Finance

Bull markets, according to John Templeton, “are born on pessimism, grow on scepticism, mature on optimism and die of euphoria”. The legendary Wall Street fund manager put this philosophy into practice in 1939. At a time when others were panicking about Europe’s descent into war, Templeton borrowed money to buy 100 of every share trading below $1 on the New York Stock Exchange. Within a few years he had booked a 400% profit and forged a template for future investors. Even in the 21st century, Templeton’s favoured moments of “maximum pessimism” present the very best buying opportunities. In March 2009 investors despaired over the future of capitalism; in March 2020, over a pandemic and shuttered businesses. Both times, the correct response was to close your eyes and buy stocks.It now looks like October 2022 should be added to the list. Pessimism was certainly rife. Central banks were raising interest rates at their fastest pace in decades. Inflation was hitting double digits in the euro zone and falling only slowly in America. Recession seemed just about nailed on. War had returned to Europe. China appeared trapped between lockdowns and soaring covid-19 deaths. Across the northern hemisphere, a cold winter threatened to send energy prices soaring again, turning a miserable downturn into a truly dangerous one. America’s s&p 500 index of leading shares was down by nearly one-quarter from its peak; Germany’s dax by more.True to form, it was an excellent time to buy. The s&p 500 has since risen by 28%. That puts it at its highest level in over a year, and within 5% of the all-time peak it reached at the start of 2022. Moreover, the rally’s progress has been positively Templetonian. Born on despair, it then advanced to the scepticism phase. Investors spent months betting that the Federal Reserve would not raise rates as high as its governors insisted they were prepared to lift them, while economists admonished their foolhardiness from the sidelines. All the time, with frequent reversals, stocks edged nervily upwards.For a few weeks, as first one then several American regional banks collapsed in the face of rising rates, it looked like the sceptics had won the day. Instead, it was time to proceed to the optimism phase. Hope of an ai-fuelled productivity boom displaced fears about growth and inflation as the main market narrative. Shares in big tech firms—deemed well-placed to capitalise on such a boom—duly rocketed.Now the party has spilled over into the rest of the market. You can see this by comparing America’s benchmark s&p 500 index (which weights companies by their market value and so is dominated by the biggest seven tech firms) with its “equal-weight” cousin (which treats each stock equally). From March to June, the tech-heavy benchmark index raced ahead while its cousin stagnated. Since June both have climbed, but the broader equal-weight index has done better. And they have both been trounced by the kbw index of bank stocks. What started as a narrowly led climb has broadened into a full-blown bull market.It is not just in stockmarket indices that the new mood is apparent. Bloomberg, a data provider, collects end-of-year forecasts for the s&p 500 from 23 Wall Street investment firms. Since the start of the year, 14 of these institutions have raised their forecasts; just one has lowered it. Retail investors, surveyed every week by the American Association of Individual Investors, are feeling their most bullish since November 2021. Even the long-moribund market for initial public offerings may be witnessing green shoots. On July 19th Oddity Tech, an ai beauty firm, sold $424m-worth of its shares by listing on the Nasdaq, a tech-focused exchange. Investors had placed orders for more than $10bn.If investors are to keep paying more and more for stocks, which they will have to do to keep the run going, they must believe at least one of three things. One is that earnings will rise. Another is that the alternatives, especially the yield on government bonds, will become less attractive. The third is that earnings are so unlikely to disappoint that it is worth coughing up more for stocks and accepting a lower return. This final belief is captured by a squeezed “equity risk premium”, which measures the excess expected return investors require in order to hold risky shares instead of safer bonds. This year it has plunged to its lowest since before the global financial crisis of 2007-09. The market, in other words, appears on the verge of euphoria. What would Templeton think of that? More

Jonathan Raa | Nurphoto | Getty Images

Check out the companies making headlines in midday trading.
3M – Shares of the chemical manufacturer rose 5.5% following the company’s latest earnings report. 3M posted $7.99 billion in revenue, beating analysts’ estimates of $7.87 billion, according to Refinitiv. The company also raised its full-year earnings guidance and reaffirmed its revenue guidance.

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Spotify — The music streaming platform tumbled 14% following weaker-than-expected revenue and guidance. Spotify reported revenue of €3.18 billion, below the consensus estimate of €3.21 billion from analysts polled by Refinitiv. Full-year revenue guidance was also softer than analysts forecasted. The results follow the company’s announcement that it will raise prices for premium subscription plans.
Alaska Air — Shares of Alaska Air shed 12%, even as the airline beat estimates on top and bottom lines for the second quarter. The airline reported $3 in adjusted earnings per share on $2.84 billion in revenue. Analysts surveyed by Refinitiv were expecting $2.70 in earnings per share on $2.77 billion in revenue. The airline’s full-year earnings guidance of $5.50 to $7.50 per share was roughly in-line with the average analyst estimate of $6.65, according to FactSet.
RTX – Shares of the defense contractor sank more than 12% after it disclosed an issue affecting a “significant portion” of its Pratt & Whitney engines that power Airbus A320neo models. Elsewhere, RTX reported second-quarter earnings that topped Wall Street expectations, posting $1.29 in adjusted earnings per share on $18.32 billion in revenue. Analysts polled by Refinitiv called for $1.18 in earnings per share and $17.68 billion in revenue.
F5 — Shares of the cloud software company rallied 5.7%. Late Monday, F5 posted a top- and bottom-line beat in its fiscal third quarter. The company reported adjusted earnings of $3.21 per share on revenue of $703 million. Analysts called for $2.86 in earnings per share and revenue of $699 million, according to Refinitiv.
NXP Semiconductors — Shares rose 4% following the chipmaker’s quarterly earnings announcement Monday after hours. NXP reported $3.43 in adjusted earnings per share on $3.3 billion in revenue. Analysts had estimated $3.29 earnings per share and revenue of $3.21 billion, according to Refinitiv. The company’s projected third-quarter earnings also topped analysts’ estimates. 

General Electric — Shares of the industrial giant popped more than 5% to hit a 52-week high after the company posted stronger-than-expected earnings for the second quarter. GE reported adjusted earnings of 68 cents per share on revenue of $16.7 billion. Analysts called for earnings of 46 cents per share on revenue of $15 billion, according to Refinitiv. GE also boosted its full-year profit guidance, saying it’s getting a boost from strong aerospace demand and record orders in its renewable energy business.
Whirlpool — Whirlpool slid more than 3% a day after reporting weaker-than-expected revenue in its second quarter. The home appliance company posted revenue of $4.79 billion, lower than the consensus estimate of $4.82 billion, according to Refinitiv. It did beat on earnings expectations, reporting adjusted earnings of $4.21 per share, higher than the $3.76 estimate.
Biogen — Shares of the biotech company declined 3.8% after its second-quarter earnings announcement. Biogen posted adjusted earnings of $4.02 per share on revenue of $2.46 billion. Analysts polled by Refinitiv anticipated earnings of $3.77 per share and revenue of $2.37 billion. Revenue for the biotech company was down 5% year over year. The company also announced it would slash about 1,000 jobs, or about 11% of its workforce, to cut costs ahead of the launch of its Alzheimer’s drug Leqembi. 
Progressive — The insurance company’s shares lost nearly 2% following a downgrade by Morgan Stanley to underweight from equal weight. The firm cited too many negative catalysts as its reason for the downgrade. 
MSCI — Shares gained 9% after the company’s second-quarter earnings and revenue came above analysts’ estimates. The investment research company posted $3.26 earnings per share, excluding items, on revenue of $621.2 million. Analysts polled by FactSet had expected $3.11 earnings per share on $602.5 million. 
General Motors — The automaker’s stock dipped about 4.5%. GM’s latest quarterly results included a surprise $792 million charge related to new commercial agreements with LG Electronics and LG Energy Solution. Separately, he company lifted its 2023 guidance for a second time this year. GM also reported a second-quarter beat on revenue, posting $44.75 billion compared to the $42.64 billion anticipated by analysts polled by Refinitiv.
UPS – Shares of UPS rose about 1% after the Teamsters union announced a tentative labor deal with the shipping giant on Tuesday.
Invesco — The investment management firm’s shares fell 5% after it posted adjusted earnings of 31 cents per share in the second quarter, while analysts polled by FactSet estimated 40 cents per share. President and CEO Andrew Schlossberg said the company would focus on simplifying its organizational model, strengthening its strategic focus, as well as aligning its expense base. 
Xerox – Shares of the workplace products and solutions provider gained more than 7% after the company raised its full-year operating margin and free cash flow guidance. Xerox now anticipates adjusted operating margin of 5.5% to 6%, compared to earlier guidance of 5% to 5.5%. It also calls for at least $600 million in cash flow, compared to its previous outlook of at least $500 million.
Packaging Corp of America — The packaging products company’s stock surged more than 10%, reaching a new 52-week high. In the second quarter, the company posted earnings of $2.31 per share, excluding items, beating analysts’ estimates of $1.93 per share, according to Refinitiv. The company cited lower operating costs from efficiency, as well as lower freight and logistics expenses. Its revenue of $1.95 billion, meanwhile, came below analysts’ estimates of $1.99 billion, according to FactSet.
Zscaler — Shares of the IT security company popped 4.5% after a BTIG upgrade to buy from neutral. “Our fieldwork leads us to believe that demand in the Secure Service Edge (SSE) has sustainably improved and that large projects which were put on hold in late 2022/early 2023 are starting to move forward again,” BTIG said in a note.
Sherwin-Williams – Shares added more than 3% after the company reported record revenue for the second quarter to $6.24 billion. Analysts called for $6.03 billion in revenue, according to FactSet. The company notched adjusted earnings per share of $3.29, while analysts estimated $2.70 per share.
— CNBC’s Yun Li, Samantha Subin, Sarah Min, Tanaya Macheel, Brian Evans and Alex Harring contributed reporting More

Maplewood, Minnesota, 3M company global headquarters. 
Michael Siluk | Universal Images Group | Getty Images

Check out the companies making headlines in premarket trading.
General Motors — Shares of General Motors rose more than 1% after the automaker raised its full-year guidance and reported second-quarter results that rose on a year-over-year basis.

3M – Shares of the manufacturer rose about 2% in premarket trading following the company’s latest earnings report. 3M posted $7.99 billion in revenue, beating analysts’ estimates of $7.87 billion, according to Refinitiv. The company also raised its full-year earnings guidance and reaffirmed its revenue guidance.
Xerox — The workplace technology provider advanced 3.6% after beating earnings expectations for the second quarter, posting 44 cents per share excluding items against a 32-cent forecast from analysts polled by FactSet. Quarterly revenue came in line with expectations at $1.75 billion. Xerox also said to expect free cash flow and the adjusted operating margin to be better than previously anticipated for the full year.
General Electric — Shares of the industrial giant jumped more than 4% in premarket trading after the company posted stronger-than-expected earnings for the second quarter. GE also boosted its full-year profit guidance on the back of strong demand from aerospace and record orders in its renewable energy business.
Danaher — Shares of the conglomerate slid 4.6%. Danaher said non-GAAP core revenue in the base business will be down in the current quarter compared with the same quarter a year ago and would be up less than previously expected for the full year. However, the company gave a strong quarterly report, posting second quarter earnings per share excluding items at $2.05 and revenue at $7.16 billion, while analysts polled by FactSet anticipated $2.01 per share on $7.12 billion in revenue.
Spotify — The music streaming platform dropped 6.1% after presenting a weak quarterly report and guidance. Spotify reported revenue of €3.18 billion, below a Refinitiv forecast of €3.21 billion. Full-year revenue guidance was also worse than analysts expected. The report follows Spotify’s announcement that it will raise prices for premium subscription plans.

Lilium — The electric helicopter stock added 5.6% after management released a letter to shareholders. In the letter, management said adjusted cash spend for the first half of 2023 was within budget and the company was successful in an audit from the European Union Aviation Safety Agency.
Alaska Air — Shares of the airline fell more than 4% even after Alaska beat estimates on the top and bottom lines for the second quarter. Alaska reported $3 in adjusted earnings per share on $2.84 billion in revenue. Analysts surveyed by Refinitiv were expecting $2.70 in earnings per share on $2.77 billion in revenue. The airline’s full-year earnings guidance of $5.50 to $7.50 per share was roughly in-line with the average analyst estimates of $6.65, according to FactSet.
RTX — Shares of the company formerly known as Raytheon slipped 3% despite a strong quarterly report. RTX ported $1.29 in earnings per share, excluding items, on $18.32 billion in revenue. Analysts polled by Refinitiv forecasted $1.18 per share and $17.68 billion. The company also raised its full-year expectations for both lines.
Verizon — The telecommunications giant traded 2.6% higher after reaffirming its full-year guidance. That came despite a mixed second quarter, with Verizon posting $1.21 in earnings per share, excluding items, on $32.6 billion in revenue. Analysts polled by Refinitiv estimated $1.17 earnings per share and revenue of $33.24 billion.
Walmart — Walmart rose more than 1% after Piper Sandler upgraded the big-box retailer Monday to overweight from neutral, and hiked its price target. Analyst Edward Yruma said Walmart could take greater market share in the grocery business as inflation eases.
— CNBC’s Samantha Subin, Yun Li, Jesse Pound, Sarah Min and Tanaya Macheel contributed reporting More

NXP Semiconductors
Source: nxp.com

Check out the companies making headlines in extended trading.
Cadence Design Systems — Shares fell 4% after the company posted its second-quarter results. Revenue in the company’s product and maintenance category came in at $922.8 million, compared to analysts’ estimates for $928.8 million, according to StreetAccount. Revenue for services also missed expectations, coming in at $53.8 million, compared to $57.9 million anticipated by analysts.

Whirlpool — The kitchen and laundry company’s stock dipped 2% after a mixed earnings announcement. Whirlpool posted $4.21 in adjusted earnings per share, coming above Refinitiv analysts’ estimates of $3.76 earnings per share. Meanwhile, revenue fell below estimates, with Whirlpool reporting $4.79 billion compared to analysts’ projections of $4.82 billion. 
NXP Semiconductors — Shares rose 1% after the chipmaker posted its latest quarterly earnings results. NXP reported $3.43 in adjusted earnings per share on $3.3 billion in revenue. Analysts had estimated $3.29 earnings per share and revenue of $3.21 billion, according to Refinitiv. The company’s projected third-quarter earnings also topped analysts’ estimates. 
F5 Networks — The cloud-based software company’s shares popped 7% after posting a top- and bottom-line beat in its fiscal third quarter. F5 posted adjusted earnings of $3.21 per share on revenue of $703 million. Analysts called for $2.86 in earnings per share and revenue of $699 million, according to Refinitiv. More

The AMC Empire 25 off Times Square is open as New York City’s cinemas reopen for the first time in a year following the Covid-19 shutdown, March 5, 2021.
Angela Weiss | AFP | Getty Images

Check out the companies making headlines in midday trading.
AMC Entertainment — Shares of the movie theater chain surged 30%. On Friday, a judge blocked a proposed settlement on the company’s stock conversion plan, which would have enabled the company to issue more shares to allow it to pay down some of its debt. Separately, AMC said it saw its biggest attendance and admissions revenue in a single weekend since 2019, nodding to the hype around the “Barbenheimer” phenomenon.

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IMAX — The entertainment technology company jumped about 6% as Universal’s “Oppenheimer” drove moviegoers to IMAX screens. B. Riley analyst Eric Wold said the over-indexing of IMAX screens in movie theaters coming out of the Covid-19 pandemic reflects improving consumer demand toward the format.
Mattel — The toymaker gained 1.9% coming off the successful opening weekend of “Barbie,” the Warner Bros. Discovery movie based on Mattel’s iconic doll.
Chevron — The energy stock jumped 2.8% after the company released a preview of its quarterly results that showed stronger-than-expected earnings. Chevron reported $3.08 a share in adjusted profit, which beat Wall Street’s consensus estimate of $2.97, according to Refinitiv. The company’s board is waiving the mandatory retirement age for CEO Mike Wirth, allowing the firm more time to find a successor. Chevron also named a new chief financial officer.
Knight-Swift Transportation — The freight transportation company’s shares gained more than 1%. Late last week, the company posted a weaker-than-expected financial update for the second quarter. Knight-Swift reported adjusted earnings of 49 cents per share on revenue of $1.55 billion. Analysts expected 55 cents per share on revenue of $1.6 billion, according to Refinitiv.
Intuitive Surgical — The health-care stock declined 3.5%. Last week, the company posted stronger-than-expected earnings and revenue for its most recent quarter. Intuitive Surgical reported adjusted earnings of $1.42 per share on revenue of $1.76 billion. That was compared with estimates of $1.33 per share on revenue of $1.74 billion, according to Refinitiv.

Domino’s Pizza — Domino’s Pizza shares rose 1.6%. The fast-food chain reported mixed quarterly results, including adjusted earnings of $3.08 per share, beating analysts’ predictions for $3.05 per share. Excluding the effect from currency, Domino’s said global retail sales grew 5.8% during the period.
Becton Dickinson — The medical technology company saw shares jump more than 6% after Raymond James upgraded Becton Dickinson to outperform. The company received clearance from the U.S. Food and Drug Administration for its updated BD Alaris infusion system, which helps monitor patients’ vital signs and deliver medications, blood and other fluids.
Sirius XM — Shares of the audio entertainment company slid 14% after Deutsche Bank downgraded the stock to sell from neutral, citing its valuation after the share price doubled over the past month. The firm said the move was driven by technical factors, specifically high short interest, as well as buying from investors ahead of the Nasdaq rebalance.
Spotify — The music streaming company’s shares dropped 5.5% after Spotify announced price increases for its premium subscription plans. The company is scheduled to report its quarterly earnings Tuesday before the bell.
Gilead Sciences — Shares of the biopharmaceutical firm dropped 4%. On Friday, the company said it would discontinue its late-stage trial of a blood cancer treatment. Gilead noted it does not expect revenue from the treatment for 2023 and that associated 2023 operating expense reductions would be immaterial.
Estée Lauder — The beauty company saw its shares fall 1.4% after Piper Sandler downgraded the stock to neutral from overweight, citing expectations for slower China recovery tailwinds, weakening market share and lower brand preference among teenage consumers.
 — CNBC’s Hakyung Kim, Yun Li, Alex Harring and Samantha Subin contributed reporting. More

The market is pricing 25 basis point hikes for the Federal Reserve and the European Central Bank, but economists will be closely scrutinizing communications on their future rate paths.
The Bank of Japan faces a different challenge, and is expected to keep its -0.1% short-term interest rate target despite inflation consistently exceeding target and signs of the economy heating up.

With the Bank of Japan maintaining its ultra dovish stance of negative interest rates, the rate differentials between the U.S. and Japan’s central bank will persist, said Goldman Sachs economists.
Bloomberg | Bloomberg | Getty Images

The U.S. Federal Reserve, Bank of Japan and European Central Bank will all announce key interest rate decisions this week, with each potentially nearing a pivotal moment in their monetary policy trajectory.
As Goldman Sachs strategist Michael Cahill put it in an email Sunday, “This should be a momentous week.”

“The Fed is expected to deliver what could be the last hike of a cycle that has been one for the books. The ECB will likely signal that it is coming close to the end of its own cycle out of negative rates, which is a big ‘mission accomplished’ in its own right,” Cahill, a G10 FX strategist, said.
“But as they are coming to a close, the BoJ could out-do them all by finally getting out of the starting blocks.”
The Fed
Each central bank faces a very different challenge. The Fed, which concludes its monetary policy meeting on Wednesday, last month paused its run of 10 consecutive interest rate hikes as it waited to see where inflation was headed.
The subsequent figures for June showed that consumer price inflation stateside fell to its lowest annual rate in more than two years, but the core CPI rate, which strips out volatile food and energy prices, was still up 4.8% year on year and 0.2% on the month.
Policymakers reiterated their commitment to bringing inflation down to the central bank’s 2% target, and the latest data flow has reinforced the impression that the U.S. economy is proving resilient.

The market is all but certain that the Federal Open Market Committee will opt for a 25 basis point hike on Wednesday, taking the target fed funds rate to between 5.25% and 5.5%, according to the CME Group FedWatch tool.
Yet with inflation and the labor market now cooling consistently, Wednesday’s expected hike could mark the end of a 16-month run of almost constant monetary policy tightening.
“The Fed has communicated its willingness to raise rates again if necessary, but the July rate hike could be the last — as markets currently expect — if labor market and inflation data for July and August provide additional evidence that wage and inflationary pressures have now subsided to levels consistent with the Fed’s target,” economists at Moody’s Investors Service said in a research note last week.
“The FOMC will, however, maintain a tight monetary policy stance to aid continued softening in demand and consequently, inflation.”

This was echoed by Steve Englander, head of global G10 FX research and North America macro strategy at Standard Chartered, who said the debate going forward will be over the guidance that the Fed issues. Several analysts over the past week have suggested that policymakers will remain “data dependent,” but push back against any talk of interest rate cuts in the near future.
“There is a good case to be made that September should be a skip unless there is a significant upside inflation surprise, but the FOMC may be wary of giving even mildly dovish guidance,” Englander said.
“In our view the FOMC is like a weather forecaster who sees a 30% chance of rain, but skews the forecast to rain because the fallout from an incorrect sunny forecast is seen as greater than from an incorrect rain forecast.”
The ECB
Downside inflation surprises have also emerged in the euro zone of late, with June consumer price inflation across the bloc hitting 5.5%, its lowest point since January 2022. Yet core inflation remained stubbornly high at 5.4%, up slightly on the month, and both figures still vastly exceed the central bank’s 2% target.
The ECB raised its main interest rate by 25 basis points in June to 3.5%, diverging from the Fed’s pause and continuing a run of hikes that began in July 2022.
The market is pricing in a more than 99% chance of a further 25 basis point hike upon the conclusion of the ECB’s policy meeting on Thursday, according to Refinitiv data, and key central bank figures have mirrored trans-Atlantic peers in maintaining a hawkish tone.
ECB Chief Economist Philip Lane last month warned markets against pricing in cuts to interest rates within the next two years.
With a quarter-point hike all but predetermined, as with the Fed, the key focus of Thursday’s ECB announcement will be what the Governing Council indicates about the future path of policy rates, said BNP Paribas Chief European Economist Paul Hollingsworth.

“In contrast to June, when President Christine Lagarde said that ‘it is very likely the case that we will continue to increase rates in July’, we do not expect her to pre-commit the Council to another hike at September’s meeting,” Hollingsworth said in a note last week.
“After all, recent comments suggest no strong conviction even among the hawks for a September hike, let alone a broad consensus to signal its likelihood already this month.”
Given this lack of an explicit direction, Hollingsworth said traders will be reading between the lines of the ECB’s communication to try to establish a bias toward tightening, neutrality or a pause.
At its last meeting, the Governing Council said its “future decisions will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary.”

BNP Paribas expects this to remain unchanged, which Hollingsworth suggested represents an “implicit bias for more tightening” with “wiggle room” in case incoming inflation data disappoints.
“The message in the press conference could be more nuanced, however, suggesting that more might be needed, rather than that more is needed,” he added.
“Lagarde could also choose to reduce the focus on September by pointing towards a possible Fed-style ‘skip’, which would leave open the possibility of hikes at subsequent meetings.”
The Bank of Japan
Far from the discussion in the West about the last of the monetary tightening, the question in Japan is when its central bank will become the last of the monetary tighteners.
The Bank of Japan held its short-term interest rate target at -0.1% in June, having first adopted negative rates in 2016 in the hope of stimulating the world’s third-largest economy out of a prolonged “stagflation,” characterized by low inflation and sluggish growth. Policymakers also kept the central bank’s yield curve control (YCC) policy unchanged.
Yet first-quarter growth in Japan was revised sharply higher to 2.7% last month while inflation has remained above the BOJ’s 2% target for 15 straight months, coming in at 3.3% year on year in June. This has prompted some early speculation that the BOJ may be forced to finally begin reversing its ultra-loose monetary policy, but the market is still pricing no revisions to either rates or YCC in Friday’s announcement.

Yield curve control is usually a temporary measure in which a central bank targets a longer-term interest rate, then buys or sells government bonds at a level necessary to hit that rate.
Under Japan’s YCC policy, the central bank targets short-term interest rates at -0.1% and the 10-year government bond yield at 0.5% above or below zero, with the aim of maintaining the inflation target at 2%.
Barclays noted Friday that Japan’s output gap — the difference between actual and potential economic output — was still negative in the first quarter, while real wage growth remains in negative territory and the inflation outlook is uncertain. The British bank’s economists expect a shift away from YCC at the central bank’s October meeting, but said the vote split this week could be important.
“We think the Policy Board will reach a majority decision, with the vote split between relatively hawkish members emphasizing the need for YCC revision (Tamura, Takata) and more neutral members, including Governor Ueda, and dovish members (Adachi, Noguchi) in the reflationist camp,” said Christian Keller, head of economics research at Barclays.
“We think this departure from a unanimous decision to maintain YCC could fuel market expectations for future policy revisions. In this context, the July post-MPM press conference and the summary of opinions released on 7 August will be particularly important.”
Clarification: This story has been updated to clarify that the Fed last month paused its run of 10 consecutive interest rate hikes as it waited to see where inflation was headed. More

An AMC Theatre on March 29, 2023 in New York City. AMC Entertainment shares jumped as much as 13%, following a report that Amazon was looking to buy the theater chain. 
Leonardo Munoz | Corbis News | Getty Images

Check out the companies making headlines in morning trading.
AMC Entertainment — Shares popped 37% after a judge on Friday denied a proposed settlement related to AMC Entertainment’s plan to convert preferred shares into common stock. The company said it has filed a revised stock plan. Preferred shares lost about 2% before the bell.

Domino’s Pizza — The stock lost nearly 4% in premarket trading after Domino’s reported mixed quarterly results. The company reported earnings of $3.08 a share on $1.02 billion in revenue. Analysts surveyed by Refinitiv had looked for EPS of $3.05 on revenues of $1.07 billion.
Mattel — The toymaker gained 1.5% after the movie based on one of its doll, Barbie, posted strong opening weekend box office numbers. Warner Bros. Discovery, the parent of the studio that made the film, rose 0.9%.
Tesla — The electric vehicle stock lost more than 1% after UBS downgraded shares to an underweight rating, saying that the recent uptick fully accounts for the demand boost prompted by recent price cuts.
American Express — The financial services stock lost nearly 2% before the bell after Piper Sandler downgraded shares to underweight and trimmed its price target. The firm cited concerns over the company hitting its revenue and profit growth targets.
UPS — Shares lost more than 1% before the bell as roughly 340,000 employees prepare to go on strike nationwide.

Shopify — The e-commerce stock popped 2.5% after MoffettNathanson upgraded shares to an outperform rating, saying that Shopify’s enterprise business is approaching an inflection point.
Chevron — Shares jumped 0.5% after Chevron announced long-time company veteran Eimear Bonner would become the next chief financial officer next year. The company reported preliminary second-quarter earnings results Sunday evening. Chevron posted adjusted earnings of $3.08 a share, which topped analysts’ estimates.
— CNBC’s Alex Harring and Hakyung Kim contributed reporting More

International investment firms have changed their China GDP forecasts nearly every month so far this year, with JPMorgan making six adjustments since January.
That’s according to CNBC analysis of the firms’ notes.
The average prediction among six firms studied by CNBC now stands at 5.1%, close to the “around 5%” target Beijing announced in March.

Workers load goods for export onto a crane at a port in Lianyungang, Jiangsu province, China June 7, 2019.

BEIJING – International investment firms have changed their China GDP forecasts nearly every month so far this year, with JPMorgan making six adjustments since January.
That’s according to CNBC analysis of the firms’ notes. JPMorgan did not immediately respond to a request for comment.

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The U.S. investment bank most recently cut its China GDP forecast in July to 5%, down from 5.5% previously.
That came alongside cuts this month by Citi and Morgan Stanley to 5%.

The average prediction among six firms studied by CNBC now stands at 5.1%, close to the “around 5%” target Beijing announced in March.
Citi’s latest forecast marks the firm’s fourth change this year. Morgan Stanley has only adjusted its forecast once since it was set in January.
During that same period, Nomura changed its forecast four times, while UBS adjusted it three times and Goldman Sachs changed forecasts twice.

The investment banks mostly revised their forecasts higher early this year after China’s initial rebound, following three years of strict Covid controls.

Quarter-on-quarter revisions 

The latest cuts come as recent economic data point to slower growth than expected, and authorities show little inclination to embark on large-scale stimulus. Second-quarter GDP rose by 6.3% from a year ago, missing the 7.3% growth that analysts polled by Reuters had predicted.
The disappointment in second-quarter GDP growth, however, is due to official revisions to China’s quarter-on-quarter growth last year, according to Rhodium Group’s Logan Wright and a team.
The resulting low figure helps Beijing make a case for supporting the economy, the analysts said in a July 17 report. “Understand what you are seeing in this year’s GDP data: these are artificially constructed narratives for various audiences, not reports on China’s economic performance.” 
The National Bureau of Statistics did not immediately respond to CNBC’s request for comment.
Instead of releasing multiple reads of data, the bureau discloses quarterly GDP relatively soon after the end of the period, and subsequently issues revisions.
The statistics bureau has also issued public statements about punishing local governments for falsifying data. The accuracy of official data in China has long been in question.
Goldman Sachs on Friday noted the seasonal revisions, but maintained its 5.4% forecast for China’s growth. “On net, we do not think the surprises are either consistent or large enough for us to make major adjustments to our China growth forecast this year.”

Non-official data

Researchers have sought alternatives to gauge growth.
One organization is the U.S.-based China Beige Book, which claims to regularly survey businesses in China in order to put out reports on the economic environment.
Earlier this year, the firm’s data “showed there was no revenge spending wave or a bombastic recovery,” said Shehzad Qazi, New York-based managing director at China Beige Book.
“Wall Street’s predictions of blockbuster growth in China were first based on hype, and then juiced up by China’s inflated GDP prints into early 2023.”
Qazi testified this month at a hearing of the U.S. House Select Committee on the Chinese Communist Party.
Investment bank research is often known as the “sell-side,” since it is meant to inform buyers about financial products and company stocks.
In the case of China, Qazi pointed out that “investment banks are not only incentivized to sell a ‘China booming’ story, but given their business interests in China, they are also unwilling to publish any views that can be seen as critical of China’s economy.”

Institutional predictions

The World Bank and International Monetary Fund also put out regular economic forecasts for China and other countries. However, their reporting schedule means that predictions may not fully match current the current economic situation.
In June, the World Bank raised its forecast for China’s growth this year to 5.6%, up from 4.3% previously.
The International Monetary Fund in April raised its forecast for China’s GDP to 5.2%, up from 4.4% previously. This month, its spokesperson noted that growth was slowing in China, and said an “updated forecast” would be reflected in the IMF’s next World Economic Outlook.  
Chinese officials have in the last several weeks emphasized the country is on track to reach its annual growth target of around 5%.
Among the six investment firms CNBC looked at, the highest China GDP forecast so far this year was JPMorgan’s 6.4% figure — when the bank adjusted for the second time in April alone.
In all, the range of the firm’s forecasts have spanned 1.4 percentage points, the most of any of those in the CNBC analysis.

Looking beyond 2023

Although businesses and investors have expressed uncertainty about China’s near-term economic trajectory, analysts expect growth in the world’s second-largest economy will still pick up in the longer term.
“Overall, there is a case emerging for a cyclical rebound in China’s economy in early 2024, even without any meaningful policy support in the second half of 2023,” the Rhodium analysts said.
They said that given four quarters, a steady household consumption recovery should help boost service sector employment, while industrial inventories will likely need restocking down the road. More