MARKET SNAP:At 06:00 a.m. ET, S&P 500 futures down 0.10%. Treasury yield higher at 2.31%. Nymex up 0.82% to $49.19; gold 0.71% lower at $1085.40. In Europe, FTSE 100 up 0.54%, DAX up 0.35% and CAC up 0.51%. In Asia, Nikkei 225 up 1.08% and Hang Seng down 0.49%.
WATCH FOR: 8:30 a.m. EDT. Weekly Jobless Claims. [Expected 270,000 vs. 255,000 in the previous week.]; 8:30 a.m. EDT. 2Q GDP, 1st read. [Expected 2.7% vs. 0.2% in 1Q.]
THE BREAKFAST BRIEFING
The first read on second-quarter GDP growth is released Thursday.
Economists surveyed by Dow Jones predict the economy expanded 2.7% from April to June after contracting 0.2% in the first three months of the year. If growth settles at 2.7% that would be roughly in line with where it's been the past several years.
Thursday's figure has added weight as the Fed tries to gauge whether weakness in the first quarter was just a one-off and that the recovery is back on track -- and enough for the central bank to increase rates this year.
Fed Chair Janet Yellen told Congress earlier this month that Fed policy makers anticipate liftoff will happen this year, but reiterated that their outlook is based on the expected path of the economy. If the data is strong enough, from the Fed's perspective, then it will raise rates. If it isn't, short-term borrowing costs will remain near zero -- where they've been since 2008.
Since the first quarter, the labor market has added an average 221,000 jobs each month, compared to 195,000 in the first three months of the year. And the unemployment rate has declined further to 5.3% in June.
It isn't all rosy though. A firmerU.S. dollar could crimp trade and keep a lid on inflation. And consumers are still shy to spend their savings at the pump. Retail sales were uneven during the spring and the Conference Board's consumer confidence index surprisingly tanked in July to its weakest level in nearly a year.
In the Fed's policy statement Wednesday, the central bank maintained its view that the economy is expanding "moderately" and that inflation is forecast to gradually ascend to its 2% target over the medium term. Still, it wants to see "some further improvement" before normalizing monetary policy.
Growth of 2.7% would surely demonstrate improvement from the first quarter's doldrums. But, because it follows such a dismal print, the Fed will likely want to see more upbeat evidence before upping rates.
"The July FOMC statement was slightly more upbeat about the data and suggested continued progress toward liftoff," wrote Bank of America Merrill Lynch U.S. economist Michael Hanson. He thinks liftoff will come in September.
With the data being the biggest factor in the Fed's decision on when to raise rates, Thursday's GDP growth report will shed light on how close the central bank is to acting.
Morning MoneyBeat Daily Factoid: On this day in 1976, Bruce Jenner, now known as Caitlyn Jenner, won the Olympic gold medal in the decathlon at the Montreal games.
-By Kristen Scholer
STOCKS TO WATCH
Time Warner Cableis projected to report second-quarter earnings of $1.80 a share, according to analysts surveyed by FactSet. The cable company earned $1.89 a share a year earlier.
ConocoPhillipsis forecast to earn 4 cents a share, down from $1.61 a share a year ago.
Mondelezis expected to post second-quarter earnings of 39 cents a share, down from 40 cents a share a year ago.
LinkedInis likely to post second-quarter earnings of 30 cents a share, down from 51 cents a share a year ago.
MUST READS (LINKS)
Fed, Citing Jobs, Stays on Track to Raise Rates: The Federal Reserve kept rates near zero but cited progress in the U.S. job market, a sign it remains on course to raise interest rates in September or later this year.
FOMC Closer to September Hike, Even If the Market Doesn't Think So: In assessing the changes to the June statement compared to the April statement, a number of commentators concluded that the statement did in fact move the central bank closer to its first interest-rate increase in nearly a decade.
Shell Posts Sharp Fall in Profit, to Cut 6,500 Jobs:Royal Dutch Shell reported a sharp fall in second-quarter profit and said it would cut 6,500 jobs, illustrating the strain sustained low oil prices are putting on large producers.
Deutsche Bank Profit Beats Forecasts, Driven by Investment Bank:Deutsche Bank on Thursday reported a sharp rise in second-quarter profit driven by unexpectedly strong investment banking revenues and lower overall taxes, but warned challenges remain.
Banks Pitch Swaps as Alternative to Buying Stock
: Banks are nudging certain hedge-fund clients to use derivatives instead of actual stocks when placing some bets, an effort aimed at lessening the impact of new capital rules on the banks' businesses.
UBS Deal Shows Clinton's Complicated Ties:After Secretary of State Hillary Clinton helped settle UBS's legal battle with the IRS in 2009, the Swiss bank increased donations to the Clinton Foundation.
Facebook, Google Tighten Grip on Mobile Ads:Facebook offered fresh evidence of its allure to deep-pocketed big brands, as it and Google increasingly take the lion's share of the fast-growing mobile advertising market.
Chevron and Exxon Get the Plaudits, but Some Smaller Drillers Faring Well:Giant oil companies are weathering the oil slump better than the average shale driller, but even their famous stability is at times being surpassed by much smaller companies that own some of the choicest U.S. oil-and-gas fields.
Carlyle and Apollo Find Selling Is Easy; Buying, Not So Much:
Private-equity firms reckon with high stock prices that make sales lucrative but purchases expensive
5 Things to Know If You Own a China Fund or ETF: U.S. investors holding China-stock mutual funds and exchange-traded funds have been watching the recent bloodbath in China's markets with a wary eye. But for U.S. fund investors, things may not be as bad as they seem.
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(END) Dow Jones Newswires
July 30, 2015 10:23 ET (14:23 GMT)
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