World Markets Digest Central Bank Talk and More Earnings Reports

Central bank speakers and earnings reports are in the spotlight this morning. Yesterday afternoon, Fed Chair Powell confirmed what rising treasury yields have been telling us for weeks, that the US is not making enough progress on inflation essentially suggesting that US rate cuts are likely to be postponed and continuing the theme of higher for longer interest rates. Today we may see if this is confirmed by other central bankers or not as two officials form the Bank of England, two officials from the European Central Bank, including President Lagarde, and three Fed officials are speaking at various times today. The Fed’s Beige Book report on regional economic and financial conditions is due at 2:00 pm EDT today. Ahead of all this, the US 10-year treasury note yield is holding steady above 4.60%.

Stock markets around the world have been mixed overnight. In Asia Pacific trading, Tokyo lost 1.3%, while Shanghai gained 2.1%. In Europe this morning, the Dax is up 0.5% and the FTSE is up 0.6%. US index futures are up 0.25%-0.35%.

Oil continues to backslide with US Crude sliding 0.7% back toward $85.00/bbl. Oil appears to have gone into a correction for the moment, based on recent soft China retail sales and industrial production data, and a larger build in this week’s US API oil inventories announced late yesterday, while waiting on Israel’s response to Iran’s weekend attack. Meanwhile, in other commodity action, Natural Gas is down 3.6%, while Copper is up 0.9%.

In currency action, the US Dollar is backsliding a bit relative to other majors like the Euro, Pound and Loonie. Gold is consolidating its recent gains near $2,400/oz, while cryptos have stabilized while waiting for developments related to a potential halving of Bitcoin.   

The market reaction to overnight earnings reports have been mixed. ADRs of semiconductor manufacturing equipment ASML are down 5.0% in premarket trading after beating on earnings but missing on sales. In transportation, United Airlines is up 5.2% premarket after bearing the street on earnings, while trucker JB Hunt is down 8.2% premarket after falling short of expectations. Insurer Travelers is down 3.4% premarket after missing on earnings as well. Later today, results are due from railroad CSX, Las Vegas Sands, and others.

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