Minutes from the Federal Reserve’s June policy meeting showed that the bank has set a firm date for the end of its asset buying program for the first time.
Fed officials decided to continue on the current path by decreasing the bank’s bond buying by $10 billion per month until October, when they will reduce purchases by $15 billion; making November the first month without any asset purchases.
The minutes confirmed that the US central bank is confident in the direction of the nation’s recovery, but cautious about how tightening its policies could interfere with growth.
The minutes gave no further indication about when the bank plans to raise its interest rate, but most expect that the Fed will require several months of solid data before deciding on a rate hike.
In other news around the markets:
- David Li has been named JPMorgan Chase & Co’s Chief Executive of Chinese operations, the bank announced on Thursday. Li, a former USB banker, will replace Fang Fang, the company’s previous head of Chinese banking who left the company in March following an investigation into the JPMorgan’s Asian hiring practices.
- Although Ukrainian government forces made some progress over the weekend by pushing pro-Moscow separatists out of their stronghold in Slaviansk, the military still has a way to go as the rebel groups still occupy several border posts and the towns of Donetsk and Luhansk. Rebel leaders reported that they’ve had a wave of new volunteers who are planning to help defend Donetsk against the Ukrainian government’s advances.
- On Wednesday, ECB President Mario Draghi called on eurozone policy makers to help him further integrate the region’s economies and avoid another financial collapse. Draghi proposed the introduction of a set of rules which would require member states to follow guidelines and make necessary changes in order to strengthen their economies. Though he did not elaborate on what the rules would require, he said a system like this would help promote competitiveness and an even recovery.
- With US consumer demand on the rise, Chinese exports picked up by 7.2 percent in June, an increase from May’s 7.0 percent rise. The figure fell short of analysts’ 10 percent prediction, but has been generally regarded as a positive sign as the nation’s economy has been struggling recently.
Asian markets were mostly higher with the exception of the NIKKEI and the Shenzhen composite, which lost 0.56 percent and 0.08 percent respectively. The Shanghai composite was up 0.14 percent, the KOSPI gained 0.12 percent and the Hang Seng index rose 0.32 percent.
European Markets
Europe’s markets were down across the board; the FTSE lost 0.68 percent, the STOXX 600 was down 1.05 percent, the DAX fell 1.16 percent, the CAC 40 was down 1.12 percent and the IBEX lost 1.84 percent.
Energy futures were lower after US inventory data disappointed on Wednesday. Brent futures were down 0.14 percent and WTI futures lost 0.51 percent. Gold and silver gained 0.54 percent and 0.94 percent respectively while industrial metals were mostly lower. Aluminum was down 0.05 percent, zinc lost 0.04 percent and tin was down 0.98 percent.
The euro was steady a$1.3641 and gained 0.14 percent against the pound, but lost 0.12 percent against the yen. The dollar was up 0.10 percent against the yen, 0.15 percent against the pound and 0.34 percent against the Australian dollar.
Earnings
Notable earnings released on Wednesday included:
- MSC Industrial Direct Company MSM reported third quarter EPS of $1.06 on revenue of $720.50 million, compared to last year’s EPS of $1.05 on revenue of $636.92 million.
- WD-40 Company WDFC reported third quarter EPS of $0.69 on revenue of $95.70 million, compared to last year’s EPS of $0.66 on revenue of $93.10 million.
- GenCorp GY reported a second quarter loss of $0.86 on revenue of $403.10 million, compared to last year’s loss of $0.20 on revenue of $286.60 million.
Stocks moving in the Premarket included:
- Alcoa AA was up 0.89 percent in premarket trade after gaining 5.66 percent on Wednesday.
- Carnival Corp CCL was down 1.95 percent in premarket trade after losing 1.57 percent over the past week.
- Transocean Ltd. RIG fell 1.23 percent in premarket trade after rising 0.81 percent on Wednesday
- Home Depot HD was down 1.03 percent in premarket trade after falling 1.52 percent over the past week.
Notable earnings releases expected on Thursday include:
- Progressive Corporation PGR is expected to report second quarter EPS of $0.48 on revenue of $4.64 billion, compared to last year’s EPS of $0.39 on revenue of $4.39 billion.
- PriceSmart PSMT is expected to report third quarter EPS of $0.69 on revenue of $624.46 million, compared to last year’s EPS of $0.61 on revenue of $571.72 million.
- Family Dollar Stores FDO is expected to report third quarter EPS of $0.89 on revenue of $2.62 billion, compared to last year’s EPS of $1.05 on revenue of $2.57 billion.
Economics
Thursday will be another slow day for economic releases with the Bank of England’s interest rate decision taking the top bill. Other notable economic releases will include US wholesale inventories, US chain store sales and the UK’s trade balance.
For a recap of Wednesday’s market action, click here.
Tune into Benzinga’s #PreMarket Prep today to hear Fari Hamzei, Vlad Karpel and Mark Shepard by clicking here!
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