US equity futures barely budged in premarket trading on Wednesday as investors held their breath for the Federal Reserve's latest meeting minutes. Dow Jones Industrial Average futures inched up by 0.1%, S&P 500 futures ticked higher by 0.2%, and so did Nasdaq futures. The Federal Open Market Committee (FOMC) will unveil the minutes from its July 30-31 meeting at 2 pm ET, where it decided to keep the federal funds rate target range steady at 5.25% to 5.50%.

Meanwhile, in the crypto mining sector, Bitfarms has announced a bold move to acquire Stronghold Digital Mining for $125 million in stock, along with taking on about $50 million in debt. Both companies' boards have given the green light, and the deal is slated to close in Q1 2025, pending shareholder approval from Stronghold, regulatory nods, third-party consents, and the usual closing conditions. Under the terms, Stronghold shareholders will receive 2.52 shares of Bitfarms for each Stronghold share, marking a 71% premium over Stronghold's 90-day volume-weighted average price on Nasdaq as of August 16. Post-merger, Stronghold shareholders will hold roughly 10% of the combined entity, with Stronghold's CEO and Chairman Gregory Beard stepping in as an advisor. The market reacted swiftly: Bitfarms shares dipped by 16%, while Stronghold shares skyrocketed by over 57% in premarket trading..

Yesterday, Wall Street's eight-session bull run finally hit a speed bump. The S&P 500 dipped 0.2%, despite an 8.1% surge since August 5. Nvidia's 2% drop, following a 25% rebound, and the oil sector's woes contributed to the decline. The FTSE also took a hit for similar reasons. European markets had a lackluster session, failing to hold onto their morning gains. Most indices closed near their daily lows, with losses under 0.5% in France, Germany, and Switzerland. The UK's FTSE fared worse, dropping 1% due to Shell and BP's struggles amid falling oil prices, spurred by ceasefire rumors in the Middle East.

In the US, the summer months painted a mixed picture. From June 20 to August 20, 2024,, the Nasdaq 100 is down 1%, despite a recent recovery in its leading stocks. The S&P 500 gained 2%, while the Russell 2000, representing small US stocks, outperformed with a 5.8% rise. Analysts had predicted a resurgence in small and medium-sized enterprises (SMEs) with the Fed's rate cuts, and the Russell 2000's performance seemed to validate this, albeit with some volatility. It soared 10.1% in July but is down 5% in August. The healthcare sector, particularly biotechs, led the charge, benefiting from low-interest rates.

Over the same period, European stock markets showed varied performances. Copenhagen fell 5%, impacted by Novo Nordisk's pause, while Brussels rose 5%, buoyed by local pharma enthusiasm. Other indices ranged between +2% (Germany, UK, Spain, Switzerland) and -2% (France, Sweden, Italy). Denmark's losses were mirrored by a 3% drop in Poland's WIG and a 2.4% decline in the Netherlands, hit by US export restrictions on semiconductor stocks ASML and ASM International.

Today's session will be marked by weak macroeconomic indicators until the Fed's latest meeting minutes are released this afternoon. This will serve as an appetizer before Jerome Powell's main course at Jackson Hole, Wyoming, on Friday. Market behavior suggests little concern over his comments. The dollar has stabilized after a sharp slide, losing 3.2% against the euro in three weeks. Citi reports that hedge funds are now borrowing in dollars rather than yen for carry trades, signaling a bearish outlook on the US currency.

In the Asia-Pacific region, China's market remains erratic, reacting to rumors of central government urging local authorities to issue public debt to support the struggling property market. International investors remain skeptical about China's economic recovery. In Hong Kong, Walmart's announcement of selling part of its JD.com shares caused JD's stock to plummet by up to 11%. Investors often react negatively to such deals due to the influx of shares and the perception that the exiting shareholder sees limited potential. Elsewhere in Asia, light red dominates Japan and South Korea, while Australia and India hold steady. Profit-taking on US semiconductors led to a 1.2% drop in Taiwan. European indices, however, are showing a bullish trend after the previous day's slight consolidation.

Things to read today:

The DOE's oil inventories and the minutes of the last Fed meeting will take centre stage. The full agenda is here.

The dollar is worth EUR 0.8988 and GBP 0.7665. The ounce of gold remains firm at USD 2,509. Oil is down, with North Sea Brent at USD 77.37 a barrel and US light crude WTI at USD 73.32. The yield on 10-year US debt is down to 3.80%. Bitcoin is trading at USD 59,500.

In corporate news:

  • Target TGT.N's second-quarter results are expected before the opening.
  • Walmart WMT.N is seeking to raise up to 3.74 billion dollars from its 5.2% stake in Chinese e-commerce company JD.Com JD.O, Bloomberg News reported on Tuesday. JD.Com's US-listed shares fell by 7% before the opening.
  • Keysight Technologies KEYS.N - The electronics manufacturer reported better-than-consensus sales for its third quarter on Tuesday, thanks to an increase in orders. The stock jumped 11.6% before the opening.
  • Microchip Technology MCHP.O - An ‘unauthorised actor’ on Tuesday disrupted the use of certain servers and some of the company's operations, the company said on Tuesday.
  • Regeneron REGN.O - The US Food and Drug Administration refused to approve the group's therapy for a common form of blood cancer, the company said on Tuesday.
  • Arch Resources ARCH.N is close to an agreement to merge with Consol Energy CEIX.N in a deal that could create a coal mining company with a valuation of 5 billion, Bloomberg News reported on Tuesday.

Analyst recommendations:

  • Cheniere Energy, Inc.: Baptista Research downgrades to hold from buy with a price target raised from USD 198 to USD 199.90.
  • Corning Incorporated: Mizuho Securities upgrades to outperform from neutral with a price target raised from USD 44 to USD 47.
  • Gilead Sciences, Inc.: Baptista Research downgrades to hold from outperform with a price target raised from USD 79.20 to USD 80.30.
  • Lowe's Companies, Inc.: RBC Capital maintains its sector perform recommendation and reduces the target price from 245 to USD 238. 
  • Palo Alto Networks, Inc.: President Capital Management Corp downgrades to neutral from buy with a target price raised from USD 355 to USD 385.
  • Royalty Pharma Plc: Baptista Research downgrades to outperform from buy with a price target reduced from USD 44.10 to USD 31.60.
  • Sonoco Products Company: Wells Fargo downgrades to underweight from equalweight with a price target reduced from USD 54 to USD 52.
  • Starbucks Corporation: DZ Bank AG Research downgrades to sell from hold with a price target raised from USD 78 to USD 85.
  • Texas Instruments Incorporated: Citi upgrades to buy from neutral with a price target raised from USD 200 to USD 235.
  • Martin Marietta Materials, Inc.: Baptista Research upgrades to outperform from hold with a price target reduced from USD 648 to USD 623.70.
  • Estee Lauder: Daiwa Securities maintains a neutral recommendation with a price target reduced from 137 to USD 95.
  • Monday.com Ltd.: Tigress Financial Partners maintains its buy recommendation with a price target raised from USD 280 to USD 340.
  • Nvidia Corporation: Raymond James maintains its strong buy recommendation and reduces the target price from USD 1200 to USD 120.
  • Wolfspeed, Inc.: Deutsche Bank maintains its hold recommendation with a price target reduced from 25 to USD 17.
  • Elementis Plc: Barclays upgrades to overweight from equalweight with a price target raised from GBP 1.55 to GBP 2.
  • Victrex Plc: Jefferies downgrades to hold from underperform with a target price reduced from GBX 1150 to GBX 1100.