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Headlines
- Market Rebound: U.S. stock index futures continued to rise, buoyed by positive labor market data and easing recession fears.
- Company Highlights: Significant gains were noted in Parker-Hannifin(NYSE:PH), Arm, ON Semiconductor, and Eli Lilly, while McKesson and Monster Beverage(NASDAQ:MNST) faced declines.
- Economic Indicators: U.S. jobless claims fell and wholesale inventories rose, while inflation and retail sales data are anticipated next week.
September S&P 500 E-Mini futures (ESU24) are up +0.39%, and September Nasdaq 100 E-Mini futures (NQU24) are up +0.42% this morning, continuing the momentum from yesterday’s substantial gains. The positive shift follows U.S. labor market data that alleviated fears of a significant economic downturn. Market participants are now looking ahead to a new set of U.S. economic data expected next week, which is anticipated to further confirm the resilience of the world’s largest economy.
In the previous trading session, major U.S. stock indexes closed in positive territory. Parker-Hannifin (PH) surged over +10% after the company reported strong Q4 results and an optimistic forecast for FY25 adjusted EPS. The semiconductor sector also saw gains, with Arm (ARM) climbing over +10%, leading the Nasdaq 100, and ON Semiconductor (ON) rising more than +8%. Additionally, Eli Lilly (NYSE:LLY) advanced over +9% after reporting better-than-expected Q2 results and increasing its full-year guidance. Conversely, McKesson (MCK) fell more than -11%, the biggest percentage loser on the S&P 500, after reporting weaker-than-expected Q1 revenue. Monster Beverage (MNST) dropped more than -10%, the top percentage loser on the Nasdaq 100, following disappointing Q2 results and a warning of decreasing demand.
The Labor Department reported on Thursday that initial jobless claims in the past week fell by -17K to 233K, below the 241K consensus and down from 250K in the prior week (revised from 249K). Additionally, U.S. wholesale inventories increased by +0.2% month-over-month in June, matching expectations.
[Thursday’s] jobless claims data may ease some of the concerns raised by last week’s soft jobs report, said Chris Larkin at E*Trade from Morgan Stanley. But with inflation data due out next week and the stock market still working through its biggest pullback of the year, it’s unclear how much this will move the sentiment needle.
Kansas City Fed President Jeffrey Schmid indicated on Thursday that he is not ready to support a reduction in interest rates with inflation above target and a healthy, albeit cooling, labor market. We are close, but we are still not quite there, Schmid said.
U.S. rate futures have priced in a 45.5% probability of a 25 basis point rate cut and a 54.5% chance of a 50 basis point rate cut at September’s policy meeting. The U.S. economic data slate is empty on Friday.
Attention will now shift to the upcoming U.S. consumer price inflation report and retail sales figures for July, scheduled for release next week, as market participants look for signs of a soft landing. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.959%, down -0.96%.
The Euro Stoxx 50 futures are up +0.75% this morning, benefiting from a strong performance on Wall Street as reduced recession fears in the U.S. lifted market sentiment. Travel and leisure stocks led the gains on Friday, while mining stocks also advanced. Final data from the Federal Statistical Office showed that Germany’s annual inflation rate increased to 2.3% in July from 2.2% in June, confirming preliminary data. Separately, final data from the statistical office Istat revealed that Italy’s annual inflation rate stood at 1.3% in July, up from 0.8% in June, confirming the preliminary estimate. In corporate news, Leg Immobilien SE (LEG.D.DX) rose over +4% after the company reported a narrower-than-expected Q2 loss.
