The July reading of the core personal consumption expenditures price (PCE) index is closely monitored by the Fed because it represents the prices of goods and services paid for and consumed solely by individuals. It excludes the more volatile food and energy costs. It showed price growth rose to 4.2% on an annual basis from the 4.1% rate recorded in June. Month over month, price growth remained relatively flat, according to the Bureau of Economic Analysis.

Barring a miracle, the last session of August is unlikely to bring Wall Street indices back into the green for the month: the backlog accumulated over the first three weeks is just too high.

Wall Street continued its upward trend on Wednesday for a fourth consecutive session. In Europe, things weren’t as rosy since Germany and Spain posted worse-than-expected inflation figures for August. In Germany, the downward trend continues, but at a slower pace than expected (6.1% year-on-year rise in prices). In Spain, consumer price inflation was more measured at 2.6%, but confirmed an upward trend, having fallen below the 2% mark in June. Both statistics have led to a slight upward revision of the ECB's rate hike forecasts for its September 14 meeting. And today, France added to worries that hawkish policies are on the way. Prices rose by 4.8% in August, after 4.3% in July. This rebound is mainly due to higher electricity and fuel prices.

In the United States, data is starting to point more towards a moderation in economic activity, and therefore less need for the Fed to apply a restrictive interest rate policy. Wall Street gained on Wednesday on the back of an ADP employment report suggesting that the labor market is (slightly) less overheated. At the same time, Q2 GDP was revised slightly downwards in its latest estimate, helping to maintain the climate of lower-than-expected statistics. CME's FedWatch tool, which tracks the future trend in interest rates, has just dropped below the 50% mark for the probability of a further rate hike in the US this year.

Meanwhile, it seems that there's always something wrong with Chinese statistics, and there has been for months. As soon as a sign of recovery appears somewhere, another part of the economy disappoints. This was illustrated again last night, with China's PMI indices remaining weak. The manufacturing activity indicator was slightly stronger than expected, at 49.7 points, but remained in contraction territory for the fifth consecutive month. The services PMI fell to 51.

Let's get away from this avalanche of "macro" figures. We can turn our attention this morning to Salesforce's results in the US (well received yesterday) and those of UBS overnight in Europe. Salesforce gained 5% in premarket trading after its robust earnings report showed that cost cuts were bearing fruits and demand was resilient. Meanwhile, Swiss bank UBS announced that it was closing Credit Suisse, launched a cost-cutting plan and secured a record profit. The Credit Suisse brand, which was too tarnished, will disappear altogether.

Wall Street hasn’t reacted much to PCE inflation. Dow Jones Futures were up 0.5% this morning, S&P 500 futures gained 0.3% and Nasdaq 100 futures inched up 0.1%.

Economic highlights of the day:

In addition to Chinese PMI indicators and European August inflation, we have PCE inflation and household income and spending, the Challenger survey on layoffs and weekly jobless claims. The full agenda is here. 

The dollar is up to EUR 0.9197 and GBP 0.7888. The ounce of gold is up to USD 1945. Oil is firm, with North Sea Brent at USD 86.02 a barrel and US light crude WTI at USD 82.34. The yield on 10-year US debt falls to 4.11%. Bitcoin is trading at around USD 27,200.

In corporate news:

  • Salesforce jumped 5.6% in pre-market trading, as the business software company reported better-than-expected second-quarter earnings and raised its sales forecast for the current quarter.
  • Microsoft will dissociate its Teams messaging service from its Office office suite and facilitate the integration of competing products into its software, the group said on Thursday, anxious to avoid a possible fine from the European Commission.
  • Goldman Sachs - TxB, the transaction banking arm of the US investment bank, has decided not to work with new high-risk clients in the fintech sector following a warning from the Fed to do so, the Financial Times reported on Thursday.
  • Tesla - The automaker is under federal investigation in the United States over the claimed range performance of its electric vehicles, following a Reuters article published in July that showed these to be exaggerated, the Wall Street Journal reported on Wednesday.
  • Chewy - The online pet food retailer was down 1.5% in after-hours trading following the publication of a sales forecast for the current quarter below Wall Street expectations.

Analyst recommendations:

  • Oshkosh: Argus Research Corp analyst John Eade raised the recommendation on Oshkosh Corp. to buy from hold.
  • Hanover: BMO Capital Markets analyst Michael Zaremski raised the recommendation on Hanover Insurance Group Inc. to outperform from market perform.
  • Nvidia: GuoSen Securities Co Ltd initiated coverage of Nvidia Corp. with a recommendation of buy.
  • Palantir Technologies: Morgan Stanley lowers its recommendation from in line to underweight.