September S&P 500 E-Mini futures (ESU24) are down -0.04%, and September Nasdaq 100 E-Mini futures (NQU24) are up +0.05% this morning as investors awaited a fresh batch of U.S. economic data and braced for Nvidia’s financial report due on Wednesday.
In yesterday’s trading session, Wall Street’s major indexes ended mixed, with the blue-chip Dow posting a new record high and the tech-heavy Nasdaq 100 dropping to a 1-week low. PDD Holdings (PDD) plummeted over -28% and was the top percentage loser on the Nasdaq 100 after the Temu-owner reported weaker-than-expected Q2 revenue. Also, chip stocks slumped, with Arm (ARM) sliding nearly -5% and Marvell Technology (MRVL) dropping more than -4%. In addition, Tesla (TSLA) fell over -3% after Canada announced it would levy a new 100% tariff on Chinese-made electric vehicles, which includes Teslas manufactured in China. On the bullish side, energy stocks gained ground as the price of WTI crude climbed over +3% to a 1-week high, with Marathon Oil (MRO) and ConocoPhillips (COP) rising more than +1%. Also, BJ’s Wholesale (BJ) advanced over +1% after JPMorgan upgraded the stock to Neutral from Underweight.
The U.S. Census Department said on Monday that U.S. durable goods orders surged +9.9% m/m in July, topping the +4.0% m/m consensus and rebounding from a -6.9% m/m slump in June (revised from -6.6% m/m). At the same time, U.S. July core durable goods orders unexpectedly fell -0.2% m/m, weaker than expectations of 0.0% m/m.
Richmond Fed President Thomas Barkin said on Monday that he still sees upside risks for inflation, though he supports “dialing down” interest rates amid a cooling labor market. Also, San Francisco Fed President Mary Daly stated that she believes it’s appropriate for the Fed to begin reducing interest rates and indicated that a larger rate cut remains on the table if the labor market weakens further. “Hard to imagine anything that could derail the September rate cut,” Daly said.
U.S. rate futures have priced in a 71.5% chance of a 25 basis point rate cut and a 28.5% chance of a 50 basis point rate cut at the next FOMC meeting in September.
Meanwhile, investors are awaiting an earnings report from AI-darling Nvidia (NVDA) on Wednesday. Expectations heading into the chipmaker’s quarterly results are high, with analysts forecasting another strong consensus beat that could lead to an upward revision in the company’s profit guidance. The July reading of the U.S. core personal consumption expenditures price index, the Fed’s first-line inflation gauge, set to be released on Friday, will also be on investors’ radar.
Today, all eyes are focused on the U.S. Conference Board’s Consumer Confidence Index, set to be released in a couple of hours. Economists, on average, forecast that the August CB Consumer Confidence index will stand at 100.9, compared to last month’s figure of 100.3.
Also, investors will focus on the U.S. S&P/CS HPI Composite - 20 n.s.a., which arrived at +6.8% y/y in May. Economists foresee the June figure to be +6.2% y/y.
The U.S. Richmond Manufacturing Index will be reported today as well. Economists estimate this figure to come in at -14 in August, compared to the previous value of -17.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.834%, up +0.45%.
The Euro Stoxx 50 futures are up +0.35% this morning as investors continued to evaluate the latest economic data and consider potential responses from major central banks. Mining stocks gained ground on Tuesday, while retail and technology stocks slumped. A survey released on Tuesday revealed that German consumer sentiment is expected to decline heading into September, influenced by slightly rising unemployment, job cuts, and increasing insolvencies, which are dampening income expectations. Separately, final data from the Federal Statistical Office revealed Tuesday that Germany’s quarterly gross domestic product decreased by 0.1% in the second quarter, following a 0.2% increase in the previous three-month period, confirming preliminary estimates. Meanwhile, market participants are awaiting the Eurozone’s preliminary inflation data for August, scheduled for release on Friday, to gain further insights into the European Central Bank’s policy trajectory. In corporate news, Bunzl Plc (BNZL.LN) climbed over +8% after the British business supplies distributor lifted its full-year adjusted operating profit guidance. At the same time, Daimler Truck Holding Ag (DTG.D.DX) fell about -1% after Goldman Sachs downgraded the stock to Neutral from Buy.
Germany’s GfK Consumer Climate Index and Germany’s GDP data were released today.
The German September GfK Consumer Climate Index arrived at -22.0, weaker than expectations of -18.0.
The German GDP has been reported at -0.1% q/q and 0.0% y/y in the second quarter, compared to expectations of -0.1% q/q and -0.1% y/y.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.24% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.47%.
China’s Shanghai Composite Index closed lower today, snapping a two-day winning streak as Canada’s new tariffs on electric vehicles and metals from China dampened market sentiment. Automobile and related stocks underperformed on Tuesday. Canada announced on Monday that it would impose a 100% tariff on imports of Chinese electric vehicles and introduce a 25% tariff on imported steel and aluminum from China. Meanwhile, Beijing called on Canada to promptly rectify the “wrong practices” of imposing new tariffs against the Asian country. The news overshadowed data showing that China’s industrial profits increased at the quickest rate in five months in July, a positive indicator for Beijing as it intensifies its focus on manufacturing to revive the economy. Profits at China’s industrial firms rose 4.1% in July compared to the previous year, up from the 3.6% growth seen in June, according to data from the National Bureau of Statistics released on Tuesday. In corporate news, Xpeng rose more than +4% in Hong Kong after its founder and CEO, He Xiaopeng, purchased 2 million shares of the company on Monday to increase his stake. Investors are now awaiting the release of official Chinese PMI figures for August, scheduled for Saturday, to gain further insights into the state of the world’s second-largest economy.
Japan’s Nikkei 225 Stock Index closed higher today, rebounding from earlier losses due to potential dip-buying and yen weakness. Energy and healthcare stocks led the gains on Tuesday. Analysts noted that Japanese equities might also have been buoyed by ongoing hopes for Fed rate cuts after Fed officials on Monday reiterated Fed Chair Powell’s dovish remarks. Meanwhile, Japanese Finance Minister Shunichi Suzuki stated Tuesday that the nation’s government will closely monitor the effects of potential U.S. interest rate cuts on the Japanese economy. “The government will continue to carefully monitor what kind of effects would bring about because they could affect the Japanese economy through various ways including external demand and overseas prices,” Suzuki said. The yen weakened on Tuesday after Japan’s corporate services price index, a gauge of producer inflation, slowed more than anticipated in July. In corporate news, NS Solutions surged over +10% after activist investor 3D Investment Partners built a 5% stake in the company. Investors await July industrial production, retail sales, and unemployment figures, along with Tokyo’s inflation data for August, later in the week to shape Japan’s economic and interest rate outlook. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -7.00% to 23.65.
The Japanese July Corporate Services Price Index came in at +2.8% y/y, weaker than expectations of +2.9% y/y.
Pre-Market U.S. Stock Movers
Paramount Global (PARA) slid over -5% in pre-market trading after media veteran Edgar Bronfman abandoned his bid to acquire the company.
CAVA Group (CAVA) slumped more than -8% in pre-market trading after Theo Xenohristos, a fast-casual Mediterranean restaurant chain director, filed to sell more than 98,000 shares of the company.
Trip.com (TCOM) climbed over +10% in pre-market trading after the company reported stronger-than-expected Q2 adjusted EPS.
Xwell (XWEL) gained more than +4% in pre-market trading after announcing an agreement to offer Priority Pass members access to its spas.
Hershey (HSY) fell over -1% in pre-market trading after Citi downgraded the stock to Sell from Neutral with a price target of $182.
Cleveland-Cliffs (CLF) rose more than +1% in pre-market trading after Seaport Research upgraded the stock to Buy from Neutral with a $16.50 price target.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - August 27th
Bank of Montreal (BMO), Bank of Nova Scotia (BNS), Woodside Energy (WDS), SentinelOne (S), PVH (PVH), Box Inc (BOX), Ncino (NCNO), Nordstrom (JWN), Semtech (SMTC), Ambarella (AMBA), American Woodmark (AMWD), ScanSource (SCSC), REX American Resources (REX), The Hain Celestial (HAIN), Waldencast Acquisition (WALD), Jiayin (JFIN), Electromed (ELMD).
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