The big picture today
Asia-Pacific stock markets ended the day lackluster. A weaker yen boosted optimism for Japanese exporters, as automakers contributed to a 1.23% gain in the Japanese Nikkei, South Korea’s KOSPI rose 0.72% and Taiwan’s TAIEX returned 0.02%, leaving this market mostly flat. Australia’s ASX All Ordinaries and China’s Shanghai Composite both fell just over 0.10%, India’s SENSEX fell 0.45% and Hong Kong’s Hang Seng fell 2.13%, led by financials. European markets are mixed midday and US equity futures point to a positive open.
We are slowly starting what will be a big week for the market with earnings from 165 S&P 500 companies, including some of the “Magnificent Seven” stocks that have driven the market higher in recent months. We also have the latest monetary policy decision from the Fed. As the market expects another 25 basis point rate hike, it will focus on what the Fed and Fed Chairman Jay Powell communicate on the way forward for monetary policy. In this regard, the market, as measured by the CME FedWatch Tool, does not expect any further rate hikes in the coming months. While that may be the case, we expect the Fed to take a more cautious tone, sharing the need to see more sustained progress in the data before considering having inflation under control.
Clues to what the Fed is likely to say will come in today’s July Manufacturing and Services Flash PMI data from S&P Global at 9:45 a.m. ET. The Flash number for manufacturing is expected to rise to 46.4 from 46.3 in June, while that for services is expected to fall to 54.0 from 54.4 the previous month. New orders data and inflation commentary will be used to gauge the speed of the economy and the progress of inflation.
We also have the previously announced special rebalancing in the Nasdaq-100 that goes into effect today. The changes are aimed at bolstering the presence of smaller index components and reducing the dominance of what the market calls “The Magnificent Seven,” which made up nearly half of the Nasdaq-100. This group of actions includes Microsoft (MSFT), Nvidia (NVDA), Meta Platforms (META), Apple (AAPL), Tesla (TSLA), Alphabet (GOOGL), And Amazon (AMZN).
Flash reading for July showed that the Jibun Bank Japan manufacturing PMI fell to 49.4 from 49.8 in May. The figure was the lowest since March, also marking the sixth contraction in factory activity so far this year, with new orders falling the most since March, while production, overseas sales and purchasing levels all continued to decline. The Jibun Bank Flash Japan Services PMI fell slightly to 53.9 in July from a final of 54.0 in May, marking the 11th consecutive month of growth in the services sector, but July’s reading was the lowest since January.
The Eurozone Flash HCOB manufacturing PMI fell to 42.7 in July from 43.4 the previous month, missing market expectations of 43.5 to mark a full year of back-to-back contractions. The drop in new orders fell at one of the fastest rates since 2009, widening the gap with the drop in production and signaling further declines in future output. The Flash Services reading for July fell to 51.1 from 52.0 in June, slightly below the market consensus of 51.5. The latest reading signaled the weakest pace of expansion in the region’s services sector since January, with new orders falling for the first time in seven months and backlogs posting the first drop in six months.
According to the Flash estimate, the S&P Global/CIPS UK manufacturing PMI fell to 45 in July from 46.5 in June and below market expectations of 46.1. The July reading marked a 12th straight month of declining factory activity and the biggest contraction since May 2020 as output continued to decline amid falling demand and overstocking among customers. The Flash Services figure for July fell to 51.5 from 53.7 the previous month and below market expectations of 53.0. As inflationary pressures continued to ease, new order intake edged up and business optimism weakened to its lowest level this year on concerns about the impact of rising borrowing costs on customer demand.
As we noted above, at 9:45 a.m. ET, S&P Global will release its July Flash readings for the manufacturing and services economy, as the market digests the data and what it says about inflationary pressures and the speed of the economy.
Markets looked set to rise on Friday, but major indices were held back by underperforming mega-cap names like Metaplatforms [-2.73%], Nvidia [-2.66%], Apple [-0.62%], Microsoft [-0.89%]And You’re here [-1.10%]. Technology (-0.05%), finance (-0.34%), industrials (-0.47%) and communication services (-1.00%) were the only sectors to close lower. They were enough to leave the Dow Jones and S&P 500 flat, the Nasdaq Composite down 0.22% and the Russell 2000 down 0.35%. In individual names, Qualcomm (QCOM) gained 3.31% after the company announced an agreement with Meta platforms (META) which would see generative AI functionality integrated into future mobile devices.
Here’s how the major market indicators stack up since the start of the year:
- Dow Jones Industrial Average: 6.28%
- S&P 500: 18.15%
- Nasdaq compound: 34.07%
- Russell 2000: 11.30%
- Bitcoin (USD-BTC): 80.29%
- Ether (ETH-USD): 57.94%
Stocks to Watch
Before US stock markets begin trading today, Domino’s Pizza (DPZ)And Phillips (PHG) are supposed to publish quarterly results.
Herringbone (CVX) issued an upward guidance for its June quarter with EPS of $3.08 from the consensus estimate of $2.96 as Permian Basin production of 772,000 barrels of oil equivalent per day set a new quarterly record.
Pushed by the immense surrounding effervescence Barbie And Oppenheimeras well as reports from other films, Cinemark Holdings (CNK) announced on the weekend of July 21, 2023, is poised to be its best summer box office weekend ever, as well as one of the highest-grossing box office weekends in company history. Reports indicate Warner Bros. Pictures (WBD) Barbie grossing $155 million in the United States and Canada, while Universal Pictures’ (CMCSA) Oppenheimer grossed $80.5 million domestically between Friday and Sunday.
KBR (KBR) won a major contract worth up to $1.9 billion for the continued support of NASA’s human spaceflight programs, including the International Space Station, Artemis, and low-Earth orbit commercialization.
Stellantis (STLA) and Samsung SDI plan to establish a second battery manufacturing plant in the United States for electric vehicles with production scheduled for 2027.
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
F5 Networks (FFIV), Logitech International (LOGI), NXP Semiconductor (NXPI), Packaging Corp. (PKG)And Whirlpool (WHR) 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
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
“The optimist thinks it’s the best of all possible worlds. The pessimist fears it’s true. ~ J.Robert Oppenheimer
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.