U.S. Stocks Slightly Higher on Positive Corporate Earnings Results

Morning Markets

September S&P 500 futures (ESU22) this morning are up +0.22% at a 2-month high. Better-than-expected quarterly earnings results today from ConocoPhillips, McKesson, and Abermarle are boosting the overall market.  Also, lower T-note yields today are supportive for stocks, with the 10-year T-note yield down -1.6 bp at 2.688%.

This morning ‘s U.S. economic data was neutral for stocks.  U.S. weekly initial unemployment claims rose +6,000 to 260,000, right on expectations.  Also, the U.S. June trade deficit of -$79.6 billion was slightly narrower than expectations of -$80.0 billion.

The Bank of England (BOE) voted 8-1 today to raise its benchmark rate by +50 bp to 1.75% and warned the UK economy is heading for a recession that will start in Q4 this year and last for a year under the weight of soaring inflation.

The Euro Stoxx 50 is up +0.73% at an 8-week high.  Strength in European automakers, retailers, and leisure stocks are leading the overall market higher.  Lower European government bond yields are also supportive of stocks.  Bond yields fell after the BOE, in its post-meeting comments, warned of a recession late this year in the UK.

Eurozone economic data today was mixed for stocks.  On the positive side, German June factory orders fell -0.4% m/m, stronger than expectations of -0.9% m/m.  Conversely, the German July S&P Global construction PMI fell -2.2 to 43.7, the weakest level in 17 months.

China’s Shanghai Composite closed up +0.80% today.  Chinese chipmakers rallied today to lead the overall market higher as U.S.-China tensions are seen as prompting the Chinese government to step up support for domestic companies to bolster their development of chip-making technology. 

Japan’s Nikkei Stock Index closed up +0.69%.  Strength in Japanese steelmakers lifted the overall market, led by a +17% jump in Godo Steel after it reported better-than-expected quarterly earnings results.  Gains were limited after Toyota Motor fell more than -3% when it kept its forecast for operating profit of 2.4 trillion yen ($18 billion) for the fiscal year through March, weaker than the consensus of 3.3 trillion yen. 

Kyodo News reported today that five missiles fired by China in its live testing military drills landed inside Japan’s exclusive economic zone.  China earlier today fired 11 missiles near Taiwan as a result of House Speaker Pelosi’s visit to Taiwan.  China said it canceled a meeting between Foreign Minister Wang Yi and his Japanese counterpart over a G-7 statement expressing concern about China’s “threatening actions” around Taiwan. 

Pre-Market U.S. Stock Movers

McKesson (MCK) gained more than +1% in pre-market trading after reporting Q1 revenue of $67.15 billion, well above the consensus of $64.86 billion, and raised its full-year revenue growth estimate to up 3%-7% from a previous estimate of 0%-4%.   

Albermarle (ALB) climbed more than +5% in pre-market trading after reporting Q2 net sales of $1.48 billion, better than the consensus of $1.43 billion, and raised its full-year net sales forecast to $7.1 billion$7.5 billion from a previous view of $5.8 billion-$6.2 billion, well above the consensus of $6.02 billion.

Sunrun (RUN) jumped +10% in pre-market trading after reporting Q2 revenue of $584.6 million, well above the consensus of $503.8 million.

U.S.-listed Chinese stocks are climbing today in pre-market trading on positive carry-over from a +3% jump in Alibaba Group Holding (BABA) after it reported better-than-expected Q1 revenue.  JD.com (JD) and Pinduoduo (PDD) are up more than +4%, and Baidu (BIDU) is up more than +2%. 

ConocoPhillips (COP) is up more than +3% in pre-market trading after reporting Q2 cash flow from operations of $7.91 billion, stronger than the consensus of $7.67 billion.

MercadoLibre (MELI) surged more than +12% in pre-market trading after reporting Q2 net revenue of $2.6 billion, higher than the consensus of $2.5 billion.

Eli Lilly (LLY) dropped more than -4% in pre-market trading after reporting Q2 adjusted EPS of $1.25, weaker than the consensus of $1.69, and then cut its full-year adjusted EPS estimate to $7.90-$8.05 from a previous estimate of $8.15-$8.30. 

Clorox (CLX) tumbled -5% in pre-market trading after reporting Q4 net sales of $1.80 billion, below the consensus of $1.86 billion, and said it sees full-year 2023 organic sales of down -3% to up +3%, weaker than the consensus of +3.1%.

Gannett (GCI) sank -5% in pre-market trading after cutting its full-year revenue forecast to $2.95 billion-$3.00 billion from a prior view of $3.1 billion-$3.2 billion.

Kohl’s (KSS) fell more than -2% in pre-market trading after Cowen downgraded the stock to market perform from outperform, saying a “weakening and inflationary consumer backdrop” could drive EPS lower.

Today’s U.S. Earnings Reports (8/4/2022)

ABIOMED Inc (ABMD), AES Corp/The (AES), Air Products and Chemicals Inc (APD), Alliant Energy Corp (LNT), Ameren Corp (AEE), Amgen Inc (AMGN), Aptiv PLC (APTV), Ball Corp (BALL), Becton Dickinson and Co (BDX), Bio-Techne Corp (TECH), CBRE Group Inc (CBRE), Cigna Corp (CI), ConocoPhillips (COP), Constellation Energy Corp (CEG), Corteva Inc (CTVA), Duke Energy Corp (DUK), Eli Lilly & Co (LLY), EOG Resources Inc (EOG), EPAM Systems Inc (EPAM), Evergy Inc (EVRG), Expedia Group Inc (EXPE), Federal Realty OP LP (FRT), Fidelity National Information (FIS), Howmet Aerospace Inc (HWM), Huntington Ingalls Industries (HII), Intercontinental Exchange Inc (ICE), Iron Mountain Inc (IRM), Johnson Controls International (JCI), Kellogg Co (K), Live Nation Entertainment Inc (LYV), Monster Beverage Corp (MNST), Motorola Solutions Inc (MSI), NortonLifeLock Inc (NLOK), NRG Energy Inc (NRG), Organon & Co (OGN), Paramount Global (PARA), Parker-Hannifin Corp (PH), Penn National Gaming Inc (PENN), Public Storage (PSA), Quanta Services Inc (PWR), Regency Centers Corp (REG), Republic Services Inc (RSG), Sempra Energy (SRE), Skyworks Solutions Inc (SWKS), Ventas Inc (VTR), Vertex Pharmaceuticals Inc (VRTX), Vulcan Materials Co (VMC), Warner Bros Discovery Inc (WBD), Westrock Co (WRK), Zoetis Inc (ZTS).

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