MARKET WRAPS

Stocks:

European equities posted solid gains on Thursday as investors remained hopeful the Federal Reserve had reached the end of its current policy-tightening cycle.

However, with the European Central Bank projected to lift interest rates by a quarter-point later on Thursday, attention will zero in on whether the central bank maintains a hawkish tone. That would indicate another rate hike is in store for September.

"We expect the ECB to continue with tough talk on Thursday, keeping the door open for another rate hike in September. But it will be tough talk but without any pre-commitment as in June," ING Research said.

Read The ECB Is Set to Follow the Fed With a Rate Hike. Things Get Less Clear After That

Economic Insight

The Bank of England is likely to slow the pace of interest-rate rises at its next meeting on Aug. 3 to 25 basis points from 50bps previously as recent U.K. economic data has been less strong than data released before the June meeting, Bank of America said.

BofA hasn't ruled out a 50bps rate increase in August, but thinks this is less likely. Read more .

U.S. Markets: Markets:

Stock futures rose ahead of more big-name earnings and consumer-spending data. Companies due to post result before U.S. markets open include Mastercard and AbbVie.

Technology stocks led gains in premarket trading as Meta Platforms jumped more than 7% after it reported its highest quarterly sales growth since 2021.

U.S. government-bond yields rose slightly. The yield on the benchmark 10-year Treasury note edged up from Wednesday's close of 3.85%.

Follow WSJ markets coverage here .

Forex:

With the ECB fully expected to raise interest rates by 25 basis points, focus will center on the outlook and this could be negative for the euro, DZ Bank Research said.

Christine Lagarde is unlikely to flag another rise in September, instead stressing the need to wait for data, DZ Bank said.

The euro "should hardly be able to hide its displeasure at the less 'hawkish' rhetoric," DZ Bank said.

The dollar was steady after falling following the Fed's expected interest-rate rise.

The Fed said further moves will depend on economic developments, and ING advised waiting for data before selling the currency further.

"We would not chase the move [lower in the dollar] just yet and prefer to take our cue from the data."

The carry trade will remain popular and with the federal-funds rate in a 5.25% to 5.5% range, "the dollar is clearly not a funding currency," ING said.

Bonds:

Eurozone government bond yields were lower ahead of the ECB, which could keep all options open, including a possible pause for September, Commerzbank Research said. It expects a 25 basis-point rate rise, in line with the market.

"Lagarde looks set to switch off the 'auto-tightening-pilot', which should encourage an overall bullish market backdrop. Bunds could take further relief if she were to leave all options open, hinting at a possible pause in September if data weakens further," Commerzbank said

Energy:

Oil prices rose, with Brent hitting a fresh 14-week high, after Jerome Powell said further Fed rate hikes would depend on how the economy fares in the coming months.

Commonwealth Bank of Australia expects Brent will rise to $85/bbl by the fourth quarter on expectations of OPEC+ supply cuts and resilient demand, which will force global oil stockpiles to fall. Still, CBA also thinks demand in affluent countries will ultimately weaken and this will weigh on prices in the first half of 2024, driving prices to $75/bbl in the second quarter. Read more .

Metals:

Base metals made solid gains after the Fed raised interest rates for what many predict will be the final time of the current campaign.

While "incoming data will be the deciding factor...the hiking cycle is effectively complete," ANZ said.

DOW JONES NEWSPLUS


EMEA HEADLINES

Weaker Energy Prices Temper Shell's Profit, but Not Cash Payouts for Investors

LONDON-Weaker oil and natural-gas prices and softer demand for everything from chemicals to U.S. renewable power took a bite out of Shell's second-quarter profit a year after the war in Ukraine supercharged commodity prices, fueling a record haul for Europe's biggest energy company.

Still, the U.K.-based company on Thursday increased its dividend and said it would buy back $3 billion more in shares this quarter, reflecting new Chief Executive Wael Sawan's quest to keep cash-thirsty investors happy amid energy-price drops and economic uncertainty.


Volkswagen Lowers Delivery Targets as Supply-Chain Issues Persist

Volkswagen said some supply chain bottlenecks were easing, including less pressure on semiconductor supplies, but warned transportation delays persisted as it lowered its deliveries target for the year.

The German car giant said it would deliver between 9 million and 9.5 million vehicles this year, down from its previous estimate of 9.5 million. It also reported higher revenue and lower profit for the second quarter.


Nespresso Maker Nestlé Raised Prices More Than 9% in First Half of the Year

Food giant Nestlé said sales rose sharply in the first six months of the year, buoyed by price hikes that it and other big consumer goods companies have been able to push through amid still-high inflation in much of the world.

The Switzerland-based maker of Kit Kat and Nespresso booked sales of 46.29 billion Swiss francs, equivalent to $53.78 billion, in the first six months of the year, 8.7% higher organically than in the same period last year. This was just shy of analysts' expectations, according to a consensus compiled by the company.


Barclays Shares Drop After 2Q Revenue Fall, Interest Margin Guidance Trim

Shares in Barclays fell around 5% at market open Thursday after the British bank reported second-quarter profit ahead of market views but revenue that missed expectations, and lowered net interest margin guidance for the year.

At 0719 GMT, shares were down 8.12 pence at 155.94 pence.


German Consumer Sentiment to Brighten in August on Easing Inflation Expectations

Consumer confidence recovered in Germany for August, a rebound from a decline in the month before, amid improved expectations for cooling inflation in the eurozone's largest economy.

Germany's forward-looking consumer sentiment index forecasts confidence to tick up to minus 24.4 in August, from a revised minus 25.2 in July, according to data from market-research group GfK published Thursday.


BNP Paribas to Start EUR2.5 Bln Buyback, Posts Lower Reported Second-Quarter Earnings

BNP Paribas posted lower reported second-quarter earnings Thursday and said it will buy back shares starting next month.

The French bank said it made 2.81 billion euros ($3.12 billion) in reported quarterly net profit, compared with profit of EUR3.09 billion in the year-earlier period, which the bank restated in May after the sale of Bank of the West.


TotalEnergies 2Q Profit Falls Short of Expectations

TotalEnergies posted a profit below analysts' expectations in a second quarter marked by a softening oil and gas environment, and said it plans to buy back $2 billion worth of shares in the third quarter.

The French oil major said Thursday that its net profit had slipped to $4.09 billion from $5.69 billion in last year's second quarter. Adjusted net profit-one of TotalEnergies' most closely watched metrics by analysts and investors-plunged 49% to $4.96 billion.


STMicroelectronics 2Q Earnings, Revenue Rose on Automotive Boost

STMicroelectronics NV on Thursday reported a rise in second-quarter revenue and profit, driven by its automotive businesses.

The chip maker said net profit in the three months to the end of June was $1.00 billion compared with $867 million in the same period of 2022.


Casino's Debt Grew in 2Q as Rescue Talks Continue

Casino Guichard-Perrachon said its debt pile had grown in the second quarter of the year as talks between the embattled French grocer and a consortium led by Czech billionaire Daniel Kretinsky to restructure its finances continue.

Casino said Thursday that net debt had come in at 6.1 billion euros ($6.76 billion) at the end of June, up from EUR5.1 billion at the end of March.


Mercedes-Benz 2Q Earnings, Revenue Jumped

Mercedes-Benz on Thursday reported higher earnings and sales in the second quarter after raising its guidance late Wednesday.

The German luxury-vehicle company said revenue rose to 38.24 billion euros ($42.39 billion) in the quarter from EUR36.44 billion in the second quarter of last year. Earnings before interest and taxes was EUR4.99 billion compared with EUR4.62 billion a year prior.


Telefonica Lifts 2023 Guidance After 2Q Profit Jump

Telefonica on Thursday raised its guidance for 2023 in light of what it called a positive performance since the beginning of the year, and reported a jump in second-quarter net profit helped by continued organic revenue growth.

The Spanish telecommunications group now expects organic revenue growth for the full year to be around 4%, while operating income before depreciation and amortization-a closely watched profitability metric-is forecast to rise around 3% organically. Telefonica said the new targets are at the top end of its prior guidance, which called for growth in a range of low single percentage digits for both metrics.


Holcim's First-Half Net Profit Rose 9.0%

Holcim said its first-half net profit rose 9.0%, driven by sales growth in its North American market and better margins.

The Swiss building-material company said Thursday that net profit was 1.26 billion Swiss francs ($1.46 billion) in the first six months of the year, compared with CHF1.16 billion a year earlier.


GLOBAL NEWS

Federal Reserve Raises Interest Rates to 22-Year High

The Federal Reserve resumed lifting interest rates Wednesday with a quarter-percentage-point increase that will bring them to a 22-year high.

(MORE TO FOLLOW) Dow Jones Newswires

07-27-23 0543ET