July 29 – A look at the next day of Danilo Massoni.
The main revelation from the Fed’s statement was that it was akin to announcing policy normalization and that didn’t surprise anyone.
The pessimistic comments made by President Jerome Powell at the press conference later did the rest, sending the dollar lower and Treasury yields lower. The focus will now turn to the macro data ahead of the Federal Reserve’s Jackson Hole summit at the end of August, with many expecting the gradual announcement to come.
The trend of travel is clear and the realization that the peak of monetary stimulus is behind us is preventing the stock markets from getting much pleasure from the stellar earnings season.
The reaction to Big Tech’s results was lukewarm and in Europe, the earnings impact appears to be skewed negatively – the market penalizes errors more than it rewards impulses.
Today’s string of powerful numbers from the likes of Airbus, Volkswagen and Nokia confirm the view that Europe Inc posted a record 125% jump in second-quarter gain. Airbus and Nokia are expected to begin 3-5% higher doors.
But, overall, futures are pointing to a muted start, although the regional STOXX index is firmly entrenched near record levels as investors wait for the recovery to take its packed course.
A conflicting note came from Credit Suisse, which posted a 78% gain drop, reflecting the hits of Archegos and Greensill.
Elsewhere, Facebook’s slowdown warning could dampen risk appetite on Wall Street ahead of Amazon’s earnings. However, in Asia, concern about the regulatory crackdown by Beijing is starting to subside, causing Chinese stocks to post their biggest daily acquire since May. Thanks for those returning to purchase a dip.
Finally, Samsung – unsurprisingly – expected powerful demand for memory chips in the second half and a rebound in the moveable device market to 2019 levels, although its shares were unaffected.
Key developments that should provide further guidance to the markets on Thursday:
Airbus raises expectations following powerful first half
Volkswagen raises margin expectations again following posting record profits
– Nestlé raises its guidance following coffee drinkers boosted its first half
– Credit Suisse’s 78% gain slice for the second quarter showed Archegos . hit
German Unemployment / Preliminary CPI
Bank of England consumer credit
Eurozone sentiment indicators
US Q2 GDP/Initial Unemployment Claims
Bond auctions: 4-week US Treasuries; 7 years notes
– US Earnings: Amazon, Alliance Bernstein, Merck, Comcast, T-Ru Price, MasterCard
(Reporting by Danilo Masoni; Editing by Sujata Rao)