Stock futures are flat as Wall Street takes a breather after Dow’s 400-point

Bernstein strategists led by Sarah McCarthy said they expect the market to take another leg down in the short term.

“While longer term sentiment indicators are bearish enough to take a positive view on equities with a horizon of 12 months, in the short term we think the market is likely to have another leg down as we are just at the start of the earnings downgrade cycle, and we have not yet seen meaningful outflows from equity funds,” they said in a note to clients Thursday.

Those comments come as the market enjoys a sharp rebound from the mid-June lows. Since then, the S&P 500 is up 14.25%.

U.S. stock futures pointed to a muted open Thursday, as the market took a breather following a rally in the previous session. Futures tied to the Dow Jones Industrial Average rose less than 0.1%, along with S&P 500 and Nasdaq 100 futures.

—Fred Imbert

European stocks were muted on Thursday as uncertainty returned following gains in the previous session.

The pan-European Stoxx 600 was up 0.2% by mid-morning. Retail stocks were the standout performers, gaining 2.2%, while telecoms fell 0.5%.

The U.K.’s FTSE pulled back ahead of the Bank of England‘s monetary policy decision later on Thursday. The central bank is broadly expected to hike interest rates by 50 basis points, its largest single increase since 1995.

Alibaba is set to report fiscal first-quarter earnings before the market open and analysts expect the Chinese e-commerce giant to post its first revenue decline on record.

Alibaba is projected to post revenue of 203.19 billion yuan ($30 billion) for the June quarter, down 1.2% from a year ago, according to consensus forecasts from Refinitiv.

Alibaba has faced a number of headwinds, from a stricter regulatory environment in China to a resurgence of Covid in the world’s second-largest economy which led to lockdowns of major cities. Those factors have hit the Chinese economy, dampening ad budgets and consumer spending, which will likely to weigh on Alibaba’s June quarter results.

Still, analysts expect the company to return to growth in the coming quarters. Alibaba’s Hong Kong-listed shares were more than 4% higher ahead of earnings.

— Arjun Kharpal

CNBC’s Jim Cramer said now is a good time to buy gold as signs are pointing to a rally, according to analysis by commodity trader Larry Williams.

The “Mad Money” host explained Williams’ analysis by looking at the weekly action of gold from 2014 and data on small speculators’ positioning on gold from the Commodity Futures Trading Commission’s Commitments of Traders report.

Gold prices usually peak soon after small speculators get too bullish on the precious metal, and bottom out when small speculators are too bearish, according to Williams.

“The charts, as interpreted by the legendary Larry Williams, suggest that the general public’s giving up on gold en masse and he thinks that that makes it the perfect entry time to do some buying,” Cramer…