September Nasdaq 100 E-Mini futures (NQU24) are up +0.36% this morning as strong quarterly results from Meta Platforms and dovish comments from Federal Reserve Chair Jerome Powell boosted sentiment, while investors awaited a new round of U.S. economic data and earnings reports.
Meta Platforms (META) climbed over +6% in pre-market trading after the company reported stronger-than-expected Q2 results and issued solid Q3 revenue guidance.
As widely expected, yesterday the Federal Reserve kept the federal funds rate in a range of 5.25% to 5.50%, a level it has held since last July. At the same time, policymakers made several changes to the language of a statement issued after their two-day meeting. The committee altered its language to state it is “attentive to the risks to both sides of its dual mandate,” moving away from previous wording that concentrated solely on inflation risks. The Fed also adjusted its language to note that price pressures remain “somewhat” elevated and to acknowledge “some further progress” toward its inflation goal, a change from “modest further progress” in the previous statement. In addition, Fed Chair Jerome Powell stated at his post-monetary policy decision press conference that a rate cut “could be on the table as soon as September” if inflation continues to move toward the central bank’s 2% target.
In yesterday’s trading session, Wall Street’s major indices ended in the green, with the benchmark S&P 500 and tech-heavy Nasdaq 100 notching 1-week highs and the blue-chip Dow posting a 1-1/2 week high. Nvidia (NVDA) surged over +12% and was the top percentage gainer on the Nasdaq 100 after Morgan Stanley named the chip giant a top U.S. chip stock pick following the stock’s recent selloff. Also, Advanced Micro Devices (AMD) gained more than +4% after the semiconductor company reported stronger-than-expected Q2 results, offered a solid Q3 revenue forecast, and boosted its full-year guidance for artificial intelligence chip sales. In addition, Match Group (MTCH) climbed over +13% after the company reported better-than-expected Q2 revenue and announced plans to cut about 6% of its staff. On the bearish side, Humana (HUM) plunged more than -10% and was the top percentage loser on the S&P 500 after the health insurer cut its full-year GAAP EPS guidance and warned of higher hospital admissions.
The ADP National Employment report on Wednesday showed private payrolls rose by 122K jobs in July, significantly lower than the consensus figure of 147K. Also, the U.S. employment cost index, a key gauge of U.S. labor costs, rose +0.9% q/q in the second quarter, weaker than expectations of +1.0% q/q. In addition, the U.S. July Chicago PMI fell to 45.3, a smaller decline than expectations of 44.8. Finally, U.S. pending home sales rose +4.8% m/m in June, stronger than expectations of +1.4% m/m and the biggest increase in 6 months.
Second-quarter corporate earnings season continues in full flow, with investors awaiting new reports today from notable companies such as Amazon (AMZN), Apple (AAPL), Intel (INTC), Block (SQ), DoorDash (DASH), Cigna (CI), ConocoPhillips (COP), Roblox (RBLX), and DraftKings (DKNG).
On the economic data front, all eyes are focused on the U.S. ISM Manufacturing PMI, set to be released in a couple of hours. Economists, on average, forecast that the July ISM Manufacturing PMI will arrive at 48.8, compared to last month’s figure of 48.5.
Also, investors will likely focus on the U.S. S&P Global Manufacturing PMI, which stood at 51.6 in June. Economists foresee the July figure to be 49.5.
U.S. Unit Labor Costs and Nonfarm Productivity preliminary data will also be closely watched today. Economists forecast Q2 Unit Labor Costs to be at +1.8% q/q and Q2 Nonfarm Productivity to stand at +1.7% q/q, compared to the first-quarter numbers of +4.0% q/q and +0.2% q/q, respectively.
U.S. Construction Spending data will be reported today. Economists foresee this figure to stand at +0.2% m/m in June, compared to the previous number of -0.1% m/m.
U.S. Initial Jobless Claims data will come in today as well. Economists estimate this figure to be 236K, compared to last week’s value of 235K.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.055%, down -1.22%.
The Euro Stoxx 50 futures are down -1.20% this morning as investors digested disappointing corporate earning results and looked ahead to the Bank of England’s monetary policy decision later in the day. Bank and automobile stocks led the declines on Thursday, while retail stocks gained ground. A survey released on Thursday showed that Eurozone manufacturing activity remained in contraction in July due to widespread weakness, with output falling at its fastest rate this year. Meanwhile, investor attention now turns to the interest rate decision from the Bank of England, due later in the session. The U.K. central bank is widely expected to lower rates by 25 basis points, marking the first cut since the onset of the pandemic. In corporate news, Bayerische Motoren Werke Ag (BMW.D.DX) fell over -3% after the automaker reported a drop in quarterly profit due to weaker sales in China and increased manufacturing costs. Also, Societe Generale (GLE.FP) slumped more than -7% after the lender lowered its full-year forecast for net interest income of its French retail division. At the same time, Rolls-Royce Holdings Plc (RR-.LN) surged over +8% after the aerospace engineer reinstated its dividend and boosted its profit guidance following strong first-half results.
Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Eurozone’s Manufacturing PMI, and Eurozone’s Unemployment Rate were released today.
The Spanish July Manufacturing PMI stood at 51.0, weaker than expectations of 52.5.
The Italian July Manufacturing PMI came in at 47.4, stronger than expectations of 46.0.
The French July Manufacturing PMI arrived at 44.0, weaker than expectations of 44.1.
The German July Manufacturing PMI stood at 43.2, stronger than expectations of 42.6.
Eurozone July Manufacturing PMI has been reported at 45.8, stronger than expectations of 45.6.
Eurozone June Unemployment Rate was at 6.5%, weaker than expectations of 6.4%.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.22% and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.49%.
China’s Shanghai Composite Index closed lower today as sentiment was dampened following a private survey that showed an unexpected contraction in the manufacturing sector. Consumer stocks led the declines on Thursday. A private sector survey revealed Thursday that China’s manufacturing activity contracted in July for the first time in nine months due to a decline in new orders, highlighting the challenges policymakers face in revitalizing a faltering economy. Separately, data showed that property sales continued their weakening trend in July. According to the China Real Estate Information Corporation, contract sales volumes for the top 100 developers fell 22.7% year-over-year in July, compared to a 22.4% decline in June, despite the low base. Meanwhile, Bloomberg reported on Wednesday that the People’s Bank of China plans to change the date on which it injects liquidity via the medium-term lending facility to the 25th of each month from the 15th. The move is designed to gradually de-link the MLF from the benchmark lending rates, known as the loan prime rates, which are published on the 20th of every month, according to the report.
The Chinese July Caixin Manufacturing PMI arrived at 49.8, weaker than expectations of 51.4.
Japan’s Nikkei 225 Stock Index closed sharply lower today, snapping three consecutive days of gains, as the yen strengthened following the Bank of Japan’s rate hike on Wednesday. Automobile and electronics stocks underperformed on Thursday, as a stronger yen diminishes their overseas earnings when repatriated. Real estate stocks also lost ground on concerns that the BOJ’s rate hike the previous day would result in higher mortgage rates and weaken housing demand. Meanwhile, data released on Thursday indicated that Japan’s manufacturing sector contracted for the first time in three months in July, driven by a renewed decrease in production and the steepest decline in new orders since March. In other news, in a full version of its quarterly outlook report, the Bank of Japan stated on Thursday that wage and price growth could exceed expectations as the labor market tightens. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +2.01% to 21.82.
The Japanese July au Jibun Bank Japan Manufacturing PMI came in at 49.1, weaker than expectations of 49.2.
Pre-Market U.S. Stock Movers
Meta Platforms (META) climbed over +6% in pre-market trading after the company reported stronger-than-expected Q2 results and issued solid Q3 revenue guidance.
Carvana (CVNA) surged more than +11% in pre-market trading after the company posted upbeat Q2 results.
Western Digital Corporation (WDC) slumped over -6% in pre-market trading after the company provided below-consensus Q1 revenue guidance.
Teladoc (TDOC) tumbled more than -18% in pre-market trading after the company reported weaker-than-expected Q2 revenue and withdrew its 2024 financial guidance as well as its three-year business outlook.
Reddit (RDDT) gained over +3% in pre-market trading after Loop Capital upgraded the stock to Buy from Hold with an unchanged price target of $75.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - August 1st
Apple (AAPL), Amazon.com (AMZN), Intel (INTC), ConocoPhillips (COP), Vertex (VRTX), Booking (BKNG), Eaton (ETN), Regeneron Pharma (REGN), Cigna (CI), Southern (SO), ICE (ICE), MercadoLibre (MELI), Ferrari NV (RACE), EOG Resources (EOG), Becton Dickinson (BDX), Motorola (MSI), Air Products (APD), Coinbase Global (COIN), WW Grainger (GWW), Microchip (MCHP), Atlassian Corp Plc (TEAM), Moderna (MRNA), Prudential Financial (PRU), DoorDash (DASH), Dominion Energy (D), TC Energy (TRP), Monolithic (MPWR), Ametek (AME), Hershey Co (HSY), Cummins (CMI), Quanta Services (PWR), Block (SQ), Cenovus Energy Inc (CVE), Exelon (EXC), Consolidated Edison (ED), Mettler-Toledo (MTD), Rocket (RKT), Xcel Energy (XEL), Ambev SA (ABEV), ResMed (RMD), Biogen (BIIB), Alnylam (ALNY), Targa Resources (TRGP), Iron Mountain (IRM), MicroStrategy (MSTR), Blue Owl Capital (OWL), Roblox (RBLX), Cloudflare (NET), Entergy (ETR), Eversource Energy (ES), Ventas (VTR), Snap (SNAP), Markel (MKL), Godaddy Inc (GDDY), Kellanova (K), Ball (BALL), Coterra Energy (CTRA), Aptiv (APTV), DraftKings (DKNG), Clorox (CLX), Mobileye Global (MBLY), Gen Digital (GEN), Ryan Specialty Group Holdings (RYAN), Celanese (CE), AMH 4 Rent (AMH), Reinsurance of America (RGA), Kimco Realty (KIM), Brookfield Infrastructure Partners (BIP), Neurocrine (NBIX), Alliant Energy (LNT), Sirius XM (SIRI), XPO (XPO), Regency Centers (REG), Camden Property (CPT), ITT (ITT), Huntington Ingalls Industries (HII), CubeSmart (CUBE), Procore Technologies (PCOR), Teleflex (TFX), Api Group Corp (APG), Floor & Decor (FND), Universal Display (OLED), Twilio (TWLO), HF Sinclair (DINO), Pinnacle West (PNW), Bio-Rad Labs (BIO), Federal Realty (FRT), Omega Healthcare (OHI), United States Steel (X), WESCO (WCC), MasTec (MTZ), Paylocity Holdng (PCTY), Roku (ROKU), Open Text (OTEX), Crocs (CROX), WillScot A (WSC), Axalta Coating Systems (AXTA), Installed Building (IBP), Lithia Motors (LAD), Altair Engineering (ALTR), Insight Enterprises (NSIT), Ionis Pharma (IONS), Middleby Corp (MIDD), AAON (AAON), Southwestern Energy (SWN), Kirby (KEX), ADT (ADT), Bright Horizons (BFAM), Nextracker (NXT), Civitas Resources (CIVI), Colliers International (CIGI), Gildan Activewear (GIL), Wayfair Inc (W), Arrow Electronics (ARW), Post (POST), Beacon Roofing (BECN), TAL Education (TAL), Vontier (VNT), Casella (CWST), Janus Henderson (JHG), Pharming Group (PHAR), Valaris (VAL), ExlServices (EXLS), Lincoln National (LNC), Air Lease (AL), Select Medical (SEM), Clearway Energy C (CWEN), Allegro (ALGM), Merit (MMSI), PBF Energy (PBF), Apellis Pharma (APLS), Dun And Bradstreet (DNB), Schneider National (SNDR), Itron (ITRI), Camtek (CAMT), Matson (MATX), ACI Worldwide (ACIW), Arcosa (ACA), Ultragenyx (RARE), Life Time Holdings (LTH), Workiva Inc (WK), Kontoor Brands (KTB), Caretrust Inc (CTRE), Insperity (NSP), Shake Shack Inc (SHAK), Belden (BDC), Allete (ALE), Chemours Co (CC), The Wendy’s Co (WEN), Warrior Met Coal (HCC), Cavco (CVCO), Hercules Capital (HTGC), Instructure Holdings (INST), Victory Capital (VCTR), Tanger Factory Outlet Centers (SKT), Ringcentral Inc (RNG), Procept Biorobotics (PRCT), Dorman (DORM), Frontdoor (FTDR), California Water Service (CWT), InterDigital (IDCC), Granite Construction (GVA), Hub Group (HUBG), Patrick (PATK), iRhythm Tech (IRTC), ICF International (ICFI), Trinity Industries (TRN), Agios Pharm (AGIO), Appian (APPN), Tronox (TROX), Siriuspoint (SPNT), Tandem Diabetes Care (TNDM), Laureate Education (LAUR), Cable One Inc (CABO), Mirion Technologies (MIR), MP Materials (MP), TransAlta Corp (TAC), Fox Factory (FOXF).
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