September S&P 500 E-Mini futures (ESU24) are trending up +0.17% this morning as market participants braced for the start of the Federal Reserve’s two-day policy meeting while also awaiting the latest reading on U.S. job openings as well as an earnings report from tech giant Microsoft.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. ON Semiconductor (ON) surged over +11% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the semiconductor maker reported better-than-expected Q2 results. Also, Tesla (TSLA) advanced more than +5% after Morgan Stanley named the electric vehicle giant as its new “Top Pick” within the U.S. auto sector. In addition, McDonald’s (MCD) climbed over +3% and was the top percentage gainer on the Dow despite posting downbeat Q2 results, as executives pledged to launch new promotions. On the bearish side, Arm (ARM) slumped more than -5% and was the top percentage loser on the Nasdaq 100 after HSBC downgraded the stock to Reduce from Hold.
The Federal Reserve begins its two-day meeting later in the day. Fed officials, who have maintained interest rates at a more than two-decade high for a full year, are widely anticipated to keep them unchanged again when their two-day meeting concludes on Wednesday. Instead, investors expect policymakers to lower their benchmark rate in September as the risk of jeopardizing a solid yet moderating job market increases.
Second-quarter corporate earnings season is in full swing, with investors awaiting new reports today from notable companies such as Microsoft (MSFT), Procter & Gamble (PG), Merck (MRK), Advanced Micro Devices (AMD), Pfizer (PFE), and Starbucks (SBUX).
On the economic data front, all eyes are focused on the U.S. JOLTs Job Openings data, set to be released in a couple of hours. Economists, on average, forecast that the June JOLTs Job Openings will come in at 8.020M, compared to the previous figure of 8.140M.
Also, investors will focus on the U.S. CB Consumer Confidence Index, which arrived at 100.4 in June. Economists foresee the July figure to be 99.7.
The U.S. S&P/CS HPI Composite - 20 n.s.a. will be reported today as well. Economists expect May’s figure to be +6.5% y/y, compared to the previous number of +7.2% y/y.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.185%, up +0.19%.
The Euro Stoxx 50 futures are up +0.37% this morning as investors digested key economic data and new earnings reports while also bracing for U.S. and U.K. central bank decisions later in the week. Technology and oil stocks led the gains on Tuesday. Preliminary data from Eurostat indicated on Tuesday that the Eurozone economy sustained its growth pace in the second quarter, despite an unexpected contraction in powerhouse member Germany. Meanwhile, investors are anticipating the Bank of England’s policy rate decision on Thursday, with most economists predicting the central bank will lower rates for the first time since the pandemic began, although a close vote is expected. In corporate news, Standard Chartered Plc (STAN.LN) climbed over +5% after the U.K. bank announced its largest-ever share buyback of $1.5 billion and lifted its full-year earnings guidance. Also, BP Plc (BP-.LN) rose more than +1% after the oil giant reported better-than-expected Q2 net profit and raised its dividend. At the same time, Diageo Plc (DGE.LN) plunged over -8% after the spirits maker reported weaker-than-expected full-year profit and cautioned that challenges might continue into next year.
France’s GDP (preliminary), Spain’s CPI (preliminary), Spain’s GDP (preliminary), Italy’s GDP (preliminary), Germany’s GDP (preliminary), Eurozone’s GDP (preliminary), and Eurozone’s Consumer Confidence data were released today.
The French GDP arrived at +0.3% q/q in the second quarter, stronger than expectations of +0.2% q/q.
The Spanish July CPI came in at +2.8% y/y, weaker than expectations of +3.0% y/y.
The Spanish GDP stood at +0.8% q/q in the second quarter, stronger than expectations of +0.5% q/q.
The Italian GDP arrived at +0.2% q/q and +0.9% y/y in the second quarter, compared to expectations of +0.2% q/q and +0.8% y/y.
The German GDP was at -0.1% q/q and -0.1% y/y in the second quarter, weaker than expectations of +0.1% q/q and 0.0% y/y.
Eurozone GDP has been reported at +0.3% q/q and +0.6% y/y in the second quarter, compared to expectations of +0.2% q/q and +0.6% y/y.
Eurozone July Consumer Confidence stood at -13.0, in line with expectations.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.43% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.15%.
China’s Shanghai Composite Index closed lower today amid weak sentiment after the July Politburo meeting pledged to introduce more policy support to boost growth but failed to provide the specifics. Oil stocks underperformed on Tuesday, while property stocks gained ground. China will enhance policy support for the economy, focusing on stimulating consumption to boost domestic demand, according to state media quoting the Politburo, the top decision-making body of the ruling Communist Party, on Tuesday. “Macro policies should be strengthened persistently and become more forceful,” the Politburo added, according to the official Xinhua news agency. It also committed to further assisting local governments in purchasing existing property stock for affordable housing projects as the real estate slump persists. In addition, Beijing will intensify the employment-focused policy and promote job creation for key groups including college graduates, and will increase efforts to address issues such as food safety and social security, Xinhua reported, citing the meeting. In corporate news, BYD slid over -2% in Hong Kong after the EV maker reduced the price for a premium model. At the same time, WuXi AppTec advanced more than +4% after maintaining its 2024 sales target. Investor attention now shifts to the release of China’s official manufacturing survey on Wednesday, which is anticipated to indicate that factory activity contracted for a third consecutive month in July, emphasizing a growing urgency for policymakers to introduce additional stimulus as a property crisis and job insecurity hinder growth.
Japan’s Nikkei 225 Stock Index closed slightly higher today, reversing earlier losses in what appears to be a position adjustment ahead of the Bank of Japan’s decision. Gains in real estate and healthcare stocks led the overall market higher on Tuesday. Government data revealed on Tuesday that Japan’s seasonally adjusted unemployment rate unexpectedly fell to 2.5% in June from 2.6% the previous month, demonstrating the labor market’s resilience amid persistent economic uncertainties. Also, the ratio of active job openings to applicants dipped slightly to 1.23 in June from 1.24 in the previous month. Meanwhile, Japanese government bond yields fell and the yen weakened on Tuesday as the BOJ began its two-day monetary policy meeting. BOJ Governor Kazuo Ueda will put investors on high alert Wednesday when he unveils a detailed plan for quantitative tightening following years of extensive easing. He might also decide to go further by implementing an interest rate hike. In corporate news, Pasona Group surged over +12% after a regulatory filing revealed that activist investor Oasis Management holds a 5.02% stake in the staffing and outsourcing company. Also, Fanuc gained nearly +3% after the robot maker lifted its full-year revenue and net profit guidance. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.59% to 21.77.
The Japanese June Jobs/applications ratio stood at 1.23, weaker than expectations of 1.24.
The Japanese June Unemployment Rate was at 2.5%, stronger than expectations of 2.6%.
Pre-Market U.S. Stock Movers
Sprouts Farmers (SFM) surged over +16% in pre-market trading after the health-food chain reported better-than-expected Q2 results and lifted its full-year forecast.
F5 Networks (FFIV) climbed more than +14% in pre-market trading after the company posted upbeat Q3 results, provided an above-consensus Q4 outlook, and raised its FY24 earnings guidance.
Symbotic (SYM) tumbled over -20% in pre-market trading after reporting mixed Q3 results and issuing dismal Q4 revenue guidance.
Lattice Semiconductor (LSCC) plunged more than -16% in pre-market trading after the company reported downbeat Q2 results and offered a below-consensus Q3 revenue outlook.
Affirm Holdings (AFRM) gained over +4% in pre-market trading after BofA upgraded the stock to Buy from Neutral with an unchanged price target of $36.
CrowdStrike (CRWD) slid more than -4% in pre-market trading after CNBC reported that Delta Air Lines had hired lawyers to seek compensation from the cybersecurity firm and Microsoft over the operations meltdown experienced during the global IT outage.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - July 30th
Microsoft (MSFT), P&G (PG), Merck&Co (MRK), AMD (AMD), Pfizer (PFE), Stryker (SYK), Arista Networks (ANET), American Tower (AMT), Mondelez (MDLZ), Starbucks (SBUX), Canadian Pacific Kansas City (CP), Illinois Tool Works (ITW), Ecolab (ECL), Enterprise Products Partners LP (EPD), PayPal (PYPL), Phillips 66 (PSX), Public Storage (PSA), American Electric Power (AEP), Electronic Arts (EA), Public Service Enterprise (PEG), Gartner (IT), Corning (GLW), Sysco (SYY), Arch Capital (ACGL), Extra Space Storage (EXR), Xylem (XYL), Howmet (HWM), Archer-Daniels-Midland (ADM), Pinterest (PINS), FirstEnergy (FE), First Solar (FSLR), Live Nation Entertainment (LYV), Leidos (LDOS), Hubbell (HUBB), Watsco (WSO), Essex Property (ESS), Skyworks (SWKS), CenterPoint Energy (CNP), Zebra (ZBRA), Incyte (INCY), UDR (UDR), Stanley Black Decker (SWK), Axa Equitable (EQH), W P Carey Inc (WPC), Ares Capital (ARCC), BXP Inc (BXP), Smurfit Kappa (SW), Ovintiv (OVV), Qorvo Inc (QRVO), Houlihan Lokey Inc (HLI), Unum (UNM), Match Group (MTCH), Graphic Packaging (GPK), Eagle Materials (EXP), Ufp Industries (UFPI), Caesars (CZR), Repligen (RGEN), AGCO (AGCO), SoFi Technologies (SOFI), Fannie Mae (FNMA), Voya Financial Inc (VOYA), STAG Industrial (STAG), Informatica (INFA), DT Midstream (DTM), CCC Intelligent Solutions Holdings (CCCS), Landstar (LSTR), TIM Participacoes (TIMB), Penumbra Inc (PEN), Littelfuse (LFUS), Axis Capital (AXS), Armstrong World Industries (AWI), Zurn Water Solutions (ZWS), CommVault (CVLT), Modine Manufacturing (MOD), Kite Realty (KRG), PJT Partners Inc (PJT), UMB Financial (UMBF), IGT (IGT), Bgc Group (BGC), M/I Homes (MHO), Terex (TEX), Western Union (WU), Axos Financial (AX), Kadant (KAI), Advanced Energy (AEIS), Blackbaud (BLKB), Freshworks (FRSH), Northern Oil&Gas (NOG), IPG Photonics (IPGP), Scorpio Tankers (STNG), Neogen (NEOG), Archrock (AROC), Broadstone Net (BNL), DoubleVerify Holdings (DV), Site Centers (SITC), NorthWestern (NWE), Mercury General (MCY), NMI Holdings (NMIH), John Bean Tech (JBT), Inari Med (NARI), Comstock Resources (CRK), Werner (WERN), LGI Homes (LGIH), Acadia (AKR), Equity Commonwealth (EQC), JetBlue (JBLU), American Assets (AAT), H&E Equipment (HEES), Huron (HURN), O-I Glass (OI), Powell Industries (POWL), Lemonade (LMND), New Gold (NGD), CTS Corp (CTS), Benchmark Electronics (BHE), JBG SMITH Properties (JBGS), Two Harbors (TWO), Select Energy Services (WTTR), Global Industrial Co (GIC), LendingClub Corp (LC), PROS (PRO), MiMedx (MDXG), TriMas (TRS), AtriCure (ATRC), BlueLinx (BXC).
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