Economic Indicators and Market Volatility: A Week of Key Insights Ahead

Wall Street will get key insight on the consumer, inflation in the week ahead as recession fears swirl

The wildest week of 2024 has investors bracing for more volatility in the week ahead, with key insight on the consumer and inflation coming at a time when recession fears are top of mind. Stocks seesawed this week, after July's disappointing jobs report spurred fears of an economic downturn, with the pullback exacerbated over the weekend with the unwind of the yen carry trade. On Monday, the S & P 500 posted its worst day since 2022, falling 3%. Just three days later, on Thursday, the broader index recouped much of its losses, rallying 2.3% and posting its best session in roughly two years after investors got some encouraging data on the labor market. The comeback continued Friday, with the S & P 500 and Nasdaq Composite wiping out their declines from earlier in the week. .SPX 5D mountain A wild week of trading With the market hypersensitive to economic data, numbers focusing on the consumer, labor and inflation could drive trading next week -- especially with the shifting expectations for the Federal Reserve's monetary policy meeting in September. The CME Group's FedWatch tool now shows a 50-50 chance of the Fed cutting by a quarter- or a half-percentage point. The latest readings on consumer and producer prices are on deck, along with retail sales and new unemployment claims figures. Key earnings from Walmart and Home Depot are also on deck -- and can give investors more insight into the state of the economy. "People are jittery," said Scott Ladner, chief investment officer at Horizon Investments. "Everybody's on edge, and so the market's gonna probably overreact to every little piece of information." Inflation, labor data Next week's inflation data could get less attention than they have over the past year, during which the Fed's fight against pricing pressures has put inflation reports center stage. Recently, it's been the labor market getting the most attention. "The market's caring much more about about labor markets and growth, than they do inflation right now," Horizon Investments' Ladner said. "Should inflation come in like monstrously hot that'll matter, but outside of something really, really on the fringes, it seems like the inflation story is sort of played out." To illustrate, Thursday's rally in stocks came after the latest weekly jobless claims -- a data point that does not typically receive outsized attention -- came in slightly weaker than expected, soothing investor worries about cracks in the labor market. The S & P 500 posted its best day since November 2022 following the report. Initial claims, due Thursday, are expected to come in at 233,000 for the week ended Aug. 10. The July consumer price index that's set to release Wednesday is expected to show rising 3% on a yearly basis, the same as in the prior reading, according to FactSet. The producer price index that comes out Tuesday is set to show a 2.3% rise on a year-over-year basis. Retail sales data for last month could also get more attention, as investors see whether consumers who have soured on the economy are nevertheless continuing to spend on goods. July retail sales are expected to have risen 0.3%. 'Calming' markets Despite the market's late-week resurgence, many investors think that a correction in the S & P 500 could materialize. Citing data going back to 1990, Strategas' Ryan Grabinski noted the average intrayear drawdown for the broader index is 14.7%. The S & P 500 was last about 6% off its all-time high. At its lowest level this week, it was nearly 10% below that record. Investor concerns also linger. While worries around the yen carry trade unwind have largely settled, particularly after the Bank of Japan said it will not raise rates amid market volatility, many on Wall Street think there could be further more volatility. "Because a lot of the Japanese investors have been buying in U.S. markets and vice versa, that sort of rebalancing of the exchange rate is likely to cause a lot of instability in both of the equity markets," said RJ Assaly, chief market strategist at Toggle AI. But some suspect that stocks overreacted this week, with markets no longer pricing in a half point reduction at the September meeting with the near certainty they had at the start of the week. Wharton School Professor Jeremy Siegel, who caused a stir Monday when he called for an emergency interest rate cut, has since backed off from those comments. Chen Zhao, chief global strategist at Alpine Macro, said stocks will be "calming down" in the week ahead as recession concerns ease. In his argument, he said the Fed cutting interest rates after inflation has already eased is a pattern that is different from other economic cycles. "If you look at all the previous cycles, inflation usually topped out when the economy is well into a recession," Zhao said. "That's precisely why I feel that it's this time around, people are misreading the economy, because the whole process is supply driven." He expects the current market set-up is not unlike the second half of the 1990s, when the Fed started to ease interest rates at a time when the U.S. economy was continuing to expand, turbocharging stocks. In 1998, the S & P 500 rallied 19% in the three months following the first Fed rate cut, according to a UBS note this week. "This is an economy which is slowing, but not slow. It's a labor market that is weakening, but not weak. And it's a consumer which is in an objectively strong spot with very little leverage on their balance sheets," said Horizon Investments' Ladner. He added that the next leg of growth could be fueled by the start of interest rate cuts from the Fed later this year. "We think this quarter could be choppy and sort of sideways, as people sort of wrestle with the growth scares and with recession fears, still," Ladner said. "But by the time we get the fourth quarter, we think those things will resolve." Week ahead calendar All times ET. Monday Aug. 12 2 p.m. Treasury Budget (July) Tuesday Aug. 13 8:30 a.m. Producer Price Index (July) Earnings: Home Depot Wednesday Aug. 14 8:30 a.m. Consumer Price Index (July) 8:30 a.m. Hourly Earnings final (July) 8:30 a.m. Average Workweek final (July) Earnings: Progressive Thursday Aug. 15 8:30 a.m. Export Price Index (July) 8:30 a.m. Import Price Index (July) 8:30 a.m. Initial Claims (08/10) 8:30 a.m. Empire State Index (August) 8:30 a.m. Philadelphia Fed Index (August) 8:30 a.m. Retail Sales (July) 9:15 a.m. Capacity Utilization (July) 9:15 a.m. Industrial Production (July) 9:15 a.m. Manufacturing Production (July) 10 a.m. Business Inventories (June) 10 a.m. NAHB Housing Market Index (August) Earnings: Applied Materials , Walmart , Tapestry , Deere & Co. Friday Aug. 16 8:30 a.m. Building Permits preliminary (July) 8:30 a.m. Housing Starts (July) 10 a.m. Michigan Sentiment preliminary (August)

Jobless Claims in Focus

All eyes will be on jobless claims data, due at 8:30 a.m. ET, for clues on the state of the U.S. economy. Meanwhile, the economic angst that delivered a summer scare to global markets could hand a surprise to U.S. consumers this fall: lower prices at the pump. And regulators are investigating some of the biggest U.S. banks for their handling of customer funds on the peer-to-peer payments platform Zelle, which has been facing scrutiny over scams and fraudulent transactions. Read on for this news and more. Top News Investors Remain on Edge Over U.S. Economy Investors remain on edge after Monday's big selloff, with the labor market in focus. Weekly jobless claims are in more-than-usual focus , following a string of disappointing economic data that culminated in Friday's jobs report. Economists forecast that unemployment claims totaled 240,000 last week, down from 249,000 the previous week. Glynn's Take: Hawkish RBA Governor Should Brace for Storms to Come By James Glynn Michele Bullock, governor of the Reserve Bank of Australia, spoke to a local community group in her hometown this week about the economic outlook, while sending out warnings to anybody that would listen that a further rate increase remains a possibility . The hawkish position has attracted the ire of many in the financial markets who, prior to her remarks, were growing comfortable with the idea that the RBA was on a trajectory to cut the official cash rate before the end of this year, taking its foot off the neck of the Australian economy, which many fear is about to tip into a recession. Read more . U.S. Economy The Silver Lining of a Slowing Economy: Cheaper Gas Fears of a slowdown in the U.S. and China, the two biggest oil consumers, dragged benchmark Brent crude prices down about 8% over the past month. Earlier this week, when haywire moves in Japan's stocks and currency reverberated through markets, Brent futures skidded to their lowest closing level since January. Financial Regulation Regulators Probing Big Banks' Handling of Zelle Scams The probe is broad in nature and meant to examine how the banks respond when customers dispute transactions made through Zelle, according to people familiar with the matter. JPMorgan disclosed in a filing Friday that it was responding to CFPB inquiries regarding Zelle; other large banks are expected to disclose contact with the CFPB soon. 3 p.m.: Richmond Federal Reserve President Thomas Barkin is scheduled to speak Research Edmond de Rothschild AM Takes Some Profit on Flight-to-Quality Winner Bonds Edmond de Rothschild Asset Management is taking some profits on sovereign bonds that benefited from the recent flight to quality but otherwise it hasn't revised its allocations, global chief investment officer Benjamin Melman says in a note. Surveys pointed to some investor complacency and to high equity investment allocations, he says, adding that the asset manager will continue to analyze the dynamics within the fluctuating environment "as the cleansing of past overweights will be instrumental in allowing markets to regain a firmer footing." While current investor behavior does seem panic-driven, no "troublemaking" factors have been identified so far that would justify an intermeeting rate cut by the Federal Reserve, he says. - Emese Bartha Basis Points U.S. crude oil inventories fell for a sixth consecutive week , while product stocks rose as refineries increased their capacity use, according to data released Wednesday by the U.S. Energy Information Administration. Commercial crude oil stocks excluding the Strategic Petroleum Reserve fell by 3.7 million barrels to 429.3 million barrels in the week ended Aug. 2 and were about 6% below the five-year average for the time of year, the EIA said. - Anthony Harrup California has become ground zero in the fight over artificial-intelligence regulation. AI startups and tech giants are rallying to kill a bill ascending through the state legislature that they say would impose impossibly vague constraints in the name of safety. Though some in the industry have called for government regulation, they say it should be done at the federal level with more specificity. - Preetika Rana Tropical storm Debby is expected to bring catastrophic flooding to the Carolinas and Virginia, days after hitting Florida as a Category 1 hurricane. The storm was about 55 miles southeast of Charleston, S.C., on Wednesday afternoon, according to the National Weather Service. It is expected to make a second landfall in South Carolina overnight Thursday, after hitting Florida's Big Bend region as a Category 1 hurricane earlier this week. - Joseph Pisani Does prodding consumers to use autopay help them reduce their credit-card balances ? Yes, although the effect may not be all that great. That's the conclusion of two recent studies that examined whether nudging people to automatically pay off their credit-card balance in full every month, or even to automatically pay a bit more than the monthly minimum payment, would make a difference. - Lisa Ward Bank of Canada officials worried about the risk of a yearslong slump in consumer spending amid signs of labor-market weakness, according to a summary of their deliberations leading up to a July rate cut. The Bank of Canada delivered a second straight quarter-point cut in July, taking its policy rate to 4.5%, and signaled more cuts were in the offing given that economic slack, or spare capacity, has risen. - Paul Vieira The U.K. economy is in better shape than previously thought, judging by data revisions published by the Office for National Statistics that show GDP is 2.6% bigger than its 4Q 2019 prepandemic size, rather than 1.8%, according to Capital Economics' Ruth Gregory. The upshot is that the country's economy is still lagging behind the U.S. and eurozone but is now ahead of Germany and Japan, she says in a note. - Ed Frankl China's regional banks are under fresh scrutiny from regulators for snapping up treasury notes amid an extended rally in Chinese government bonds that's drawn alarm from the central bank. The National Association of Financial Market Institutional Investors, a regulatory body backed by the People's Bank of China, said Wednesday that it's investigating four rural commercial banks in eastern Jiangsu province for potentially manipulating government bond prices. India's central bank left its policy rate unchanged , in an attempt to rein in relatively high inflation driven partly by elevated food prices. Reserve Bank of India Gov. Shaktikanta Das said Thursday that the monetary-policy committee decided to maintain its policy repo rate at 6.50%. He said the committee will also remain focused on the withdrawal of accommodation. - Kosaku Narioka About Us WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[email protected]]. This article is a text version of a Wall Street Journal newsletter published earlier today.

Catalyst Watch: Eyes on Walmart earnings, the July CPI print, and 13F filings

Welcome to Seeking Alpha's Catalyst Watch - a breakdown of some of next week's actionable events that stand out. Check out Seeking Alpha's earnings calendar for a full list of companies due to report. Monday - August 12 Volatility watch - Options trading volume is elevated on Black Diamond Therapeutics (BDTX) and Trump Media & Technology (DJT). The most overbought stocks per their 14-day relative strength index include Investcorp India Acquisition (IVCA), G1 Therapeutics (GTHX), and Kellanova (K). The most oversold stocks per their 14-day Relative Strength Index include Pinterest (PINS), Snap (SNAP), and ODP Corp. (ODP). Short interest has moved higher on Spirit Airlines (SAVE) and Cassava Sciences (SAVE). Earnings watch - Notable companies due to report include Barrick Gold (GOLD), Monday.com (MNDY), and Rumble (RUM). FDA watch - The FDA action dates arrive during the week for Citius Pharmaceutical's (CTXR) Lymphir and CymaBay Therapeutics' seladelpar. All day - OPEC will release its monthly oil report. All day - Progyny (PGNY) will host the first Investor Day event in the company's history. All day - Verizon (VZ), C3.AI (AI), Coinbase Global (COIN), and Cirrus Logic (CRUS) are some of the companies participating at the two-day Oppenheimer Technology, Internet & Communications Conference. All day - MSCI Inc. (MSCI) will announce the results of the August 2024 Index Review for the MSCI Equity Indexes. All changes will be made as of the close of August 30. 2:00 p.m. The three-day Ai4 Conference will begin. Chegg (CHGG), Amazon (AMZN), Wells Fargo (WFC), Medtronic (MDT), and Dick's Sporting Goods (DKS) are some of the companies participating in the conference that covers AI and machine learning innovation in business. Tuesday - August 13 Earnings watch - Notable companies due to report include Home Depot (HD), Tencent Music (TME), and On Holding (ONON). Options trading implies a double-digit share price swing for Cipher Mining (CIFR) and Oklo (OKLO). All day - Google (GOOG) (GOOGL) will hold its annual Pixel hardware event at the company's headquarters in Mountain View, California. The company is expected to show off the Pixel 9 and a Pixel 9 Pro Fold. All day - Illumina (ILMN) will present a strategy update. The event will feature presentations by members of Illumina's executive team and conclude with a Q&A session. All day - Super Micro Computer (SMCI) will begin its highly anticipated Fourth Annual Open Storage Summit. The three-week summit includes a roundtable keynote session, followed by five focus sessions that showcase influential guests from companies such as Intel (INTC), AMD (AMD), NVIDIA (NVDA), Micron (MU), Samsung (OTCPK:SSNLF), and Japanese chipmaker Kioxia. All day - IEA will release its monthly oil report. All day - ARS Pharmaceuticals (SPRY), Astria Therapeutics (ATXS), and Compass Therapeutics (CMPX) are some of the companies participating at the two-day Wedbush PacGrow Healthcare Conference. All day - Electronic Arts (EA) will release Madden NFL 25. The highly anticipated game will be available on PlayStation 4, PlayStation 5, Xbox One, Xbox Series X/S, and PCs. 8:30 a.m. The July Producer Price Index report will be released. 10:00 a.m. The Cass Freight Index will be released. 4:30 p.m. Flutter Entertainment (FLUT) will hold its earnings conference call. Management is likely to be asked if FanDuel plans to match DraftKings (DKNG) with a surcharge in high tax rates. Wednesday - August 14 Earnings watch - Notable companies due to report include UBS Group (UBS), Cardinal Health (CAH), Brinker International (EAT), and Cisco (CSCO). All day - It is the deadline for 13F filings for institutional investment managers to reveal their positions as of June 30. The Bitcoin ETF holdings of hedge funds and portfolio managers will be of high interest. Investors may also be watching to see if hedge funds made any significant moves with the Magnificent Seven group of Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). 8:30 a.m. The July Consumer Price Index Report will be released. Thursday - August 15 Earnings watch - Notable companies due to report include Walmart (WMT), Alibaba (BABA), Applied Materials (AMAT), Deere (DE), JD.com (JD), and Tapestry (TPR). Options trading implies a double-digit share price swing for Despegar.com (DESP) after its report is released. All day - Notable investor events include IDEXX Laboratories' (IDXX) Investor Day. All day - The Department of Justice timing agreement on the Hawaiian Holdings (HA)-Alaska Air Group (ALK) deal expires. All day - US Steel (X) will enter arbitration with the United Steelworkers union. 8:30 a.m. The July Retail Sales Report will be released. 9:10 a.m. St. Louis Federal Reserve Bank President Alberto Musalem will speak on the U.S. economy and monetary policy before the Greater Louisville Inc. Regional Economic Development Update. Friday - August 16 All day - Genius Group (GNS) will begin trading on a split-adjusted basis following the company's 1-for-10 stock split. All day - The go-shop period ends on the Darden Restaurants (DRI) offer for Chuy's Holdings (CHUY). Shares of Chuy's traded 1.1% below the deal price at the time of publication. 10:00 a.m. The initial University of Michigan Consumer Sentiment report for August will be released. 1:25 p.m. Chicago Federal Reserve Bank President Austan Goolsbee will participate in a fireside chat before the Angeles Investors' Q3 Summit and Awards Event. Seeking Alpha Editor Josh Fineman contributed to this story. More on the markets Asset Class Scoreboard: July 2024 SPY: 4 Reasons To Exercise Prudence Stocks Correction Gathering Momentum But Short Term Rally Likely InspereX survey shows most advisors are bullish on the S&P's year-end outlook Piper Sandler says markets are 'shaken' but sticks to year-end S&P target of 5,800

Trump's Plans Stir Fears for Fed Independence; Has the U.S. Economy Reached a Tipping Point?

Trump's Plans Stir Fears for Fed Independence; Has the U.S. Economy Reached a Tipping Point? By Hardika Singh Donald Trump's assertion that as president he should have more say over how the Federal Reserve sets interest rates would, if carried out, reverse a longstanding custom by which the central bank enjoys political autonomy to fight inflation with often unpopular rate increases. Meanwhile, according to Richmond Fed President Tom Barkin, the labor market is in better shape than feared and is merely "normalizing" from overheated levels seen during the post-pandemic recovery. Economists, however, have raised the probability of recession and others say the Fed needs to lower rates more swiftly to stave one off. The uncertainty is weighing on consumers and businesses of all sizes as they try to make spending decisions and plans. Plus, a consent order against FTX Trading and Alameda Research requires them to pay $8.7 billion in restitution and $4 billion in disgorgement. Elsewhere, the Bank of Mexico cut rates for the first time since March in a split decision, stressing the continued decline in core inflation and leaving the door open for further reductions. Read on for this news and more. Top News Trump's Plans Stir Fears for Fed Independence, Inflation Donald Trump's comments during a Thursday press conference were the former president's most direct acknowledgment of his longstanding desire to chip away at the Federal Reserve's independence. If he wins the election and follows through on his pledge to directly influence monetary policy, Trump would break with decades of precedent . Fed Official Sees Labor Market in Normal State not Recession Federal Reserve Bank of Richmond President Thomas Barkin sees the U.S. economy and labor market in a state of normalization-not barreling into a recession. He said Thursday that the Fed is weighing both its employment and inflation mandates in considering its next move on interest rates, echoing recent comments by other officials including Fed Chair Jerome Powell. Bank of Mexico Cuts Benchmark Interest Rate in Split Decision The five-member board of Bank of Mexico voted 3-2 Thursday to lower the overnight interest-rate target by a quarter percentage point to 10.75%, resuming an easing trend after staying on hold at the previous two meetings. U.S. Economy Has the U.S. Economy Reached a Tipping Point? Until recently, the U.S. appeared to be headed for a soft landing-with inflation coming down while employment has remained high and growth has been steady. Events of the past few weeks, however, have undermined confidence in that outlook . Financial Regulation FTX Trading, Alameda Research Ordered to Pay $12.7 Bln, CFTC Says The U.S. District Court for the Southern District of New York entered a consent order against FTX Trading and Alameda Research, requiring them to pay $12.7 billion in monetary relief to fraud victims, resolving Commodity Futures Trading Commission litigation. Research ECB Easing Interest Rates Can't Drive Rapid Growth Alone Any boost to eurozone economic growth from interest-rate cuts over the next year or two will be quite small, Capital Economics economist Jack Allen-Reynolds says in a note. Because the European Central Bank will lower rates only gradually-and leave them above pre-Covid levels-borrowing costs in the private sector won't fall far, interest expenditure at households and firms will remain at multiyear highs, and any increase in lending will be limited, he says. The ECB might loosen policy more quickly should the economy perform much worse than expected, but in that case it would only be cushioning against a negative shock rather than helping growth. However, beyond monetary policy, GDP should continue expanding due to rising incomes and an improvement in global activity, he says. - Ed Frankl Basis Points The average rate on the standard 30-year fixed mortgage in the U.S. fell around a quarter percentage point to 6.47%, according to a survey of lenders released Thursday by mortgage-finance giant Freddie Mac, a low not seen since May 2023 and the sharpest weekly decline in around nine months. - Gina Heeb and Nicole Friedman "Survive until 25" has become a mantra for landlords who are hanging onto buildings by their fingernails and praying for rate cuts soon. While it is well understood that many offices are a lost cause, apartment loans are in surprisingly bad shape, too. - Carol Ryan A bipartisan group of U.S. lawmakers have proposed a new law to restrict a trade provision, favored by retailers such as Temu and Shein, that lets goods flow in from China with little scrutiny and no duties. The bill, released Thursday, would block textiles and apparel from being imported through what is known as the de minimis provision. It also would establish a fee of $2 per shipment for goods that aren't banned from entering via this route. - Richard Vanderford China's consumer inflation rose more than expected last month but the data didn't paint a strong enough picture to dispel concerns about weak demand in the world's second-largest economy. The country's consumer-price index rose for a sixth consecutive month in July, ticking up 0.5% from a year earlier and marking a five-month high, the National Bureau of Statistics said Friday. Germany's inflation rate edged up this month, potentially complicating policymakers' task as they look to give a boost to a lackluster economy without causing prices to surge. Consumer prices rose 2.3% on year in July, preliminary data from statistics authority Destatis showed Tuesday, a little faster than a month earlier and above expectations laid out in a Wall Street Journal poll. - Joshua Kirby French unemployment fell unexpectedly over the second quarter, a boon as the country looks to set itself on a recovery path. Joblessness stood at 7.3% of the working population between April and June, down from 7.5% in the year's first quarter, data from national statistics agency Insee showed Friday. - Joshua Kirby Executive Insights Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful. Lenovo's ThinkPad laptop hasn't changed much over the years . Corporate technology leaders say that's why they love it. JD Vance's track record during his short-lived career as a venture capitalist was mixed, reflecting the realities of early-stage startup investing. A number of companies have said the accountant shortage has contributed to deficiencies in their financial reporting. It could ding CFOs as well. California and Massachusetts could soon enact laws that would likely be the strongest curbs in the nation on private equity's activities in healthcare. Listen to Vinod Khosla, whose Khosla Ventures was an early investor in OpenAI, discuss the potential good in AI , the future of capitalism and the political climate in the U.S. About Us WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[email protected]]. This article is a text version of a Wall Street Journal newsletter published earlier today.

North American Morning Briefing : Jobless Claims Eyed as Market Volatility Continues

Stock futures were weaker again on concerns that new jobs data may provide further evidence of weakness in the U.S. economy, while bond yields also fell, reversing a move partly caused by a poor auction of 10-year notes on Wednesday. Traders' main focus likely will be on the weekly initial jobless benefit claims report, due for release at 8:30 a.m. Eastern. The data has become increasingly imbued with importance as investor fears grow that a cooling labor market--as shown by the weaker-than-expected July nonfarm payrolls report published last Friday--is indicative of an economy that may be slipping into recession. Economists expect 240,000 unemployment claims registered for the week to August 3rd, down from the previous week's 249,000, which was the highest for the year. Earnings are due from Eli Lilly among others, with results season now in its later stages. Overall, analysts expect profits from S&P 500 companies rose 12% last quarter, up from a forecast for 9% growth at the end of March, according to FactSet. Premarket Movers Bumble fell 35%. The company sharply cut its revenue outlook for the year. Duolingo reported second-quarter earnings of 51 cents a share, beating Wall Street estimates of 32 cents, and raised its outlook for the year. The stock was up 5%. Fastly fell 17% it said it expected to post a full-year loss of 11 cents to 16 cents a share on revenue of $530 million to $540 million of revenue. Analysts were expecting a loss of 11 cents a share on revenue of $558 million. HubSpot's earnings and revenue in the second quarter beat analysts' estimates. Its shares rose 7%. JFrog dropped 29% after the company issued weaker-than-expected third-quarter guidance. Monster Beverage was down 7% after reporting second-quarter profit of 41 cents a share, missing analysts' estimates. Warner Bros. Discovery posted second-quarter revenue of $9.71 billion, down 6.2% from a year earlier and below analysts' estimates. Shares fell 11%. Zillow reported a narrower second-quarter loss and named a new chief executive. The stock rose 12%. Postmarket Movers Robinhood Markets posted higher-than-expected earnings in its second quarter. Shares rose 3%. Virgin Galactic doubled its quarterly revenue on more membership fees. The company also narrowed its loss to $94 million. Shares rose 7%. Economic Insight An expected Trump victory should lead to weaker global growth and a brief spike in inflation, William Blair said. Likely higher tariffs will also weigh on trade, it added. Major economies like China and Europe with large trade surpluses with the U.S. will likely be the first to face the consequences. In order to offset higher tariffs and fragility in the global economy, William Blair anticipates an acceleration of the global monetary policy reaction, triggering lower interest rates globally. -Bausch Plan to Spin Off Eye-Care Business Stuck in Creditor Standoff -Goldman Sachs Wants to Be a Bigger Lender. It's Asking Insurance Companies For Help -Boeing's New CEO Is Hands On. He's Being Handed a Company in Crisis -A Slowing Economy's Silver Lining: Cheaper Gas -Kamala Harris Makes Risky Bet That Tim Walz Can Prop Up Blue Wall The euro could rise above the key $1.10 level versus the dollar once volatile markets settle, as focus switches to narrowing eurozone-U.S. interest rate differentials, ING said. "That is our bias over the coming months." Expectations for 81 basis points of European Central Bank rate cuts this year look "far too aggressive" so a potential unwinding of these bets at some stage should provide further EUR/USD support, ING said. It expects 50 basis points of ECB rate cuts this year. EUR/USD could take another run at 1.10 if U.S. initial jobless claims data are higher than expected, ING said. The dollar was lower as investors exercised caution ahead of the data. Bonds: Commerzbank Research said Treasury supply remains an issue for markets, as signaled by Wednesday's yield moves. Treasurys bear-steepened before and after the 10-year note auction, affirming existing supply concerns. "While one should not over-interpret every tick during these volatile summer markets, this price action underscores that the underlying supply concerns have not disappeared." Traders will be keeping an eye on the Treasury's $25 billion auction of 30-year bonds, with results published at 1:00 p.m. Deutsche Bank noted that the $42 billion of 10-year notes on Wednesday were issued 3.1 basis points above the pre-sale yield with the highest primary dealer take up since April. "Overall it was one of the weaker auctions of recent years." High-yield corporate bonds look more attractive than equities considering the bonds' absolute yields, Generali Investments said. Rating agencies are expected to downgrade more companies than they upgrade in the coming months as economic activity slows. However, the number of 'fallen angels,' or companies which are downgraded from an investment-grade to a high-yield rating, should remain "very limited," Generali Investments said. Energy: Oil prices were volatile, rapidly swinging from positive to negative territory but staying in a tight range as the market awaits Iran's possible retaliatory strike against Israel. Metals: Gold prices edged up, largely steadying after a selloff earlier in the week. Bullion held by the PBOC at the end of July stood unchanged at 72.8 million troy ounces, according to official data. The bank ended an 18-month buying spree in May that had driven gold prices to record highs, though those same high prices have likely deterred further purchases for now, ING said. TODAY'S TOP HEADLINES AI Companies Fight to Stop California Safety Rules California has become ground zero in the fight over artificial-intelligence regulation. AI startups and tech giants are rallying to kill a bill ascending through the state legislature that they say would impose impossibly vague constraints in the name of safety. Though some in the industry have called for government regulation, they say it should be done at the federal level with more specificity. Office Loans Are Toxic. Apartment Loans Could End Up Worse. "Survive until 25" has become a mantra for landlords who are hanging onto buildings by their fingernails and praying for rate cuts soon. While it is well understood that many offices are a lost cause, apartment loans are in surprisingly bad shape, too. More than $40 billion of office loans were in distress at the end of the second quarter based on data from MSCI, which is around three times the value of distressed apartment loans. Retail investors haven't been this pessimistic in nine months, AAII survey finds The latest American Association of Individual Investors survey finds retail investors are the most pessimistic they've been in nine months. That comes after the S&P 500 SPX on Monday had its worst single day in two years, with the index finishing Wednesday down 8% from its mid-July record high. Write to [email protected] TODAY IN CANADA Nutrien 2Q EPS 78c; Sales $10.16B; Appointed Mark Thompson as Executive Vice Pres and Chief Fincl Officer, Effective Aug. 26 08:30/UK: 2Q Mortgage and landlord possession statistics 08:30/UK: 2Q Mortgage Arrears and Possessions data 12:30/US: 08/03 Unemployment Insurance Weekly Claims Report - Initial Claims All times in GMT. Powered by Kantar Media and Dow Jones.