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European stocks traded lower on Thursday, with a slew
of disappointing earnings as well as downbeat PMI and unemployment data
weighing on markets. The eurozone manufacturing sector remained in contraction
territory in July, according to a survey released earlier today.
The Monetary Policy Committee voted five to four for the
rate cut.
US Stocks moved to the upside early in the trading
day on Thursday but have come under pressure over the course of the session.
The major averages have pulled back well off their highs of the session and
into negative territory. The major averages have seen further downside in
recent trading, falling to new lows for the session.
Gold prices declined on Thursday after hitting a
two-week high on rate cut optimism. The dollar steadied in
early European trade, after having fallen to a near two-week low as Federal
Reserve Chair Jerome Powell indicated a possible interest rate cut in
September.
After keeping the key interest rate unchanged at a 23-year
high, Powell indicated on Wednesday that recent progress on inflation and
cooling in the labour market could put the September rate cut on the table.
The Fed's next monetary policy meeting is scheduled for
September 17-18, when investors widely expected the Fed to begin lowering
interest rates. Almost three cuts are priced in by the year-end.
Oil prices rose further on Thursday, after having
surged about 4 percent in the previous session on signs of strong U.S. demand
and due to concerns about possible supply disruptions amid heightened Middle
East tensions.
In corporate news, Rolls-Royce lifted its
full-year profit guidance on Thursday as it hailed a strong first half and said
it was reinstating dividends. At the time of writing the share price is up
7.33% today.
In the first half, underlying operating profit rose 74% on
the same period a year earlier to £1.15bn. The company said this was driven by
its transformation programme and strategic initiatives, with commercial
optimisation and cost efficiency benefits across the group.
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