
A look at the details for some of the earnings released today show:
Abbvie Inc (ABBV) - BEAT: Adjusted EPS: $2.91, beating the expected $2.81.Revenue: $13.87 billion, surpassing the expected $13.52 billion.The company has also revised its Full Year EPS forecast upward to $10.90-$11.10 from $10.72-$11.12, which is above the expected $10.85.
HCA Healthcare Inc (HCA) - BEAT: Reported adjusted EPS of $4.29, beating the expected $4.22. Revenue was $15.86bn, exceeding the forecasted $15.62bn. This performance signals a positive financial health and may likely inspire investor confidence.
S&P Global Inc (SPGI) - MISSED: EPS was $3.12, missing the expectation of $3.14. However, revenue was $31bn, higher than the expected $3.06bn, signaling a mixed financial performance.
New York Community Bancorp Inc (NYCB) - BEAT: Reported an adjusted EPS of $0.47, considerably higher than the expected $0.31. Also, revenue of $1.20bn was significantly above the anticipated $0.78bn, indicating robust financial performance.
American Tower Corp (AMT) - MISSED: Reported EPS of $2.46 was slightly above the expected $2.36, while revenue of $2.722bn narrowly missed the forecasted $2.73bn, demonstrating a mixed performance.
Keurig Dr Pepper Inc (KDP) - BEAT: Adjusted EPS of $0.39 narrowly beat the expected $0.40, while revenue of $3.79bn exceeded the forecasted $3.69bn, showing an overall positive financial outcome.
Comcast Corp (CMCSA) - BEAT: Reported an EPS of $1.13, outperforming the expected $0.97. Revenue of $30.51bn surpassed the estimated $30.13bn, indicating a strong financial performance.
McDonald's Corp (MCD) - BEAT: Adjusted EPS of $3.17 beat the expected $2.79, and revenue of $6.5bn exceeded the projected $6.27bn. These results indicate strong business performance and may lead to positive market sentiment.
Bristol-Myers Squibb Co (BMY) - MISSED: Reported EPS of $1.75, missing the expected $1.98. Revenue was also lower at $11.2bn, compared to the expected $11.8bn. This shows a weaker-than-expected performance which might concern investors.
After the close, Ford, Intel, Roku, First Solar, T-Mobile, and U.S. Steel will all release. Tomorrow morning, Exxon, P&G, and Chevron will highlight the earnings calendar.
In addition to the ECB decision, the economic calendar is full today:
8:30am - Advance GDP q/q (USD): Est. 1.8%, Prior 2.0%
8:30am - Advance GDP Price Index q/q (USD): Est. 3.0%, Prior 4.1%
8:30am - Unemployment Claims (USD): Est. 234K, Prior 228K
8:45am - Durable Goods Orders m/m (USD): Est. 1.3%, Prior 1.8%
8:45am - Core Durable Goods Orders m/m (USD): Est. 0.1%, Prior 0.7%
10:00am - Goods Trade Balance (USD): Est. -91.8B, Prior -91.1B
10:00am - Prelim Wholesale Inventories m/m (USD): Est. -0.1%, Prior 0.0%
10:00am - Pending Home Sales m/m (USD): Est. -0.5%, Prior -2.7%
Oil prices are higher, recovering from losses experienced yesterday. The increase is being driven by anticipated supply constraints from key oil producers, despite the Federal Reserve recommencing its policy of raising interest rates. Both Saudi Arabia and Russia have announced plans to reduce production in August with the aim of driving up prices through tightening global supply.
A snapshot of the markets as the NA session gets underway shows:
- Crude oil is trading up $0.76 or 0.96% at $79.54. This week the price moved above it to hundred week moving average currently at $76.99. That was the 1st break above that key moving average since August 2022. Bullish.
- Spot gold is trading up $6 and 30 points or 0.32% at $1977.62
- Silver is trading up $0.19 or 0.79% at $25.10
- Bitcoin is trading at $29,502. At 5 PM yesterday, the price was trading near $29,600
In the premarket for US stocks, the major indices are trading higher. The Dow Industrial Average is up after closing higher for the 13th consecutive day yesterday. A gain today would surpass the longest string for consecutive days going back to 1987. According to CNBC, you have to go back to 1897 to find a longer string. The Dow was created in 1896
- Dow Industrial Average is trading up 86 points after rising by 82.05 points yesterday
- S&P index is trading up 30.5 points after trading down by -0.71 points yesterday
- NASDAQ index is trading up 211 points after trading down by -17.27 points yesterday
In the European equity markets, the major Indices are higher.
- German DAX, up 1.14%
- France's CAC, up 1.67%
- UK's FTSE 100, up 0.30%
- Spain's Ibex, up 0.88%
- Italy's FTSE MIB, up 1.55% (delayed).
In the Asian Pacific market today, markets closed mixed:
Japan’s Nikkei 225, up 0.68%
China’s Shanghai Composite, down -0.20%
Hong Kong’s Hang Seng, up 1.41%
Australia’s S&P/ASX 200, up 0.73%
In the US debt market, yields are lower in early US trading
- 2-year yield, 4.830%, +0.4 basis points
- 5-year yield, 4.104% +1.7 basis points
- 10-year yield, 3.872% +2.2 basis points
- 30-year yield, 3.95 a 3% +2.5 basis points
In the European debt market, benchmark 10-year yields are mixed:
