While the attention in the global markets is completely focused on the Fed economic data and the balance sheets from the USA stand out as the main factors that guide the pricing before the Fed.
On Tuesday, the negative expectations about global growth, the upcoming Fed decision and the weak data announced were effective in the losses in the stock markets. US Consumer Confidence fell to the lowest level since February 2021, while new home sales fell more than expected in June to the lowest level in two years.
The International Monetary Fund (IMF) has lowered its global growth forecasts for this year and next, warning that the world economy may soon be on the verge of a complete recession.
In the US, the S&P 500 fell 1.15 percent and the Nasdaq 100 fell 1.95 percent. However, strong technology balance sheets following the close, mainly from Microsoft and Alphabet, supported stock futures indices. Initial trading in US stock futures pointed to a positive opening. Microsoft shares supported this rally, with futures gaining more than 5 percent.
However, the same optimism is not felt in Asian indices: Japan's Nikkei 225 made a limited premium; Hong Kong Hang Seng and China CSI 300 are negative.
Before the Fed decision, the US 10-year bond yield is flat at 2.80 percent. The Bloomberg Dollar Index is slightly down at 1.279.
Tech balance sheets give hope
The balance sheets released by US tech giants on Tuesday calmed concerns about how they would perform in the second half amid a slowdown in the economy.
Alphabet Inc., Microsoft Corp. and Texas Instruments Inc. announced two-digit quarterly revenue growth, while presenting optimistic expectations for the coming months.
Microsoft has announced a strong sales forecast for the newly started fiscal year. The software giant announced that it expects revenue and operational profit to grow in double digits in fiscal 2023. Microsoft executives said fluctuations in exchange rates would cut sales by about 4 percent in the fiscal year and about 5 percent in the current quarter, easing concerns that the strong U.S. dollar will have an even greater impact on the value of overseas sales.
Google's parent company Alphabet reported revenue of $57.5 billion in the second quarter, close to analyst expectations. The company's sales revenues showed that its advertising business – particularly search ads – is positioned to offset the drop in marketing spend.
Announcing its balance sheet last week, Snap Inc. and Twitter Inc. Its shares tumbled on the decline in online advertising. Chipmaker Texas Instruments also predicted sales revenue and profits will likely exceed Wall Street estimates this year.
Shares of Alphabet, Microsoft and Texas Instruments rose in futures after the close, while pushing the S&P 500 futures index higher. Balance sheets to be released this week Meta Platforms Inc., Qualcomm Inc., Apple Inc., Amazon.com Inc. and Intel Corp. It also gave morale before the balance sheets.
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