Wall Street rises after strong US GDP data
In early trading on Wednesday, the Dow Jones Industrial Average rose 1.42 points to 44,632.50, the S&P 500 gained 7.20 points, or 0.11 per cent, to 6,378.06 and the Nasdaq Composite gained 47.19 points, or 0.22 per cent, to 21,145.48.
US economic growth rebounded in the second quarter, beating expectations, but the reality remains grim as most of the boost came from waning imports while domestic demand only inched higher.
"The market's taking some reassurance from the headline number but the more you dig into it, the more concerned that you get," said Ben Laidler, head of equity strategy at Bradesco BBI.
"It puts the Fed in a tougher position, with the rise coming in higher than expected. There's a huge amount of tariff noise in this reading.
Following the data, traders dialled back their bets on a September Fed rate cut with the odds slipping to 57 per cent from 64 per cent, according to CME's FedWatch tool.
While analysts anticipate little drama from the Fed decision, investors will be parsing chair Jerome Powell's comments for any hints on future policy direction especially as the central bank navigates political pressure and assesses the effects of tariffs on inflation.
The latest ADP report showed private payrolls grew by 104,000 in July, topping forecasts of 75,000, ahead of Friday's all-important non-farm payrolls release.
Investors are now placing their bets on results from megacaps to steer Wall Street to new highs.
Microsoft and Meta Platforms will report their results after the market closes while Amazon and Apple will report on Thursday.
A burst of upbeat earnings from consumer favourites underscored the resilience of US shoppers.
Starbucks posted better-than-expected third-quarter sales but its shares slipped 1.3 per cent.
Hershey gained 4.0 per cent on results that topped forecasts.
VF Corp, parent of Vans, jumped 22 per cent while Kraft Heinz was largely steady after both companies beat quarterly revenue estimates, adding to the consumer-driven rally.
Still, caution crept into markets after US President Donald Trump slapped a 25 per cent tariff on Indian imports starting on August 1, vowing no deadline extensions for trading partners without a deal in place.
Meanwhile, US-China trade talks wrapped up with both sides seeking to extend their tariff truce, leaving the final call in Trump's hands.
South Korea was also lobbying to secure a trade deal ahead of Trump's August 1 deadline as its officials met US Commerce Secretary Howard Lutnick in Washington DC.
Among other earnings moves, Humana gained 10 per cent after the health insurer raised its annual profit forecast.
Global payments processing company Visa fell 2.3 per cent despite beating estimates for third-quarter earnings as it kept its annual net revenue growth forecast unchanged.
Declining issues outnumbered advancers by a 1.18-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.22-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and four new lows while the Nasdaq Composite recorded 25 new highs and 39 new lows.
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Sydney Morning Herald
2 hours ago
- Sydney Morning Herald
Don't let FOMO fool you: Selling Big Bash teams is a bad idea
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Best to reduce costs, run at a surplus over the cycle, invest the proceeds wisely and host more World Cups. That brings us to the fear of missing out. The arguments for: Everyone else is doing it, so why shouldn't we? In particular, the England Cricket Board has sold stakes in the Hundred for seemingly good prices – especially the team based at Lord's. The IPL includes private owners, and is a success, so perhaps this is causation as well correlation? The IPL clubs are globalising and, if they end up contracting players to their franchises across the world on a 12-month basis, the BBL might miss out on having these players involved unless the IPL owners also own BBL teams. BBL clubs might not be able to afford players in demand from other privately owned leagues played in the same window. The core hope is that someone will overpay for the revenue streams CA would otherwise be receiving, or that they can generate more revenue or profit than CA and the states can. 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And CA will not exercise the same degree of control over Indian billionaires as the Board of Control for Cricket in India does. The BCCI is in effect an arm of the Indian government; CA is not. The nub of the issue appears to be 'If we sell the BBL now we can get top dollar. If we don't, the IPL owners will compete with it and take the players'. This is already happening to a degree, with parallel tournaments over summer in South Africa and the Middle East. Is it therefore better to surrender, to take the money and run? The answer in my view is no. It is a mistake to think the BBL is popular because of specific players. Players come and go and always will. And the BBL makes stars as much as stars make the BBL. BBL is popular fundamentally because it is cricket, it is T20 and it is played in the perfect timeslot – every summer night. Its standing among global T20 leagues is largely irrelevant to Aussie fans. As, frankly, is the IPL. It is also a mistake to think the IPL is better-run. It simply operates in a far bigger market. Which brings us to cricket politics. The argument for: Key figures are in favour of it. The 'privatise' faction has existed in Australian cricket since at least 2011. However, its incentives must be carefully examined. If I am a leading player, player agent, or players' union, I want as much competition for players as possible – except when it comes to restrictions on overseas player slots in the BBL. More owners and more competitions are better. So privatisation is good. CA's incentives are the opposite. If I am associated with a potential investor or stand to make money from a transaction, I want privatisation. CA needs to discount these perspectives accordingly. Loading And if I am an executive or director who wants to be seen to 'do something', or 'leave a legacy', or just do something new, I might want privatisation. That requires a good hard look in the mirror. Administrators are only temporary custodians of the game. 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The Age
2 hours ago
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Don't let FOMO fool you: Selling Big Bash teams is a bad idea
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Best to reduce costs, run at a surplus over the cycle, invest the proceeds wisely and host more World Cups. That brings us to the fear of missing out. The arguments for: Everyone else is doing it, so why shouldn't we? In particular, the England Cricket Board has sold stakes in the Hundred for seemingly good prices – especially the team based at Lord's. The IPL includes private owners, and is a success, so perhaps this is causation as well correlation? The IPL clubs are globalising and, if they end up contracting players to their franchises across the world on a 12-month basis, the BBL might miss out on having these players involved unless the IPL owners also own BBL teams. BBL clubs might not be able to afford players in demand from other privately owned leagues played in the same window. The core hope is that someone will overpay for the revenue streams CA would otherwise be receiving, or that they can generate more revenue or profit than CA and the states can. The core fear is we need to sell now or be left behind. It's possible a foreign owner can make more money from BBL clubs from overseas sources than CA can, but only if the BBL effectively becomes the Australian leg of a global T20 tour controlled by IPL owners and private equity firms. Think Sydney Knight Riders rather than Sydney Sixers. The question for CA is whether this will help it to grow the game in Australia more effectively than retaining full ownership and control. This seems unlikely. CA and the states are focused on growing Australian cricket and understand the participation and consumption markets better than anyone; foreign BBL owners are not, and won't ever, be focused on this. Nor is Boston Consulting Group. CA's flagship product, international cricket, also runs parallel to the BBL. CA has the ability to manage its schedule to maximise the audience for all formats. This will become far more challenging when private owners are solving only for BBL. And CA will not exercise the same degree of control over Indian billionaires as the Board of Control for Cricket in India does. The BCCI is in effect an arm of the Indian government; CA is not. The nub of the issue appears to be 'If we sell the BBL now we can get top dollar. If we don't, the IPL owners will compete with it and take the players'. This is already happening to a degree, with parallel tournaments over summer in South Africa and the Middle East. Is it therefore better to surrender, to take the money and run? The answer in my view is no. It is a mistake to think the BBL is popular because of specific players. Players come and go and always will. And the BBL makes stars as much as stars make the BBL. BBL is popular fundamentally because it is cricket, it is T20 and it is played in the perfect timeslot – every summer night. Its standing among global T20 leagues is largely irrelevant to Aussie fans. As, frankly, is the IPL. It is also a mistake to think the IPL is better-run. It simply operates in a far bigger market. Which brings us to cricket politics. The argument for: Key figures are in favour of it. The 'privatise' faction has existed in Australian cricket since at least 2011. However, its incentives must be carefully examined. If I am a leading player, player agent, or players' union, I want as much competition for players as possible – except when it comes to restrictions on overseas player slots in the BBL. More owners and more competitions are better. So privatisation is good. CA's incentives are the opposite. If I am associated with a potential investor or stand to make money from a transaction, I want privatisation. CA needs to discount these perspectives accordingly. Loading And if I am an executive or director who wants to be seen to 'do something', or 'leave a legacy', or just do something new, I might want privatisation. That requires a good hard look in the mirror. Administrators are only temporary custodians of the game. The real question for CA is what is best for Australian cricket fans, and the grassroots clubs and associations that ultimately own the game. Publicising the report would help us decide for ourselves. That is the right next step.
AU Financial Review
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