Stock Index Futures Slip as Investors Await Key U.S. Economic Data, Chinese Data Disappoints

September S&P 500 futures (ESU23) are down -0.14%, and September Nasdaq 100 E-Mini futures (NQU23) are down -0.25% this morning as market participants digested weak Chinese and Eurozone manufacturing data while looking ahead to the U.S. ISM manufacturing survey.

In Monday’s trading session, SoFi Technologies Inc. (SOFI) surged over +19% after the online bank reported stronger-than-expected Q2 revenue and raised its FY23 adjusted net revenue guidance. Also, energy stocks gained ground as the price of WTI crude rose more than +1% to a 3-1/2 month high. In addition, ON Semiconductor (ON) climbed over +2% after the company reported upbeat Q2 results and issued above-consensus Q3 revenue guidance. On the bearish side, Johnson & Johnson (JNJ) fell more than -3% and was the top percentage loser on the blue-chip Dow after the pharmaceutical giant’s second attempt to use its unit’s bankruptcy filing as a method to handle talc-related lawsuits was rejected by a New Jersey bankruptcy court.

“It looks like investors are taking a little bit of a pause. The jury is still out on Amazon and Apple, and markets are waiting to see if we get some positive news like we got out of Meta or Google or if we see somewhat disappointing news like we saw with Microsoft,” said Chris Zaccarelli, a chief investment officer at Independent Advisor Alliance.

Chicago Fed President Austan Goolsbee stated Monday that the data indicating slower U.S. inflation is “fabulous news.” However, he has not made a final decision on whether to support pausing rate hikes at the next policy meeting. “We’ll get several more major data points before the next meeting,” he said.

Meanwhile, U.S. rate futures have priced in an 81.5% probability of no hike and an 18.5% chance of a 25 basis point rate increase at September’s monetary policy meeting.

On the earnings front, major global companies like Merck&Co (MRK), Pfizer (PFE), AMD (AMD), Caterpillar (CAT), and Starbucks (SBUX) are set to report their quarterly figures today. Analysts estimate aggregate S&P 500 earnings to fall 6.4% year-over-year in Q2, an improvement compared with an expected drop of 7.9% a week earlier.

Today, all eyes are focused on the U.S. ISM Manufacturing PMI survey in a couple of hours. Economists, on average, forecast that July ISM Manufacturing PMI will stand at 46.8, compared to the previous value of 46.0.

Also, investors are likely to focus on U.S. JOLTs Job Openings data, which came in at 9.824M in May. Economists foresee the June figure to be 9.610M.

U.S. S&P Global Manufacturing PMI will come in today. Economists foresee this figure to stand at 49.0 in July, compared to June’s number of 46.3.

U.S. ISM Manufacturing Prices data will be reported today as well. Economists expect July’s figure to be 42.8, compared to the previous number of 41.8.

In the bond markets, United States 10-Year rates are at 3.977%, up +0.48%.

The Euro Stoxx 50 futures are down -0.87% this morning as weak Eurozone manufacturing data and some disappointing earnings weighed on sentiment. Losses in automobile and consumer product stocks are leading the overall market lower. Data released on Tuesday indicated that Eurozone manufacturing activity contracted in July, experiencing the most rapid decline since the beginning of the COVID-19 pandemic, primarily due to decreased demand, despite factories cutting their prices sharply. In corporate news, Dhl Group (DHL.D.DX) dropped over -4% after the freight forwarder reported a fall in quarterly earnings. Also, Man Group Plc (EMG.LN) plunged more than -7% after the world’s largest publicly traded hedge fund firm posted weaker-than-expected core net revenue. On the positive side, HSBC Holdings Plc (HSBA.LN) rose over +2% after the lender reported better-than-expected Q2 revenue and announced a new buyback program.

Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Germany’s Unemployment Change, Germany’s Unemployment Rate, Eurozone’s Manufacturing PMI, U.K.’s Manufacturing PMI, and Eurozone’s Unemployment Rate were released today.

The Spanish July Manufacturing PMI has been reported at 47.8, weaker than expectations of 48.3.

The Italian July Manufacturing PMI stood at 44.5, stronger than expectations of 44.2.

The French July Manufacturing PMI came in at 45.1, stronger than expectations of 44.5.

The German July Manufacturing PMI arrived at 38.8, in line with expectations.

The German July Unemployment Change stood at -4K, stronger than expectations of +20K.

The German July Unemployment Rate was at 5.6%, stronger than expectations of 5.7%.

Eurozone July Manufacturing PMI has been reported at 42.7, in line with expectations.

U.K. July Manufacturing PMI came in at 45.3, stronger than expectations of 45.0.

Eurozone June Unemployment Rate was at 6.4%, stronger than expectations of 6.5%.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed flat, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.92%.

China’s Shanghai Composite erased earlier gains and closed flat today following the release of data indicating a slowdown in home sales and manufacturing in the world’s second-largest economy. A private sector survey showed Tuesday that China’s factory activity swung to contraction in July, with supply, demand, and export orders deteriorating amid sluggish market conditions at home and abroad. Also, China’s home sales experienced the most significant decline in a year in July, highlighting the need for policymakers to address the property slowdown that’s affecting the economic recovery, according to preliminary data from China Real Estate Information Corp. Meanwhile, Country Garden Holdings Co. plunged over -7% after the major property developer canceled a share sale, raising concerns over its ability to meet $2.9 billion in bond payments for the remainder of the year.

The Chinese July Caixin Manufacturing PMI came in at 49.2, weaker than expectations of 50.3.

At the same time, Japan’s Nikkei 225 Stock Index closed higher today, buoyed by gains in automobile and technology stocks. Data on Tuesday showed that Japan’s factory activity contracted in July, impacted by soft orders amid weakening global economic conditions. Meanwhile, the yen dropped to a fresh 3-week low on Tuesday, boosting export-oriented stocks. Chip-related stocks also advanced, with chip-making equipment maker Tokyo Electron rising over +2% and chip-testing equipment maker Advantest climbing about +4%. In corporate news, Toyota Motor Corp gained more than +2% after the Japanese automaker topped profit estimates. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -1.45% to 18.32.

“Japanese shares tracked Wall Street gains. They also benefited from the yen’s weakness, which tends to boost domestic corporate earnings,” said Shigetoshi Kamada, a general manager of the research department at Tachibana Securities.

The Japanese July Manufacturing PMI stood at 49.6, stronger than expectations of 49.4.

Pre-Market U.S. Stock Movers

ZoomInfo Technologies Inc (ZI) plunged over -16% in pre-market trading after the software and data company posted mixed Q2 results and cut its FY23 revenue guidance.

Harmonic Inc (HLIT) slid more than -7% in pre-market trading after the company reported downbeat Q2 results.

Arista Networks (ANET) climbed over +14% in pre-market trading after the company reported upbeat Q2 results and provided an above-consensus Q3 revenue forecast.

Gap Inc (GPS) gained more than +4% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight.

American Eagle Outfitters Inc (AEO) rose over +2% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight.

SoFi Technologies Inc. (SOFI) slid over -3% in pre-market trading after Keefe Bruyette downgraded the stock to Underperform from Market Perform.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - August 1st

Merck&Co (MRK), Pfizer (PFE), AMD (AMD), Caterpillar (CAT), Starbucks (SBUX), Vertex (VRTX), Eaton (ETN), Altria (MO), Illinois Tool Works (ITW), Marriott Int (MAR), Enterprise Products Partners LP (EPD), Pioneer Natural (PXD), Ecolab (ECL), Aflac (AFL), AIG (AIG), IQVIA Holdings (IQV), Rockwell Automation (ROK), Sysco (SYY), Electronic Arts (EA), Ametek (AME), MPLX LP (MPLX), Prudential Financial (PRU), Devon Energy (DVN), Public Service Enterprise (PEG), Ares Management (ARES), Allstate (ALL), Zimmer Biomet (ZBH), Global Payments (GPN), WEC Energy (WEC), Gartner (IT), Astellas Pharma Inc (ALPMY), Eversource Energy (ES), FirstEnergy (FE), Paycom Soft (PAYC), Howmet (HWM), Pinterest (PINS), Sirius XM (SIRI), EXACT Sciences (EXAS), Blue Owl Capital (OWL), Zebra (ZBRA), Revvity (RVTY), Stanley Black Decker (SWK), Molson Coors Brewing B (TAP), Incyte (INCY), Watsco (WSO), Mosaic (MOS), Leidos (LDOS), Match Group (MTCH), Caesars (CZR), Boston Properties (BXP), Penumbra Inc (PEN), Aspen (AZPN), Neurocrine (NBIX), Allegro (ALGM), Unum (UNM), Norwegian Cruise Line (NCLH), Lear (LEA), Inspire Medical Systems (INSP), VF (VFC), Littelfuse (LFUS), Graphic Packaging (GPK), Voya Financial Inc (VOYA), Assurant (AIZ), Axalta Coating Systems (AXTA), Credit Acceptance (CACC), CCC Intelligent Solutions Holdings (CCCS), IGT (IGT), Encompass Health (EHC), Exelixis (EXEL), ELF Beauty (ELF), IPG Photonics (IPGP), MicroStrategy (MSTR), Agree Realty (ADC), Oshkosh (OSK), Melco Resorts & Entertainment (MLCO), Bright Horizons (BFAM), EnLink Midstream LLC (ENLC), Alight (ALIT), DT Midstream (DTM), Freshworks (FRSH), Flowserve (FLS), Surgery Partners Inc (SGRY), Columbia Sportswear (COLM), Axis Capital (AXS), Triton Int (TRTN), Phillips Edison Co (PECO), Insperity (NSP), Equitrans Midstream (ETRN), Shoals Technologies Group (SHLS), Enact Holdings (ACT), ESAB Corp (ESAB), Sprouts Farmers (SFM), Terex (TEX), Blackbaud (BLKB), John Bean Tech (JBT), Quaker Chemical (KWR), O-I Glass (OI), CommVault (CVLT), Matson (MATX), LGI Homes (LGIH), Crestwood Equity Partners LP (CEQP), MakeMyTrip (MMYT), Douglas Emmett (DEI), Omnicell (OMCL), Genworth (GNW), Camping World Holdings (CWH), Dorman (DORM), Kadant (KAI), JetBlue (JBLU), Kennametal (KMT), Bloomin Brands (BLMN), Four Corners Property Trust Inc (FCPT), NMI Holdings (NMIH), Trinity Industries (TRN), Harmony Bio (HRMY), Frontier Group Holdings (ULCC), Gulfport Energy Operating (GPOR), Gentherm (THRM), USA Compression Partners LP (USAC), Shutterstock (SSTK), Meridianlink (MLNK), Mercury General (MCY), Textainer (TGH), Claros Mortgage Trust (CMTG), The Andersons (ANDE), Acadia (AKR), Nu Skin (NUS), LeMaitre Vascular (LMAT).

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