STOXX 600 at seven-week high

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STOXX 600 AT SEVEN-WEEK HIGH (0818 GMT)

The pan-European index of shares STOXX 600 is trading at an almost two month high this morning, rising 0.31%.

Earnings are a mixed bag, with some large moves on the biggest risers and losers so far. Some notably positive cases stand out.

France's Ipsen share are up 10% after upgrading guidance, Finland's Neste up 8.5% after reporting strong refining margins, and Wacker Chemie, 8.2% higher after raising outlook.

Europe's biggest oil companies Shell and TotalEnergies extended share buybacks on Thursday after their second-quarter profits beat an already record-breaking previous quarter on the back of soaring crude, gas and oil product prices. Shell and TotalEnergies shares are up a modest 1.4% and 0.7% respectively.

A rally yesterday in U.S. equities following the Fed's latest 75 bps hike is also supporting shares.

In terms of sectors, miners are leading the pack, rising 3.4%. Even amid a dividend cut and fall in first-half earnings, Anglo American shares are up 4.8% with analysts saying the results beat estimates.

Healthcare meanwhile is not looking so healthy. Medtech company Smith & Nephew is plunging 11% after a profit warning, while kidney dialysis group Fresenius Medical Care shares are down 13.8% after cutting its outlook.

(Lucy Raitano)

LOOK ON BRIGHT SIDE (0752 GMT) Fed boss Jerome Powell was reticent on the future policy-tightening path, so markets, ever optimistic, took it as a sign the U.S. central bank will pivot to a slower rate-hike pace.

Note, some argue the opposite, pointing to Powell's allusion to an "unusually large" move at the next meeting. But markets chose to go with the former view, cutting rate-hike pricing by year-end to less than 100 bps and allowing the rate-sensitive Nasdaq equity index to end Wednesday 4% higher.

Twelve hours on, some introspection has crept in. Ten-year Treasury yields are up six bps while Wall Street equity futures are in the red.

What is clear is that the Fed, like the European Central Bank, will no longer offer markets explicit forward guidance, ditching a policy adopted during the low-inflation years in favour of a data-dependent approach.

So let us look at the data.

July's weak PMI prints highlighted economic recession risks while data on housing, business sentiment and consumer confidence makes it likely that second-quarter GDP, due later on Thursday, will show a contraction for the second quarter straight -- meeting the definition of a recession

And in Europe, watch German flash inflation reading for July as well as a consumer sentiment index for the euro zone. Clearly consumers are tightening their belts in the face of surging gas prices -- a confidence index for the bloc may hit a record low.

The pan-European STOXX equity index is looking to build on Wednesday's seven-week highs, looking for inspiration in Q2 earnings, which include Shell's record $11.5 billion profit anda record first-half from carmaker Stellantis .

Others such as Nestle and Volkswagen, noted cost pressures but were optimistic on full-year earnings

Key developments that should provide more direction to markets on Thursday:

German July inflation

Meta posts revenue drop as inflation throttles ad sales

Euro zone July business sentiment index

Barclays reports first half profit slump

Italy far-right leader Meloni in pole position to be next prime minister

U.S. Q2 advance GDP data

U.S. earnings: Merck, Northrop Grumman Corp, Pfizer, Southwest Airlines, Harley-Davidson, T.Rowe Price, Apple, Intel, Amazon.com Inc

OPTIMISM AHEAD OF BUSIEST EARNINGS DAY FOR EUROPE: (0637 GMT)

European future contracts are trading higher, up between 0.5%-0.8% as they track a rally in U.S. stocks following the Fed's 75 bps interest rate hike on Wednesday.

Meanwhile all eyes are on earnings, as European traders gear up for one of the busiest days yet in the region.

FTSE-listed global miner Anglo American has already flagged a 28% drop in first-half earnings, and France's EDF has issued a new profit warning.

Better news is coming from Shell who reported a profit of $11.5 billion in the second quarter, smashing the previous quarter's record, lifted by refining profits and gas trading.

Other key earnings to watch are from Barclays, Nestle, Volkswagen and Cellnex.