By (Bloomberg) – U.S. stocks were poised for a rebound amid a tech rally, while further evidence of labour-market cooling bolstered the outlook for rate cuts. The euro edged lower after the European Central Bank remained on hold.
Futures on the tech-heavy Nasdaq 100 outperformed after a solid outlook from Taiwan Semiconductor Manufacturing Co. spurred a rally in chipmakers. Netflix Inc. is due to report results after market close. Meta Platforms Inc. has explored a multibillion euro investment into the maker of Ray-Ban sunglasses, the Financial Times reported. Domino’s Pizza Inc.’s sank 15 per cent as its results showed that discounts and new product launches weren’t strong enough to lure diners.
Initial jobless claims rose last week by the most since early May and continuing claims jumped. The slowdown in the job market —along with recent moderation in inflation — bolsters the case for the U.S. Federal Reserve to cut rates as early as September.
“The Fed asked to see more evidence of a cooling economy, and for the most part, they’ve gotten it,” said Chris Larkin at E*Trade from Morgan Stanley. “Add today’s weekly jobless claims to the list of rate-cut-friendly data points. And with Jerome Powell saying the Fed won’t wait for inflation to fall to two per cent before cutting rates, the path to September remains open.”
The ECB left interest rates unchanged and gave away little on its plans as investors bet on a move in September. It reiterated that borrowing costs will remain “sufficiently restrictive for as long as necessary,” and said it isn’t “pre-committing to a particular rate path.”
S&P 500 futures rose 0.3 per cent. Nasdaq 100 futures added 0.8 per cent. The yield on 10-year Treasuries advanced three basis points to 4.18 per cent.
Corporate highlights:
• United Airlines Holdings Inc. said third-quarter profit will fall short of Wall Street’s expectations as US carriers slash ticket prices to lure domestic travelers, keeping even the industry’s largest players from fully capitalizing on record summer travel.
• Domino’s Pizza Inc.’s second-quarter results showed that discounts and new product launches weren’t strong enough to attract more value-seeking diners.
• Blackstone Inc.’s real estate arm weighed on the investment giant’s second-quarter results, as high interest rates crimped property valuations and investors pumped less money into the business.
• Ford Motor Co. will invest US$3 billion to build its highly profitable Super Duty F-Series pickup truck at a plant in Ontario, Canada, shifting focus at the site after previously delaying plans for electric sport utility vehicle.
• Abbott Laboratories nudged up its full-year profit guidance as strong growth in its medical-devices segment helped quarterly results beat estimates.
• Warner Bros. Discovery Inc. is considering separating its streaming and studio businesses from legacy TV, one of several options intended to boost its share price, the Financial Times reported.
Key events this week:
• Japan CPI
• Fed’s John Williams, Raphael Bostic speak, Friday
• Canada retail sales
Some of the main moves in markets:
Stocks
• S&P 500 futures rose 0.3% as of 9:12 a.m. New York time
• Nasdaq 100 futures rose 0.8%
• Futures on the Dow Jones Industrial Average fell 0.3%
• The Stoxx Europe 600 rose 0.6%
• The MSCI World Index was little changed
Currencies
• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0922
• The British pound fell 0.2% to $1.2977
• The Japanese yen fell 0.2% to 156.46 per dollar
Cryptocurrencies
• Bitcoin rose 0.9% to $65,079.03
• Ether rose 2% to $3,485.3
Bonds
• The yield on 10-year Treasuries advanced three basis points to 4.18%
• Germany’s 10-year yield was little changed at 2.43%
• Britain’s 10-year yield declined three basis points to 4.05%
Commodities
• West Texas Intermediate crude fell 0.2% to $82.72 a barrel
• Spot gold rose 0.1% to $2,462.12 an ounce
This story was produced with the assistance of Bloomberg Automation.
©2024 Bloomberg L.P.
