Morning Update: Markets Point Higher as Fed Signals Rate Cut

First Look

Stocks are pointed higher in the pre-market Thursday. Jerome Powell is scheduled to testify in front of the Senate at 10:00 a.m. this morning in the second phase of his semi-annual update on monetary policy. Powell spoke before Congress Wednesday, signaling that the central bank could cut interest rates as soon as this month. Speculation has been growing that future rate cuts were coming, but Powell’s dovish tone changes the speculation from if the Fed will lower interest rates to how much will they be cut. Despite June’s better-than-expected job report and a healthy economy, Powell said that high risks due to the ongoing trade war with China would be a dominant factor in the central bank’s decision to lower rates. The Dow Jones is up 0.33%, the S&P 500 is up 0.22%, the S&P 500 is up 0.22%.

Today's market outlook is Neutral

Nip the shoots of arbitrary power in the bud, is the only maxim which can ever preserve the liberties of any people.
John Quincy Adams

Stocks on the Move

Cigna Corp (CI), CVS Health Corp (CVS) and Walgreens Boots Alliance Inc (WBA) are moving higher this morning, while Fastenal Company (FAST), Iron Mountain Inc (IRM) and Comerica Incorporated (CMA) are headed lower. Freeport-McMoRan Inc (FCX), Spirit Realty Capital Inc (SRC) and Weight Watchers International, Inc. (WW) were upgraded by analysts this morning, while Iron Mountain Inc (IRM), TD Ameritrade Holding Corp. (AMTD) and Alcoa Corp (AA) were downgraded.

International Markets

Stocks in Asia are up. The Hang Seng is up 0.81%, the Mumbai Sensex is up 0.69%, the Nikkei 225 is up 0.51% the Australia ASX All Ordinaries is up 0.41% and the Shanghai SE Composite Index is up 0.08%. In Europe stocks are mixed. The CAC 40 is up 0.1%, the Euro Stoxx 50 is up 0.05%, the FTSE 100 is down -0.06% and the DAX is down -0.21%.

Futures and Currencies

Energy futures are up today. The price for West Texas Intermediate crude oil is up 0.25 at 60.68 per barrel. Brent crude is up 0.31 at 67.32 per barrel. Natural Gas is up 0.01 at 2.45. Precious metals are up this morning. Gold is up 1.06 at 1420.08 per ounce. Platinum is up 1.48 at 828.1 while silver is up 0.08 at 15.31. The dollar is down compared to the major currencies today. The greenback is down against the euro, down against the Yen and down against the Pound.

Put/Call Ratio

Yesterday, 1,072,189 call contracts traded on the Chicago Board Options Exchange (CBOE) compared to 547,357 put contracts. The single-session put/call was 0.51 while the 20-day moving average is now at 0.61.

Earnings Expected Today

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Today's Economic Calendar

What's Happening Period Release Time
CPI Jun 08:30
Initial Claims 07/06 08:30
Continuing Claims 06/30 08:30
Fed Chair Powell Testimony 10:00
EIA Natural Gas Inventories 07/06 10:30
Treasury Budget Jun 14:00

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