Alphabet, Intel Beat
Alphabet and Intel delivered some good news in an otherwise dour day. The Google parent beat Wall Street expectations with second-quarter sales—excluding payments to partners—that came in at $31.71 billion. Sales from its own online properties, including Search and YouTube, climbed 18% to $27.34 billion. Intel beat on profit and revenue and gave an upbeat sales forecast for the current period. Both stocks were up as much as 7%. Amazon’s story wasn’t as rosy. Shares fell after the company’s second-quarter profit missed expectations and it forecast operating income for the current quarter of $2.1 billion to $3.1 billion, well below the $4.34 billion estimates. Also of concern: a revenue miss and slowing growth from the profitable Amazon Web Services.
The ECB held rates steady and altered its policy statement to lay the groundwork for a rate cut in the near future, probably September. Interest rates will remain at present or lower levels at least through the first half of next year. Mario Draghi said the significant monetary stimulus is needed, and the outlook is “getting worse and worse.” Meanwhile, the Turkish central bank bowed to President Erdogan’s instructions, slashing its key rate by a more-than-expected 425 basis points to 19.75%, citing weaker economic activity. It was the biggest rate cut since 2002.
Talking to North Korea
Secretary of State Michael Pompeo said the door remains open for diplomacy with North Korea even after its launch of short-range missiles Thursday — an act he described as a negotiating tactic. “Everybody tries to get ready for negotiations and create leverage and create risk for the other side,” Pompeo said in an interview Thursday with Bloomberg Television. “We remain convinced that there’s a diplomatic way forward, a negotiated solution to this.” He also said he’d be willing to travel to Tehran to address the Iranian people about American foreign policy, likening it to Iranian counterpart Javad Zarif’s visits to the U.S.
Stocks Set to Dip
Asian equity futures are poised to open lower after U.S. stocks fell from record highs amid a torrent of corporate results. The euro swung between gains and losses and European bonds reversed gains after Draghi didn’t give markets more of a dovish signal. The dollar was stronger against most G-10 peers. Oil advanced, while gold dipped.
New HKMA Head
Eddie Yue will be the next chief executive of the Hong Kong Monetary Authority, succeeding a retiring Norman Chan, Hong Kong’s government said. He’ll be in charge of guarding the local dollar’s peg to the greenback, overseeing the city’s HK$4 trillion ($512 billion) exchange fund, formulating banking policies and regulating lenders. Yue, 54, joined the quasi-central bank on its establishment in 1993.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
- Hong Kong police refused permission for a protest on Saturday.
- Singapore is spending big to future-proof its slowing economy.
- Airlines are packing in more passengers than ever. And it’s going to get worse.
- A CEO who courted Ronaldo loses billionaire status.
- Elizabeth Warren has a radical plan to beat Trump at his own game.
- Japanese banks are running out of room to cope with negative rates.
- Thailand has a developing economy and a big first-world problem.