US equity markets are poised to open lower on Friday, erasing the gains from the previous session when the Dow Jones Industrial Average and the S&P 500 hit record highs following the Federal Reserve's 50-basis-point rate cut. Across the pond, the Bank of England held its ground, keeping interest rates steady at 5.00%. This cautious stance sent ripples through European markets, with the EuroStoxx 50 and Stoxx 600 both dipping by 0.6%.

The initial euphoria from the Fed's aggressive move has given way to a more measured outlook. Central banks worldwide have made their positions clear this week. The Bank of Japan maintained its 0.25% interest rate, and the People's Bank of China kept its one-year loan prime rate at 3.35%, defying some expectations for a cut. Japan's monetary policy remains a hot topic, especially after the surprise rate hike in July disrupted the carry trade. Analysts anticipate further tightening, but the exact timing remains uncertain, with two meetings left this year in October and December. In China, the PBOC has more room to maneuver following the Fed's cut, but no action has been taken yet. Rumors suggest Beijing might ease rules on non-local property buyers to boost the housing market, which has lifted developer shares despite ongoing concerns in the sector.

Adding to the cautious sentiment, FedEx shares plummeted 14% after reporting weaker-than-expected fiscal Q1 results. Investors are also bracing for the "triple witching" event, which could cause significant price swings due to the expiration of options and futures contracts.

Yesterday's session saw a robust rebound on Wall Street. The Nasdaq 100 surged 2.56%, the Russell 2000 climbed 2.1%, and the S&P 500 rose 1.7%. The Dow Jones lagged slightly, gaining 1.26%. Investors snapped up a variety of stocks, shunning utilities and consumer staples. Despite research firms touting these sectors as safe bets during rate cuts, investors are flocking back to tech favorites like Nvidia, finding them more appealing than staples like Mondelez or Colgate-Palmolive. Mid-cap stocks also had a moment, with the Russell 2000 making a notable appearance between the Nasdaq and the S&P 500, indicating a market push to reduce the discount on undervalued companies as borrowing costs fall. The equity market's exuberance is understandable: the Fed appears set on an aggressive rate-cutting path. In contrast, bonds remain a safe haven, with yields stable since the Fed's announcement, suggesting the fixed-income market had already priced in the move. The dollar was volatile but stayed near recent levels against other major currencies.

In corporate news, Nike's share price soared after hours following the announcement of a new CEO, marking a significant shift after a challenging period for the company.

In the Asia Pacific region, the week ended on a high note. Japan closed up 1.5%, Hong Kong gained 1.3%, India rose 1.5%, and South Korea edged up 0.5%. Australia was less buoyant, closing just above zero.

Today's economic highlights:

The agenda includes Japan’s rate decision, German Producer Price Index and UK Retail and French Business Confidence. The Baker Hughes domestic oil-and-gas rig count was published this morning, before a speech from Federal Reserve Bank of Philadelphia President Patrick Harker. The full agenda is here. 

The dollar is worth to EUR 0.8954 and GBP 0.7513. The ounce of gold remains firm at USD 2,600. Oil is steady, with North Sea Brent at USD 74.44 a barrel and US light crude WTI at USD 70.75. The yield on 10-year US debt is at 3.75%. Bitcoin is trading at USD 63,400.

In corporate news:

  • Nike leaps ahead by 8.4% before the opening bell, as the sportswear titan passed the baton from Chairman and CEO John Donahoe to the seasoned Elliott Hill, a Nike veteran sprinting back into the fray with thirty-two years of brand loyalty under his soles.
  • FedEx stumbles by 14% in pre-market trading, due to earnings down to $3.60 per share for the first half, a drop from last year's $4.55.
  • Johnson & Johnson ups the ante in its legal poker game, raising its settlement offer to over $8.2 billion for the myriad of lawsuits claiming its baby powder led to cancer, according to Bloomberg reports.
  • Macy's announces its plan to hire more than 31,500 full- and part-time employees for the holiday season. 
  • General Motors  recalled 449,671 vehicles in the United States over a brake fluid alert hiccup, as flagged by the vigilant National Highway Traffic Safety Administration on Friday.
  • Ford Motor is also on the recall road, bringing back more than 144,000 of its 2022-2024 Ford Maverick models due to a rearview camera that's freezing up when it should be backing up, as announced by the National Highway Traffic Safety Administration.

Analyst recommendations:

  • Agnc Investment Corp.: Wells Fargo upgrades to overweight from equal weight with a target price raised from USD ten to USD twelve.
  • Annaly Capital Management, Inc.: Wells Fargo upgrades to overweight from equal weight with a target price raised from USD nineteen to USD twenty-three.
  • Darden Restaurants, Inc.: Bernstein downgrades to market perform from outperform with a price target reduced from USD one hundred ninety to USD one hundred eighty.
  • Fedex Corporation: Fubon Securities downgrades to neutral from buy with a target price reduced from USD three hundred ten to USD three hundred.
  • Globant S.a.: Bradesco BBI initiates an Outperform recommendation with a target price of USD two hundred forty.
  • Pbf Energy Inc.: Piper Sandler & Co downgrades to underweight from neutral with a price target reduced from USD forty-seven to USD twenty-five.
  • Pepsico, Inc.: Morgan Stanley downgrades to equal weight from overweight with a target price of USD one hundred eighty-five.
  • Reddit, Inc.: B Riley Securities Inc. initiates a Buy recommendation with a target price of USD seventy-five.
  • Valero Energy Corporation: Piper Sandler & Co downgrades to neutral from overweight with a price target reduced from USD one hundred sixty-nine to USD one hundred twenty-three.
  • Dominion Energy, Inc.: Jefferies initiates a Hold recommendation with a target price of USD fifty-eight.
  • Wells Fargo & Company: Keefe Bruyette & Woods maintains its market perform recommendation with a target price reduced from sixty-one to USD sixty.
  • Deckers Outdoor Corporation: BNP Paribas Exane maintains its outperform recommendation and reduces the target price from one thousand one hundred eleven to USD one hundred eighty-five point twenty.
  • Sirius Xm Holdings Inc.: Pivotal Research Group maintains its buy recommendation and raises the target price from USD four to USD forty.
  • Burberry Group Plc: Jefferies downgrades to underperform from hold with a target price reduced from GBX eight hundred to GBX four hundred ninety.
  • Fevertree Drinks Plc: Goodbody downgrades to hold from sell with a target price of GBP eight point fifty.
  • Integrafin Holdings Plc: Peel Hunt upgrades to add from buy with a price target raised from GBX three hundred eighty-five to GBX four hundred.