| Good morning. Investors are awaiting signals from the Fed on a possible rate cut and tech stocks are rebounding despite disappointing earnings from Microsoft overnight. Meanwhile Vice President Kamala Harris has knocked out Donald Trump's polling lead in key swing states. Here's what markets are talking about — Morwenna Coniam. Want to receive this newsletter in Spanish? Sign up to get the Five Things: Spanish Edition newsletter. Global stocks rallied, with Nasdaq 100 index futures jumping, as a flurry of bullish news powered a rebound in technology stocks. The yen strengthened after Japan raised interest rates. Federal Reserve Chair Jerome Powell is expected to signal a potential rate cut for the US in September later today. Meanwhile, oil extended gains after Hamas said Israel killed its political leader, stoking tensions in a region that produces around a third of the world's crude. Federal Reserve officials are likely to move closer to lowering interest rates from a two-decade high this week by signaling a potential rate cut in September, though they may stop short at providing details beyond that. The US central bank's Federal Open Market Committee will keep its benchmark rate in a range of 5.25% to 5.5%, a peak reached a year ago, at the conclusion of its two-day policy meeting Wednesday, according to economists surveyed by Bloomberg News. Meanwhile, euro-area inflation unexpectedly quickened, an outcome that may make the European Central Bank warier about cutting interest rates further when it meets in September. Semi-conductor shares rallied after Reuters reported the US plans to exempt chip-equipment makers in Japan, the Netherlands and South Korea from upcoming export restrictions. The Biden administration is still under pressure to take additional steps to curb Beijing's technological developments, and the semiconductor-production equipment companies may still face constraints on selling to Chinese companies, people familiar with the situation told Bloomberg. Meanwhile, Microsoft shares slid in pre-market trading after its Azure cloud-computing service posted a slowdown in quarterly growth. Revenue from Azure, Microsoft's main growth engine in recent years, rose 29% in the fiscal fourth quarter, compared with a 31% jump in the previous period. Advanced Micro Devices gained in pre-market trading after giving an upbeat revenue forecast. Now investors are awaiting results from Meta Platforms due after the close today, with the firm's AI investments expected to be in focus. Kamala Harris has wiped out Donald Trump's lead across seven battleground states as the vice president rides a wave of enthusiasm among young, Black and Hispanic voters, according to the latest Bloomberg News/Morning Consult poll. Harris was backed by 48% of voters to 47% for Trump — a statistical dead heat — in the swing states that will likely decide November's election. The poll offers early hints that the party's historic gambit in pushing an incumbent president off the ballot is having the effect that Democrats hoped it would. This is what's caught our eye over the past 24 hours. Hello and Happy Fed Day. By now you've probably read all of the decision previews, and know that the expectation is that Powell & Co will set up the first rate cut to come in September. Certainly the market seems to think that's a total lock. So I'll just keep this short. Yesterday we got the latest JOLTS Data, as well as the latest update from the Conference Board Consumer Sentiment survey. The reports dovetail with each other in a very elegant way.
One of the things measured in JOLTS is the Quit Rate (the percentage of people who are quitting their jobs each month.) Generally, when the labor market is booming, the quit rate goes up, since people have another job lined up, or feel that they can get another job easily after taking a break from work.
Meanwhile the Conference Board asks people to just qualitatively assess whether they perceive the labor market to be good or not. So one is quantitative (a measurement of people getting their jobs and one is qualitative (how are the labor market vibes?)
It turns out that both are signaling that things are continuing to cool off in the labor market. Here's the chart, which shows the Quit Rate Labor Differential Index are clearly below pre-Covid levels. The direction and levels of the line are clear and the question is the degree to which they still have further to fall, and whether Jerome Powell can pull up the nose of the airplane at just the right time so that the landing is smooth. Follow Bloomberg's Joe Weisenthal on X @TheStalwart | 
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