Over in Japan, the Nikkei index strutted its stuff with a 1.2% rise, shaking off its earlier blues. In Europe, the STOXX 600 index enjoys a 1.3% boost, with the banking sector feeling particularly chipper. Meanwhile, on the other side of the Atlantic, Nasdaq futures decided to join the fun, climbing by 1.3%. Not to be outdone, Dow Jones and S&P 500 futures rose by 0.8% and 1.1%, respectively. Major tech stocks like Nvidia and Amazon were in high spirits, each bouncing back with a 2% rise in premarket trading. In short, it’s a good day to be an investor, unless you’re rooting for the yen.

The stock market's rollercoaster ride in the first half of the year has left investors feeling queasy. Some see the recent downturn as a necessary correction, others think it's unfinished business, and a third group believes it's just plain wrong.

Volatility remains high, causing erratic market movements. Yesterday saw the end of the market chaos seen on Monday. The Nasdaq 100 managed a 1% gain after peaking at 2.6% earlier in the day. The semiconductor sector, led by Nvidia, took a much-needed breather. Rising U.S. bond yields suggest that the doomsday scenarios ("The Fed will have to cut rates immediately!") were probably overblown. Jerome Powell won't be burned at the stake just yet. The VIX volatility index, which measures market tension, has plummeted at its fastest rate since 2010, after climbing at its fastest rate since 2008. When records and counter-records are set within 24 hours, you know there's some excess. The VIX remains high, indicating that not all fears have evaporated.

Calls for calm from political, financial, and monetary leaders seem to be working, along with some savvy tactical moves. A JPMorgan forex manager noted that 50-60% of the most aggressive yen carry trades had been unwound, suggesting the market had absorbed most of the shock. Goldman Sachs revealed that hedge funds took advantage of the dip to strengthen their positions in battered sectors. The bank's data shows that the previous day's session was the most active in five months for these funds, especially in U.S. tech stocks.

China's July exports disappointed, while imports exceeded expectations. The duality of Chinese data continues as the country faces potential new measures from the U.S. The Biden administration wants to limit Chinese components in modern vehicles to avoid data leaks or sabotage. This move is reminiscent of the Huawei ban and is unlikely to help China's recovery or ease trade tensions.

Today's economic highlights:

Few indicators today, apart from the DOE's US oil inventories. The full agenda is here.

The dollar is worth EUR 0.9160 and GBP 0.7857. The ounce of gold is down to USD 2,404. Oil regained some ground, with North Sea Brent at USD 78.10 a barrel and US light crude WTI at USD 74.31. The yield on 10-year US debt inches up to 3.93%. Bitcoin is trading at USD 57,500.

In corporate news:

  • Walt Disney reported quarterly results ahead of Wall Street expectations on Wednesday, buoyed by the success of its Pixar subsidiary's animated film "Inside Out 2", offsetting lower theme park profits. The stock gained 1.4% in pre-market trading.
  • Hilton Worldwide raised its profit forecast for this year on Wednesday, saying it was counting on continued strong demand for international travel, particularly in Asia-Pacific, Latin America, and Europe.
  • Airbnb on Tuesday forecast third-quarter sales below Wall Street estimates and reported lower second-quarter earnings, due to weaker demand from US customers. The stock lost 16% before the opening.
  • Lyft fell by 6.2% in pre-market trading, as the VTC services specialist announced moderate forecasts for the current quarter on Wednesday, overshadowing its strong second-quarter results.
  • Tripadvisor reported below-consensus sales on Tuesday, and was down 13.5% before the opening.
  • Super Micro Computer on Tuesday forecast first-quarter earnings below consensus, although the company is counting on strong demand for its artificial intelligence servers. The stock lost 11.1% before the opening, dragging down its competitor Dell Technologies, which dropped 2.4% in pre-market trading.
  • Instacart on Tuesday forecast third-quarter operating profit ahead of Wall Street estimates, betting on higher transaction and advertising costs and a greater number of orders.
  • Reddit on Tuesday forecast third-quarter sales above consensus, as the recovery in the digital advertising market continues. The stock nevertheless lost 1.5% before the opening, its second-quarter results having disappointed.
  • Rivian on Tuesday maintained its forecast of stagnant production this year and said it expected slightly lower deliveries in the third quarter. The electric vehicle manufacturer is working to rebuild its inventories following a plant closure in April designed to cut costs. The stock fell by 6.3% in pre-market trading.
  • CVS Health on Wednesday lowered its profit forecast for this year, due to rising medical costs in its health insurance division. The stock is down 3.6% in pre-market trading.
  • Amgen reported a drop in second-quarter earnings on Tuesday, as higher expenses weighed on the balance sheet, despite a 20% jump in sales linked to the acquisition of Horizon Therapeutics in October. The stock lost 2.7% before the opening.
  • Devon Energy - The oil and gas producer reported above-consensus earnings on Tuesday, thanks to higher oil prices.
  • V.F. Corp - On Tuesday, VF Corp reported a smaller-than-expected drop in first-quarter sales, thanks to the recovery of its activities in China and lower inventories. The share price advanced by 8% before the opening.
  • Warner Bros is due to publish its results on Wednesday.
  • Lumen Technologies raised its free cash flow estimates for the year on Tuesday, betting on AI-related demand to support growth in its connectivity solutions. The stock soared 43% before the opening.
  • Fortinet raised its annual sales forecast on Tuesday, as companies spend more to protect their digital assets and operations against cyber-attacks. The stock advanced by 16.4% before the opening.
  • Mosaic - The fertilizer producer missed market estimates for second-quarter earnings on Tuesday, penalized by lower input prices.

Analyst recommendations:

  • American Airlines Group Inc.: Baptista Research downgrades to buy from outperform with a price target reduced from USD 16.80 to USD 11.90.
  • Amgen Inc.: Wells Fargo downgrades to equalweight from overweight with a price target raised from USD 320 to USD 335.
  • Aramark: Deutsche Bank upgrades to buy from hold with a price target raised from USD 36 to USD 39.
  • Bristol-Myers Squibb Company: Baptista Research downgrades to underperform from outperform with a target price reduced from USD 53.50 to USD 50.50.
  • Builders Firstsource, Inc.: Baird upgrades to outperform from neutral with a price target raised from USD 185 to USD 190.
  • Fortinet, Inc.: HSBC upgrades to hold from reduce with a price target raised from USD 46 to USD 59.
  • Globus Medical, Inc.: Wells Fargo upgrades to overweight from equalweight with a target price raised from USD 60 to USD 78.
  • Moderna, Inc.: Deutsche Bank downgrades to hold from sell with a price target reduced from USD 85 to USD 80.
  • Pfizer, Inc.: Daiwa Securities upgrades to outperform from neutral with a price target raised from USD 28 to USD 34.
  • Procter & Gamble Company: Baptista Research downgrades to underperform from hold with a price target raised from USD 174 to USD 176.
  • Skechers U.S.A., Inc.: Baptista Research upgrades to buy from hold with a price target raised from USD 73.30 to USD 81.30.
  • V.F. Corporation: Zacks upgrades to neutral from underperform with a price target raised from USD 14 to USD 17.
  • Airbnb, Inc.: Wells Fargo maintains its underweight recommendation and reduces the target price from USD 129 to USD 100.
  • Bath & Body Works, Inc.: Barclays maintains its equalweight recommendation and reduces the target price from USD 45 to USD 32.
  • Celsius Holdings, Inc.: Morgan Stanley maintains its market weight recommendation and reduces the target price from USD 68 to USD 50.
  • Cirrus Logic, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 110 to USD 140.
  • Exelixis, Inc.: Leerink Partners maintains its market perform recommendation and raises the target price from USD 19 to USD 25.
  • Lululemon Athletica Inc.: Barclays maintains its equalweight recommendation and reduces the target price from USD 338 to USD 263.
  • Qualys, Inc.: Truist Securities maintains its hold recommendation with a price target reduced from USD 165 to USD 130.
  • Sunrun Inc.: Truist Securities maintains its hold recommendation with a price target raised from USD 12 to USD 18.
  • Super Micro Computer, Inc.: Wells Fargo maintains its equalweight recommendation and reduces the target price from USD 890 to USD 650.
  • Trex Company, Inc.: Stifel maintains its buy recommendation and reduces the target price from USD 110 to USD 85.
  • Unity Software Inc.: Jefferies remains at hold with a price target reduced from USD 24 to USD 16.
  • UWM Holdings Corporation: Deutsche Bank maintains its hold recommendation with a price target raised from USD 7 to USD 9.
  • V.F. Corporation: JP Morgan maintains its neutral recommendation and raises the target price from USD 12 to USD 17.
  • Vornado Realty Trust: Evercore ISI maintains its underperform recommendation and raises the target price from USD 24 to USD 31.
  • Abrdn Plc: Autonomous Research downgrades to underperform from neutral with a price target reduced from GBP 1.80 to GBP 1.50.
  • Asos Plc: Oddo BHF downgrades to neutral from underperform with a price target raised from GBP 3.40 to GBP 95.
  • BP Plc: RBC Capital downgrades to sector perform from outperform with a target price reduced from GBX 650 to GBX 550.
  • DS Smith Plc: Barclays downgrades to equalweight from overweight with a price target raised from GBP 4.20 to GBP 4.35.
  • Hammerson Plc: Stifel upgrades to buy from hold with a price target raised from GBX 25 to GBX 32.
  • Johnson Matthey Plc: AlphaValue/Baader Europe upgrades to add from reduce with a price target reduced from GBX 1814 to GBX 1775.
  • Mondi Plc: Barclays upgrades to equalweight from underweight with a price target raised from GBP 13.80 to GBP 14.70.