BOJ hikes with Fed ahead, Big Tech flubs
A look at the day ahead in U.S. and global markets from Mike Dolan
By any standards of an already busy year, markets are digesting an awful lot of information in a very short space of time - with a Bank of Japan interest rate rise and Microsoft earnings disappointment the latest servings on the final day of July.
Just hours before the Federal Reserve is expected to nod to a first U.S. rate cut in September, the BOJ hiked its official policy rate to 0.25% - sending the yen JPY= surging and pulling dollar/yen back to 150 for the first time since March.
Despite months of speculation, the rate move was something of a surprise to a market that had only seen a 50-50 chance of a move this week.
What's more, the BOJ also unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus as inflation normalises and spurring government bond yields JP2YT=RR to their highest in 15 years.
Although the yen hesitated after the decision initially and Japanese stocks .N225 ended higher, comments from BOJ Governor Kazuo Ueda suggested further tightening may be in store.
"If the economy and prices move in line with our projection, we will continue to raise interest rates," Ueda told reporters.
With the Fed decision out later, the Japan jolt did little to disturb U.S. Treasuries and 10-year yields US10YT=RR hit their lowest in four months early on Wednesday. Influenced largely by the yen, the dollar index .DXY slipped back too.
With U.S. disinflation resuming and the central bank turning to the loosening labor market, a big week for employment statistics is being watched closely.
Job openings data on Tuesday showed signs that hiring was on the wane last month and July private sector payroll readings later today are expected to tee up a cooler national jobs report on Friday too.
Interest rate markets also screened out a pop higher in crude oil prices CLc1 from near two-month lows as Middle East tensions went up several notches and fears of a regional escalation of the conflict there increased.
Hamas leader Ismail Haniyeh was assassinated in the early hours of the morning in Iran, less than 24 hours after Israel claimed to have killed a senior Hezbollah commander in Beirut.
But the big picture for oil remains subdued, with year-on-year price moves still negative to the tune of some 5%.
One eye is also on political upheaval in OPEC producer Venezuela, where protesters took to the streets on Tuesday to demand President Nicolas Maduro acknowledge he lost Sunday's election to the opposition.
Oil also has a wary eye on spluttering Chinese demand, where July business surveys show manufacturing still in contraction and overall business activity weakening close to stagnation.
And yet China stocks .CSI300 jumped more than 2% in their biggest one-day gain in more than five months - led by consumer and tech shares as investors welcomed a Politburo meeting that stressed the need to boost consumption.
Aside from the Fed, Big Tech jitters were top of mind back on Wall Street.
Microsoft's MSFT.O shares were down almost 3% ahead of Wednesday's open after its post-bell earnings report late yesterday underwhelmed investors increasingly anxious about the big spend in artificial intelligence and cloud computing revenues.
With Meta's quarterly update META.O due out later on Wednesday after the Fed decision, the tension around the so-called Magnificent Seven of U.S. megacap stocks is high - not least after last week's shakeout on Tesla and Alphabet's earnings sent shockwaves through the S&P500 .SPX.
But with a rotation to small cap stocks afoot, aggregate earnings growth still punchy above 11% and the majority of S&P500 stocks higher on Tuesday, stock futures ESc1, NQcv1, RTYc1 were higher across the board.
Helping the Big Tech mood, Samsung Electronics 005930.KS forecast strong AI-driven demand for chips in the second half of this year and reported a more than 15-fold rise in its second-quarter operating profit.
On the flipside, the Biden administration plans to unveil a new rule that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule told Reuters.
Elsewhere, HSBC HSBA.L jumped 3% after it announced a $3 billion buyback and upgraded its income outlook on Wednesday - showing progress in its strategy to future-proof its business from global interest rate cuts.
Key developments that should provide more direction to U.S. markets later on Wednesday: * US ADP July private sector payrolls report, US Q2 employment costs, July Chicago business survey, US June pending home sales
* Federal Reserve policy decision, statement and press conference by chair Jerome Powell
* US corporate earnings: Meta Platforms, Qualcomm, Ingersoll Rand, AIG, MetLife, Mastercard, KKR, eBay, Western Digital, Boeing, Dupoint De Nemours, Kraft Heinz, MGM Resorts, Marriott, Albemarle, Johnson Controls, Borgwarner, Hess, Altria, Everest, Verisk, Garmin, Humana, FMC, Allstate, ETSY, Eversource Energy, Paycom, Cognizant, Lam Research, Automatic Data Processing etc
BOJ raises rate target to 0.25%, highest since 2008 https://reut.rs/3LLWmXR
Mission accomplished? FAIT accompli? https://tmsnrt.rs/3MODeXb
More jobs than jobseekers in the US https://tmsnrt.rs/3m50wOw
China's July factory activity contracts again https://reut.rs/3A49nJX
'Magnificent Seven' versus the market https://reut.rs/3WtWQqJ
By Mike Dolan, editing by Ros Russell
mike.dolan@thomsonreuters.com
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
