OPENING CALL
Stock futures were mixed and Treasury yields nudged higher early Thursday as traders continued to absorb some slightly stronger than expected economic data and more cautious comments on interest rate cuts from Federal Reserve officials.
Nasdaq-100 futures were up, after a revenue hike from Taiwan's TSMC lifted shares of U.S. chip companies, which had tumbled during the tech selloff on Wednesday.
TSMC reported second-quarter earnings that beat analysts' estimates and the world's largest contract chip maker boosted its revenue projections for the full year. U.S.-listed shares of the company were up 3.6% premarket.
The earnings flurry will continue Thursday, with results due from Netflix, as well as Abbott Laboratories and Blackstone. In addition, the European Central Bank will make its latest interest-rate decision. No changes are expected.
"[T]he current stance of economic conditions do not yet indicate a reason, let alone a need, to reduce policy firming," Stifel said.
"Thus, even if the Fed did opt to open the door to rate cuts as early as Q3, the Fed will likely be limited in action, disappointing investors' hopes of returning to neutral or below sometime soon," Stifel added.
Premarket Movers
Chuy's Holdings rose 47% after Darden Restaurants agreed to acquire the Tex-Mex restaurant chain for about $605 million.
United Airlines posted second-quarter adjusted earnings ahead of analysts' estimates. But shares were down 1% after third-quarter earnings guidance fell short of expectations.
Postmarket Movers
Leslie's cut its outlook for the year, expecting a weak pool market damped by unfavorable weather and ongoing weakness in discretionary categories. Shares fell 14%.
Watch For:
Weekly jobless claims; Netflix earnings
Today's Headlines/Must Reads:
-Goldman Sachs Opens Up an Investment Strategy Once Reserved for the Wealthy
-Why the Fed Should Cut Rates Now-Not Wait Until September
-Where Do Economists Think We're Headed? These Are Their Predictions
MARKET WRAPS
Forex:
The dollar remained weak, having hit a 17-week low against a basket of currencies on Wednesday, as investors turned their focus to the likelihood of the Fed cutting rates in September, while the boost from prospects of Donald Trump winning the presidency faded.
"A full conviction that the Fed will start cutting interest rates in September support the negative dollar outlook," Swissquote Bank said, adding the DXY dollar index has dropped below key support levels and now has potential to weaken further.
With the ECB likely to keep interest rates unchanged later Thursday, DZ Bank Research expects a quiet day for the euro, which has appreciated around 2.5% against the dollar so far this month.
The yen has been recovering against the dollar after recently sliding to multi-year lows, helped by growing confidence the Fed is moving closer to cutting rates as well as intervention by Japanese authorities, MUFG said.
The yen is also likely benefiting from elevated short yen positions being pared back ahead of the Bank of Japan's policy meeting at the end of this month, MUFG said.
Energy:
Oil extended its gains, boosted by healthy demand signals from the U.S. and after prospects of looser monetary policy weakened the dollar.
Still, bullish sentiment is tempered by a build in U.S. road-fuel stockpiles, with gasoline and distillate inventories rising by 3.3 million barrels and 3.5 million barrels, respectively, and persistent concerns over growth in China.
Metals:
Gold futures rose, consolidating just below their recent record high on growing hopes the Fed will soon start easing monetary policy.
TODAY'S TOP HEADLINES
Netflix Stock Is Pricey. Earnings Are the Next Big Test.
Netflix reports second-quarter earnings after the close Thursday, and judging from the stock price, it has a lot to live up to.
At a recent $650, shares of the streaming company are up by a third this year. That is twice the S&P 500's 17% rise.
Bud Light Slips to No. 3 After Boycott Reshaped Beer Industry
Bud Light's star is still falling more than a year after a boycott turned the U.S. beer industry upside down. The former favorite has tumbled to the No. 3 spot behind Modelo Especial and Michelob Ultra, recent sales data show.
Bud Light represented 6.5% of beer dollar sales in U.S. stores in the four weeks ended July 6, compared with 7.3% for Michelob Ultra and 9.7% for Modelo, according to an analysis of NielsenIQ data by the consulting firm Bump Williams.
Pro Take: Natural Disasters Are Costing U.S. Households, Fed Finds
Federal Reserve officials have been reluctant to wade into discussions over climate change, arguing that's best left to other policymakers while they keep their focus on the economy.
But that hasn't stopped Fed researchers from looking into the economic effects of climate change. What they're finding suggests the weather has a bigger effect on people's financial situation than we might think.
Bank Stocks Celebrate Return of M&A, Ignore the Health of the Consumer
Wall Street is back. Main Street? Not so much. That's the big takeaway after the largest U.S. financial institutions reported this earnings season.
JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs showed investors that one thing is certain: Large transactions are returning. That's enriching dealmakers, driving banks' profits, and pushing their stocks higher.
Utility Stocks Got Hit by the Trump Trade. Why They Still Look Good.
As Donald Trump's chances of winning the U.S. presidential election powered up, utility stocks powered down. But income investors should stick with the sector.
Utilities are supposed to be a solid, sleepy group of stocks offering yield-hungry investors nice quarterly payouts and low volatility, more sensitive to the direction of interest rates than who might manage to win the White House in 2024. That wasn't the case on Monday, however, when the Vanguard Utilities exchange-traded fund dropped 2.3%, and big utilities such as AES and NextEra Energy fell 10% and 6.6%, respectively.
Prospect of Trump's Return to Dominate European Security Summit
The coming U.S. presidential election, with the growing prospect of a return of Donald Trump to the White House, promises to have profound repercussions for Europe's security, future trans-Atlantic relations and the conflict in Ukraine-changes with which European leaders are starting to grapple.
Trump's pick of Sen. JD Vance (R., Ohio) as his running mate on Monday reinforced a sense in Europe that the former president's return to office could mean a dramatic drop in U.S. aid for Ukraine and a push to force Kyiv into peace talks with the Kremlin. It could also mean a U.S. pivot in defense priorities toward Asia to deter China that would leave Europe to increasingly fend for itself.
Top Democrats Close In on Biden as Plan to Sew Up Nomination Falters
The Democratic coalition backing President Biden showed new signs of cracking Wednesday as top congressional leaders successfully pushed to delay a procedural vote on his nomination and Rep. Adam Schiff of California called for Biden to bow out of the race in the midst of growing party fears of steep down-ballot losses.
The new developments showed that the efforts to oust Biden, while quieter in the immediate aftermath of an assassination attempt on Donald Trump, haven't stopped. They reveal how the president's grip on his party has slipped, with fundraising anemic and his top lieutenants bending after a threatened revolt over the campaign's effort to speed his nomination.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
None Scheduled
Economic Calendar (ET):
0830 May Employment Insurance
Stocks to Watch:
Condor Signs Its First LNG Framework Agreement in Kazakhstan
MEG Energy Responds to Regional Wildfires; Non-Essential Personnel Evacuated From Christina Lake Regional Project
Expected Major Events for Thursday
06:00/UK: Jun UK monthly unemployment figures
12:30/US: Jul Philadelphia Fed Business Outlook Survey
12:30/CAN: May Employment Insurance
12:30/US: 07/13 Unemployment Insurance Weekly Claims Report - Initial Claims
12:30/US: U.S. Weekly Export Sales
13:00/RUS: Weekly International Reserves
14:00/US: Jun Leading Indicators
14:30/US: 07/12 EIA Weekly Natural Gas Storage Report
20:00/US: May Treasury International Capital Data
20:30/US: Federal Discount Window Borrowings
20:30/US: Foreign Central Bank Holdings
23:01/UK: Jul UK Consumer Confidence Survey
23:30/JPN: Jun CPI (Nation), CPI ex-food (Nation)
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
AAR Corp (AIR) is expected to report $0.84 for 4Q.
Abbott Laboratories (ABT) is expected to report $0.81 for 2Q.
Alaska Air Group Inc (ALK) is expected to report $2.34 for 2Q.
BCB Bancorp Inc (BCBP) is expected to report $0.30 for 2Q.
BankUnited Inc (BKU) is expected to report $0.65 for 2Q.
Berkshire Hills Bancorp Inc (BHLB) is expected to report $0.51 for 2Q.
Blackstone Inc (BX) is expected to report $0.95 for 2Q.
CCA Industries Inc (CAWW) is expected to report for 2Q.
Cass Information Systems Inc (CASS) is expected to report $0.53 for 2Q.
Choice Properties Real Estate Investment Trust (CHP.UN.T) is expected to report for 2Q.
Cintas Corp (CTAS) is expected to report $3.82 for 4Q.
Commerce Bancshares Inc (CBSH) is expected to report $0.94 for 2Q.
Conn's Inc (CONN) is expected to report $-0.38 for 1Q.
Cryo-Cell International Inc (CCEL) is expected to report $0.04 for 2Q.
DR Horton Inc (DHI) is expected to report $3.77 for 3Q.
Domino's Pizza Inc (DPZ) is expected to report $3.65 for 2Q.
Forestar Group Inc (FOR) is expected to report $0.93 for 3Q.
Frequency Electronics (FEIM) is expected to report for 4Q.
Hexcel Corp (HXL) is expected to report $0.56 for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
07-18-24 0615ET
