Fed interest rate hike decision in focus, earnings season continues

EU markets edge higher as investors prepare for final Fed decision

European markets edged higher on Wednesday morning as investors prepared to hear the final Federal Reserve decision on interest rate hikes.

The DAX was 0.20% higher in early trade on Wednesday, the CAC 40 gained 0.80% and the FTSE 100 was up by 0.61%.

The Federal Reserve is set to complete a two-day meeting later today and announce an interest rate hike. Markets are largely anticipating a 75-basis points hike, with only a small chance of a supersised 100-basis points hike.

Oil prices higher on Wednesday as demand concerns offset U.S. crude stock drawdown

Oil prices climbed higher on Wednesday as demand concerns offset US crude stock drawdown.

Brent Crude futures were 1.24% higher and valued at $100.69 a barrel while West Texas Intermediate (WTI) futures grew by 1.43% and were valued at $96.42 a barrel.

In addition, the prospect that the US Federal Reserve will announce an aggressive interest rate rise later on Wednesday weighed on sentiment.

On Tuesday, the Biden administration said that it will sell an additional 20 million barrels of oil from the country’s Strategic Petroleum Reserve as part of a previously announced plan to tap the facility to calm oil prices boosted by Russia’s invasion of Ukraine and a recovery in demand following the COVID-19 pandemic.

Gold futures higher

Gold futures edged slightly higher on Wednesday morning, rising by 0.17% and costing $1,720.55/oz.

Silver futures also followed the positive trend, up by 0.70%, platinum futures were 0.49% higher and palladium futures grew by 0.34%.

Earnings season continues 

Publicly traded companies continue to post their results. Last night Alphabet Inc. (Google’s parent company) and Microsoft announced that they did not manage to reach earnings expectations.

Alphabet reported that this quarter saw its lowest quarterly sales growth in two years as macroeconomic pressures weigh on the market for digital advertisements. The company posted $69.69 billion Q2 revenue, up 13% from the same period last year. This, however, was the company’s slowest rate of growth. Alphabet (GOOGL) shares were nearly 4% higher in pre-market trade.

Microsoft Co. also missed its revenue estimate but issued a rosy income forecast for the year ahead. The company reported that its revenue amounted to $51.87 billion, vs. the $52.44 billion expected by analysts. This was the company’s also slowest revenue growth in two years, at 12% year over year in the quarter. The company’s earnings per share fell short of consensus for the first time since 2016. Microsoft shares (MSFT), however, were bullish in pre-market trade, rising by 3.71%.

GSK boosts full-year forecast

GSK, the British pharmaceutical industry company, lifted its full-year forecast on Wednesday, helped by reinvigorated demand for its blockbuster Shingrix vaccine.

The company now expects that its 2022 sales will rise 6% to 8% and adjusted operating profit to increase by 13% to 15%. Previously, the company had forecasted full-year sales to grow 5% to 7% and adjusted operating profit to rise 12% to 14%.

GSK shares (GSK) were 0.71% higher in early trade.

Reckitt posts 11.9% rise in quarterly like-for-like sales, beats expectations 

Reckitt Benckiser, the British maker of Dettol and Lysol cleaning products, said that its revenue rose by 11.9%, on a constant currency basis, ahead of the 6.8% growth analysts had expected.

The company’s stock (RKT) was 5.04% higher following the news.

Danone raises annual sales outlook 

The French food company, Danone, raised its annual sales outlook after its second quarter like-for-like sales beat analysts’ estimates on strong demand for baby food and bottled water, even as the company had raised prices.

The company saw an 11.4% jump in sales of the Specialised Nutrition business, which includes infant milk formula and medical nutrition. In addition, Danone said that it expects its yoghurt sales to grow at 5-6% in 2022 compared with the previous 3-5% forecast.

Danone reported quarterly like-for-like sales growth of 7.7%, compared to analyst estimates of 5.6%.

Despite the positive news, Danone shares (BN.PA) were 0.65% lower.

Deutsche Bank extends profit streak in Q2

Deutsche Bank extended its profit streak in the second quarter of 2022, however, warned about the economy outlook.

The company reported a 51% rise in its Q2 profit on Wednesday as investment banking revenues rose. Net profit attributed to shareholders was 1.046 billion euros ($1.06 billion), this compares with a profit of 692 million euros a year earlier and exceeds analyst expectations for a profit of around 788 million euros.

“The months ahead will continue to be challenging. There is reason to believe that things will become even more difficult economically,” the bank’s CEO, Christian Sewing, wrote in a note.

The company’s stock (DBK) was 3.53% lower despite the positive news.

Mercedes-Benz raises outlook after higher Q2 earnings

The German luxury vehicles company, Mercedes-Benz, had raised its outlook on yearly revenues as the company reported a jump in its Q2 earnings.

According to the firm, in the second quarter of 2022 it saw an 8% jump in adjusted earnings to 4.9 billion euros ($4.97 billion).

Previously, the carmaker expected only slightly higher revenues this year and earnings equal to last year. Uncertainty due to the war in Ukraine, high inflation, interest rate hikes and the pandemic, particularly in China could all weigh on the business, the company warned.

Top cryptocurrencies bullish as BTC stays above $23,000 levels

Top cryptocurrencies were bearish on Wednesday morning as bitcoin (BTC) continued its rally at the $21,000 level.

Ethereum (ETH), however, was 0.38% higher in the past 24 hours.

BNB saw small losses, dipping by 0.66%, Cardano (ADA) fell by 0.34% and Solana (SOL) dipped by 0.49%.

The popular Elon Musk-endorsed memetoken Dogecoin (DOGE) was 0.21% lower.

Note, cryptocurrency CFD trading is restricted in the UK for all retail clients.