adly-received earnings from Facebook and a Federal Reserve statement that leaves a September rate-hike still on the table is setting US markets up for a lower open on Thursday ahead of a deluge of companies reporting quarterly results.
The latest policy statement from the Federal Reserve has left the picture on the timing of a rate hike even murkier than before. The main takeaways were that the Fed is waiting for more economic data to show “some” further improvement in the labour market and gives it “reasonable confidence” that inflation is heading higher. The hawkish argument is that a September hike was not ruled out; the dovish argument is that September was not hinted at.
Given the Fed’s ongoing data-dependence; today’s US GDP figure takes on extra significance for the state of the US economy and the likely timing of any rate hikes. The expectation is that growth has picked up to 2.6% in Q2 with Q1 possibly receiving a higher revision from -0.2%.
Facebook shares are expected to drop around 3% on the open, having been down as much as 5% afterhours following a drop in profits due to a previously-signalled increase in expenses. The earnings report beat expectations on most other important metrics. The number of active monthly users grew 13% on the year to 1.49bn and revenue increased 39% to $4.04bn. Shares are hovering below the widely-watched $100 mark and may not have done quite enough to push through just yet.
Shares of upmarket grocer Whole Foods are expected to lose as much as 10% of their value at the open on Thursday after a surprise fall in profits and weak guidance for the year.
Earnings are expected from LinkedIn, Expedia, Amgen, T-Mobile, Procter & Gamble, Time Warner Cable, Electronic Arts, ConocoPhillips, Colgate-Palmolive, Western Union, Virgin America and World Wrestling Entertainment on Thursday.
Futures suggest the:
will open 6 points lower at 2,102 with the
expected to open 30 points lower at 17,721 and the
15 points lower at 4,566.
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