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© Reuters.
Jeffrey Smith
Investing.com-US second quarter GDP and weekly unemployment claims will be announced soon. After regulators tried to calm investors’ nervousness, the Chinese market rebounded. Didi soared due to reports that its supporters may privatize it again. Amazon (NASDAQ:) announces earnings after the market closes, while Facebook (NASDAQ:) and Paypal are unable to meet extremely high expectations. And Robinhood’s IPO faces the risk of flatness-but not as flat as battery manufacturer Clarios. Here is the information you need to know in the financial markets on Thursday, July 29th.
1 The Chinese market rebounded after regulators extended an olive branch
After the China Securities Regulatory Commission called large domestic and foreign banks and investors to assure them that the actions against online education companies were isolated incidents and had no broader significance to the market, the Chinese stock market rebounded sharply.
The report quoted an unnamed person familiar with the matter as saying that the China Securities Regulatory Commission stated that it is still committed to allowing Chinese companies to enter foreign capital markets, but declined to say what changes (if any) it plans to make to the supervision of listed companies in the United States. The “variable interest entity” structure favored by Chinese companies listed in the United States.
In recent weeks, Chinese technology stocks have been hit by a wave of regulatory actions. After the Wall Street Journal reported that its supporters might privatize it again to appease the regulators that suggested its listing in the United States, ride-hailing giant Didi Global rebounded by more than 30% in pre-market trading.
2. Number of people applying for unemployment benefits and GDP in the second quarter
The United States will announce the first estimate of the second quarter gross domestic product at 8:30 am Eastern Time (1230 GMT). The growth rate is expected to accelerate from 6.4% in the first quarter to 8.5%, reflecting the reopening of the country’s service industry as the Covid-19 pandemic subsides.
These figures were released after Federal Reserve Chairman Jerome Powell stated that the central bank would not hurriedly reduce its bond purchases (currently US$120 billion per month) because of higher-than-trend growth and inflation in a few quarters. The U.S. dollar fell to a two-week low on Wednesday as the market lowered expectations for early tightening of policies.
Also at 8:30 am Eastern time will be the latest weekly unemployment benefits. The number of initial jobless claims is expected to fall from 419,000 a week ago to 380,000. Recent application data suggests a slight slowdown in the labor market, although they are still difficult to explain because the pandemic disrupted the usual seasonal adjustment process.
3. Facebook warns and Paypal is struggling, but stocks will continue to rise
The earnings season continues to advance at full speed. After warning that advertising revenue may slow, Facebook fell nearly 4% before going public because changes in Apple’s latest iOS operating software made user behavior more difficult to track.
Paypal, another pandemic winner, also reported on Wednesday night. After reporting a sharp slowdown in net new users, its stock price fell by about 4.7%. Nasdaq futures underperformed the broader market overnight, staying flat, rising 153 points or 0.4%, and then rising 0.2%.
Amazon topped the list of companies reported on Thursday, albeit after the close. Companies such as Merck, Altria (NYSE:), Southern, Hershey, Hilton Worldwide, and ICE (NYSE:) will be updated in advance.
4. Robinhood sets the IPO price at the bottom of the range; Clarios postpones
The brokerage firm Robinhood priced its initial public offering at the low end of its marketing range because investors were unwilling to commit to a company that recently had a major conflict with regulators over its business model.
The company’s bankers priced the offering at $38 per share. This still makes it valued at approximately US$32 billion, almost three times the value reported in the private financing round last year.
These stocks will make their debut on the Nasdaq market later today. For Brookfield-backed battery manufacturer Clarios International, this is far more than that. According to Bloomberg News, the company has postponed its debut indefinitely due to market conditions. Clarios had hoped to raise up to $1.8 billion in funding
5 Oil prices hit a two-week high; buoyancy shell (LON:), total update
After US government data confirmed a substantial reduction in inventories last week, crude oil prices rose to a two-week high, maintaining the increase. The grumpy public diplomacy between Iran and the West has also increased expectations that Iranian supplies will not return to world markets as quickly as they did a month ago.
The strong quarterly updates released overnight by Royal Dutch Shell (NYSE:) and Total Energies also boosted this sentiment, especially Shell returning additional funds to shareholders instead of increasing capital expenditures. This shows that large oil companies will be happy to enjoy the current windfall, rather than working hard to increase production in the coming months.
As of 6:30 am Eastern Time (1030 GMT), futures rose 0.5% to US$72.75 per barrel, while futures rose 0.2% to US$74.12 per barrel.
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