Stocks Gain on Strong Earnings Results from Amazon and Apple

Morning Markets

September S&P 500 futures (ESU22) this morning are up +0.36%.  U.S. stock indexes are gaining today on better-than-expected quarterly earnings results from Amazon.com and Apple.  Amazon.com is up nearly +13% in pre-market trading after reporting stronger than expected Q2 net sales and forecasting better-than-expected Q3 net sales.  Apple is up more than +2% in pre-market trading after reporting better-than-expected Q3 revenue.

Stock indexes fell back from their best levels after this morning’s U.S. economic data raised inflation concerns.  The U.S. Q2 employment cost index rose more than expected, and the U.S. June core PCE deflator rose at a faster pace than was expected.  The 10-year T-note yield rose +2.3 bp to 2.99% on today’s inflation news.

The U.S. Q2 employment cost index eased to +1.3% from +1.4% in Q1, still stronger than expectations of +1.2%.

U.S. June personal spending rose +1.1% m/m, slightly stronger than expectations of +1.0% m/m. U.S. personal income rose +0.6% m/m, stronger than expectations of +0.5% m/m.

The U.S. June core PCE deflator rose +0.6% m/m and +4.8% y/y, slightly stronger than expectations of +0.5% m/m and +4.7% y/y.

The Euro Stoxx 50 climbed to a 1-1/2 month high today and is up +1.40%.  A stronger-than-expected Eurozone Q2 GDP report fueled gains in equities today. Also, European bank energy stocks are moving higher after Standard Chartered Plc, BNP Paribas Sa, and Banco Bilbao Argentaria SA posted better-than-expected quarterly earnings results.  European stocks rose today despite the stronger-than-expected Eurozone July CPI report.

Eurozone Q2 GDP rose +0.7% q/q and +4.0% y/y, stronger than expectations of +0.2% q/q and +3.4% y/y.

Eurozone July CPI rose by a record +8.9% y/y, stronger than expectations of +8.7% y/y.  Eurozone July core CPI rose a record +4.0% y/y, stronger than expectations of +3.9% y/y. 

China’s Shanghai Composite Index today closed down by -0.89%.  Chinese stocks retreated today on disappointment that no fresh stimulus was mentioned following a meeting of China’s Politburo.  Also, weakness in technology stocks weighed on the overall market as Alibaba Group Holding tumbled more than -6% after a report said that Jack Ma ceded control of his Ant Group, a third of which is owned by Alibaba. 

China's top leadership gave a downbeat growth assessment and did not announce new stimulus policies following today's Politburo meeting.  Instead, the post-meeting statement from the Politburo said the country should achieve "the best outcome" possible for economic growth this year while sticking to a strict Covid Zero policy.  Also, "local governments must shoulder the responsibility" for ensuring the delivery of housing projects.

Japan’s Nikkei Stock Index today was little changed and closed down by -0.05%.  Mixed Japanese economic data today failed to inspire the market. Also, Japanese technology stocks were under pressure on an overnight slump in Intel after the world’s biggest producer of computer processors missed earnings estimates.

The Japan July consumer confidence index fell -1.9 to a 1-1/2 year low of 30.2, weaker than expectations of 31.5. 

Japan’s June industrial production rose a record +8.9% m/m, stronger than expectations of +4.2% m/m.

Japan’s June retail sales unexpectedly fell -1.4% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 14 months.

Pre-Market U.S. Stock Movers

Amazon.com (AMZN) soared nearly +13% in pre-market trading after forecasting Q2 net sales of $121,23 billion, better than the consensus of $119.53 billion, and forecast Q3 net sales of $125 billion-$130 billion, the midpoint above the consensus of $126.97 billion. 

Apple (AAPL) climbed nearly +3% in pre-market trading after reporting Q3 revenue of $82.96 billion, stronger than the consensus of $82.76 billion. 

Chevron (CVX) gained more +3% in pre-market trading after reporting Q2 adjusted EPS of $5.82, well above the consensus of $4.96. 

U.S. Steel (X) rose more than +4% in pre-market trading after reporting Q2 adjusted Ebitda of $1.62 billion, above the consensus of $1.44 billion.

Snowflake (SNOW) gained more than +2% in pre-market trading after Cboe Global Markets said it was working with Snowflake to shift its corporate data and analytics software to the cloud. 

Intel (INTC) tumbled more than -9% in pre-market trading after reporting Q2 adjusted EPS of 29 cents, well below the consensus of 69 cents, and cut guidance on its full-year adjusted EPS estimate to $2.30 from a prior view of $3.60, much weaker than the consensus of $3.39.

Dexcom (DXCM) slumped more than -15% in pre-market trading after reporting Q2 revenue of $696.2 million, weaker than the consensus of $700.8 million.

Edward Lifesciences (EW) dropped more than -7% in pre-market trading after reporting Q2 sales of $1.37 billion, below the consensus of $1.40 billion, and forecasted Q3 sales of $130 billion-$1.37 billion, weaker than the consensus of $1.44 billion. 

Roku (ROKU) sank more than -25% in pre-market trading after reporting Q2 net revenue of $764.4 million, weaker than the consensus of $804.1 million, and forecast Q3 net revenue of $700 million, well below the consensus of $903 million. 

U.S.-listed Chinese stocks fell in pre-market trading on disappointment that there was no announcement of new stimulus policies after a meeting of China’s Politburo.  Alibaba Group Holding (BABA) and NetEase (NTES) are down more than -5%.  Also, JD.com (JD) and Baidu (BIDU) are down more than -4%.  In addition, Pinduoduo (PDD) is down more than -3%. 

Procter & Gamble (PG) dropped more than -4% in pre-market trading after forecasting 2023 organic revenue up +3% to +5%, weaker than the consensus of +5.19%. 

Today’s U.S. Earnings Reports (7/29/2022)

AbbVie Inc (ABBV), Aon PLC (AON), Cboe Global Markets Inc (CBOE), Charter Communications Inc (CHTR), Chevron Corp (CVX), Church & Dwight Co Inc (CHD), Colgate-Palmolive Co (CL), Exxon Mobil Corp (XOM), LyondellBasell Industries NV (LYB), Mettler-Toledo International Inc (MTD), Newell Brands Inc (NWL), Phillips 66 (PSX), Procter & Gamble Co/The (PG), Weyerhaeuser Co (WY), WW Grainger Inc (GWW).

• Bed, Bath, and Beyond Meat
• Risk Reversal Strategy - Is Now The Time To Get Your Feet Wet?
• Long Straddle Screener Results For July 29th
• Farfetch Could Be the Best Consumer Cyclical Stock to Buy Now