Global markets have found some stability after a tumultuous week, which saw a surge in the yen following a surprise rate hike by the Bank of Japan. This move led to the unwinding of currency carry trades. The CBOE Volatility Index, Wall Street's "fear gauge," dropped to 23 points from a high of 65 at the week's start. Despite the recent gains, all major indexes are poised for weekly losses, with the S&P 500 and Nasdaq on track for a fourth consecutive week of declines. 

Thursday's reassuring US employment data saved the day, but let's be honest, investors were going to reverse course anyway after judging their earlier panic as a bit over-the-top. We saw it coming, sort of.

The financial markets are ending the week on a rebound after starting it with a plunge. Think of it like a fairground ride—one minute you're up, the next you're down. You might say, "It's just volatility," but that's a bit simplistic. We often correct excesses with more excesses. The reality is that the market wouldn't have been so jittery about mediocre US economic stats if the Tokyo Stock Exchange hadn't collapsed at the start of the week. 

Wall Street financiers have three loves—American tech, Japanese stocks, and the resilient US economy. Tech is complicated but still dominant. Japanese stocks are reassuring and profitable, making us forget about China's disappointments. And the US economy, despite doomsayers, is holding up. Lately, two of these pillars have been shaky. Tech needed a breather, and US economic indicators were so-so. Then, the Japanese market stalled spectacularly, causing emotional and financial turmoil.

According to Bank of America's mid-July survey, being long on US tech and bearish on the yen were the most popular bets. So, a lot of money was at stake, amplifying reactions. Since then, things have calmed down. Yesterday's US employment figures reassured investors that the US economy isn't collapsing. These stats will be crucial in the coming weeks, as the labor market will be the main source of volatility and the Fed's key adjustment variable. The market now expects three 25bp rate cuts by the end of 2024, down from five just three days ago. Investors are now keenly awaiting next week's consumer prices and retail sales data for July, which could provide further insights into the U.S. economy's trajectory.

In other news,  In a bid to clean up its act, Nasdaq has proposed stricter delisting rules for penny stocks. The exchange filed a proposal with the U.S. Securities and Exchange Commission on Thursday, aiming to expedite the delisting process for companies with share prices below $1 for 360 trading days. they will now face immediate suspension from trading, and won't have access to the current option to request a 180-day extension after the initial 180-day notice period. And if they try a reverse stock split to keep their share price above $1, Nasdaq will immediately issue a delisting notice. 

Elsewhere, Ukraine's surprise offensive into Russian territory boosted gas and oil prices. In China, economic data showed inflation accelerated to 0.5% year-on-year in July, a positive sign for an economy that's been lagging. Producer prices are still contracting but less than expected. In the Asia-Pacific region, the Japanese market was sluggish after its roller-coaster start. Hong Kong gained South Korea, Australia, and India all gained around 1%. Despite the upturn, the weekly balance sheet is negative for most major Asian indices. European leading indicators are mostly in the green, but futures on Wall Street are hovering just under zero.

Today's economic highlights:

The dollar is worth EUR 0.9164 and GBP 0.7849. The ounce of gold is down to USD 2,423. Oil regained some ground, with North Sea Brent at USD 79.49 a barrel and US light crude WTI at USD 76.58. The yield on 10-year US debt inches up to 3.93%. Bitcoin is trading at USD 60,500.

In corporate news:

  • Gilead Sciences reported second-quarter earnings well above consensus on Thursday, thanks to lower operating expenses and higher product sales. The drugmaker raised its full-year earnings outlook.
  • Paramount Global wrote down the value of its cable networks by almost six billion dollars on Thursday, as the TV market remained under pressure from streaming. The group also reported above-consensus revenue for the second quarter, and gained six point three percent before the open.
  • News Corp - The media conglomerate reported above-consensus fourth-quarter sales on Thursday, thanks to growth in subscriptions for its Dow Jones media.
  • Intel - Moody's on Thursday downgraded the group's senior unsecured debt to BAA1 from A3, citing concerns about the chipmaker's profitability. The downgrade, to which Moody's adds a negative outlook, highlights the pressure for Intel to repay its short-term debt.
  • The Trade Desk - On Thursday, the advertising technology company forecast above-consensus third-quarter revenues, citing strong demand for automated ad buying. The stock gained six point seven percent before the opening.
  • Expedia - The online travel agency reported above-consensus earnings for the second quarter on Thursday, thanks to sustained demand for international travel. The stock gained ten point two percent before the opening.
  • Take-Two Interactive Software - The video game publisher reported below-consensus second-quarter results on Thursday, penalized by weak consumer spending. The number of bookings should nevertheless rise in two thousand twenty-six and two thousand twenty-seven, and the stock gained five point six percent before the opening.
  • Occidental Petroleum said on Thursday that it would focus on debt reduction and catching up with its oil production targets, before revising upwards its cash distribution program.
  • E.L.F. Beauty on Thursday forecast below-consensus annual sales and earnings, and said it would raise prices on its products if Republican presidential candidate Donald Trump takes office and implements tariffs on imports from China. The stock lost eight point nine percent before the opening.
  • Akamai Technologies forecast above-consensus sales and earnings for the third quarter, betting on strong demand for its cybersecurity services.

Analyst recommendations:

  • Altria Group, Inc.: Baptista Research downgrades to hold from outperform with a price target raised from USD 50.50 to USD 55.90.
  • Copart, Inc.: William O'Neil & Co Incorporated drops coverage on the stock.
  • Dutch Bros Inc.: William O'Neil & Co Incorporated drops coverage on the stock.
  • Epam Systems, Inc.: Itau BBA Securities upgrades to market perform from underperform with a price target raised from USD 200 to USD 215.
  • Five9, Inc.: Baird downgrades to neutral from outperform with a target price reduced from USD 90 to USD 40.
  • General Dynamics Corporation: Morgan Stanley upgrades to overweight from equal weight with a target price raised from USD 293 to USD 345.
  • Ingredion Incorporated: Barclays upgrades to overweight from equal weight with a price target raised from USD 122 to USD 145.
  • Johnson Controls International Plc: Baptista Research upgrades to outperform from underperform with a price target raised from USD 67.30 to USD 76.70.
  • L3Harris Technologies, Inc.: Morgan Stanley downgrades to equal weight from overweight with a price target reduced from USD 275 to USD 257.
  • Marriott International, Inc.: Baptista Research downgrades to hold from underperform with a price target reduced from USD 245 to USD 242.60.
  • Paramount Global: Wells Fargo upgrades to equal weight from underweight with a price target raised from USD 10 to USD 11.
  • Paypal Holdings, Inc.: Daiwa Securities upgrades to outperform from neutral with a price target raised from USD 68 to USD 72.
  • Sealed Air Corporation: Jefferies downgrades to hold from buy with a price target reduced from USD 47 to USD 35.
  • Synaptics Incorporated: Mizuho Securities downgrades to outperform from buy with a price target reduced from USD 124 to USD 110.
  • T-Mobile Us, Inc.: Baptista Research downgrades to underperform from outperform with a target price of USD 199.
  • 10X Genomics, Inc.: Citigroup maintains its buy recommendation and reduces the target price from USD 50 to USD 35.
  • Arrowhead Pharmaceuticals, Inc.: Leerink Partners maintains its market perform recommendation and reduces the target price from USD 29 to USD 19.
  • Celsius Holdings, Inc.: Truist Securities maintains its hold recommendation with a price target reduced from USD 60 to USD 45.
  • Crowdstrike Holdings, Inc.: Stifel maintains its buy recommendation and reduces the target price from USD 400 to USD 300.
  • Doximity, Inc.: Nephron Research LLC maintains its hold recommendation with a price target raised from USD 24 to USD 30.
  • Dxc Technology Company: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 17.50 to USD 22.
  • Fair Isaac Corporation: Redburn Atlantic maintains a neutral recommendation with a price target raised from USD 1155 to USD 1465.
  • Lyft, Inc.: D.A. Davidson maintains its neutral recommendation with a price target reduced from USD 18 to USD 11.
  • Omega Healthcare Investors, Inc.: Wedbush maintains its neutral recommendation with a price target raised from USD 33 to USD 40.
  • Solaredge Technologies, Inc.: HSBC maintains its hold recommendation with a price target reduced from USD 29 to USD 21.
  • Under Armour, Inc.: BNP Paribas Exane maintains its neutral recommendation with a price target raised from USD 6 to USD 9.
  • Unity Software Inc.: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 25 to USD 17.
  • Ventas, Inc.: RBC Capital maintains its outperform rating and raises the target price from USD 52 to USD 63.
  • Future Plc: Canaccord Genuity downgrades to sell from hold with a target price raised from GBX 660 to GBX 733.
  • Hargreaves Lansdown: Peel Hunt downgrades to hold from buy with a price target reduced from GBX 1220 to GBX 1140.
  • United Utilities: AlphaValue/Baader Europe upgrades to add from reduce with a target price reduced from GBX 1132 to GBX 1118.
  • Shopify Inc.: DZ Bank AG Research downgrades to hold from buy with a price target raised from USD 65 to USD 68.