Despite Federal Reserve Chair Jerome Powell’s efforts to keep the Fed’s options open, the market is largely anticipating the start of a rate-cutting cycle in September. Stock futures rose on Thursday as investors evaluated the latest corporate earnings reports. Investors are also bracing for a busy day filled with additional earnings and economic reports, which will further influence market sentiment.

European markets declined on Thursday as investors digested a series of central bank actions. The Bank of England is set to announce its latest monetary policy decision at midday London time, with market pricing slightly favoring a 25-basis point interest rate cut. However, analysts note increased uncertainty around the decision, as some voting members remain concerned about service sector inflation and wage growth.

Asian markets are evaluating business activity readings from across the region, including the Caixin purchasing managers index from China. Australia’s S&P/ASX 200 reached new all-time highs, rising 0.28% to close at 8,114.7. In contrast, Japan’s Nikkei 225 fell by 2.49%, primarily due to declines in real estate stocks and losses among heavyweight exporters as the yen strengthened.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include, ACAW, ADT, AER, AGIO, APD, ALGM, ALE, ALNY, ATUS, AME, HOUS, SPLS, APG, APPN, APTV, MT, ARW, AUPH, AXTA, BALL, BAND, BHC, BCE, BDX, BDC, BIGC, BIIB, BIP, CWT, CAMT, CNQ, CWEN, CIGI, COP, CROX, CMI, D, LPG, DRVN, DNB, ETN, ECVT, ETR, NVRI, ES, EVGO, EXC, EXLS, FTDR, GWW, HSY, HTZ, DINO, HII, IDA, INMD, NSIT, NSP, IBP, ICE, IDCC, IONS, IRM, ITRI, ITT, JHG, K, KRP, KMI, KEX, KTB, LH, LAUR, LTH, LNC, LAD, MTSI, MIDD, MBLY, MRNA, NBIX, OCSL, OMCL, PATK, PBF, BTU, PNW, PDS, PWR, PACK, REGN, RBLX, RUSHA, SABR, SNDR, SHAK, SIRI, SWI, SO, STGW, TNK, TFX, CI, TRI, THRY, TRN, TBP, UNIT, UPBD, UTZ, VCEL, VSTS, WNT, W, WEN, WCC, XEL , & XPO.  After the bell include, AAON, APPL, ACCO, ADPT, AEM, AL, ALHC, LNT, ALTR, AMZN, AMH, ACA, ARDX, TEAM, BECN, BZH, BBAI, BIO, SQ, BKNG, BFAM, CABO, CPT, CWST, CE, CC, CIVI, CLFD, CLX, NET, COIN, ED, CRSR, CTRA, CUBE, CTOS, DRH, DASH, DORM, DKNG, LOCO, ELME, EOG, FRT, FND, FOXF, FDP, GEN, GDDY, GDYN, HTGC, HUBG, IVFI, INST, IAS, INTC, ITRC, LEG, LMAT, MTZ, MATX, MMSI, MTD, MCHP, MSTR, MIR, MPWR, MSI, MP, NXT, LASR, OHI, OTEX, OPEN, OEC, PCTY, POST, PCOR, PRU, REG, RGA, RMD, RNG, RLJ, RKT, ROKU, RYAN, SEM, SIMO, SNAP, SWM, SPT, SPXC, SNDX, TNDM, SKT, TROX, TWLO, X, OLED, VREX, VTR, VRTX, WK, XHR & XPOF.

News & Technicals’

The AI Act, a landmark regulation designed to oversee the development, use, and application of AI, has received final approval from EU member states, lawmakers, and the European Commission. Four years after its initial proposal, the law goes into effect on Thursday. The legislation employs a risk-based approach, meaning different AI applications are regulated according to the level of risk they pose to society. The AI Act’s implications extend beyond the EU, as it applies to any organization with operations or impact within the EU, making it relevant to entities worldwide.

China’s economic officials have decided against implementing additional stimulus measures for the second half of the year, opting to focus on existing policies and long-term objectives such as technological advancement. Despite achieving 5% growth in the first half of the year, a slowdown in retail sales growth to 2% in June has cast doubt on meeting the full-year growth target. While central authorities have refrained from introducing large-scale consumption vouchers, some local governments, like Lu’an City, are issuing their own vouchers to boost spending in sectors such as dining, home goods, and car purchases.

Shell reported adjusted earnings of $6.3 billion for the three-month period ending in June, surpassing analysts’ expectations of $5.9 billion as per LSEG estimates. In addition, Shell announced a $3.5 billion share buyback program to be executed over the next three months, maintaining the same pace as the previous quarter. This positive financial performance led to a 1.4% rise in the company’s London-listed shares on Thursday morning.

Carvana is anticipating a record year in 2024 for its used-car retail business. In the second quarter, the company reported a net income of $48 million, achieving a net income margin of 1.4%. Additionally, Carvana announced plans for an at-the-market stock offering valued at approximately $1 billion, involving around 35 million shares. This strategic move aims to bolster the company’s financial position and support its growth ambitions.

Hopeless of a rate-cutting cycle beginning in September inspired another big point afternoon whipsaw. Expect more challenging price action with huge number of earnings reports highlighted by the highly anticipated AAPL and AMZN after the bell.

Trade Wisely,

Doug