September S&P 500 E-Mini futures (ESU25) are down -0.02%, and September Nasdaq 100 E-Mini futures (NQU25) are down -0.08% this morning, taking a breather after recent gains, while investors look ahead to crucial U.S. producer inflation data for insight into how aggressively the Federal Reserve may cut interest rates.
Today’s PPI data “could be make or break to cement a 25 basis-point rate cut from the Fed, or even to encourage the possibility of a jumbo cut,” said Andrea Gabellone, head of global equities at KBC Securities.
In yesterday’s trading session, Wall Street’s major indexes ended in the green, with the S&P 500 and Nasdaq 100 posting new record highs. Chip stocks climbed amid growing expectations for Fed rate cuts, with Advanced Micro Devices (AMD) rising over +5% and NXP Semiconductors N.V. (NXPI) gaining more than +4%. Also, Amazon.com (AMZN) advanced over +1% after announcing plans to expand its same-day grocery delivery service to 2,300 cities by the end of the year. In addition, Intapp (INTA) surged more than +15% after the AI cloud company posted upbeat FQ4 results and announced a $150 million stock buyback. On the bearish side, CoreWeave (CRWV) tumbled more than -20% after the AI cloud vendor reported a wider-than-expected Q2 loss.
Chicago Fed President Austan Goolsbee said on Wednesday that the central bank’s meetings this fall will be “live,” as he and his colleagues work to interpret mixed economic data and determine how best to adjust interest rates in response. “As we go into the fall, these are going to be some live meetings and we’re going to have to figure it out,” Goolsbee said. At the same time, Atlanta Fed President Raphael Bostic said he still considers one interest rate cut appropriate in 2025 if the labor market remains solid.
Meanwhile, U.S. rate futures have priced in a 100% chance of a 25 basis point rate cut at September’s monetary policy meeting.
Today, all eyes are focused on the U.S. Producer Price Index, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. July PPI will stand at +0.2% m/m and +2.5% y/y, compared to the previous figures of unchanged m/m and +2.3% y/y.
The U.S. Core PPI will also be closely monitored today. Economists expect July figures to be +0.2% m/m and +2.9% y/y, compared to June’s numbers of unchanged m/m and +2.6% y/y.
U.S. Initial Jobless Claims data will be released today as well. Economists estimate this figure will come in at 225K, compared to last week’s number of 226K.
In addition, market participants will be looking toward a speech from Richmond Fed President Tom Barkin.
On the earnings front, notable companies like Applied Materials (AMAT) and Deere & Company (DE) are scheduled to report their quarterly figures today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.209%, down -0.68%.
The Euro Stoxx 50 Index is up +0.22% this morning as investors digest a flurry of regional economic data while keeping their attention on geopolitical developments. Defense stocks rose on Thursday after U.S. officials downplayed the likelihood of a ceasefire deal in Ukraine being reached at Friday’s meeting between Trump and Putin. Insurance stocks also gained ground, supported by solid results from Admiral and Aviva. Eurostat said in an update on Thursday that the Eurozone’s gross domestic product growth for the second quarter stood at 0.1%, in line with a preliminary estimate. Separately, data from the Office for National Statistics showed that the U.K. economy slowed in the second quarter but still expanded, demonstrating resilience in the face of higher U.S. tariffs that weighed on exports and increased business taxes that dampened hiring. In addition, data showed that Eurozone industrial production fell more than expected in June, reflecting the impact of the pullback of tariff front-running. Meanwhile, investors are awaiting Friday’s summit between the U.S. and Russian leaders. U.S. President Donald Trump warned that he would impose “very harsh consequences” if Vladimir Putin failed to agree to a ceasefire in the war with Ukraine. In corporate news, Embracer Group AB (EMBRB.S.DX) plunged over -24% after the gaming company posted weaker-than-expected FQ1 operating profit. Also, Carlsberg AS (CARLB.C.DX) slumped more than -5% after the Danish brewer reported half-year profit and volume that missed estimates.
U.K. GDP (preliminary), France’s CPI, Eurozone’s GDP (second estimate), Eurozone’s Employment Change (preliminary), and Eurozone’s Industrial Production data were released today.
U.K. GDP has been reported at +0.3% q/q and +1.2% y/y in the second quarter, stronger than expectations of +0.1% q/q and +1.0% y/y.
U.K. June GDP stood at +0.4% m/m and +1.4% y/y, stronger than expectations of +0.2% m/m and +1.1% y/y.
The French July CPI rose +0.2% m/m and +1.0% y/y, in line with expectations.
Eurozone GDP came in at +0.1% q/q and +1.4% y/y in the second quarter, in line with expectations.
Eurozone Employment Change arrived at +0.1% q/q and +0.7% y/y in the second quarter, compared to expectations of +0.2% q/q and +0.6% y/y.
Eurozone June Industrial Production stood at -1.3% m/m and +0.2% y/y, weaker than expectations of -0.9% m/m and +1.7% y/y.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.46%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.45%.
China’s Shanghai Composite Index gave up earlier gains and ended lower today as cautious investors took profits ahead of key economic data from the country. Steel and communication stocks underperformed on Thursday. Data released on Wednesday after the market closed showed that China’s new yuan loans turned negative in July for the first time in two decades, primarily due to the suspension of consumer trade-in programs and weaker property sales. New yuan loans shrank by 50 billion yuan ($6.97 billion) in July, coming in below even the most pessimistic analysts’ forecasts. The data followed China’s announcement earlier this week that it will provide interest subsidies to businesses in eight consumer service sectors, including catering and tourism, in a bid to boost services consumption amid a slowing economy. Barclays economists said in a note, “We think offering interest subsidies in targeted areas, instead of rate cuts, is an indication of the PBOC’s continued reservation to cut rates.” Meanwhile, Bloomberg News reported on Thursday that China is planning to mobilize companies owned by the central government in Beijing to purchase unsold homes from struggling property developers. Regulators plan to ask some of the largest state-owned enterprises and bad debt managers, including China Cinda Asset Management, to help clear the housing glut. In corporate news, Tencent gained about +0.7% in Hong Kong after the internet giant topped estimates in all reporting segments. Investor focus now turns to a flurry of China’s official data, scheduled for release on Friday, which will provide the most comprehensive view yet of the country’s economic momentum in July.
Japan’s Nikkei 225 Stock Index ended lower today, retreating from the record high set in the prior session, as the yen strengthened amid concerns that the Bank of Japan may soon raise interest rates. Investors also seemed to take profits amid mounting concerns about the market overheating following the recent rally. Heavy-industry and electronics stocks led the declines on Thursday. Meanwhile, the Japanese currency rose the most in almost two weeks on Thursday after U.S. Treasury Secretary Scott Bessent said the BOJ is falling “behind the curve” in tackling inflation and that he expected it to raise rates. Bessent’s comments on the BOJ mark a rare example of criticism of a foreign central bank’s policy decisions. The remarks contrast with those of BOJ Governor Kazuo Ueda, who has repeatedly dismissed the notion that the central bank is moving too slowly to raise rates and might be late in forestalling too-high inflation. The BOJ, at its latest meeting in July, left rates unchanged but revised up its inflation projections and presented a more optimistic view of the economy, sustaining market expectations for a rate hike later this year. According to the latest Bloomberg survey of economists tracking the BOJ, about 42% of respondents said they anticipate a hike in October, while one-third expect a move in January. Investors now await Japan’s preliminary second-quarter GDP data, scheduled for release on Friday. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.24% to 24.56.
Pre-Market U.S. Stock Movers
Cisco Systems (CSCO) fell more than -1% in pre-market trading after the computer networking company gave a cautious full-year forecast.
Ibotta (IBTA) plummeted over -32% in pre-market trading after the performance marketing platform posted downbeat Q2 results and issued below-consensus Q3 revenue guidance.
Coherent (COHR) plunged more than -19% in pre-market trading after the optical networking company provided soft FQ1 guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - August 14th
Applied Materials (AMAT), Deere&Company (DE), Nu Holdings (NU), Tapestry (TPR), Credicorp (BAP), Applied Industrial Technologies (AIT), Birkenstock Holding (BIRK), Vipshop (VIPS), Energy of Minas Gerais (CIG), First Majestic Silver (AG), Golar (GLNG), Advance Auto Parts (AAP), Globant SA (GLOB), Cellebrite (CLBT), Weibo Corp (WB), Celcuity (CELC), TMC the metals company (TMC), Nano Nuclear Energy (NNE), Afya (AFYA), Evolv Technologies Holdings (EVLV), Acuren (TIC), Jefferson Capital (JCAP), Youdao (DAO), Bit Digital (BTBT), Venu Holding (VENU), AIRO Holdings (AIRO), Gambling.com Group (GAMB), Unusual Machines (UMAC), Canaan (CAN), Allot (ALLT), Innovative Solutions (ISSC), Strattec (STRT), Omeros (OMER), Fennec Pharma (FENC), Digimarc (DMRC), Mediwound (MDWD), SWK Holdings (SWKH), Biostem Tech (BSEM), Profound Medical (PROF), Origin Materials (ORGN), Protalix (PLX), Sunlands Tech (STG), Duos Tech (DUOT), Bragg Gaming (BRAG).
