The big picture today
Asia-Pacific stock markets ended the day lackluster. Japan’s Nikkei fell 1.23% as semiconductor chip stocks came under pressure, while China’s Shanghai Composite fell 0.92%, South Korea’s KOSPI fell 0.31% and the Hong Kong Hang Seng fell 0.13%. Australia’s ASX All Ordinaries closed flat, gaining 0.05%, while Taiwan’s TAIEX rose 0.28% and India’s SENSEX closed 0.71% higher, with bank names having been chained. European markets are higher at midday, with the exception of Ireland and the Nordics and US stock futures point to a weaker open.
The June quarter earnings season started off on a positive footing, but as it progresses, we’ve started to see more companies miss quarterly expectations and, in some cases, provide looser-than-expected guidance. With the S&P 500 trading at stretched valuations, one key to the stock market’s sustained rise has been the 2H 2023 EPS forecast. earnings for a wider range of sectors release their quarterly results and update expectations for the second half of this year.
Before this clearer picture emerges, the market should be trading based on the latest batch of quarterly results. Last night Netflix (NFLX) beaten on profit but missed on revenue, just like IBM (IBM) And Discover Financial (DFS). This sets the stage for the current market, which sees around 130 companies publishing reports today, including Taiwan Semiconductor (TSM)whose feedback will shape the expectations of the cloud, data center and smartphone markets, as well as the businesses that touch them.
Annual producer inflation in Germany slowed to 0.1% in June, the lowest since December 2020, from 1% in May and market estimates of a stable reading. Excluding energy, producer prices increased by 2.8%. On a monthly basis, producer prices fell 0.3% in June, after a forecast decline of 0.4% and after falling 1.4% in May.
At 10:00 a.m. ET, the July Flash Consumer Confidence reading for the Eurozone will be released and is expected to be little changed from the June reading of -16.1.
In addition to the increasingly busy earnings ledger for today, we also have some fresh economic data to decode. Among them are the usual Thursday weekly data series for weekly initial and continuing unemployment claims as well as natural gas inventory data from the Energy Information Administration.
Building on the New York Fed’s July Empire Manufacturing Index, the latest Philadelphia Fed Manufacturing Index will be released at 8:30 a.m. ET. Shortly after the market opens, existing home sales data for June will be released and the market is expecting a modest decline to 4.2 million from 4.3 million in May.
Traders were broadly bullish yesterday as all sectors saw bid except Materials (-0.54%) which came under pressure as shares of Linde Plc (LIN) traded on what appears to be profit taking, and Technology (-0.25%) which was impacted by Microsoft (MSFT) trading lower on the announcement of the postponement of the closing of its acquisition of Activision Blizzard (ATVI) until October. Real Estate (1.10%), Utilities (1.02%) and Consumer Staples (1.01%) posted the largest gains, with the Russell 2000 rising 0.45%, the Dow Jones 0.31%, the S&P 500 0.24% and the Nasdaq Composite. flat day, making a gain of 0.03%. AT&T (T) gained 8.48% after the company announced it would end plans to remove lead-sheathed cables from facilities in the Lake Tahoe area.
Here’s how the major market indicators stack up since the start of the year:
- Dow Jones Industrial Average: 5.77%
- S&P 500: 18.91%
- Nasdaq compound: 37.18%
- Russell 2000: 12.70%
- Bitcoin (BTC-USD): 80.18%
- Ether (ETH-USD): 57.56%
Stocks to Watch
Before US stock markets begin trading today, Abbott Laboratories (ABT), American Airlines (AAL), Bader Meter (BMI), DR Horton (DHI), Johnson & Johnson (JNJ), Nokia (NOK), Philip Morris International (PM), SAP SE (SAP)And Taiwan Semiconductor (TSM) are supposed to publish their quarterly results.
Tesla (TSLA) reported EPS of $0.11 per share for the June quarter, well ahead of consensus of $0.80. Revenue for the quarter climbed 47.2% year-on-year to $24.93 billion, also beating the respective consensus forecast. The company’s revenue was the 83% year-over-year increase in total shipments to 466,140, but following price cuts in the quarter, Tesla’s operating margin fell to 9.6% in the June quarter from 14.6% in the prior year and 11.4% in the March quarter. In terms of guidance, the company said for this year it expects to “stay ahead of the long-term CAGR of 50% with approximately 1.8 million vehicles for the year.” However, it expects current quarter production to be affected by the summer. stops for factory upgrades.
Netflix (NFLX) also reported better-than-expected EPS for its June quarter, but the streaming service missed the consensus revenue forecast of $8.29 billion, with revenue growing just 2.7% year-on-year for reach $8.19 billion. Global streaming paid net adds in the quarter were 5.89 million and the company shared that it expects paid net adds in the current quarter to be around that level. For the current quarter, Netflix sees EPS of $3.52 versus consensus of $3.23, but has guided revenue to $8.52 billion versus consensus of $8.66 billion. dollars.
Results for the quarter from June to IBM (IBM) beat Wall Street expectations for its bottom line, however, the company’s revenue is slightly below consensus expectations. For the period, gains in its Software and Consulting revenue were tempered by a 15% decline in the company’s Infrastructure business. In updating its outlook for 2023, IBM said it continues to expect steady currency revenue growth of 3% to 5% and at current exchange rates, the currency should be neutral to revenue growth. income.
United Airlines (UAL) reported June quarter EPS of $5.03 versus consensus of $4.04, while revenue which rose 17.1% year-on-year to $14.18 billion also topped consensus of $13.9 billion. The airline raised its 2023 annual adjusted EPS estimate to $11-12 from $10-12, and its third-quarter adjusted EPS estimate to $3.85 from $4.35 from an estimate of $3.68.
Shares of Discover Financial Services (DFS) sank in after-hours trading last night after reporting June quarter results well below Wall Street consensus as its provision for credit losses continued to climb and net charges increased.
Alcoa (AA) reported a lower-than-expected earnings loss for the June quarter and revenue for the period fell 26.3% year-on-year to $2.68 billion, in line with consensus forecasts. Assessing 2023, the company still expects total alumina and aluminum shipments between 12.7 and 12.9 million metric tons, and between 2.5 and 2.6 million metric tons, respectively.
Quarterly revenue at Steel Dynamics (STLD) fell 18.2% year-over-year to $5.08 billion, missing the consensus forecast of $5.51, but the company delivered better-than-expected EPS of $4.81 per share versus consensus of $4.78. The company noted that order entry activity continues to be strong across its businesses and believes that steel consumption in North America will increase in the coming years, and that demand for U.S.-made low-carbon steel products, coupled with lower imports, will support steel prices. .
Dell Technologies (DELL) announced that it has signed a definitive agreement to acquire Moogsoft, a provider of AI-based intelligent surveillance solutions that support DevOps and IT Ops.
The Teamsters Union will resume contract talks with United Parcel Service (UPS) next week to avoid a strike when the current contract expires at the end of the month. The decision to resume talks ends a two-week stalemate after talks broke down, with both sides accusing the other of stalling the process.
Oddity Tech (ODD) price of 12.1 million shares at $35, well above the transaction’s original price range of $27 to $30.
Fitell Corp. (FTEL) and SRM Entertainment (SRM) are expected to price their IPOs in the coming days. 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
CSX (CSX), Intuitive Surgical (ISRG), PPG Industries (PPG), Robert Half (RHI), And Valmont Industries (VMI) are expected to release their quarterly results after the shares halt trading. Those interested in learning more about upcoming quarterly earnings reports should head to the Nasdaq Earnings Calendar.
on the horizon
friday july 21
- Japan: Consumer Price Index – June
- United Kingdom: Retail sales – June
Thought of the day
“Be realistic and adjust your strategy based on honest results.” –Charles Caleb Colton
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.