MARKET WRAPS
Watch For:
University of Michigan Final Consumer Survey for August; Speeches from Jerome Powell and Christine Lagarde at the Jackson Hole Economic Symposium
Today's Top Headlines/Must Reads:
- Can the Nvidia Rocket Ship Power Stocks Through a Slowing Economy?
- China Offers Tax Breaks to Home Buyers, Finance Ministry Says
- Rising Insurance Costs Start to Hit Home Sales
- How Donald Trump Could Attack Georgia RICO Prosecution
Follow WSJ market coverage here
Opening Call:
Stock futures were steady on Friday ahead of an eagerly awaited speech from Jerome Powell.
Last year Powell clobbered markets with talk of the need to raise interest rates further, but now he's expected to be more balanced in his remarks.
Investors now see a near-50% chance of another rate hike by year-end, a significant increase from last week, futures pricing showed.
Near the end of the trading day, ECB's Lagarde will also speak. Markets were pricing in about a two-in-five chance of a hike in September, as of Friday morning.
This week's purchasing managers indexes disappointed to the downside, and Germany confirmed its economy was stagnant in the second quarter.
ING said Lagarde has a harder task than Powell. "The latest PMIs confirmed the eurozone economy is heading towards a period of sluggish growth, which now makes any hawkish statement a harder sell," it said.
"At the same time, Lagarde and her ECB colleagues are probably aware that the window for one last hike to curb the still non-negligible service inflation is closing fast."
Pre-Market Movers
Affirm was rising 11% after revenue of $446 million in its fiscal fourth quarter beat analysts' estimates and the company posted a narrower-than-expected loss.
Gap reported a sales decline in the second quarter of 8% to $3.55 billion, below Wall Street estimates, while comparable-store sales fell 6%. The stock, however, was rising 3%.
Hawaiian Electric fell 19% in premarket trading after Maui County sued the utility, claiming its power lines caused recent wildfires on the island.
Intuit reported fiscal fourth-quarter earnings and revenue that beat analysts' estimates. The stock declined 1.5%.
Marvell Technology reported second-quarter adjusted earnings that beat analysts' forecasts but issued an outlook for the third quarter that was in-line with estimates, disappointing investors and sending shares down 4.8%.
Nordstrom second-quarter earnings beat forecasts and the company reaffirmed its forecasts for the fiscal year even as revenue fell to $3.77 billion from $4.09 billion a year earlier. Shares fell 0.7%.
Workday posted better-than-expected second-quarter adjusted earnings and a 16% jump in revenue to $1.79 billion, which also beat expectations. The company also raised its guidance for fiscal-year subscription revenue growth.
Forex:
The dollar rose to its highest level in more than two months against a basket of currencies and the euro ahead of Powell's speech at the Jackson Hole symposium later.
"The dollar extended gains to the strongest levels since the beginning of summer, as traders positioned for a hawkish speech from the Federal Reserve," Swissquote said.
"Pricing in the market suggests that the Fed may already be done with its rate hikes."
Read Dollar Has Potential to Firm Against Euro in 3Q
Bonds:
Long Treasury yields might have room to rise a little higher from current levels as the Fed might not have finished interest-rate rises, Nordea said.
"Our baseline remains one where the Fed is not yet done hiking and will continue have a tightening bias well into next year to ensure that inflation returns to the target." Nordea therefore thinks that long U.S. yields "could still climb a bit further."
The market action in September amid important central bank meetings will give a better picture of the true underlying market sentiment, it added.
Read German Bunds Expected to Continue Outperforming US Treasurys
Energy:
Oil prices ticked higher in Europe but were on course for a weekly loss as concerns about easing supply tightness and a cloudy demand outlook have outweighed reduced OPEC output.
"The cutbacks in place by OPEC+, additional unilateral action by Saudi Arabia and export declines in Russia, as well as seasonally strong consumption, support the market," BMI said.
Metals:
Base metals prices were on course to end the week higher, despite weak demand from China dampening sentiment, meanwhile gold prices ticked lower.
"Industrial metals continue to face headwinds from weak activity in Mainland China," BMI said.
LME inventories for aluminum and copper have ticked higher recently, adding near-term price pressure, BMI said. However "a modest demand recovery in Mainland China in the coming months will support gains in base metal prices."
TODAY'S TOP HEADLINES
VinFast, Arm and Other Index Orphans Miss Out on Billions From Passive Investors
The hype around VinFast Auto, a Vietnamese maker of electric cars that this week was worth more than Ford or General Motors, and the imminent blockbuster IPO of Arm Holdings, a British chip designer about to list on the Nasdaq, conceals a common drawback of both: They are global orphans, missing from the major indexes.
The two sit in a weird no-man's-land between countries, qualifying neither for their home index nor the S&P 500, thanks to their decision to list outside their home countries. They're in a growing group of companies including the Italian fashion designer Prada, the Swedish music streamer Spotify and the German vaccine maker BioNTech, which miss out not only on the trillions of dollars tracking domestic indexes and index futures but also on global index money.
Heineken Sells Russia Business...for $1
Beer giant Heineken said it sold its Russia business, which includes seven breweries and 1,800 employees, to a Russian packaging and cosmetics company for the symbolic sum of about $1.
Russia recently moved to make it tougher for companies to leave the country, passing a decree in April that allows the state to take temporary control of the assets of companies or individuals from what Moscow calls "unfriendly" states.
Weight-Loss Drug Wegovy Also Works Against Heart Failure
There is new evidence that a popular weight-loss drug can deliver health benefits beyond shedding pounds.
Novo Nordisk's anti-obesity drug Wegovy eased the symptoms of a common form of heart failure in patients who also have obesity, researchers reported Friday.
German Business Sentiment Worsened for Fourth Consecutive Month in August
Business sentiment in Germany weakened in August for the fourth month in a row, and by more than expected, as the economic outlook turns gloomier in Europe's largest economy, according to a survey of companies.
The Ifo business-climate index declined to 85.7 in August from 87.4 in July, data from the Ifo Institute said Friday, missing expectations of 86.6 by economists polled by The Wall Street Journal. The reading was the lowest level since October 2022.
Germany Exited Recession in 2Q as Economy Remained Flat, Confirming Prior Estimates
Germany left its recession behind in the second quarter of 2023, after new data confirmed preliminary results that the economy stalled in the three months to June, but didn't contract.
Gross domestic product in Europe's largest economy flatlined from April to June compared with the previous quarter, according to preliminary data from the country's statistics office released Friday.
Trump's Mug Shot Released After Former President Surrenders in Georgia
ATLANTA-Former President Donald Trump surrendered at the Fulton County, Ga., jail to answer charges that he operated a criminal enterprise that sought to overturn Joe Biden's 2020 electoral victory in the state.
It provided a striking moment in which, for the fourth time this year, Trump had to present himself to authorities to face criminal charges-and the first time he, or any former U.S. president, stood for a mug shot.Trump looked intently into the camera, brow furrowed.
Early Intelligence Suggests Prigozhin Was Assassinated, U.S. Officials Say
The plane carrying Yevgeny Prigozhin, the head of the Wagner paramilitary group, crashed as the result of an assassination plot but wasn't shot down by a surface-to-air missile, U.S. officials said.
The preliminary U.S. government assessments, which officials stressed are incomplete, suggest that a bomb exploded on the aircraft or that some other form of sabotage caused the crash northwest of Moscow.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Calendar (ET):
Nothing major scheduled
Expected Major Events for Friday
05:30/JPN: Jul Tokyo area department store sales
05:30/JPN: Jul Nationwide department store sales
06:00/GER: 2Q GDP - Detailed breakdown
08:00/GER: Aug Ifo Business Climate Index
08:30/UK: Jul Capital issuance statistics
08:59/JPN: Jun Final Labour Survey - Earnings, Employment & Hours Worked
14:00/US: Aug University of Michigan Survey of Consumers - final
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
9 Meters Biopharma Inc (NMTRQ) is expected to report for 2Q.
Akebia Therapeutics Inc (AKBA) is expected to report $-0.03 for 2Q.
Bright Green Corp (BGXX) is expected to report for 2Q.
Greenwich LifeSciences Inc (GLSI) is expected to report for 2Q.
Hibbett Inc (HIBB) is expected to report $0.74 for 2Q.
Ideanomics Inc (IDEX) is expected to report for 2Q.
MGT Capital Investments (MGTI) is expected to report for 2Q.
Micron Solutions Inc (MICR) is expected to report for 2Q.
National American University Holding Inc (NAUH) is expected to report for 4Q.
Niko Resources (NKO-T,NKRSF) is expected to report for 1Q.
North European Oil Royalty Trust (NRT) is expected to report for 3Q.
Oncotelic Therapeutics Inc (OTLC) is expected to report for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
08-25-23 0616ET
