Good morning,
It’s a big day in the markets: Facebook reports second quarter earnings after the close and the Federal Reserve releases a policy statement at 2 p.m. ET. Buckle your seatbelts. Fed watchers are anticipating a rate lift but the timing just gets murkier and murkier. June turned to September, which could turn to December, as China’s market and economic woes make some wonder if the U.S. can handle higher interest rates. Meanwhile, social media lubbers are hoping Facebook won’t disapppoint like Twitter and Yelp. The Wall Street consensus: $0.47/share on revenues of $3.994 billion. Also reporting results Wednesday: MasterCard and Elon Musks’ Solar City.
U.S. stocks heading higher in the a.m. The S&P 500 futures was trending 0.22% higher after the index gained 1.24%. The Fed is the bigs story of the day. Market watchers will also be eying the oil inventories report at 10:30 a.m. and the pending home sales index at 10:00 a.m. ET.
What invisible hand pushed China’s stock markets higher in the closing hour? After a lot of nothing, the Shanghai Composite surged over 3.4%, its best day since July 17 and snapping a three-day losing streak. Shenzhen also took off at the end of the day, gaining 4.1%. Market watchers speculate the government intervened to stanch the bleeding. New account openings have slowed in China as investors take a giant step back from volatility. Hong Kong’s Hang Seng Index only managed to climb 0.5%. In Japan, the Nikkei Average closed down 0.13%. MarketWatch
Twitter does u-turn after strong earnings report, diving 12% as CFO warns about growth outlook. The stock initially surged 6% after hours when the microblogging platform reported $0.07/share earnings for the 2Q and revenues of $502 million — well above expectations. But in the conference call, broadcast on real-time app Periscope, Anthony Noto warned that investors shouldn’t expect the user base to grow meaningful in the next few months. Business Insider
Barclays pre-tax profits rise 25% despite fines for six months ending in June. The bank has reserved £6 billion total for improperly sold payment protection insurance. Profits were £3.1 billion, up from £2.55bn. BBC
Hedge funds call for Puerto Rico to fire teachers, shutter schools and Reddit goes nuts. A group fo 34 hedge funds hired a former International Monetary Fund economist to studo the debt crisis on the island nation. Puerto Rico has a massive $72 billion in debt and its governor has said it’s just not payable. Reddit gave the hedgies an earful with 5,300+ comments and counting. More than 56% of children live in poverty. The Guardian, Reddit
Taliban leader reportedly dead. Mullah Omar hasn’t been seen since 2001. Afghanistan is investigating the report. Reuters
Good reads: “Trump schools the Republican establishment,” Politico; “Yelp reviewers tear apart American dentist who killed Cecil the lion,” The Verge; “Facebook expands its role in politics and candidates find much to like,” New York Times (paywall); “China rewrites rules of global Internet,” Wall Street Journal (paywall)
Japanese retail sales burst through estimates. Year on year retail sales in the land of the rising sun surged 0.9% in June, beating analyst estimates for a 0.5% rise. It’s still way down compared to the previous month though. CNBC
MERS takes a chunk out of South Korean department store sales. June South Korea department store sales had to be revised down to its lowest level ever as MERS continues to plague the region. Reuters
Fanuc shares get hammered. Fanuc, the secretive Japanese robotics company that counts Dan Loeb as one of its investors, saw its shares slide over 11% today after the company slashed its profit forecast. Barron’s
Check out the newest craze among Japanese women. Moss viewing – yes, moss viewing – has apparently taken Japan by storm lately. Japan Times
Photo: Thomas Angermann