Stock Market Update

The S&P 500 futures are up seven and are trading 0.2% above fair value, the Nasdaq 100 futures are up 46 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are up 125 points and are trading 0.3% above fair value.

There's a positive bias in early trading as investors digest better-than-expected earnings from Walmart (WMT) and Cisco (CSCO).

Participants are also waiting on another influential economic release following this week's inflation readings that went the market's way in term of disinflation and supporting a rate cut by the Fed in September. The July Retail Sales report will be released at 8:30 ET.

On a Fed-related note, Chicago Fed President Austan Goolsbee (not an FOMC voter) noted that he is becoming more concerned about the labor market than inflation, according to Bloomberg. In other central bank news, Norges Bank kept its policy rate at 4.50% and released a somewhat dovish Statement.

In corporate news:

• Walmart (WMT 73.08, +4.34, +6.4%): beats by $0.02, reports revs in-line; guides Q3 EPS below consensus, revs in-line; raises FY25 guidance; Q2 US comps 4.2%
• Cisco (CSCO 48.11, +2.67, +5.9%): beats by $0.02, reports revs in-line; guides Q1 EPS above consensus, revs in-line; guides FY25 EPS in-line, revs in-line; saw steady customer demand; announces restructuring plan; to recognize pre-tax charges of up to $1.0 bln consisting of severance and other costs
• Ulta Beauty (ULTA 369.98, +40.93, +12.4%): surging as Warren Buffett discloses new position
• NIKE (NKE 81.80, +3.28, +4.2%): New position from Pershing Square (Bill Ackman)
• JD.com (JD 26.78, +0.87, +3.4%): beats by RMB 3.12, reports revs in-line
• Deere (DE 355.00, +3.72, +1.1%): beats by $0.61, beats on revs; provides FY24 guidance
• Alibaba (BABA 76.52, -2.95, -3.7%): beats by RMB1.44, misses on revs

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: +0.8%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: +0.9%, India's Sensex: HOLIDAY, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: +0.2%.
  • In economic data:
    • China's July Industrial Production 5.1% yr/yr (expected 5.2%; last 5.3%), July Retail Sales 2.7% yr/yr (expected 2.6%; last 2.0%), July Fixed Asset Investment 3.6% yr/yr (expected 3.9%; last 3.9%), and July Unemployment Rate 5.2% (expected 5.1%; last 5.0%). July House Prices -4.9% yr/yr (last -4.5%)
    • Japan's flash Q2 GDP 0.8% qtr/qtr (expected 0.6%; last -0.6%); 3.1% yr/yr (expected 2.1%; last -2.3%). Q2 GDP Price Index 3.0% (expected 2.6%; last 3.4%). June Industrial Production -4.2% m/m (expected -3.6%; last 3.6%) and Capacity Utilization -3.1% m/m (last 4.1%)
    • Australia's July Employment Change 58.200 (expected 20,200; last 52,300) and full employment change 60,500 (last 45,200). July Unemployment Rate 4.2% (expected 4.1%; last 4.1%) and Participation Rate 67.1% (expected 66.9%; last 66.9%)
    • New Zealand's July Electronic Card Retail Sales -0.1% m/m (last -0.7%); -4.9% yr/yr (last -4.9%). July FPI 0.4% m/m (last 1.0%)
  • In news:
    • Markets in India and South Korea were closed for holidays.
    • Japan reported stronger-than-expected growth for Q2 after a contraction in Q1.
    • China Securities Journal warned about "additional volatility" in the bond market as the government tries to discourage strong demand for fixed income.
    • China Baowu Steel Group warned that the Chinese steel industry is facing a bigger crisis than what was seen in 2008 and 2015.
    • Thailand's prime minister was dismissed after being found guilty of an ethics violation.
• Major European indices trade near their flat lines. STOXX Europe 600: +0.1%, Germany's DAX: +0.4%, U.K.'s FTSE 100: +0.1%, France's CAC 40: UNCH, Italy's FTSE MIB: HOLIDAY, Spain's IBEX 35: +0.1%.
  • In economic data:
    • U.K.'s flash Q2 GDP 0.6% qtr/qtr, as expected (last 0.7%); 0.9% yr/yr, as expected (last 0.3%). Q2 Business Investment -0.1% qtr/qtr (expected 0.4%; last 0.5%); -1.1% yr/yr (last -1.0%). June Construction Output 0.5% m/m (expected -0.3%; last 1.7%); -1.7% yr/yr (expected -1.9%; last 0.6%). June Industrial Production 0.8% m/m (expected 0.1%; last 0.3%); -1.4% yr/yr (expected -2.1%; last 0.4%). June Manufacturing Production 1.1% m/m (expected 0.2%; last 0.3%); -1.5% yr/yr (expected -2.4%; last 0.4%). June trade deficit GBP18.89 bln (expected deficit of GBP16.00 bln; last deficit of GBP18.58 bln). Q2 Labor Productivity 0.1% qtr/qr (expected -0.3%; last -0.2%)
    • Swiss July PPI 0.0% m/m (expected 0.2%; last 0.0%); -1.7% yr/yr, as expected (last -1.9%)
  • In news:
    • Italy's MIB is closed for Assumption Day, which is keeping volume on the light side throughout the region.
    • Q2 growth figures from the U.K. were largely in line with expectations.
    • Norges Bank kept its policy rate at 4.50% and released a somewhat dovish Statement.