US equity futures are following European and most Asian stocks higher, with traders’ attention turning to today's retail sales report (full preview here) which may support the case for the Federal Reserve to cut rates at its September meeting. As of 7:45am, S&P futures are up 0.2%, higher for the fifth day in a row, as the burst of 13-F releases overnight helps to boost some individual names; Nasdaq futures also gain 0.1% led by tech with Mag7 and Semis leading pre-mkt though NVDA is lower to start the day. Bond yields are flat to up 1bps, and USD is flat. Commodities are bid across all 3 complexes though base metals are lagging and Silver over Gold. PPI/CPI data shaped the inflation story and now Retail Sales/Jobless Claims will do the same for the Growth story, while Walmart boosting its profit outlook will help ease recessionary fears. That said, the Fed may not reveal its hand until the Sep 6 NFP print.
Walmart jumped 7.8% in premarket trading after raising its sales and profit guidance for the full year, as the chain expects to draw shoppers searching for deals. Cisco Systems rose after the networking equipment maker’s results beat expectations. Nike rallied after Pershing Square Capital Management LP disclosed a new stake in the sportswear company. Bavarian Nordic A/S, one of few companies with an approved mpox vaccine, soared 17% in Copenhagen after the World Health Organization declared a fast-spreading outbreak of the disease a global public health emergency. Here are some other notable premarket movers:
S&P 500 contracts were steady after the benchmark extended its winning streak to a fifth day Wednesday, buoyed by a benign consumer price index print. Europe’s Stoxx 600 Index rose 0.2%.
“The latest US inflation data supports our view of a gradual cooling of the US economy,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “This underlines our view that the Fed will start easing policy at its September meeting. That provides a positive backdrop for risk assets. It would also erode returns on cash, underlining our view that investors should brace for lower rates.”
In the UK, the economy maintained its muted rebound from last year’s recession, with GDP rising 0.6% in the second quarter after an 0.7% gain in the first three months. The figures are unlikely to shift the calculus of policymakers at the Bank of England, which had expected an even stronger expansion.
Norway’s central bank kept rates unchanged (as expected) for an eighth month and shed little light on when easing might begin, given risks to the inflation outlook from a weaker krone. The currency gained after the announcement.
Meanwhile, it will be another busy session for for traders tracking updates on the world’s biggest economy. Thursday brings readings on initial jobless claims and retail sales. Figures out Wednesday showed that US year-on-year core consumer prices in July rose at the slowest pace since 2021. Traders are fully pricing in one 25 basis-point cut by the Fed next month and 100 basis points of reductions through year-end.
European stocks rise for a third day, led by health care, insurance and technology names, while travel and leisure is falling the most. Here are the most notable movers:
Earlier, in Asian trading Japan’s Topix index and China’s CSI 300 benchmark rose in a broadly positive reaction to data points in the two countries. Japan’s economy grew faster in the second quarter than analysts forecast. China, meanwhile, saw signs of stabilization that included slowing declines in home prices and better-than-expected retail sales.
In FX, the Bloomberg Dollar Spot Index is unchanged; the pound rises 0.1% against the dollar. The Norwegian krone has risen to the top of the G-10 FX leader board, adding 0.4% after a hawkish hold from the Norges Bank.
In rates, treasuries dip, with US 10-year yields rising 1bps to 3.84% while gilts underperformed after data showed the UK economy grew in line with estimates during the second-quarter and industrial production topped forecasts.
In commodities, oil prices advanced, with WTI rising 0.7% to $77.50 a barrel. Spot gold rises $9 to around $2,457/oz. Iron ore falls 1.4%.
Looking at today's busy calendar, the US data slate includes August Empire manufacturing, July retail sales, August Philadelphia Fed business outlook, initial jobless claims, July import/export price indexes (8:30am), industrial production (9:15am), June business inventories, August NAHB housing market index (10am) and June TIC flows (4pm). Fed speakers scheduled for the session include Musalem (9:10am) and Harker (1:10pm)
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APAC stocks shrugged off the mixed lead from the US and gained as participants digested a slew of key data. ASX 200 traded higher but with gains capped as participants digested earnings releases and jobs data. Nikkei 225 was among the biggest gainers after GDP data topped forecasts and showed a return to growth. Hang Seng and Shanghai Comp. gradually advanced in the aftermath of mixed Chinese activity data in which industrial production disappointed but retail sales topped forecasts, while Chinese indices were also unfazed by the steeper contraction in home prices. Furthermore, the PBoC delayed its MLF operation to later in the month but announced a firm liquidity injection via 7-day reverse repos which is meant to counteract maturing MLF loans, tax payments and government bond issuance.
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European bourses, Stoxx 600 (+0.2%) are modestly firmer across the board. Price action today has generally been rangebound, but some modest pressure has entered the complex in recent trade. European sectors hold a positive tilt; Healthcare takes the top spot, propped up by AstraZeneca (+0.9%). Insurance is also found near the top after Admiral (+7.3%) reported strong results. Travel & Leisure is at the foot of the pile. US Equity Futures (ES +0.1%, NQ +0.2%, RTY -0.1%) are mixed, with very slight outperformance in the NQ, ahead of a packed schedule including jobless claims, retail sales and Fed speak.
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