S&P Futures Climb Ahead of Key U.S. Inflation Data, Intel Surges on Upbeat Earnings

September S&P 500 futures (ESU23) are trending up +0.46% this morning as market participants braced for a reading on the Federal Reserve’s preferred inflation gauge.

Intel Corporation (INTC) climbed over +7% in pre-market trading after the semiconductor giant reported stronger-than-expected Q2 results and issued upbeat Q3 guidance.

In Thursday’s trading session, Wall Street’s major averages closed lower as bond yields surged following a report by the Nikkei news agency stating that the Bank of Japan would discuss adjustments to its yield-curve control at its meeting. Meta Platforms Inc (META) climbed over +4% after the social media platform operator posted better-than-expected Q2 results and provided upbeat Q3 revenue guidance. Also, AbbVie Inc (ABBV) gained more than +4% after the company reported stronger-than-expected Q2 results and raised its FY23 adjusted EPS forecast. In addition, Royal Caribbean Cruises (RCL) soared over +8% and was among the top percentage gainers on the benchmark S&P 500 after raising its full-year profit forecast. On the bearish side, eBay Inc (EBAY) tumbled more than -10% after the e-commerce platform’s Q3 earnings guidance missed analyst estimates. Also, Chipotle Mexican Grill Inc (CMG) dropped over -9% after the fast-casual restaurant operator’s Q2 comparable sales fell short of expectations.

The Commerce Department’s preliminary reading on Thursday showed the U.S. economy grew at a +2.4% annualized rate in the second quarter, stronger than expectations of +1.8%, driven by robust consumer spending. Also, U.S. June Pending Home Sales unexpectedly rose +0.3% m/m, stronger than expectations of -0.5% m/m. In addition, the number of Americans filing for jobless claims the past week dropped -7K to a 5-month low of 221K, stronger than expectations of 235K.

“Economic data followed a familiar storyline ... all pointing to a buoyant economy that continues to cruise despite interest rates reaching their highest levels in more than two decades. For now, the indicators are still pointing toward a relatively soft economic landing,” said Mike Loewengart, a head of model portfolio construction at Morgan Stanley.

Second-quarter earnings season continues, with investors awaiting new reports from major global companies, including Exxon Mobil (XOM), Procter&Gamble (PG), Aon (AON), and Colgate-Palmolive (CL). Analysts expect corporate earnings from S&P 500 companies to fall 6.8% from a year ago in Q2.

Today, all eyes are focused on the U.S. core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, in a couple of hours. Economists, on average, forecast that the Core PCE Price Index will stand at +0.2% m/m and +4.2% y/y in June, compared to the previous values of +0.3% m/m and +4.6% y/y.

Also, investors will likely focus on the U.S. Employment Cost Index, which came in at +1.2% q/q in the first quarter. Economists foresee the second-quarter figure to be +1.1% q/q.

U.S. Michigan Consumer Sentiment Index will be reported today. Economists foresee this figure to stand at 72.6 in July, compared to June’s value of 64.4.

U.S. Personal Spending data will also be closely watched today. Economists forecast Personal Spending to be at +0.4% m/m in June, compared to the previous figure of +0.1% m/m.

In the bond markets, United States 10-Year rates are at 4.005%, down -0.35%.

The Euro Stoxx 50 futures are down -0.31% this morning as investors digested a mixed batch of corporate earnings results, while bond yields climbed following the Bank of Japan’s move to loosen its signature yield curve control. Bank and personal care stocks gained ground on Friday, while real estate and technology stocks underperformed. The Federal Statistical Office reported Friday that the German economy was stagnant in the second quarter after two periods of decline. Meanwhile, the European Central Bank Thursday raised its main refinancing rate by 25 basis points to 4.25% while keeping the door open to further tightening. In corporate news, Standard Chartered Plc (STAN.L.EB) climbed over +6% after the lender raised its 2023 income growth forecast and announced a fresh $1 billion buyback program. Also, International Consolidated Airlines Group Sa (IAG.L.IX) rose more than +3% after the company reported better-than-expected Q2 earnings and issued an upbeat outlook for the rest of the year. At the same time, Capgemini (CAP.FP) plunged over -6% after the French IT consulting group announced it would invest 2 billion euros in AI over three years.

France’s GDP (preliminary), France’s CPI (preliminary), Spain’s CPI (preliminary), Spain’s GDP (preliminary), Germany’s GDP (preliminary), and Eurozone’s Consumer Confidence data were released today.

The French GDP has been reported at +0.5% q/q in the second quarter, stronger than expectations of +0.1% q/q.

The French July CPI stood at 0.0% m/m and +4.3% y/y, compared to expectations of +0.2% m/m and +4.3% y/y.

The Spanish July CPI arrived at +0.1% m/m and +2.3% y/y, stronger than expectations of -0.4% m/m and +1.6% y/y.

The Spanish GDP came in at +0.4% q/q and +1.8% y/y in the second quarter, compared to expectations of +0.4% q/q and +2.0% y/y.

The German GDP has been reported at 0.0% q/q in the second quarter, weaker than expectations of +0.1% q/q.

Eurozone July Consumer Confidence was at -15.1, in line with expectations.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.84%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.40%.

China’s Shanghai Composite today closed sharply higher amid reports that regulators have indicated further support for the technology sector, while speculation about possible reductions in stamp duties to stimulate trading levels also boosted sentiment. According to sources familiar with the matter, Chinese regulators have requested the largest technology companies in the country to submit case studies of their successful startup investments in consumer, telecom, and media sectors. This move indicates that the authorities are now willing to provide these companies with more flexibility in supporting such deals. Demand for Chinese equities is further supported by a report suggesting the possibility of reducing stamp duties as part of efforts to boost capital markets. Meanwhile, shares of tech giants listed in Hong Kong advanced on Friday. Consumer staples and automobile stocks also outperformed.

Japan’s Nikkei 225 Stock Index closed lower today as investors grappled with interpreting the Bank of Japan’s decision on Friday to adopt a more flexible approach to its yield curve control policy. The Bank of Japan kept ultra-low interest rates unchanged, but it stated that its target for 10-year government bond yields of 50 basis points on either side of zero would now be regarded as “references” rather than “rigid limits.” The BOJ also announced it would offer to buy 10-year Japanese government bonds at 1.0% in fixed-rate operations, indicating its willingness to accept a potential increase in the 10-year yield up to 1.0%. Also, data showed on Friday that inflation in Tokyo grew more than expected in July. Meanwhile, shares of Japanese banks rallied on the prospect of a steeper yield curve. Also, insurance stocks surged on Friday, with Resona Holdings climbing over +8% and Dai-chi Life Holdings rising more than +7%. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.05% to 18.82.

“By raising the upper limit for the fixed rate operations to 1%, the BOJ effectively widened the 10-year target band, making it easier for the central bank to flexibly guide the yield target. It made a stealth move in that sense,” said Naomi Muguruma, a senior market economist at Mitsubishi UFJ Morgan Stanley Securities. 

The Japanese July Tokyo Core CPI stood at +3.0% y/y, stronger than expectations of +2.9% y/y.

Pre-Market U.S. Stock Movers

Roku Inc (ROKU) gained over +9% in pre-market trading after the company posted upbeat Q2 results and issued above-consensus Q3 revenue guidance. 

Sleep Number Corp (SNBR) tumbled more than -28% in pre-market trading after the company reported mixed Q2 results and provided weaker-than-expected Q3 EPS guidance.

Enphase Energy Inc (ENPH) slid about -13% in pre-market trading after the company posted mixed Q2 results and issued a downbeat Q3 revenue forecast.

Sweetgreen Inc (SG) fell about -11% in pre-market trading after the company reported downbeat Q2 results.

Coursera Inc (COUR) climbed more than +15% in pre-market trading after the company posted upbeat Q2 results and provided better-than-expected Q3 and FY23 revenue guidance.

SIGA Technologies Inc (SIGA) surged over +29% in pre-market trading after announcing that the U.S. Department of Health and Human Services exercised procurement options for the delivery of about $113 million worth of oral TPOXX treatment courses and IV TPOXX treatment courses.

Orion Group Holdings Inc (ORN) rose more than +3% in pre-market trading after B. Riley upgraded the stock to Buy from Neutral.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - July 28th

Exxon Mobil (XOM), Procter&Gamble (PG), Aon (AON), Charter Communications (CHTR), Colgate-Palmolive (CL), Natwest Group (NWG), Centene (CNC), TC Energy (TRP), T Rowe (TROW), Church&Dwight (CHD), CNH Industrial NV (CNHI), Avantor (AVTR), W P Carey Inc (WPC), Booz Allen Hamilton (BAH), Franklin Resources (BEN), Saia (SAIA), nVent Electric (NVT), Portland General Electric (POR), Newell Brands (NWL), Balchem (BCPC), Moog (MOGa), Arbor (ABR), ArcBest Corp (ARCB), Carter’s (CRI), First Hawaiian (FHB), Dana (DAN), Piper Sandler (PIPR), Barnes (B), Newmark Group (NMRK), Virtus (VRTS), Costamare (CMRE), WisdomTree (WT), Dime Community (DCOM), Imperial Oil (IMO), Capital Product (CPLP), Civista Bancshares (CIVB), Civeo (CVEO).

More Stock Market News from Barchart

• Stocks Give Up Early Gains as the 10-Year T-note Yield Jumps Above 4%
• Don’t Let the EV Hype Train Dissuade You From HF Sinclair (DINO)
• Is UnitedHealth Group a Good Dow Stock to Buy Now?