Marketmind: ECB to follow Fed hike, Meta surges
Send a link to a friend
[July 27, 2023] A
look at the day ahead in U.S. and global markets from Mike Dolan
With markets still betting Wednesday's interest rate hike from the
Federal Reserve was the last in the cycle, the European Central Bank is
due to follow suit today - while Meta provided one of bright spots of a
packed corporate earnings diary.
Fed Chair Jerome Powell remained equivocal about whether there was one
more policy rate rise left this year and said Fed staff were no longer
forecasting a recession - but futures markets continue to see a less
than 50% chance of another move.
Treasury yields and the dollar eased overnight.
The Commerce Department's snapshot of gross domestic product due on
Thursday is expected to show the U.S. economy grew at a trend rate of
1.8% in second-quarter, almost a full point drop in core inflation to 4%
and the housing slump nearing an end.
The stock market remains buoyed near highs for the year.
Aided by upbeat Boeing results, the Dow Jones blue chip index clocked 13
straight daily gains on Wednesday for the first time since 1987 and
S&P500 futures are up again ahead of today's bell. The VIX volatility
gauge slipped below 13 for the first time this month.
![](http://archives.lincolndailynews.com/2023/Jul/27/images/ads/current/debbiesfloral_lda_060123.png)
But Meta Platforms stole the show overnight, with its stock soaring 7%
after the digital giant reported a strong rise in advertising revenue -
while topping Wall Street financial targets and third-quarter revenue
guidance.
Global stocks hit their highest since April last year on Thursday, with
European stocks up more than 1% ahead of the ECB decision.
While the ECB is also expected to deliver a quarter-point hike to 3.75%,
money markets similarly doubt there's another rate rise left in the
campaign - wary of a euro zone economy that's slipping in and out of
recession this year as disinflation progresses.
The euro pushed higher against a softer dollar ahead of the announcement
and press conference from ECB chief Christine Lagarde. The yen also
firmed as the Bank of Japan is expected to keep its easy policy
unchanged on Friday.
The rest of the news was dominated by the screed of earnings hitting the
headlines.
[to top of second column] |
![](../images/072723PIX/busine93.jpg)
A view shows the logo of the European
Central Bank (ECB) outside its headquarters in Frankfurt, Germany
March 16, 2023. REUTERS/Heiko Becker/File Photo
![](http://archives.lincolndailynews.com/2023/Jul/27/images/ads/current/graue_lda_GREYTRUCKpreowned_070323.jpg)
Shares in oil giants Shell and TotalEnergies fell after they both
missed forecasts in reporting big profit drops for the second
quarter - the result of the sharp oil price recoil over the last
year.
Exxon Mobil and Chevron report later on Thursday.
Barclays was again an outlier in banking. Its shares dived 7%
despite plans for a hefty buyback after the British lender warned of
growing pressure on its UK business and missed forecasts for its
investment bank as a global corporate dealmaking slump persists.
The euro zone's biggest bank BNP Paribas, by contrast, beat Q2
estimates and the stock jumped 4%.
In Asia, Hong Kong shares rose in line with world markets, but
mainland China indices continue to stumble under a cloud. China's
industrial profits extended this year's double-digit pace of
declines into a sixth month, falling almost 17% for the year through
June.
Events to watch for on Thursday:
* European Central Bank policy decision, followed by press
conference from President Christine Lagarde
* U.S. corp earnings: Exxon Mobil, Chevron, Proctor & Gamble,
Colgate Palmolive, T Rowe Price, Aon, Centene, Franklin Resources,
Newell Brands, Church & Dwight, Charter Communications
* U.S. Q2 gross domestic product, weekly jobless claims, June
durable goods orders, June pending home sales, June wholesale/retail
inventories, Kansas City July business surveys
* U.S. Federal Reserve Board holds open meeting to discuss proposed
rules to implement the Basel III banking agreement
* U.S. Treasury auctions 7-year notes, 4-week bills
* Italy's Prime Minister Giorgia Meloni meets U.S. President Joe
Biden in Washington
(By Mike Dolan; Editing by Toby Chopra; mike.dolan@thomsonreuters.com.
Twitter: @reutersMikeD)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |