September Nasdaq 100 E-Mini futures (NQU23) are down -0.67% this morning as disappointing earnings results from U.S. heavyweights Tesla and Netflix weighed on sentiment, while investors looked ahead to the next round of corporate earnings.

Netflix Inc (NFLX) tumbled over -6% in pre-market trading after the company reported weaker-than-expected Q2 revenue and issued a disappointing Q3 revenue forecast. Also, Tesla Inc (TSLA) fell more than -2% in pre-market trading after the Austin-based company’s profitability shrank in Q2 and CEO Elon Musk indicated the possibility of price cuts during “turbulent times.”

In Wednesday’s trading session, Wall Street’s major averages closed higher. AT&T (T) soared over +8% and was among the top percentage gainers on the benchmark S&P 500 after the company announced that it does not have immediate plans to remove lead cables from below Lake Tahoe. Also, Elevance Health Inc (ELV) climbed more than +4% after the company reported upbeat Q2 results and raised its full-year guidance. In addition, Carvana Co (CVNA) surged about +40% after the used car sales company reported better-than-expected Q2 revenue and announced a debt restructuring agreement with noteholders. On the bearish side, Omnicom Group Inc (OMC) plunged more than -10% after reporting weaker-than-expected Q2 results.

Economic data on Wednesday showed U.S. June Building Permits, a proxy for future construction, unexpectedly fell to 1.440M, weaker than expectations of 1.490M. Also, U.S. housing starts came in at 1.434M in June, weaker than expectations of 1.480M.

“Clearly the market is looking through the Fed meeting. In the short term, we’re in this Goldilocks scenario where good news is good news, and bad news is good news,” said Rhys Williams, a chief strategist at Spouting Rock Asset Management.

Meanwhile, U.S. rate futures have priced in a 99.8% probability of a 25 basis point rate increase at the Fed’s monetary policy committee meeting next week.

Second-quarter earnings season kicks into full gear, and investors anticipate new reports from major global companies today, including J&J (JNJ), Abbott Labs (ABT), and Philip Morris (PM). Analysts expect corporate earnings from S&P 500 companies to fall 8.2% year-over-year for the quarter.

Today, all eyes are focused on the U.S. Philadelphia Fed Manufacturing index in a couple of hours. Economists, on average, forecast that the July Philadelphia Fed Manufacturing index will stand at -10.0, compared to the previous value of -13.7.

Also, investors will likely focus on U.S. Existing Home Sales data, which came in at 4.30M in May. Economists foresee the new figure to be 4.20M.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 242K, compared to last week’s value of 237K.

In the bond markets, United States 10-Year rates are at 3.785%, up +1.10%.

The Euro Stoxx 50 futures are down -0.21% this morning as market participants digested a mixed bag of corporate earnings. Losses in technology stocks are leading the overall market lower, with Asml Holding NV (ASML.A.DX) falling over -3% after Taiwan Semiconductor Manufacturing Co. cut its 2023 revenue outlook. In corporate news, shares of Electrolux Ab (ELUXB.S.DX) plunged over -16% after Europe’s biggest home appliances maker swung to a loss in Q2. At the same time, Saab Ab (SAABB.S.DX) rose over +3% after the Swedish defense group boosted its organic sales growth guidance.

Germany’s PPI and France’s Business Survey data were released today.

The German June PPI has been reported at -0.3% m/m and +0.1% y/y, stronger than expectations of -0.4% m/m and 0.0% y/y.

The French July Business Survey stood at 100, in line with expectations.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.92%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.23%.

China’s Shanghai Composite today closed lower, extending losses into a fourth straight session as the government’s pledge to support the private economy failed to impress investors. The People’s Bank of China kept its benchmark lending rates unchanged on Thursday, aligning with market expectations. Meanwhile, BofA Global Research on Thursday cut China’s economic growth forecast for this year to 5.1% from 5.7% amid a disappointing second-quarter gross domestic product growth. According to the bank’s recent Asia Fund Manager Survey, 57% of investors are anticipating new lows in China equities, undershooting the October 2022 lows. China on Wednesday pledged to make the private economy “bigger, better and stronger” with a set of policy measures aimed at supporting private businesses and strengthening the post-pandemic recovery. On the positive side, shares of China property developers listed in Hong Kong climbed on Thursday following a Bloomberg News report that Chinese authorities are considering easing home-buying restrictions in the country’s biggest cities.

Japan’s Nikkei 225 Stock Index closed sharply lower today, weighed down by losses in chip-related stocks. The trade data released by the Ministry of Finance on Thursday revealed that Japan’s annual exports grew much less than expected in June, while imports declined more than expected, indicating a sluggish global demand. Also, data showed the country’s trade balance unexpectedly swung to a surplus in June, the first since July 2021. Meanwhile, semiconductor testing equipment maker Advantest plunged over -4%, while chip maker Renesas Electronics slid more than -3%. On the positive side, Nissan Motor Co Ltd rose over +1% after the company decided to adopt Tesla’s charging network in North America. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 2.70% to 19.82.

The Japanese June Trade Balance has been reported at +43.0B, stronger than expectations of -46.7B.

The Japanese June Exports came in at +1.5% y/y, weaker than expectations of +2.2% y/y.

The Japanese June Imports stood at -12.9% y/y, weaker than expectations of -11.3% y/y.

Pre-Market U.S. Stock Movers

International Business Machines (IBM) fell about -1% in pre-market trading after the company reported mixed Q2 results.

Equity Lifestyle Properties Inc (ELS) climbed more than +4% in pre-market trading after being named to join the S&P Midcap 400.

United Airlines Holdings Inc (UAL) gained about +3% in pre-market trading after the company posted upbeat Q2 results and lifted its Q3 and FY23 adjusted EPS guidance.

Discover Financial Services (DFS) plunged more than -12% in pre-market trading after the company reported downbeat Q2 results.

Zions Bancorporation (ZION) soared over +5% in pre-market trading after the regional lender posted stronger-than-expected Q2 results and reflected a robust rebound in customer deposits. 

Cadence Design Systems Inc (CDNS) rose more than +1% in pre-market trading after Stifel upgraded the stock to Buy from Hold.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday – July 20th

J&J (JNJ), Abbott Labs (ABT), Philip Morris (PM), Blackstone Group (BX), Intuitive Surgical (ISRG), Marsh McLennan (MMC), CSX (CSX), Freeport-McMoran (FCX), Kenvue (KVUE), Truist Financial Corp (TFC), Capital One Financial (COF), DR Horton (DHI), Travelers (TRV), Newmont Goldcorp (NEM), PPG Industries (PPG), Nidec (NJDCY), Genuine Parts (GPC), Fifth Third (FITB), WR Berkley (WRB), Snap-On (SNA), Pool (POOL), American Airlines (AAL), KeyCorp (KEY), MarketAxesss (MKTX), Knight Transportation (KNX), East West Bancorp (EWBC), Webster Financial (WBS), Synovus (SNV), Bank Ozk (OZK), Home BancShares (HOMB), ManpowerGroup (MAN), Badger Meter (BMI), Glacier (GBCI), WNS Holdings (WNS), Texas Capital (TCBI), Associated Banc-Corp (ASB), ServisFirst Bancshares (SFBS), First Financial Bancorp (FFBC), Triumph Bancorp (TFIN), OFG Bancorp (OFG), Scholastic (SCHL), S&T Bancorp (STBA), Forestar (FOR), 1st Source (SRCE), OceanFirst (OCFC), Berkshire Hills Bancorp (BHLB), Foreign Trade Bank of Latin America (BLX), Amerant Bancorp A (AMTB), Heritage Financial Co (HFWA), Insteel Industries (IIIN), Sify (SIFY), Metropolitan Bank (MCB), Five Point (FPH), Capstar Financial (CSTR), Alpine Income (PINE).

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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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