US stock market futures rose on Thursday, a day after the Federal Reserve issued its first rate cut in more than a decade, while also signaling reluctance in starting a prolonged rate-cutting cycle.
"We're thinking of it essentially as a mid-cycle adjustment to policy" Powell said during the post-cut press conference Wednesday, following the Fed's decision to slash interest rates by 25 basis points, as expected. "I'm contrasting it with the beginning of a lengthy cutting cycle" he added.
Following a relatively muted initial response to the Fed’s rate cut, its first since the financial crisis, stocks unambiguously turned south as Powell warned that future cuts aren't guaranteed.
The S&P 500 finished -1.09% lower, its biggest one-day drop since May 31, following a slight recovery from a fall of as much as -1.6%, at its base, during the afternoon session.
The Dow Jones Industrial Average also tracked lower, down -1.25%, its biggest drop since the end of May, while the Nasdaq Composite’s -1.38% decline was its largest since late June.
In a somewhat symbolic gesture, following the Fed press conference President Donald Trump wrote in a tweet; "What the market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, the European Union and other countries around the world. As usual, Powell let us down."
With the Fed now out of the way, investors will continue to keep an eye on the ongoing earnings season, with; Verizon Communications (VZ), General Motors (GM), US Steel (X), Shopify (SHOP), DuPont (DD), Kellogg (K), Clorox (CLX), Etsy (ETSY), Wayfair (W), Yum Brands (YUM), Square (SQ), Pinterest (PINS), GoPro (GPRO), Cigna (CI), Redfin (RDFN) and Yeti Holdings (YETI) all expected to report today.
Also coming up, in today’s economic calendar are; Weekly Jobless Claims at 8:30am EST, followed by Construction Spending for June and the ISM Manufacturing Index for July at 10am EST.
TODAY'S TOP HEADLINES
UK & Economy: Bank of England slashes growth forecasts amid no-deal Brexit fears. (CNBC)
The Bank of England pushed back against calls to cut interest rates on Thursday, leaving borrowing costs unchanged amid an intensifying risk of a no-deal departure from the European Union.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:30AM - ★☆☆ - Weekly Jobless Claims (Previous: 206,000)
10:00AM - ★☆☆ - Construction Spending (Jun) (Previous: -0.8%)
10:00AM - ★★★ - ISM Manufacturing PMI (Jul) (Previous: 51.7)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Qualcomm (QCOM): [EARNINGS] Reported adjusted quarterly profit of 80 cents per share, 5 cents a share above Street forecasts. The chipmaker’s revenue came in below estimates and the company gave current-quarter earnings forecast that falls largely below consensus, as it strips out business from China’s Huawei Technologies.
Beyond Meat (BYND): [NEWS] Beyond Meat priced a secondary offering of 3.25 million new shares at $160 per share, 18.6% below Wednesday’s closing price for the plant-based burger maker’s stock.
Fitbit (FIT): [EARNINGS] Lost 14 cents per share for its latest quarter, 4 cents a share less than Wall Street had projected. The fitness-device maker saw revenue beat estimates, however Fitbit cut its full-year sales forecast on disappointing sales of its new Versa Lite smartwatch.
Wayfair (W): [EARNINGS] Lost $1.35 per share for its latest quarter, matching Street forecasts. Revenue beat estimates, but the bottom line was impacted by a more than 50% increase in operating expenses.
Yum Brands (YUM): [EARNINGS] Beat consensus by 6 cents a share, with adjusted quarterly profit of 93 cents per share. Revenue beat estimates as well. Comparable-restaurant sales rose 5%, beating the forecast of 3.1% by analysts surveyed by Refinitv.
Cigna (CI): [EARNINGS] Earned an adjusted $4.30 per share for the second quarter, beating the consensus estimate of $3.74 a share. Revenue also exceeded forecasts, with overall results getting a boost from strength in Cigna’s health-services unit.
Clorox (CLX): [EARNINGS] Beat estimates by 5 cents a share, with quarterly profit of $1.88 per share. Revenue missed forecasts, however, and Clorox gave a weaker-than-expected fiscal 2020 forecast on weakness in its household segment as well as unfavorable exchange rates in certain markets.
DuPont (DD): [EARNINGS] Reported adjusted quarterly profit of 97 cents per share, 13 cents a share above estimates. Revenue fell short of forecasts, however, and said it expects organic sales to fall slightly this year.
Las Vegas Sands (LVS), Wynn Resorts (WYNN): [NEWS] Gaming revenue in Macau dropped 3.5% from a year earlier, slightly below analysts’ forecasts.
Verizon (VZ): [EARNINGS] Reported adjusted quarterly profit of $1.23 per share, 3 cents a share above estimates. Revenue came in below forecasts, however. Verizon added a net 245,000 phone subscribers during the quarter, above the 163,000 that analysts surveyed by FactSet had been forecasting.
Dunkin’ Brands (DNKN): [EARNINGS] Came in 4 cents a share above estimates, with second-quarter profit of 86 cents per share. Revenue was short of forecasts, however. Comparable sales at U.S. Dunkin’ locations rose 1.7%, better than expected, but comparable sales at U.S. Baskin-Robbins locations were short of forecasts.
Amazon.com (AMZN): [NEWS] Amazon is in early-stage talks to buy a 26% stake in India’s Reliance Industries, according to the Economic Times.
BlackRock (BLK): [NEWS] Is no longer in talks to buy private-equity firm Pamplona’s stake in cybersecurity firm Cofense, according to The Wall Street Journal.
MOMENTUM STOCKS
GAINERS: ENPH, MRCY, SBH, FDC, SLCA, JWN, EIX, MCO, AMGN
DECLINERS: TWOU, TENB, DAN, AMD, EXP, MXIM, BERY
TODAY'S IPOs
Dynatrace Holdings (DT) (Price: 16) (Est. Vol: $569.6M)
Kura Sushi (KRUS) (Price: 14) (Est. Vol: $40.6M)
RAPT Therapeutics (RAPT) (Low: 14, High: 16) (Est. Vol: $75.0M)
Sundial Growers (SNDL) (Price: 13) (Est. Vol: $11.0M)
