U.S. GDP Declined Less than Expected for the Quarter

U.S. stock futures traded higher in early pre-market trade on Thursday ahead of the three-day Jackson Hole economic symposium, with Federal Reserve chief Jerome Powell scheduled to speak on Friday. Powell is expected to restate the Fed's inflation-fighting resolve, but any further details remain unknown at this point. JPMorgan (JPM) Asset Management's chief Bob Michele said Powell should use his address to give more clarity on how hawkish the Fed interest rate approach is expected to be. Meanwhile, U.S. President Joe Biden announced a controversial package of student-debt relief that forgives as much as $20,000 in loans for some deprived beneficiaries. Biden also announced a 4-month extension of the moratorium on student loan repayments, as well as plans to allow borrowers with undergraduate loans to cap repayments at 5% of their monthly income. The cost would run into the hundreds of billions of dollars, based on an administration official’s estimate.

Investors are awaiting earnings results from Abercrombie & Fitch (ANF, more below), Dollar Tree (DLTR, see below) and Dell Technologies (DELL). Data on the U.S. GDP (QoQ 2nd estimate actual -0.6% (forecast -0.7%, previous -0.9%) and initial jobless claims were released at the U.S. market open.

Commoditywise, crude oil prices are pushing higher as Brent crude futures rose 0.2% to $101.71 per barrel, while U.S. WTI crude futures rose 0.2% to trade at $95 a barrel. The U.S. Energy Information Administration’s weekly report on natural gas inventories in underground storage is scheduled for release at 10:30 a.m. EST.

Earningswise, Peloton Interactive (PTON) dropped after reporting FQ4 results well below expectations. The primary blame for the YoY revenue decline was dwindling consumer demand for PTON products following exit from the pandemic’s peak. Connected fitness revenue fell 55% to $296 million but subscription revenue rose 36% to $383 million. Total platform workouts were down 4%. PTON ended the quarter with 980K app subscriptions vs. 870K a year ago.

Dollar Tree (DLTR) the discount retailer’s stock slid 6.6% in the premarket after cutting its FY earnings forecast, due to the impact of pricing-related investments at its Family Dollar stores. Dollar Tree reported better-than-expected profit for its latest quarter, with revenue in line with Wall Street estimates.

Abercrombie & Fitch (ANF) shares took a 10.5% dive in the premarket after the apparel retailer reported another quarterly loss and undershot in terms of its revenue. It also cut its FY sales forecast, blaming high inflation.

European markets were higher today. The Stoxx Europe 600 Index climbed 0.7%, The British FTSE 100 gained 0.24% while the French CAC 40 Index rose 0.16%, and German DAX gained 0.35% as of 2:40 p.m. CET.

The Germany’s Ifo Business Climate indicator fell to 88.5 in August against a revised 88.7 in July, while the country’s economy unexpectedly grew 0.1% QoQ in Q2. In its turn, Manufacturing climate indicator in France declined for a second month to 104 in August. Meanwhile UK’s car production surged 8.6% from a year ago to 58,043 units in July. Spanish annual producer inflation declined to 40.4% in July from a revised 43.1% annual surge in the prior month.

Asian markets traded higher today. Sentiment was boosted after China stepped up economic support with a further 1 trillion yuan (approximately $146 billion) of monetary measures. Japan’s Nikkei 225 rose 0.58%, China’s Shanghai Composite advanced by 0.97%, while Hong Kong’s Hang Seng Index jumped 3.63%. Australia’s S&P/ASX 200 rose 0.7%, while India’s S&P BSE Sensex added 0.6%.