A Look at the Day Ahead in European and Global Markets

Overview

In this article, Kevin Buckland examines the day's focus on mega-tech earnings amid stable Bank of Japan policies.

Mega-Tech Earnings

On Thursday, earnings from mega-tech companies remain under the spotlight. Key reports include:
– Apple (NASDAQ:AAPL)
– Amazon (NASDAQ:AMZN)

These reports follow the previous day's results from Meta (NASDAQ:META) and Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL). The notable exception awaiting results is Nvidia (NASDAQ:NVDA), which will report in three weeks. Last week, Tesla (NASDAQ:TSLA) initiated a positive trend with optimistic EV sales forecasts.

Alphabet sustained momentum with strong performance in YouTube ads and cloud services. However, Microsoft and Meta raised concerns about increasing AI investment costs, leaving investors anxious about Amazon's upcoming report. Despite Alphabet earlier signaling high AI expenditures, it didn't appear to threaten market stability at that time.

AI hype has propelled Wall Street and many global markets to record highs this year. Yet, signs of weakness, like the 10% drop in AMD (NASDAQ:AMD) due to disappointing AI chip sales, can unsettle investor confidence, impacting other chipmakers like Nvidia.

European Bank Earnings

In Europe, focus is on bank earnings, with BNP Paribas (OTC:BNPQY), SocGen, and ING reporting today. Santander's international banking conference in Madrid includes influential speakers such as Bank of Spain Governor Jose Luis Escriva and Dutch central bank governor Klaas Knot.

Traders are keen for indications the European Central Bank (ECB) might expedite rate cuts, as inflation decreases more rapidly than expected.

Notable statements include:
– Bundesbank President Joachim Nagel: "Price stability is not far off."
– French Central Bank Chief François Villeroy de Galhau: Victory over excessive inflation is "in sight".

Upcoming Economic Indicators

Key upcoming indicators include:
– Euro-area and country-specific inflation figures
– German retail sales
– U.S. PCE deflator

With the Fed's next decision approaching and conflicting macroeconomic signals surfacing, a careful approach is anticipated regarding rate cuts. The Bank of Japan highlighted risks in the U.S. economy while refraining from raising rates, but maintains a cautiously optimistic stance on policy normalization.

U.S. Election Considerations
As the U.S. election approaches, opinion polls indicate a close race, though financial markets shift in favor of a potential Donald Trump win.

Other Noteworthy Events

In sports, Shohei Ohtani contributed to the LA Dodgers' victory in the World Series, garnering significant attention during his first season with the team.

Key Developments Influencing Markets on Thursday:

• Earnings reports from Apple and Amazon in the U.S.
• Earnings reports from BNP Paribas, SocGen, and ING in Europe
• Release of Euro area HICP and German retail sales data
• Release of U.S. PCE deflator data

(By Kevin Buckland; Editing by Edmund Klamann)