Stocks Slightly Lower on Mixed Corporate Earnings Results

Morning Markets

September S&P 500 futures (ESU22) this morning are down -0.10% on mixed earnings results.  Social-media stocks are falling today, with Snap Inc down nearly -30% in pre-market trading after reporting disappointing earnings results.  Also, Seagate Technology Holdings Plc, the world’s biggest maker of computer hard drivers, tumbled -11% in pre-market trading after giving a weak forecast for the current pricing period citing “weakening global economic conditions.”

Stock indexes recovered from their worst levels this morning after American Express jumped more than +4% in pre-market trading after reporting record revenue for Q2 and raising its full-year revenue forecast.  Also, a slide in T-note yields today supports stocks as the 10-year T-note yield dropped to a 2-week low today of 2.787%. 

The Euro Stoxx 50 is up +0.34% today at a 6-week high.  Weaker-than-expected Eurozone PMI data today trimmed expectations of aggressive ECB rate hikes and pushed stocks and government bond prices higher.  The 10-year German bund yield dropped to a 7-week low today of 1.030%.   Also, European chipmakers rallied today on the heels of a rally in U.S chipmakers Thursday on signs of stronger demand.  Gains in European stocks were limited after the Bundesbank warned in its monthly report today that "the inflation rate is likely to remain high in the coming months." 

The Eurozone July S&P Global manufacturing PMI fell -2.5 to 49.6, weaker than expectations of 51.0 and the weakest report in 2 years.  Also, the Eurozone July S&P Global composite PMI fell -2.6 to 49.4, weaker than expectations of 51.0 and the weakest report in 17 months.

In its monthly report today, the Bundesbank said "the inflation rate is likely to remain high in the coming months," and the worry about Russian gas "is weighing on the outlook" for German growth.

China’s Shanghai Composite Index today closed down by -0.06%.  Weakness in Chinese airlines weighed on the overall market today following losses in U.S. carriers on Thursday after United Airlines said it was limiting flying for the rest of the year and cutting growth plans for 2023.  Strength in Chinese technology stocks limited losses in the overall market on optimism that a regulatory crackdown by China on the sector may end after regulators wrapped up a year-long probe into Didi Global and fined the company $1.2 billion.  Sentiment in Asian technology stocks also improved after U.S. chipmakers rallied Thursday on evidence demand is growing. 

Japan’s Nikkei Stock Index climbed to a 6-week high today and closed up by +0.40%.  Positive carry-over from a rally in U.S. stocks Thursday lifted Japanese shares.  Also, Japanese shippers rallied today to lead the overall market higher after several companies raised their profit outlooks for the fiscal year as the falling yen boosted earnings.  Japanese stocks fell back from their best levels on pandemic concerns after Tokyo reported a record 34,995 new Covid infections Friday.

Japan June national CPI ex-fresh food & energy rose +1.0% y/y, stronger than expectations of +0.9% y/y and the biggest increase in 6-1/2 years.

The Japan July Jibun Bank manufacturing PMI fell -0.5 to a 10-month low of  52.2.

Pre-Market U.S. Stock Movers

Snap (SNAP) plunged -28% in pre-market trading after reporting Q2 revenue of $1.11 billion, weaker than the consensus of $1.14 billion.  Other social-media stocks sank on the news, with Meta Platforms (META) falling more than -4% and Alphabet (GOOGL) and Twitter (TWTR) down more than -2%.

Capital One Financial (COF) dropped more than -3% in pre-market trading after reporting Q2 adjusted EPS of $4.96, weaker than the consensus of $5.10. 

Seagate Technology (STX) tumbled -11% in pre-market trading after reporting Q4 revenue of $2.63 billion, below the consensus of $2.80 billion, and forecast Q1 revenue o $2.50 billion, weaker than the consensus of $3.01 billion. 

Intuitive Surgical (ISRG) sank -12% in pre-market trading after reporting Q2 revenue of $1.52 billion, weaker than the consensus of $1.57 billion.

Micron Technology (MU) dropped more than -4% in pre-market trading after Morgan Stanley downgraded the stock to underweight from equal weight.

Verizon Communications (VZ) fell more than -2% in pre-market trading after reporting Q2 adjusted EPS of $1.31, below the consensus of $1.33, and lowering its full-year adjusted EPS estimate to $5.10-$5.25 from a prior estimate of $5.40-$5.55. 

American Express (AXP) jumped more than +4% in pre-market trading after reporting Q2 revenue of $13.40 billion, well above the consensus of $12.51 billion, and raised its full-year revenue forecast to up +23%-25% from a prior view of +18%-20%.

Schlumberger (SLB) rose more than +2% in pre-market trading after reporting Q2 revenue of $6.77 billion, above the consensus of $6.28 billion, and forecast full-year revenue of at least $27 billion, better than the consensus of $26.21 billion.

HCA Healthcare (HCA) surged +13% in pre-market trading after reporting Q2 adjusted Ebitda of $3.04 billion, stronger than the consensus of $2.81 billion.

Tenet Healthcare (THC) jumped more than +8% in pre-market trading after reporting Q2 adjusted Ebitda of $843 million, well above the consensus of $729 million, and sees full-year adjusted Ebitda of $3.38 billion-$3.58 million, stronger than the consensus of $3.38 billion. 

Today’s U.S. Earnings Reports (7/22/2022)

American Express Co (AXP), HCA Healthcare Inc (HCA), NextEra Energy Inc (NEE), Regions Financial Corp (RF), Roper Technologies Inc (ROP), Schlumberger NV (SLB), Twitter Inc (TWTR), Verizon Communications Inc (VZ).

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