By Laura Curtis
All eyes on the Fed. Again
Policy makers at the Federal Reserve are widely expected to lower the federal funds rate by a quarter point when they complete their two-day meeting this afternoon. Barring any surprises from that announcement, attention will be trained on Chairman Jerome Powell’s press conference and whether he will give any hints on future easing. That’s by no means a given, considering recent U.S. data. It’s a different story elsewhere: Numbers this morning showed economic growth in the euro area slowed by half in the second quarter, the latest in a string of reports flagging a deteriorating outlook which have investors mulling the chances of a return to central bank stimulus.
Trade talks on pause. Again
Chinese and U.S. negotiators concluded a round of ‘cordial’ trade talks, but there was little immediate evidence of progress being made toward ending their year-long dispute. The talks, which began with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin sitting down to dinner with Chinese counterparts on Tuesday, were the first in months. Presumably it was all politeness when the teams were face-to-face, despite U.S. President Donald Trump throwing barbs at the Asian nation on Twitter from the outset. The People’s Daily, mouthpiece of the Communist Party, responded to Trump on Wednesday with a commentary saying that China has no motive to “rip off” the U.S. and has never done so, and China won’t make concessions against its principles on trade.
Earnings roll in. Again
Apple Inc.’s upbeat numbers are supporting U.S. futures this morning. The next big names to report include Fiat Chrysler Automobiles NV (at 6:59 a.m. Eastern time) and Spotify Technology. It’s also a biggish day for energy companies, with numbers from Hess Corp. and Dominion Energy Corp. due. And look for MetLife Inc., Prudential Financial Inc., Qualcomm Inc. and BlackRock Capital Investment Corporation earnings after the close. Earlier in Europe, Credit Suisse Group AG brushed off much of the gloom in European bank earnings as wealthy clients added 9.5 billion Swiss francs ($9.6 billion) in new money. BNP Paribras SA reported better-than-expected results. Elsewhere, Nomura Holdings Inc. posted profits abroad for the first time in two years.
Markets mixed. Again
The MSCI Asia Pacific Index fell 0.6% overnight, while the Hang Seng index closed 1.3% lower as Hong Kong charged dozens of protesters under a colonial-era rioting law, suggesting the government is ramping up its response to the escalating unrest. In Europe, the Stoxx 600 Index traded little changed at 5:29 a.m. as mixed corporate results and economic data weighed on the regional gauge. S&P 500 futures pointed to a green open, the 10-year Treasury yield was at 2.054% and gold traded sideways.
Be on the look out for any more from the trade meetings as officials may seek to fill in details. And aside from the Fed and the glut of corporate earnings, we’re due data on mortgage applications (7 a.m.), ADP employment numbers (8:15 a.m.) and the Chicago PMI data for July (9:45 a.m.). That’s projected to be 51.0. after falling more than expected last month.