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Morning Brief

Fed statement looms with positive momentum in evidence

Key Points


U.S. stock futures are higher this morning as investors await the outcome of the latest Fed policy meeting. Wall Street is coming off a mixed session, though the major averages wiped out most of their mid-session losses with the S&P 500 and Nasdaq managing to finish Tuesday higher.

Japanese stocks rebounded from Tuesday's sell-off as Japanese media agency Jiji reported the government of Prime Minister Shinzo Abe will compile a stimulus package of more than $265 billion to support Japan's flagging economy. (CNBC)

U.S. crude futures remained near a three-month low ahead of key U.S. government stockpiles data and following four straight days of losses during which oversupply concerns have weighed on prices. (Reuters)

The latest assessment by the World Bank sees internationally traded Brent crude oil ending the year higher than previously expected at $43 a barrel, though that is below the current price above $44 a barrel. (CNBC)

The Democratic Party formally nominated Hillary Clinton for president Tuesday, making her the first woman chosen by a major American party. (CNBC)

In a Democratic National Convention speech peppered with personal stories, former president Bill Clinton on Tuesday portrayed his wife as compassionate but tenacious, calling her "the best darn change maker I've ever met in my life." (CNBC)

Nine black women whose children died in racially-charged incidents took the convention stage to endorse Hillary Clinton, saying they believe she cares deeply about racial injustice and would try to heal wounds between police departments and African American communities. (NBC News)

Wall Street has become far less certain Hillary Clinton will be the next president. Just 52 percent of respondents to the July CNBC Fed Survey now believe the Democratic nominee will prevail in November, a sharp drop from 80 percent in the April and June surveys. (CNBC)

Apple's (AAPL) stock is jumping after quarterly profit of $1.42 beat estimates by 4 cents and revenue also beat forecasts. Apple gave strong current quarter revenue guidance and reported iPhone and iPad shipments that were higher than analysts had been estimating.

Twitter (TWTR) saw its stock price sink after the company beat profit estimates, but reported revenue below forecasts. The company also gave lower-than-expected current quarter revenue guidance, and revenue growth was the slowest since Twitter went public in 2013.

Tesla's (TSLA) upcoming Model 3 car could generate $20 billion in revenue per year and an annual gross profit of about $5 billion, CEO Elon Musk said Tuesday. (CNBC)

Investors yanked $20.7 billion from global hedge funds in June, bringing net redemption for the second quarter to $10.7 billion following inflows in April and May, the Financial Times reported. This is the third consecutive quarter capital has fled the hedge fund sector. (FT)

Third Point's Dan Loeb compared the current investment environment to the — spoiler alert — epic battle in the penultimate episode of "Game of Thrones" season six: "Surging enemies forming a seemingly impossible perimeter, a crush of fellow soldiers on the field, arrows coming in overhead, and the need to avoid panic." (CNBC)

An employee at Ray Dalio's Bridgewater Associates described the hedge fund as a "cauldron of fear and intimidation" in a complaint filed in Connecticut alleging sexual harassment, The New York Times reported. The complaint describes an environment of constant surveillance, according to the newspaper. (NYT)

Goldman Sachs (GS) has been slapped with a $510 million lawsuit by a shareholder of one of its former clients over alleged fraudulent misrepresentations that involve links to the prime minister of Malaysia and the country's troubled 1MDB development fund. (CNBC)


The Fed's post-meeting statement comes at 2 p.m. ET, with no interest rate change expected, but investors will as usual be parsing the statement for any clues as to future rate moves.

Several economic reports come ahead of the Fed's pronouncement, beginning at 8:30 a.m. ET with the government's report on durable goods. Economists are expecting a 1.3 percent drop for June following a 2.3 percent decline in May.

At 10 a.m. ET, the National Association of Realtors will release its June pending home sales report, with consensus forecasts calling for a 1.9 percent increase following a 3.7 percent drop in May.

Other reports out today include the weekly report on mortgage applications from the Mortgage Bankers Association at 7 a.m. ET, and the Energy Department's usual Wednesday look at oil and gasoline inventories at 10:30 a.m. ET.

Dow components Boeing (BA) and Coca-Cola (KO), as well as NBCUniversal and CNBC parent Comcast (CMCSA) highlight this morning's list of corporate earnings. Also out this morning: Altria (MO), Anthem (ANTM), Corning (GLW), Dr Pepper Snapple (DPS), Gannett (GCI), Garmin (GRMN), General Dynamics (GD), Goodyear Tire (GT), Hess (HES), Hilton Worldwide (HLT), Mondelez International (MDLZ), Nasdaq (NDAQ), Norfolk Southern (NSC), Northrop Grumman (NOC), Owens Corning (OC), Southern Company (SO), State Street (STT), T-Mobile US (TMUS), Waste Management (WM), and Wyndham Worldwide (WYN).

Facebook (FB) and Whole Foods (WFM) are among today's after-the-bell earnings reports, along with Amgen (AMGN), CA Technologies (CA), GoPro (GPRO), Groupon (GRPN), IAC/Interactive (IACI), Marriott (MAR), McKesson (MCK), O'Reilly Automotive (ORLY), Public Storage (PSA), Realty Income (O), and Xilinx (XLNX).


Linear Technology (LLTC) agreed to be bought by rival semiconductor maker Analog Devices (ADI) in a cash and stock deal worth $14.8 billion. The transaction values Linear at $60 per share, representing a 24 percent premium.

Deutsche Bank (DB) said it may need more cost cuts to turn its operations around, following a sharp decline in second-quarter revenue.

Buffalo Wild Wings (BWLD) reported quarterly profit of $1.27 per share, 2 cents above estimates, but the chicken wings restaurant saw revenues come in below Street projections as same-store sales fell from a year earlier.

Anadarko Petroleum (APC) lost 60 cents per share for its latest quarter, a loss that was 20 cents smaller than expected, and the oil and gas producer saw revenue slightly above estimates. Cost cutting helped Anadarko avoid a bigger loss.

U.S. Steel (X) reported a loss of 31 cents per share for its latest quarter, smaller than the 49 cent consensus estimate, but the steel maker's revenue fell below estimates. The company said it is seeing an improving pricing environment and that its European operations saw its best results in nearly eight years.


A film production unit of Disney (DIS) on Tuesday admitted to health and safety breaches during a hearing in Britain over an accident on the set of "Star Wars: Episode VII The Force Awakens" that left Harrison Ford with a broken leg.