Morning Bid: Markets stoic over Powell's shifting fate
The markets were in a calm but sombre mood on Thursday after a dramatic session on Wall Street driven by renewed uncertainty over the tenure of Federal Reserve Chair Jerome Powell.
U.S. President Donald Trump soothed investors' nerves a bit by stating he was not planning to fire Powell, but he confirmed he floated the idea with Republican lawmakers and kept his options open, saying he would love for the Fed Chair to resign.
Stocks in Asia were largely muted on Thursday while Wall Street futures fell, although European stock futures edged higher after slipping during the cash session on Wednesday.
The long-running Trump-Powell saga continues to undermine the dollar, which on Thursday was on fragile footing given lingering worries over the Fed's independence.
With calm mostly restored to the markets, investors have enough earnings reports and data releases on their plate to keep them distracted for now, barring any stepped-up attacks on Powell.
Top of mind are results from TSMC (2330.TW), opens new tab, the world's main producer of advanced AI chips, and streaming giant Netflix (NFLX.O), opens new tab, both expected later in the day.
TSMC, a key supplier to Nvidia (NVDA.O), opens new tab and Apple (AAPL.O), opens new tab, is expected to post a 52% jump in second-quarter profit to record levels, although U.S. tariffs and a strong Taiwan dollar could weigh on its outlook.
As for Netflix, the bar is high for it to deliver a result that could impress investors. They are likely to focus on the company's expansion into live sports and the growth of its ad-supported tier.
Over in the UK, Thursday's jobs numbers could provide further clarity on the outlook for domestic interest rates.
Pay growth in Britain is expected to have slowed further in the three months to May with the unemployment rate likely to have stayed steady at 4.6%.
Still, Bank of England policymakers could turn more cautious on further rate cuts this year, after data on Wednesday showed Britain's annual rate of consumer price inflation unexpectedly rose to its highest in more than a year, at 3.6% in June.
The Australian dollar fell sharply in the Asian session after domestic employment rose only marginally in June, while the jobless rate jumped to its highest since late 2021.
Japan's exports fell for a second straight month as sweeping U.S. tariffs took a toll on the country's manufacturers, and Canadian retailer Alimentation Couche-Tard (ATD.TO), opens new tab pulled its $47 billion bid to buy Seven & i Holdings (3382.T), opens new tab, citing a lack of constructive engagement by the Japanese retailer.
Key developments that could influence markets on Thursday:
- TSMC, Netflix earnings
- British labour market data (May)
- U.S. weekly jobless claims
- Fed's Waller speaks
Trying to keep up with the latest tariff news?
Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
11 minutes ago
- Reuters
Analog chipmaker Texas Instruments forecasts third-quarter revenue above estimates
July 22 (Reuters) - Texas Instruments (TXN.O), opens new tab forecast third-quarter revenue above Wall Street estimates on Tuesday, signaling recovering demand for its analog chips even as U.S. tariff negotiations lead to macroeconomic uncertainty. The company expects revenue in the range of $4.45 billion to $4.80 billion for the third quarter, compared with analysts' average estimate of $4.59 billion, according to data compiled by LSEG.
The Guardian
11 minutes ago
- The Guardian
Trump claims new CBS owner will give him $20m worth of airtime over $16m settlement
Donald Trump has claimed the future owner of the US TV network CBS will provide him with $20m worth of advertising and programming – days after the network canceled The Late Show with Stephen Colbert. The US president recently reached a $16m settlement with Paramount, the parent of CBS News, over what he claimed was misleading editing of a pre-election interview with the Democratic candidate for president, Kamala Harris. While CBS initially called the lawsuit 'completely without merit', a view shared by many legal experts, its owner Paramount is in the midst of an $8bn sale to the Hollywood studio Skydance Media, which requires the approval of federal regulators. In a post on his Truth Social platform, Trump claimed the settlement had been paid – and that he was expecting much more from the new owners of Paramount. 'Paramount/CBS/60 Minutes have today paid $16 Million Dollars in settlement, and we also anticipate receiving $20 Million Dollars more from the new Owners, in Advertising, PSAs [public service announcements], or similar Programming, for a total of over $36 Million Dollars,' he wrote. CBS and Skydance did not immediately respond to requests for comment. Trump's claim that he has been offered millions of dollars' worth of programming is likely to exacerbate anger over the axing of The Late Show, which CBS announced on Thursday. Days earlier Colbert, a high-profile critic of Trump, had branded Paramount's settlement with Trump 'a big fat bribe'. He is due to remain on air until May, and declared on Monday that 'the gloves are off'. Skydance was founded in 2010 by David Ellison, son of the tech billionaire Larry Ellison, co-founder of Oracle, and an ally of Trump. The $16m settlement was already seen by critics as a further example of capitulation by media companies hoping to smooth the waters with the US president. ABC News, ultimately owned by Disney, also agreed to pay $15m to settle a defamation lawsuit over its coverage. After Trump's latest claim regarding $20m worth of advertising and programing from Paramount, the Democrat senator Elizabeth Warren, said in a statement on X, formerly Twitter: 'This reeks of corruption.'
Reuters
11 minutes ago
- Reuters
S&P 500 notches record-high close; GM slumps as tariffs bite
July 22 (Reuters) - The S&P 500 eked out a record-high close on Tuesday, following steep losses in General Motors and a gain in Tesla as investors focused on recent and upcoming quarterly reports and watched for signs of progress in U.S. trade discussions. GM (GM.N), opens new tab tumbled 8.1% after the automaker reported a $1 billion hit from tariffs to its quarterly results, adding more fuel to investor concerns about U.S. President Donald Trump's global trade policy. Shares of Ford Motor (F.N), opens new tab fell about 1%. Tesla (TSLA.O), opens new tab climbed 1.1% a day before its quarterly report, while Alphabet (GOOGL.O), opens new tab, also reporting on Wednesday, rose 0.65%. Optimism about heavy spending on artificial intelligence has underpinned a rally in Wall Street's most valuable companies, with the S&P 500 trading around record highs. "The market is consolidating recent gains and is in a bit of a holding pattern with some huge catalysts over the next week or two, including the August 1 tariff deadline and a lot of important Magnificent Seven earnings," said Ross Mayfield, an investment strategy analyst at Baird. Other Big Tech stocks lost ground, with Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab both losing about 1%. Shares of RTX (RTX.N), opens new tab dropped 1.6% after the aerospace and defense giant t from Trump's trade war despite strong demand for its engines and aftermarket services. Lockheed Martin (LMT.N), opens new tab tumbled almost 11% after its quarterly profit plunged by about 80%. U.S. trade policy remains a major point of uncertainty for investors and companies as Trump's self-imposed August 1 deadline for many countries to reach agreements with the White House approaches. U.S. Treasury Secretary Scott Bessent said he would meet his Chinese counterpart next week to discuss an extension to the August 12 deadline set for tariffs on imports from China. Other trade negotiations appeared stalled, with optimism for a breakthrough deal with India waning and EU officials weighing countermeasures against the United States. The S&P 500 climbed 0.06% to end the session at 6,309.62 points. The Nasdaq declined 0.39% to 20,892.69 points, while the Dow Jones Industrial Average rose 0.40% to 44,502.44 points. Nine of the 11 S&P 500 sector indexes rose, led by healthcare (.SPXHC), opens new tab, up 1.9%, followed by a 1.78% gain in real estate (.SPLRCR), opens new tab. Volume on U.S. exchanges was relatively heavy, with 18.8 billion shares traded, compared with an average of 17.7 billion shares over the previous 20 sessions. Philip Morris (PM.N), opens new tab slumped 8.43% after reporting second-quarter revenue below expectations, as shipments of its ZYN nicotine pouches disappointed investors. Analysts on average expected S&P 500 companies to report a 7% increase in earnings for the second quarter, with technology heavyweights driving much of that gain, according to LSEG I/B/E/S. After last week's mixed economic data, traders have all but ruled out an interest-rate cut from the U.S. Federal Reserve at next week's policy meeting. They now see about a 60% chance of a reduction in September, according to the CME's FedWatch tool. Advancing issues outnumbered falling ones within the S&P 500 (. opens new tab by a 4.3-to-1 ratio. The S&P 500 posted 21 new highs and 1 new low; the Nasdaq recorded 73 new highs and 41 new lows.
