Wall St futures edge up as optimism over economy offsets Netflix's fall
At 5:30 a.m. ET, S&P 500 E-minis were up 8.75 points, or 0.14%, Nasdaq 100 E-minis were up 33 points, or 0.14%, and Dow E-minis were up 66 points, or 0.15%.
Wall Street's winning streak continued overnight, with the S&P 500 and the Nasdaq notching fresh record closes after upbeat data on retail sales and jobless claims signaled a healthy U.S. economy. The data gives the Federal Reserve some breathing room to assess the inflationary effects of U.S. tariffs.
Netflix rode the success of "Squid Game" to top earnings estimates and boost its revenue outlook for the year. Yet, the streaming giant's shares slipped 1.5% in premarket trading. It has risen 43% this year.
All eyes remain on whether President Donald Trump's tariff measures are starting to ripple through the economy. The Fed has signaled it will stay the course on interest rates until it sees clearer signs of how higher import taxes are shaping inflation.
Traders now put the odds of a rate cut in September at about 56.3%, with a July move nearly off the table, according to CME's FedWatch tool.
"This week's data supports the wait-and-see camp on the Fed. Tariffs are percolating to consumer prices but is not withholding households from opening their wallets," said Kenneth Broux, head of corporate research and rates, at Societe Generale.
Federal Reserve Governor Christopher Waller signaled on Thursday that mounting economic risks and tame inflation have him backing an interest rate cut by this month's end, downplaying concerns that tariffs will fuel lasting price hikes.
As the second-quarter earnings season gets underway, early results from 36 S&P 500 companies that reported, more than 80% have topped Wall Street's earnings expectations, according to LSEG I/B/E/S data.
The S&P 500 and the Dow are on track for only modest advances this week, as investors navigate a swirl of mixed signals - robust retail sales, a spike in consumer inflation, and a stall in producer prices for June.
Cryptocurrency stocks rose after the U.S. House of Representatives passed a bill that would develop a regulatory framework for cryptocurrencies.
Robinhood Markets and Coinbase Global COIN.O gained 1.9% each, while Bitfarms rose 2.8% and Hut 8 advanced 1.3%.
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The National
39 minutes ago
- The National
Why solving Iraq's gas problem is crucial for its economy and environment
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These are two of the largest undeveloped gas accumulations in the Kurdistan region and, indeed, the whole of Iraq. And Sharjah-based Crescent Petroleum is moving ahead with work on Chemchemal, another large gasfield in Kurdistan, while it completes work to expand its long-standing Khor Mor field. Agreement signalled that a logjam between the two main Kurdish political parties had been broken – the Kurdistan Democratic Party, which controls the capital Erbil, the oil sector and most of the government, and the smaller Patriotic Union of Kurdistan, which holds the gasfields themselves and territory through which pipelines have to run. On the bad side, drones launched by unidentified assailants struck several oilfields in the semi-autonomous Kurdistan region. Fortunately, and probably by design, no one was killed or injured, and the damage to facilities seems to be limited. But most of the region's oil output has now been closed down as a precautionary measure. One of the two initial targets was the Sarsang field, operated by HKN. The company has been one of the most vocal in pressing its rights in Baghdad, and bringing US political pressure to bear. These bombings are the most widespread and clearly targeted assault on the Kurdish petroleum sector so far. Earlier attacks were sporadic, and mostly consisted of unguided rockets aimed at Khor Mor. One strike killed four workers at the field in April last year, the only deadly incident known of this campaign. Iran-aligned armed groups are well-understood to be the culprits, which used Iranian-model drones, though they denied responsibility. Their aims seem to be to attack American interests, deter alleged ties of the Kurdistan region with Israel, prevent competition to Iranian gas supplies to Iraq, and keep up pressure on Mr Al Sudani's government as it seeks a workable arrangement with Erbil and as federal elections in November loom. In the ambiguous category is Turkey's decision to exit the treaty governing the Iraq-Turkey oil pipeline when it expires next July. The pipeline has been shut anyway since March 2023 when an arbitral judgment went against Turkey. But the main sticking point since then has been the need for an accord between the Kurdistan region and the federal authorities in Baghdad over the rules for oil export, the responsibility for sales, the distribution of revenue, and the contractual position of the oil companies operating in Kurdistan. Ankara seems to favour replacement of the treaty with a more expansive agreement covering gas and electricity as well as oil. That could be good news for facilitating Kurdish gas exports finally, after a decade of discussion. But Turkey is playing a complicated game, including balancing tensions within Iraq, its interests in Syria, which include gas supply and electricity investments, and its gas trade with Russia, Iran and European neighbours. 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Its exports to Turkey too are coming under increasing strain. If Iran overcame these problems, Iraq would be ready to continue buying its gas: domestic Iraqi, including Kurdish, supplies will not be enough for years to come, so great is the deficit and the pent-up demand. Turkey would gain from a greater pool of gas which it can combine with its own burgeoning supplies, to on-sell to Europe. Europe too would be aided in its attempts to eliminate its remaining fraction of Russian gas imports. Brussels' lack of realpolitik and its allergy to hydrocarbons unfortunately prevent it from playing the active role it should. Gulf, European, Turkish and American companies may be able to tread a path between Baghdad, Erbil and Ankara. But first, the shadowy figures behind the drone swarm need to be stopped.
Zawya
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YBUOJ Responds to BaFin Announcement, Reaffirms Compliance Credentials and Global Regulatory Commitment
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The National
2 hours ago
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Federal Reserve meeting: If not now, then when?
The Federal Reserve enters this week facing relentless pressure from the White House, mixed economic data and continued uncertainty. Yet, in the face of it all, the US central bank is expected to hold rates steady once more. The meeting comes less than a week after President Donald Trump's tour of the Fed headquarters, where he and Federal Reserve Chair Jerome Powell publicly bickered over the renovation project's costs. But with Mr Trump on holiday in Scotland, focus now shifts towards the Fed's interest rates. Mr Powell had acknowledged the bank would have cut rates by now were it not for Mr Trump's tariffs, which have put the global economy on edge since his announcement on April 2. The President's harsher 'reciprocal tariffs' are due to take effect on Friday. Meanwhile, recent data shows that other charges are beginning to be passed on to consumers. The Labour Department's Consumer Price Index (CPI) report showed that inflation rose to 2.7 per cent annually in June. Everyday goods such as toys, household appliances and clothing also saw price increases. Citing uncertainty surrounding tariffs and the current inflation level above its 2 per cent target, most Fed officials are signalling they will keep their target range level for a fifth consecutive meeting at 4.25 to 4.50 per cent. The UAE Central Bank, which mirrors Fed decisions due to the dollar peg, would also be expected to hold rates at 4.4 per cent following the US central bank's announcement. Path forward According to the Fed's projections from June, it still expects to cut rates twice this year to bring its target level to around 3.9 per cent. But with the central bank likely to hold interest rates at this meeting and only three left on the calendar this year, the window to cut is closing. 'We're simply taking some time,' Mr Powell said during a panel discussion in Portugal at the start of July. Mr Powell has practised extreme caution towards cutting rates this year, afraid that moving too soon or too quickly could lead to a renewed spike in prices not long after the most recent inflationary surge, with CPI inflation peaking at 9.1 per cent in 2022. 'When you get through an inflation episode like that, by the skin of their teeth, they're going to be really careful about anything that looks inflationary from now on,' said Derek Tang, an economist at LHMeyer/Monetary Policy Analytics in Washington. Traders anticipate the Fed will resume cutting rates in September, before reductions in October and December, according to CME Group data. A deluge of economic data this week should also give Fed officials greater clarity on the direction of the economy. When you get through an inflation episode like that, by the skin of their teeth, they're going to be really careful about anything that looks inflationary from now on Derek Tang, economist at LHMeyer / Monetary Policy Analytics The Labour Department will provide fresh insight into the health of the labour market with the Job Openings and Labour Turnover Survey on Tuesday and the June unemployment report on Friday. The government will also report on second-quarter GDP hours before the Fed rate announcement. US economic activity contracted by 0.5 per cent in the first quarter, but economists note that was due to a surge of imports as business rushed to get ahead of tariffs. The Fed's preferred inflation metric – Personal Consumption Expenditures Price Index – for June is also due to be released on Thursday. Fed divisions Not everyone might be on board with the committee's decision this time. Public remarks indicate a growing division inside the rate-setting Federal Open Market Committee. Fed Governor Christopher Waller, who holds a permanent vote on the rate-setting committee, laid out his case for a quarter-point cut earlier this month. Speaking in New York, he said the Fed should not wait for further weakening in the labour market to act. 'With inflation near target and the upside risks to inflation limited, we should not wait until the labour market deteriorates before we cut the policy rate,' he said. US job growth was more solid than expected in June, although most of those gains occurred in the government sector. At the same time, the unemployment rate has remained steady around 4.1 per cent. Dissents among FOMC members are rare. Under Mr Powell's stewardship, only 3 per cent of dissents have come from a Fed governor. 'I'm sure it'll get a lot of attention,' said David Wilcox, senior fellow at the Peterson Institute for International Economics and director of US economic research at Bloomberg Economics. However, he argued such disagreements could guard against groupthink. Fed Vice Chair for Supervision Michelle Bowman could join Mr Waller's dissent after she voiced her own support for a rate cut this month. It would be the first time two Fed governors dissented on a rate move since 2002, when Alan Greenspan was in charge of the central bank. Mr Wilcox, a former staff member of the Federal Reserve Board, expects Mr Powell to acknowledge there could be a case to cut rates this week but that a majority of officials favour holding them steady. 'And he'll lay out the rationale for why that is,' he said. What will Trump say? Looming against this backdrop is Mr Trump, who softened his stance on Mr Powell last week after touring the Fed's headquarters. Those attacks have ranged from calling the Fed Chair a 'numbskull' to at times publicly considering whether he should fire him. But last week's tour offered some relief for Mr Powell after Mr Trump said he did not think the unprecedented move is necessary. 'I think we had a very good meeting on interest rates. And [Mr Powell] said to me … very strongly, the country is doing well,' Mr Trump told reporters after touring the Fed. 'I got that to mean that I think he's going to start recommending lower rates.' Mr Powell has sometimes cited the economy's strength as a reason not to move on rates. The President's holiday in Scotland could give the Federal Reserve some breathing room for now, although Mr Trump has proven he can dictate the news cycle and gyrate financial markets with a push of a button.
