Top 5 Things to Know in the Market on Thursday

Here are the top five things you need to know in financial markets on Thursday, July 28:

1. Google Earnings Report Imminent as S&P 500 Companies Announce Results
The second quarter earnings season continues to unfold on Thursday with numerous reports expected. Overall, the reporting season has exceeded initial expectations, leading analysts to revise projected earnings declines for companies down to 3.0%, from the previously anticipated 4.7%, according to Thomson Reuters. The spotlight on Thursday will be on Alphabet, Google’s parent company, which will report its earnings after the market closes. Other companies in the S&P 500 set to release their quarterly numbers include Dow Chemical, Colgate-Palmolive, Ford, Mastercard, Hershey, The New York Times, Harley-Davidson, and Bristol-Myers Squibb.

2. Federal Reserve Rate Hike Unlikely for 2016
Futures tied to Federal Reserve funds point towards no rate hike this year following the Fed’s decision to maintain existing monetary policy on Wednesday. In its policy statement, the Fed indicated that "near-term risks to the economic outlook have diminished," and acknowledged improvements in the labor market. However, many markets were hoping for stronger signals regarding potential moves in September, and the Fed fell short. The probability of a December rate move has now dropped below 50%, with attention now turning to the March 15, 2017 policy meeting. According to recent data, the likelihood of a hike in September has decreased to 18%.

3. Gold Prices Surge to 2-Week Highs
In response to the Fed’s lack of guidance on future rate hikes, the price of gold rose by 1% on Thursday, reaching its highest point in two weeks. Gold is particularly responsive to changes in U.S. interest rates, with a gradual increase seen as less detrimental to its price compared to rapid rate hikes. Additionally, a weakened U.S. dollar, as measured against a basket of six major currencies, supported gold prices.

4. Bank of Japan Under Pressure for Monetary Easing
The Bank of Japan is facing pressure to enhance its monetary policy ahead of its upcoming policy decision to be announced after U.S. market hours. Following a 28 trillion yen ($267 billion) stimulus package unveiled by Prime Minister Shinzo Abe, the country’s Minister of Economy, Nobuteru Ishihara, commented on the need for robust economic measures. However, some analysts believe the stimulus may be insufficient, noting that only 7 trillion yen of the package is allocated for direct fiscal spending, sparking discussions about further asset purchases due to emerging economic risks.

5. Mixed Global Stock Performance Post-Fed Announcement
Global stocks experienced mixed movements on Thursday following the Fed’s positive outlook for the U.S. economy, with investors expressing concern that the Bank of Japan might not implement as aggressive monetary easing as anticipated. Markets are currently processing the implications of the Fed’s statement alongside numerous earnings reports. U.S. futures indicate a slight uptick in the market open, with major indices close to all-time highs. As of 9:53 AM GMT, the Dow Jones Industrial Average was up 27 points (0.15%), the S&P 500 increased by 4 points (0.17%), and the Nasdaq climbed 5 points (0.11%).