OPENING CALL
Stock futures were rising Friday, and benchmark Treasury yields were above 3.85%, ahead of the market's set piece of the week, Powell's speech at Jackson Hole.
Investors can't make up their minds about how aggressively the Federal Reserve might cut interest rates next month.
Shifting expectations might be one reason stocks retreated Thursday after a day in the green on Wednesday, and Powell's remarks are hoped to help shore up bets.
The market had lowered the chances of a 50 basis point cut to 25% from 36%, amid comments made by other Fed officials at the Jackson Hole conference, as well as the latest economic data, Deutsche Bank said.
However, it seems some can't deal with the anticipation any longer, and have turned their attention to what's coming up next week.
"Move over, Fed, it's all about Nvidia's earnings on August 28th. The waiting is the hardest part," Bolvin Wealth Management Group said, with a nod to the late Tom Petty.
Premarket Movers
Cava sales and profit exceeded expectations. Shares rose more than 8%.
Ross Stores posted higher profit and shares rose more than 5%.
Skydance Media accused Paramount 's special committee of directors of breaching the terms of its deal by extending the period when it can engage with other bidders for the company, The Wall Street Journal reported. Paramount shares fell 1.4%.
Tesla 's head of finance operations left the company, marking a further change in Teslsa's top ranks after several long standing leaders departed.
Workday published a new long-term outlook. Shares jumped.
Postmarket Movers
Red Robin Gourmet Burgers cut its full-year outlook and swung to a loss as inflation-weary consumers cut back on eating out. Shares fell 13%.
Intuit swung to a loss despite posting revenue that beat analysts' expectations. Shares fell 1.5%.
Watch For:
Existing Home Sales for July; Weekly Jobless Claims, Buckle earnings.
Today's Headlines/Must Reads:
- Retailers Are Sending Mixed Messages About the Economy. What's the Deal?
- Utilities are Beating the Mag 7; They Could Keep Rising
- Why China Is Starting a New Trade War
MARKET WRAPS
Forex:
In the short term, Powell's speech is likely to have little impact on the dollar, Commerzbank said.
"The memory of the recent market turmoil is still fresh, so he will likely make efforts to keep markets calm," it said.
"However, given the dollar's weakness in recent days, this alone may be enough to provide some support for the dollar."
EUR/USD has potential to rally further, according to the weekly chart , UOB's Global Economics & Markets Research said.
To sustain its strong momentum, EUR/USD should ideally stay above 1.0950, which was its triangle breakout level, with key weekly support lower at 1.0860.
The next key level to watch is the 2023 high of 1.1275, it added.
Investors might use Powell's speech to lock in some profit in EUR/USD, which could cause the exchange rate to fall and potentially test the 1.1100 support level, ING said.
Sterling's gains are partly due to the dollar's weakness, which looks overdone, according to Swissquote Bank.
BOE Governor Andrew Bailey's speech at Jackson Hole later could be a non-event for sterling as he might say very little about interest-rate cuts, ING reckons.
The yen could strengthen in the near-term on expectations for further rate rises by the BOJ , but the currency might weaken in the longer run if inflation remains subdued, Commerzbank said.
Monetary policy that isn't in line with price developments is more of a risk for the yen in the longer term, it added.
Energy:
Oil prices continued to rise, after prices staged a recovery on Thursday, breaking a four-day streak of declines which had pushed the market towards oversold territory, ING said.
OPEC+ will still be concerned about the recent weakness in the market and it is increasingly likely that the group will have to ditch plans to start raising supply from October, it added, however, it will depend on where the market is trading toward the end of September.
Metals:
Gold partially recovered from a sharp sell-off late in the Thursday European session on likely profit-taking.
Its price remains elevated, up 17% in the year to date, despite Thursday's decline--its biggest one-day fall in a month.
BMI said prices should remain elevated, as geopolitical uncertainties continue to benefit gold's safe-haven characteristic, while Fed rate cuts and a weaker dollar lend further support.
TODAY'S TOP HEADLINES
NetEase Shares Slump on Profit Miss, Softness in PC Games
NetEase's profit miss and computer-game sector softness on operational adjustments prompted a selloff in shares of the Chinese videogame giant that some analysts called an overreaction.
The company's Hong Kong-listed shares were 13% lower at 124.60 Hong Kong dollars, or US$15.98, by Friday afternoon trading. The stock is on track for its largest daily percentage loss since December, when China proposed new online-gaming curbs that it later walked back. Its American depositary receipts sank 11% overnight.
Canada Orders Binding Arbitration in Rail Stoppage to End Labor Dispute
OTTAWA-Canada on Thursday ordered an end to a work stoppage at the country's two main railroads, saying an arbitrator would resolve disagreements between the companies and a Teamsters union that had disrupted freight traffic and supply chains across North America.
"It is the government's responsibility to ensure industrial peace," said Steven MacKinnon, Canada's labor minister. He said negotiations between the two railroads-Canadian National Railway and Canadian Pacific Kansas City-and the Teamsters Canada Rail Conference had reached an impasse.
French Manufacturing Optimism Improves, Despite Weak Prospects
French manufacturers were more positive this month, as hopes of production rebound, despite confidence still being behind its long-term average.
A gauge of manufacturing sentiment rose to 99 in August from 95 in July in a survey published Friday by national statistics agency Insee
Harris Accepts Democratic Presidential Nomination, Vowing to Unite Nation 'Around Our Highest Aspirations'
CHICAGO-Kamala Harris frequently recalls her mother telling her that she might be "the first to do many things" but to make sure she isn't the last. Yet as Harris formally accepted the Democratic presidential nomination Thursday, the vice president didn't directly invoke the historic nature of her candidacy.
Instead of leaning into what her campaign thinks is obvious, the 59-year-old former California senator and prosecutor tried to accomplish something she has struggled to do since her unsuccessful presidential bid in 2019: provide a clear picture to Americans of what she stands for-and why.
Two Million Gazans Are Now Confined to 15 Square Miles
Palestinians in Gaza have long lived in one of the most crowded places on the planet. Since the war broke out there over 10 months ago, the designated space in which they can hope to exist safely has dramatically diminished.
Israel has in recent weeks widened its offensive against Hamas in Gaza to areas its military previously marked as safe zones, but where it now says militants are hiding, hemming Palestinians into smaller and smaller portions of the strip.
Ukrainian Drones Hit Russian Military Air Base as Kyiv Escalates Long-Range Strikes
Ukraine used aerial drones to attack an air base in Russia's Volgograd region early Thursday in an escalating campaign of long-range strikes seeking to damage Moscow's war machine.
Ukraine's main security and intelligence agency, known as the SBU, said the strike had targeted warehouses containing fuel and glide bombs to degrade Russia's air power. Russia has made massive glide bombs dropped from warplanes a key weapon in their latest offensives to smash holes in Ukrainian defenses.
Write to clare.kinloch@wsj.com
TODAY IN CANADA
Earnings:
Nothing Major.
Economic Calendar $(ET)$:
0830 Jun Retail Trade
0830 Q2 Quarterly financial statistics for enterprises
Stocks to Watch:
Canadian National Railway; Canadian Pacific Kansas City : Canada Orders Binding Arbitration in Rail Stoppage to End Labor Dispute
Expected Major Events for Friday
05:30/JPN: Jul Tokyo area department store sales
05:30/JPN: Jul Nationwide department store sales
06:45/FRA: Aug Monthly business survey (goods-producing industries)
10:00/FRA: 2Q OECD trade statistics release
12:30/CAN: Jun Retail trade
12:30/CAN: 2Q Quarterly financial statistics for enterprises
14:00/US: Jul New Residential Sales
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
Avalon GloboCare Corp (ALBT) is expected to report for 2Q.
BeyondSpring Inc $(BYSI)$ is expected to report for Interim.
Buckle Inc $(BKE)$ is expected to report $0.80 for 2Q.
Digital Ally Inc (DGLY) is expected to report for 2Q.
EBET Inc $(EBET)$ is expected to report for 3Q.
Equus Total Return Inc $(EQS.AU)$ is expected to report for 2Q.
Excellon Resources Inc (EXN.T) is expected to report for 2Q.
Hibbett Inc $(HIBB)$ is expected to report $1.18 for 2Q.
Ideanomics Inc $(IDEX)$ is expected to report for 1Q.
Ideanomics Inc (IDEX) is expected to report for 2Q.
Immersion Corp $(IMMR)$ is expected to report $0.50 for 2Q.
Lendway Inc (LDWY) is expected to report for 2Q.
Neptune Wellness Solutions Inc (NEPT-T) is expected to report for 4Q.
Newcore Gold Ltd (NCAU.V) is expected to report for 2Q.
StageZero Life Sciences Ltd (SZLS.T) is expected to report for 2Q.
TOR Minerals International Inc $(TORM)$ is expected to report for 2Q.
TerraVest Industries Inc (TVK.T) is expected to report for 3Q.
Ubiquiti Inc $(UI)$ is expected to report $2.10 for 4Q.
Universal Security Instruments Inc $(UUU)$ is expected to report for 1Q.
Windtree Therapeutics Inc $(WINT)$ is expected to report for 2Q.
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ANALYST RATINGS ACTIONS
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August 23, 2024 06:07 ET (10:07 GMT)
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