MARKET WRAPS
Stocks:
European stocks inched higher again on Thursday as investors digested a mixed bag of earnings.
Mining stocks were among the biggest FTSE 100 risers after upbeat corporate statements from the sector. Anglo American led the charge after it reported strong first-half copper production, Interactive Investor said.
Meanwhile, hopes continued to rise that global central banks could soon stop raising rates.
BNP Paribas said the European Central Bank will likely reach a 4% peak terminal deposit rate at the September meeting.
In line with the market pricing, a 25 basis-point interest-rate rise at the July 27 meeting appears a done deal, but the future policy path appears more open, BNP Paribas added.
Deutsche Bank said the Bank of England's choice of how far to raise interest rates in August is a tossup after the better-than-expected inflation data for June. Read more .
Read Fed on Track to Deliver Last Hike Next Week
U.S. Markets:
A premarket selloff in Netflix and Tesla shares weighed on Nasdaq futures, denting investor optimism about the second-quarter earnings season after largely reassuring bank results.
Netflix fell 7.3% premarket after reporting revenue that fell short of its own projections, despite adding 5.9 million subscribers. Tesla shares were down 3.7% before the opening bell after Elon Musk cautioned that the company might need to cut prices further.
U.S. bond yields rose. The yield on the benchmark 10-year Treasury note was up to 3.787%, from 3.741% Wednesday.
Investors will eye data on weekly jobless claims.
Stocks to Watch
IBM was down 0.9% after second-quarter earnings were better than expected but revenue came in slightly below expectations, mostly because of a higher-than-expected hit from unfavorable foreign exchange rates.
ADRs of Taiwan Semiconductor Manufacturing fell 2.7% after second-quarter profit and revenue declined as it grapples with a slump in demand for chips in electronic devices.
United Airlines tripled its profit on surging international travel. Shares were up 2.9% premarket.
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Forex:
The dollar edged lower as a recovery after sterling's drop on Wednesday following the U.K. inflation data proved short lived, showing investors aren't ready to buy into the U.S. currency yet, UniCredit Research said.
"Investors might have taken more profit but continued to show little conviction in reversing the recent dollar tumble," it said, noting that the DXY dollar index is "still struggling at around 100."
Having recently scaled back expectations of aggressive tightening in the U.S., pushing the dollar sharply lower, investors were forced to do the same for the U.K. after the inflation data, suggesting that retreats in rate expectations might not be confined to the U.S., UniCredit said.
Read Sterling Seen Recovering Vs. Dollar After Below-Forecast Inflation Data
Bonds:
The rally in eurozone government bonds could further lose momentum as little bullish impetus is on the radar, Commerzbank Research said.
"Without further bullish impetus the rally in Bunds may soon run out of steam amid resilient risk sentiment."
The eurozone data calendar is light on Thursday, while government bond issuance will be significant.
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Spanish government bonds represent an attractive investment with comparatively low political and moderate fiscal risks, Erste Asset Management said.
Ten-year Spanish bonds have underperformed their German and other eurozone peers, partly due to election risks, it said ahead of Sunday's snap elections.
"On a relative basis, however, it can be said that both the rather low but rising political risks and the moderate medium-term fiscal policy risks appear lower than in some comparable countries."
Read BOE Could Increase the Pace of Its Gilt Sales, Says BOE's Ramsden
Energy:
Oil was little changed following the smaller-than-expected drop in U.S. crude stocks.
Investor sentiment about the U.S. economy has turned more positive in recent weeks while Russian exports have weakened helping to drive oil prices higher.
"The U.S. economy remains resilient, production cuts continue, the Fed appears closer to finishing its rate hike cycle" while China could be poised to set out new stimulus measures, LPL Financial said.
Metals:
Metals prices inched higher as a weaker dollar helped provide support for some risk assets.
"Disappointing economic data out of China are weighing on market sentiment, while supply-side fundamentals remain tight," ANZ said.
Short supply of copper and aluminum is giving the two metals more upside potential, ANZ added.
"Renewed supply issues in South American mines and energy shortages should limit their respective downsides."
DOW JONES NEWSPLUS
EMEA HEADLINES
Nokia 2Q Net Profit Weighed by Macroeconomic Uncertainty, Lower US Spending
Nokia on Thursday posted a 29% drop in its second-quarter comparable net profit as macroeconomic uncertainty weighed on sales in its network-infrastructure business while North American customers continued to evaluate overall spending and deplete inventories in mobile networks.
The company said it sees second-half sales broadly similar to the first half in network infrastructure and mobile networks, with some sequential improvement into the fourth quarter.
Electrolux Considers Divestments to Raise $973 Mln After Swing to 2Q Net Loss
Electrolux on Thursday swung to an unexpected second-quarter net loss and said it is considering selling its Zanussi brand and other non-core assets during the coming years that together could raise around 10 billion Swedish kronor ($973.3 million).
The Swedish home-appliance manufacturer posted a second-quarter net loss of SEK648 million from a profit of SEK257 million as earnings were weighed by SEK643 million provision, significantly lower volumes due to weaker market demand, currency headwinds, labor cost and energy inflation.
Publicis Shares Climb After 2023 Outlook Upgrade
Shares in Publicis Groupe traded higher Thursday after the company raised its guidance for 2023 and reported organic revenue growth for the second quarter that beat its expectations.
At 0754 GMT, shares in the Paris-based advertising group were up 3.8% at EUR74.22.
Volvo Car 2Q Revenue Rose, Helped By Higher Volumes
Volvo Car on Thursday said revenue in the second quarter rose, boosted by higher volumes.
The Swedish auto maker said net profit attributable to shareholders was 3.33 billion Swedish kronor ($324.1 million), compared with SEK8.94 billion a year earlier, when earnings were boosted by the listing of its Polestar brand on Nasdaq.
ABB 2Q Net Profit More Than Doubled Despite Decline in Orders
ABB on Thursday reported a surge in second-quarter net profit despite a decline in new orders.
The Swiss industrial company said second-quarter net income more than doubled to $906 million from $379 million in the prior year, on revenue that grew 13% to $8.16 billion.
Anglo American 2Q Copper Production Rose; Backs Full-Year View
Anglo American on Thursday backed its full-year production guidance after second-quarter copper production rose.
The multinational mining company produced 209,000 metric tons copper in the quarter, a 56% increase from 134,000 tons in the second quarter of 2022.
GLOBAL NEWS
China Keeps Benchmark Lending Rates Unchanged
China's benchmark lending rates were kept unchanged, as expected on Thursday, following a hold of policy rates earlier this month. However, economists say Beijing will need to ramp up support to shore up the country's sputtering economy.
The one-year loan prime rate was held steady at 3.55%, while the five-year LPR was unchanged at 4.2%, the People's Bank of China said. The loan prime rates are calculated monthly based on the interest rates which 18 designated commercial banks charge their best clients.
Mining Deploys Innovative Tech to Find Copper, Other EV Metals
Miners are turning to machine learning, cutting-edge chemistry and other innovative means to increase the supply of critical materials such as copper and graphite amid the rising demand for green technologies.
In 2011, Nico Cuevas, a Mexican immigrant and Arizona resident, realized Tesla would require a source of graphite for battery anodes to build electric vehicles in the U.S. Fortunately, it just so happened that a friend's family owned an artisanal graphite mine in Mexico. Unfortunately it mined the wrong type of graphite.
That Extreme Heat Hasn't Budged Natural-Gas Prices
Americans are burning more natural gas than ever to stay cool this summer. Unlike the past two summers, when sweltering weather sent gas surging, the continuing heat wave has hardly moved prices for the power-generation fuel.
Benchmark natural-gas prices have stayed in a tight range that is roughly 60% lower than a year ago, when prices exploded to shale-era highs. Prices are 30% less than in July 2021.
Far Right Looks to Seize on Spanish Election
VALENCIA, Spain-For decades after the death of dictator Francisco Franco, Spain was viewed as largely immune to the appeal of the far right. That is no longer so. After years in opposition, the far-right Vox party has emerged as a likely kingmaker in Spain's coming parliamentary elections.
Across Western Europe, stridently nationalist parties considered fringe just a few years ago are moving to the center stage, promising to banish crime, restore traditional values, increase welfare and disempower what they describe as out-of-touch elites.
Supreme Court Has Worked on Code of Conduct but Gotten Nowhere
WASHINGTON-An internal plan for the Supreme Court's first-ever code of conduct has been stalled for years, people familiar with the matter said, and justices are deeply divided despite increased scrutiny surrounding their ethical behavior.
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07-20-23 0553ET
