The big picture today
Asia-Pacific stock markets ended the day on a lackluster after some disappointment on earnings from the US tech sector. India’s SENSEX fell 1.31%, Taiwan’s TAIEX 0.78%, Japan’s Nikkei 0.57%, Australia’s ASX All Ordinaries fell 0.20% and China’s Shanghai Composite closed almost at flat, down 0.06%. South Korea’s KOSPI rose 0.37% and Hong Kong’s Hang Seng gained 0.78% in a broad rally led by communications names. Major European markets are up midday and US stock futures point to a positive open.
Earnings season continues to unfold as yesterday’s index results pointed to stretched valuations in tech and a weaker-than-expected outlook for 2H 2023. This will set the tone for what’s to come over the coming weeks as the pace of earnings reports kick in. a higher speed.
Investors should expect action today in tech names as it’s not just an options expiration date, but the extraordinary rebalancing of the Nasdaq Composite and Nasdaq 100 indices is expected. for today. Portfolio managers who track these indices have been busy preparing for the changes, which were announced on July 11 and went into effect on Monday the 24th, but today is the last day to implement these announced changes. High potentials Microsoft (MSFT), Apple (AAPL), Nvidia (NVDA), Amazon (AMZN)And Tesla (TSLA) will have their weighting in the index reduced and the overall excess weight will be redistributed among the remaining names in the indices. Names should be added to meaningfully include Starbucks (SBUX), Mondelez (MDLZ), Reservation credits (BKNG)And Broadcom (AVGO)among others.
The annual inflation rate in Japan rose slightly to 3.3% year-on-year in June, from 3.2% in May, but less than the market forecast of 3.5%. The core consumer price index, which excludes fresh food but includes fuel costs, rose 3.3% year-on-year in June, accelerating slightly from a 3.2% gain in May
UK retail sales rose 0.7% MoM in June, up from the downwardly revised 0.1% increase in the previous month and much better than the expected reading of +0.2%. The June figure marked the third straight month of retail growth and the fastest pace in the streak. On a yearly basis, retail trade fell 1.0%, the 15th consecutive month of decline, but the figure was better than the forecast drop of 1.5%.
India, the world’s largest rice exporter, has banned exports of non-basmati white rice, with immediate effect, to ensure adequate availability in the country and curb soaring domestic prices. The move comes at a time when the onset of the El Niño weather pattern threatens to tighten supplies, potentially pushing rice prices even higher.
We have a very quiet domestic economic calendar today and the next update to the Atlanta Fed’s GDPNow model, which is currently seeing 2.4% for the June quarter, will be updated next Wednesday July 26th. This is the same day that the Fed will conclude its next monetary policy meeting, after which it is expected to announce another 25 basis point rate hike.
As noted, technology earnings disappointed yesterday as the sector and communication services fell 2.00%. Additionally, Consumer Discretionary (-3.41%) was hit after traders reacted to weaker-than-expected results from Amazon [-3.99%] And You’re here [-9.74%]. All other sectors except Real Estate (-0.34%) were up. This was reflected in the broad indices as the Dow Jones (0.47%) was the only index to post a gain. The S&P 500 fell 0.68%, the Russell 2000 fell 0.89% and the Nasdaq Composite closed down 2.05%. Helping the Dow post gains yesterday was Johnson & Johnson (JNJ) [6.07%] as the company posted a strong quarter and raised its guidance for 2023.
Here’s how the major market indicators stack up since the start of the year:
- Dow Jones Industrial Average: 6.27%
- S&P 500: 18.11%
- Nasdaq compound: 34.37%
- Russell 2000: 11.69%
- Bitcoin (BTC-USD): 79.58%
- Ether (ETH-USD): 57.88%
Stocks to Watch
Before US stock markets begin trading today, American Express (AXP), AutoNation (AN), Comerica (CMA)And Sensitive (SXT) are supposed to publish their quarterly results.
Capital One (COF) reported mixed results for the June quarter with better-than-expected EPS offset by a slight revenue shortfall for the period. Net interest income declined from the prior quarter and net charges increased as credit returned to more normal post-pandemic levels. Total deposits stood at $343.7 billion at the end of the quarter, compared to $349.8 billion at the end of the March quarter.
Results for the quarter from June to CSX (CSX) As expected, the company benefited from lower fuel prices, while lower intermodal volumes more than offset the effects of coal and freight volume growth. Key areas of volume weakness for the company included chemicals (-3%), agricultural/food products (-2%) and forestry products.
coating company PPG Industries (PPG) provided both above and below expectations for the June quarter and released guidance online for the current quarter and 2023 second quarter, including continued tepid global industrial production, as well as some gradual slowdown in U.S. architectural residential paint due to a significant decline in existing home sales. »
Shares of SAP SE (SAP) sank yesterday after the company released its second-quarter results and lowered the top of its revenue forecast for the rest of the year. For this year, it now forecasts cloud and software sales of between €27.0 and €27.4 billion compared to the previous forecast of €26.9 and €27.4 billion, with cloud revenue included. between 14.0 and 14.2 billion euros. Previously, SAP saw its cloud revenue in 2023 be between 14.0 and 14.4 billion euros compared to 11.43 billion euros in 2022.
AbbVie (ABBV) announced that a panel of experts from Europe’s medicines regulator, the European Medicines Agency (EMA), has approved conditional marketing authorization for epcoritamab, a treatment it co-developed with Danish biotech Genmab (GMAB) for lymphoma.
In the short term, the timeline for such activity seems rather slim. Readers who want to dig deeper into the schedule of upcoming IPOs should visit Nasdaq’s Latest and Upcoming IPOs page.
After today’s market close
When shares stop trading today, no company is expected to release quarterly results. Those interested in learning more about upcoming quarterly earnings reports should head to the Nasdaq Earnings Calendar.
on the horizon
Monday July 24
- Japan: Flash manufacturing PMI – July
- Euro zone: Manufacturing and services PMI flash – July
- United Kingdom: Flash manufacturing and services PMI – July
- United States: S&P Global Flash Manufacturing and Services PMI – July
tuesday july 25
- Germany: Ifo Business Climate Index – July
- UK: CBI Industrial Trends Orders – July
- United States: FHFA House Price Index – May
- United States: S&P Case Shiller House Price Index – May
- United States: Consumer confidence – July
Wednesday July 26
- US: Weekly MBA Mortgage Applications
- United States: Sales of new homes – June
- United States: EIA Weekly Crude Oil Inventories
- United States: FOMC rate decision
Thursday July 27
- China: Industrial profits since the start of 2023 – June
- Germany: GfK consumer sentiment – August
- European Central Bank decision on interest rates
- United States: Initial and Continuing Weekly Unemployment Claims
- United States: 2Q GDP
- United States: Sustainable orders – June
- United States: pending home sales – June
- United States: EIA Weekly Natural Gas Inventories
friday july 28
- Japan: Consumer Price Index – July
- Euro zone: Business and consumer survey – July
- Germany: consumer price index – July
- United States: personal income and expenditure, PCE price index – June
- United States: employment cost index – 2nd quarter 2023
- United States: University of Michigan Consumer Confidence Index – July
Thought of the day
“Perfect moves keep you from moving at all.” ~ Anonymous
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.