MARKET WRAPS
Stocks:
European stocks were higher again on Thursday as AI-related shares rose following Nvidia's results and as investors looked ahead to the Jackson Hole symposium.
The Jackson Hole Symposium officially kicks off Thursday, ahead of a speech by Jerome Powell on Friday. Investors are hopeful that Powell will offer insight into how the central bank views its fight against inflation, and the potential path of interest-rate moves.
Read Powell Expected to Highlight Fed's Ability to Return Inflation to Target
Stocks to Watch
European semiconductor stocks rose after Nvidia reported a surge in earnings for its most recent quarter and projected sales growth ahead of expectations.
Shares in ams-Osram rose 3.2%, making it one of the top gainers in the Stoxx Europe 600 index. ASML Holding, ASM International and BE Semiconductor gained 1.7% or more, while shares of other companies in the semiconductor supply chain, such as Siltronic and VAT Group, rose more than 2%.
Shares in European chip makers STMicroelectronics and Infineon Technologies also added 1.7% and 1.2%, respectively.
U.S. Markets:
Nasdaq-100 futures rallied after Nvidia's earnings smashed expectations, in a sign that interest in artificial intelligence is still intensifying. The stock jumped nearly 9% premarket, pulling other AI stocks higher.
The 10-year Treasury yield retreated slightly, falling from its closing level of 4.197% Wednesday, extending its decline into a third day.
Economic updates set for release include the weekly initial jobless claims and durable goods orders for July.
More Stocks to Watch
AMC Entertainment was falling 1.5%. The company will conclude a 10-for-1 reverse stock split on Thursday.
Autodesk posted second-quarter adjusted profit and revenue that topped Wall Street forecasts. The stock rose 6.6%.
Boeing was down 2.4%. Spirit AeroSystems said it was aware of a quality issue on some models of the 737 fuselage that it makes but would continue to deliver units to Boeing.
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Forex:
Growing evidence of a weak eurozone economy could increase prospects of the ECB keeping rates unchanged rather than raising them in September, which should push eurozone bond yields and the euro lower, MUFG said.
Unless eurozone inflation figures next week show "significant upside surprise for core inflation in August," MUFG would expect market participants to grow less confident that the ECB will hike rates in September, a decision which would pose "some downside risk for eurozone yields and the euro in the month ahead."
Read ECB Hawks Now Hold Fewer Cards Ahead of September Rate Decision
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The safe-haven dollar could edge lower as equities rose following strong Nvidia results, ING said.
Following the weak PMI data, focus now turns to jobless claims data, ING added.
"Any tick higher [in jobless claims] to the 250,000 area could slightly weigh on U.S. yields and the dollar."
Read Less Than 'Significant' Turkish Rate Rise Could Hit Lira
Bonds:
Eurozone government bonds are expected to deliver higher returns in the remainder of the year in light of yields declining, UniCredit Research said.
"EGB performance would be positive even if yields were to be moderately higher."
The end of the interest-rate rising cycle would be positive news for eurozone government bonds, which have managed to achieve slightly positive performance so far this year despite elevated market volatility and more interest-rate rises than predicted at the end of last year, UniCredit added.
Read Gilt Yields Fall as Weak Data Dent UK Interest-Rate Prospects
Energy:
Oil prices slipped on reports that the U.S. could be considering easing sanctions on Venezuelan oil exports.
The Biden administration has drafted proposals that would ease sanctions on the South American nation's oil exports if Caracas moves toward fair elections, according to Reuters, citing five people with knowledge of the proposal.
Extra oil exports from Venezuela would come as Iran has been ramping up its own oil exports, alleviating tightness in the oil market and weighing on prices.
Metals:
Base metals prices were falling but gold edged higher in early trading, as worries around China's property sector continued to pressure industrial goods.
"China's beleaguered property sector shows no signs of improving," ANZ said.
It pointed to a lack of sufficient support measures as well as consumer reluctance to buy as key reasons noting a 25% on-year drop in floor space sold in July.
"New starts and buildings under construction have fallen nearly 50% year-on-year. That looks unlikely to reverse in the short term."
DOW JONES NEWSPLUS
EMEA HEADLINES
Iran, Saudi Arabia, Others Invited to Join Brics Group
JOHANNESBURG-The Brics group of emerging nations has invited six additional countries to join the bloc in an effort to grow its global importance and ability to challenge the West on key political and economic issues.
Saudi Arabia, Egypt, Argentina, Iran, Ethiopia and the United Arab Emirates have been invited to join Brics, which currently comprises Brazil, Russia, India, China and South Africa, South African President Cyril Ramaphosa said Thursday at a leaders' summit in Johannesburg.
Norwegian Air Shuttle 2Q Net Profit Fell, But Demand Remains Strong
Norwegian Air Shuttle on Thursday reported a fall in second-quarter net profit, but said demand remains strong and that it has begun examining the potential for a dividend.
The low-cost carrier reported a net profit of 537.9 million Norwegian kroner ($50.8 million), down from NOK1.25 billion a year earlier.
Credit Suisse Drops Real-Estate Fund IPO Plan
Credit Suisse said it has abandoned its plan to launch an initial public offering for its Credit Suisse 1a Immo PK real-estate fund due to low trading volumes for listed Swiss real-estate funds.
The Swiss bank-now part of UBS Group-said Thursday that Credit Suisse Funds decided not to carry out the IPO, which had been planned for the fourth quarter of 2023, and that this will allow the newly formed real-estate unit within UBS Asset Management to coordinate its offer of real-estate investment services.
GLOBAL NEWS
Didn't Get Get Invited to the Fed's Mountain Retreat? Here's What to Watch
Federal Reserve officials return to Grand Teton National Park on Thursday for their annual economic symposium with a slightly brighter economic backdrop than the one they faced last year.
They have lifted interest rates to a 22-year high in the most aggressive sequence of rate increases in 40 years to battle inflation, which has retreated from four-decade highs. But the U.S. economy remains surprisingly resilient-with the unemployment rate at 3.5%, essentially unchanged over the past year-and so-called core inflation, which excludes volatile food and energy prices, is nearly double the Fed's 2% target.
Arizona Labor Spat Signals Challenges for U.S. Chip Manufacturing
A labor tussle at a semiconductor-plant construction site in Arizona points to one of the thornier challenges facing the U.S. as it moves to revive domestic chip manufacturing: ensuring there are enough skilled workers to meet new demands.
Taiwan Semiconductor Manufacturing Co. is investing $40 billion for two chip fabrication plants in Phoenix and is expected to seek up to $15 billion in tax credits and grants for the project under the $53 billion Chips Act, The Wall Street Journal has reported.
Will Powell crush stocks again during Friday's Jackson Hole speech? Here's one reason investors shouldn't worry.
Worried that Jerome Powell might smash stocks lower on Friday when he steps up to the microphone in Jackson Hole, Wyo.? Good news: Last year's market-crushing speech was an outlier, according to an analysis by Bespoke Investment Group.
Usually, market reactions to Fed chiefs' speeches at the Kansas City Fed's annual Jackson Hole Economic Symposium are much more muted than the washout that stocks experienced on Aug. 26, 2022, the date of last year's Jackson Hole speech.
China Casts CIA as Villain in New Anti-Spying Push
SINGAPORE-Chinese leader Xi Jinping is expanding a campaign to harden the country against foreign efforts to steal its secrets, with his spymasters warning citizens abroad to guard against enticement from the U.S. Central Intelligence Agency.
The Ministry of State Security-China's main civilian intelligence agency-recently accused two Chinese nationals of spying for the U.S., saying both were recruited by the CIA while living overseas. It publicized the cases soon after CIA Director William Burns said the agency had made progress in rebuilding its spy network in China, an assertion that drew widespread attention on Chinese social media.
Tracking the Charges in Trump's Indictments
Donald Trump is expected to surrender in Georgia on Thursday, after bond for the former president was set at $200,000 in the election-interference case. He is facing criminal charges at both the federal and state levels while seeking the Republican nomination for president in 2024. Here is a look at the status of the most prominent criminal prosecutions, investigations and lawsuits involving the former president and declared presidential candidate, and how the timing of the protracted legal processes could run up against the demands of a presidential campaign.
Write to ina.kreutz@wsj.com
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
08-24-23 0619ET
