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The Thursday Market Minute

  • Global stocks grind higher as investors bet on near-term support from G-7 central banks amid slowing growth in the world's biggest economies.
  • Asia stocks rise as U.S.-China trade talks inch forward, while Japan's Nikkei 225 hits a three-month high on rate cuts hopes.
  • European stocks gain after ECB hints at lower rates, renewed bond purchases, following its policy meeting in Frankfurt.
  • Global oil prices edge higher after U.S. data shows a big decline in domestic crude stocks, but demand concerns hold gains as manufacturing activity plunges to near 10-year lows.
  • U.S. equity futures suggest modest opening bell gains on Wall Street ahead of earnings from 3M, Comcast, American Airlines, Dow, Amazon, Starbucks and Alphabet as well as durable goods orders and weekly jobless claims data at 8:30 am Eastern time.

Market Snapshot

U.S. equity futures were little changed Thursday, while global stocks edged higher on bets of near-term support from the world's biggest central banks, as investors prepped for the busiest day of the corporate earnings season on Wall Street.

Just over 50 companies will report quarterly profits Thursday, including tech and retail giants Amazon (AMZN) and Alphabet (GOOGL) after the close of trading and industrial bellwethers 3M Co. (MMM) , Dow Inc. (DOW) prior to the opening bell. With around a fifth of S&P 500 companies reporting so far this season, analysts at FactSet suggest collective second quarter earnings are on pace to fall 1.9% from last year, a figure that would mark the first back-to-back decline in three-month profits since 2016.

The earnings weakness, as well as some of the softest manufacturing data in nearly a decade, hasn't blunted global stocks or snuff out gains on Wall Street, with investors riding hopes of near-term interest rate cuts from the Federal Reserve, the Bank of England, the Bank of Japan and the European Central Bank that have propelled stocks in various G-7 economies to multi-month highs.

On Wall Street, stocks remain withing touching distance of fresh record peaks ahead of next week's Fed rate decision, from which investors are pricing in a 100% chance of a 25 basis point rate cut.

Early indications from U.S. equity futures, however, suggest investors are first waiting for both the ECB rate decision and earnings updates before reaching for new record peaks, with contracts tied to the Dow Jones Industrial Average suggesting a 22 point gain and those linked to the S&P 500 little-changed from last night's close.

Tesla Inc. (TSLA) shares were indicated sharply lower in pre-market trading after the clean-energy carmaker posted a much-wider-than-expected second quarter loss and said it chief technology officer was leaving the company.

3M Co. (MMM)  shares jumped 2.8% after it posted stronger-than-expected second quarter earnings Thursday, and affirmed its full-year profit guidance, as its job cuts program reduced costs and boosted its bottom line.

American Airlines Group (AAL)  fell 1.7% after it posted stronger-than-expected second quarter earnings Thursday but said the grounding of Boeing's (BA) 737 MAX will clip full year earnings by around $400 million.

European stocks were higher across the board, while the euro fell to a three month low against the dollar and bund yields tumbled to a fresh record trough of -0.41% after the European Central Bank held its key interest rates unchanged following its regular policy meeting in Frankfurt Thursday, but hinted at near-term policy support for the struggling Eurozone economy.

The Stoxx 600 benchmark was seen 0.6% higher by mid-day in Frankfurt while Britain's FTSE 100 edged 0.4% higher in London as the pound held at 1.2467 against the dollar.

Overnight in Asia, Japan's Nikkei 225 reached a three-month high during intra-day trading before fading into the close, while stocks around the region ground to multi-month highs amid hopes that next week's face-to-face meeting between U.S. and China trade representatives will lead to a much-anticipated breakthrough in the on-again/off-again negotiations.

Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, edged modestly higher to 97.75 as the euro drifted lower into the ECB rare decision, while benchmark 10-year Treasury bond yields drifted lower, to 2.029%, as Wall Street futures sputtered.

Global oil prices extended gains in overnight trading following Energy Department data yesterday which showed a much bigger-than-expected decline in U.S. crude stocks. 

The Energy Information Administration, the Energy Department's statistics office, said U.S. crude supplies fell by 10.8 million barrels in the week ending July 19, more than double the 4 million barrels forecast by analysts. The figures from the EIA followed a private reading from the American Petroleum Institute which said domestic stocks fell by 10.961 million barrels, the second biggest of the year. The collective decline in U.S. stockpiles over the past four weeks has topped 24.535 million barrels, EIA data indicates.

Brent crude contracts for September delivery, the global benchmark, were seen 93 cents higher from their Wednesday close and changing hands at $64.11 per barrel while WTI contracts for the same month, which are more tightly linked to U.S. gas prices, were marked 84 cents higher at $56.72 per barrel.