September S&P 500 E-Mini futures (ESU24) are up +0.02%, and September Nasdaq 100 E-Mini futures (NQU24) are down -0.11% this morning as investor attention shifted from U.S. politics to a deluge of corporate earnings reports, with particular emphasis on results from “Magnificent Seven” companies Tesla and Alphabet.
In yesterday’s trading session, Wall Street’s major indexes ended higher. IQVIA Holdings (IQV) surged over +9% and was the top percentage gainer on the S&P 500 after the company posted upbeat Q2 results and raised its FY24 guidance. Also, ON Semiconductor (ON) advanced more than +6% and was the top percentage gainer on the Nasdaq 100 after the company announced it had signed a multi-year deal with Volkswagen to be the main supplier of a complete power box solution for its next-generation electric vehicles. In addition, Nvidia (NVDA) rose over +4% after Reuters reported that the company is developing a version of its new flagship AI chips for the China market that will comply with existing U.S. export controls. On the bearish side, CrowdStrike Holdings (CRWD) tumbled more than -13% and was the top percentage loser on the S&P 500 and Nasdaq 100 after several brokerages downgraded their ratings and reduced their price targets on the stock following a software update from the company that triggered a global IT outage last Friday. Also, Verizon (VZ) slid over -6% and was the top percentage loser on the Dow after reporting weaker-than-expected Q2 revenue.
Second-quarter earnings season is gathering pace, with investors awaiting new reports from big-name companies such as Alphabet (GOOGL), Tesla (TSLA), Visa (V), Coca-Cola (KO), Philip Morris International (PM), UPS (UPS), Lockheed Martin (LMT), and General Motors (GM).
On the economic data front, investors will focus on U.S. Existing Home Sales data, set to be released in a couple of hours. Economists, on average, forecast that June Existing Home Sales will stand at 3.99M, compared to last month’s figure of 4.11M.
The U.S. Richmond Manufacturing Index will be reported today as well. Economists estimate July’s figure to be -7, compared to the previous number of -10.
Meanwhile, investor focus also rests on the U.S. core personal consumption expenditures price index for June, the Fed’s first-line inflation gauge, which is set for release on Friday. The reading could provide insights into whether policymakers might lower interest rates in September.
U.S. rate futures have priced in a 2.6% chance of a 25 basis point rate cut at the Fed’s monetary policy committee meeting later this month and a 91.7% probability of a 25 basis point rate cut at the September FOMC meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.241%, down -0.47%.
The Euro Stoxx 50 futures are up +0.37% this morning as market participants digested a new wave of earnings reports. Technology and travel stocks outperformed on Tuesday, while mining and automobile stocks lost ground. Meanwhile, European Central Bank Vice President Luis de Guindos suggested the possibility of an interest rate cut in September, highlighting the ECB’s new projections as the “most important” factor in assessing whether inflation is returning to the 2% target. “In September we will have another two months of data on inflation and underlying inflation, but the new macroeconomic projections will be the most important,” de Guindos told Spanish news agency Europa Press in an interview published on Tuesday. Investors are also awaiting Eurozone consumer confidence data for July, set to be released later in the session. In corporate news, SAP Se (SAP.D.DX) climbed over +6% after Europe’s largest software maker reported better-than-expected Q2 revenue, driven by cloud growth momentum. Also, Logitech International Sa (LOGN.Z.IX) rose more than +2% after the computer mouse maker lifted its annual outlook. At the same time, Porsche Ag (P911.D.DX) slid nearly -5% after the automaker lowered its 2024 guidance.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.65% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.01%.
China’s Shanghai Composite Index closed lower today due to widespread disappointment following the Third Plenum, with Monday’s unexpected rate cut failing to improve sentiment. Liquor and consumer-related stocks led the declines on Tuesday as consumer sentiment continued to be fragile. Semiconductor stocks also lost ground. China issued a policy document over the weekend outlining familiar goals, such as developing advanced industries and improving the business environment, without signaling any major policy shift. Adding to the pessimism, China’s Ministry of Finance reported a 2.8% year-over-year drop in national general public budget revenue for the first half of the year, amounting to 11.591 trillion yuan. Meanwhile, BofA Securities analysts stated in a research note that the People’s Bank of China’s surprise cut of the 7-day reserve repo rate highlights a sense of urgency to accelerate economic recovery and indicates that additional easing measures will be implemented to bolster growth. In other news, China approved 105 video game licenses for July, indicating that regulators have withdrawn a proposal to limit spending on games. In corporate news, BYD dropped more than -4% after an exchange filing revealed on Monday that Warren Buffett’s Berkshire Hathaway trimmed its stake in the electric vehicle maker to less than 5%.
Japan’s Nikkei 225 Stock Index closed just below the flatline today. Gains in shipping and financial stocks offset losses in electronics stocks on Tuesday. The Japanese yen strengthened against the dollar on Tuesday amid rising expectations that the Bank of Japan would raise interest rates again at its meeting next week. Toshimitsu Motegi, a senior ruling party official, called on the BOJ to more clearly outline its plan to normalize monetary policy through gradual rate hikes, noting that excessive yen declines were adversely affecting the economy. Meanwhile, Bloomberg News reported on Monday that some BOJ officials are contemplating the possibility of raising rates at the upcoming July meeting, while others believe that weakness in consumer spending complicates their decision. In corporate news, Nippon Yusen surged over +8% after the Japanese shipping company boosted its fiscal-year net profit forecast, citing stronger container-shipping business. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -7.48% to 19.06.
Pre-Market U.S. Stock Movers
Medpace Holdings (MEDP) plunged more than -12% in pre-market trading after the company cut its FY24 revenue guidance.
NXP Semiconductors (NXPI) slumped over -7% in pre-market trading after the company provided underwhelming Q3 guidance.
Johnson & Johnson (JNJ) fell about -0.5% in pre-market trading after Daiwa downgraded the stock to Neutral from Outperform with a price target of $150.
Crown Holdings (CCK) surged over +7% in pre-market trading after reporting better-than-expected Q2 adjusted EPS and raising its full-year diluted EPS forecast.
Solventum Corp. (SOLV) rose more than +4% in pre-market trading after Bloomberg reported that activist investor Nelson Peltz’s Trian Fund Management had built a substantial stake in the company.
Snap (SNAP) gained over +3% in pre-market trading after Morgan Stanley upgraded the stock to Equal Weight from Underweight with a price target of $16.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - July 23rd
Alphabet (GOOGL), Tesla (TSLA), Visa (V), Coca-Cola (KO), Texas Instruments (TXN), Danaher (DHR), General Electric (GE), Philip Morris (PM), Comcast (CMCSA), United Parcel Service (UPS), Lockheed Martin (LMT), Chubb (CB), HCA (HCA), Moody’s (MCO), Sherwin-Williams (SHW), Canadian National Railway (CNI), Freeport-McMoran (FCX), Spotify Tech (SPOT), General Motors (GM), Capital One Financial (COF), Kimberly-Clark (KMB), MSCI (MSCI), CoStar (CSGP), PulteGroup (PHM), Seagate (STX), Genuine Parts (GPC), Avery Dennison (AVY), Packaging America (PKG), Quest Diagnostics (DGX), EQT (EQT), Enphase (ENPH), Logitech (LOGI), Avangrid Inc (AGR), Manhattan Associates (MANH), Pentair (PNR), AO Smith (AOS), First Quantum Minerals (FQVLF), Albertsons (ACI), East West Bancorp (EWBC), FTAI Aviation (FTAI), MakeMyTrip (MMYT), EastGroup Properties (EGP), Webster Financial (WBS), Range Resources (RRC), Matador (MTDR), Invesco (IVZ), ChampionX Corp (CHX), Agree Realty (ADC), Mattel (MAT), Old National Bancorp (ONB), Red Rock Resorts (RRR), GATX (GATX), PennyMac Financial (PFSI), Franklin Electric (FELE), Polaris Industries (PII), Herc Holdings (HRI), First Bancorp (FBP), Cal-Maine (CALM), Community Bank System (CBU), Highwoods Properties (HIW), Constellium Nv (CSTM), Banc of California (BANC), Trustmark (TRMK), Renasant (RNST), Enova International Inc (ENVA), Retail Opportunity (ROIC), National Bank Holdings (NBHC), Northwest Bancshares (NWBI), First Commonwealth Financial (FCF), Vicor (VICR), First Busey (BUSE), Sandy Spring (SASR), Veritex Holdings Inc (VBTX), PennyMac Mortgage (PMT).
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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
