Trump's Fed Decision Could Launch Market 'Fireworks'

Equity futures are mixed on Thursday morning as investors contend with a mixed bag of June quarter earnings results and reports that President Trump will continue his passive-aggressive attack on the Fed.

Trump will reportedly visit the Federal Reserve at 4 p.m. ET on Thursday, the first time in nearly two decades that an American president has made an official trip. Odds are, Trump will press his case for rate cuts, but we expect Chair Jerome Powell will remain firm, especially with the central bank in between policy meetings and much data to come before its September rate cut decision. That could prompt some headline fireworks after the market close, setting the stage for how we end the current trading week.

While we wait to see what unfolds from that visit and whether there are any additional trade deals announced on Thursday, the market is benefitting from better-than-expected earnings reports from our own Alphabet GOOGL and ServiceNow NOW on Wednesday night, and Labcorp LH on Thursday morning, as well as those from T-Mobile TMUS, Las Vegas Sands LVS and others. However, those positives are being tempered by the market’s reaction to underwhelming results from Tesla TSLA, cut comp sales guidance from Chipotle CMG, soft software sales at IBM IBM and a steep loss at Dow DOW that spurred a surprise dividend cut.

In between another round of corporate earnings on Thursday morning and after Thursday's market close, at 9:45 a.m. ET, S&P Global SPGI will publish its Flash July PMI report, and what it reveals will be a fresh take on the speed of the domestic economy, the pace of hiring and inflation pressures at the start of the current quarter. We’ll be parsing those comments, looking to see the direction and velocity of those items relative to the last few months of the June quarter. The anecdotal insights from survey respondents and what they say about the impact of tariffs should also be insightful.

That's interesting timing for this report as Trump heads to visit Powell.

We are also seeing the latest victories in the IPO market with offerings from Accelerant Holdings ARX and McGraw Hill (MH). While Accelerant priced its transaction at $21, above the targeted $18 to $20 range, McGraw Hill’s landed at $17, below the expected $19 to $22. Let's remember that pricing of an IPO is one thing, but how it trades in the aftermarket is another. When it comes to judging the tone of the IPO market, we'll continue to weight both, especially following the sharp move higher that unfolded after CoreWeave's CRWV less-than-stellar IPO pricing.

Coming up, we’ll have our larger thoughts on quarterly results from Alphabet, ServiceNow and Labcorp, as well as United Rentals URI. Given the importance of comments and other items discussed on quarterly earnings calls, and the timing of those calls for Labcorp and United Rentals on Thursday morning, you should expect alerts on GOOGL and NOW shares first. In those comments, we’ll be reviewing what drove their respective quarters, and of course, our price targets as necessary.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long GOOGL, NOW, LH and URI.