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US stocks rose on Wednesday as investors viewed the results of Target and Lowe's as positive and waited for the release of the minutes of the Federal Reserve's July meeting.
Here are the main market movements, starting at 10:57 am:
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S & P 500 (^ GSPC): + 0.79% or 22.86 points
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Dow (^ DJI): + 0.91%, or 236.32 points
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Nasdaq (^ IXIC): + 0.91% or 72.32 points
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10 Year Treasury Return (^ TNX): +1 to 15.69%
Investors were hoping to a large extent that the last minutes of the Fed meeting would reaffirm the market's expectations for cutting key borrowing costs. At the close of the July meeting, the Fed lowered rates for the first time since 2008, and markets have since forecast further cuts between 50 and 75 basis points by the end of 2019.
However, two members of the Federal Open Market Committee (FOMC) disagreed with the Fed's latest monetary policy decision, saying the economy did not need a July rate cut. This left market participants concerned about whether the FOMC would be willing to further reduce rates, particularly given recent economic data that highlight the strength of consumer spending and the tightening of the labor market.
Fed Chairman Jerome Powell's remarks at the annual Jackson Hole Central Bank Symposium on Friday will also be closely monitored for monetary policy signals, which will give the Fed a boost. new opportunity to streamline his messages before the next meeting.
Capital Economics economist, Paul Ashworth, said last week that such remarks could "trigger a carnage on the bond and equity markets" if public statements did not calm the market demand for from a clear signal in favor of a more flexible monetary policy.
Powell's remarks come four weeks before the Fed's deliberations in September, which the markets estimate with near certainty will result in a 25 basis point reduction in the benchmark interest rate.
Abroad, interest rates turned into negative territory as a dovish bias took precedence over international monetary policy as global growth slowed. In Germany, the government sold 30-year negative yield bonds on Wednesday.
Germany auctioned nearly $ 914 million of negative public debt – which also has a zero coupon and therefore pays no interest – as investors flocked to safe haven assets and increased their value. German government bonds have recently posted negative returns across the curve, and recent 30-year bond sales contribute more than $ 15 trillion worth of negative-yielding bonds around the world.
Winning update
Revenue continued to grow on Wednesday, with statements from Target (TGT) and Lowe (LOW) before market opening. Nordstrom's Department Store (JWN) and Victoria's Secret's parent company, L Brands (LB), publish their quarterly results after the close of the market.
Target Exceeded Wall Street's Second Quarter Results and Increased Earnings Targets for the Year, with New Delivery and Delivery Initiatives Including In-Store Pickup and Same-Day Purchases , helping to increase sales.
Online sales were also a strong point of the report. Comparable digital sales grew by 34% and contributed 1.8 percentage points to the company's overall 3.4% growth over the period. The results reflect those of Walmart big box retailer (WMT), which outperformed expectations last week and strengthened expectations as online sales increased.
At the same time, Lowe's shares climbed early in the session after the company also announced higher-than-expected quarterly sales and earnings, reflecting the impact of Marvin Ellison's CEO's turnaround plan for residential renovation.
Ellison, who took the helm in July 2018, said earlier this year that Lowe's would improve its internal inventory and price tracking systems at the company's stores, helping to streamline past operational inefficiencies that weighed on the company. and weighed on the results. In the second quarter, same-store Lowe's same-store sales increased 3.2% in the US, outperforming those of rival Home Depot (HD), which released its results on Tuesday.
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Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck
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