Send me real-time posts from this site at my email

Daily Markets: Earnings Deluge Continues, But Here Comes Inflation Data

Today’s Big Picture Asia-Pacific equity indexes ended today’s session mixed as tech pressure pushed Hong Kong’s Hang Seng 0.77% lower, and continued tension with China nudged Taiwan’s TAIEX 0.10% into the red. South Korea’s KOSPI gained 0.09%, Australia’s ASX All Ordinaries rose 0.13%, Japan’s Nikkei advanced 0.26%, China’s Shanghai Composite was up 0.31% and India’s Sensex close ahead 0.80%. By mid-day trading, European equity indices are up across the board and U.S. futures point to a positive open later this morning. With little in the way of economic data today, and following the late weekend news the U.S. Inflation Reduction Act will move to the House for a vote later this week, the start of this week’s trading will be directed primarily by the day’s earnings reports. It is not lost on us that the government feels that the solution to the problem of a historically high amount of money in circulation is to print even more. While we understand the desire to help families under pressure, in the past, bills like these often do more to help keep prices at elevated levels than to help reduce demand and send a clear signal to manufacturers that their prices are simply too high for customers to afford. While investors will be watching the 1,200 earnings reports this week, they are also waiting to see what the inflation data will show in terms of those numbers hitting the Fed’s targeted levels. Depending on how much inflation goes down, it likely won’t be enough to remove the Fed’s hands from the interest rate hike wheel, but will it be enough for them to consider smaller policy steps than that at its last few meetings? That answer will be data dependent, and we have a quite a bit of data before its next policy meeting concludes in September. The road there could have a few potholes along the way if the data presents a less than clear path ahead. Data Download International Economy The Economy Watchers' Survey found Japan's service sector sentiment fell by 9.1 points to 43.8 in July from 52.9 in June amid a resurgence in covid infections. The outlook component of the July Survey moved lower month over month, falling to 42.80 from 47.60. The August reading for the Eurozone’s Sentix Investor Confidence inched up to -25.2 from -26.4 the prior month but missed the consensus forecast of -24.7. Domestic Economy At 10 AM ET, the Conference Board Employment Trends Index (ETI) for July will be published; its June reading came in at 119.38, up from May’s 118.88 reading. When the index increases, employment is likely to increase as well, and vice versa. Following Friday’s outsized July Employment Report, odds are the July ETI reading should move higher month over month as well. With a vote of 51-50 that included a tie breaking vote by Vice President Kamala Harris, the U.S. Senate narrowly passed the $430 billion Inflation Reduction Act, which aims to cut government deficits and consumer medical bills while boosting climate spending. The bill now goes to the House for a vote, which will likely take place this Friday. San Francisco Fed President Mary Daly suggested a 50 basis-point rate increase isn’t locked in at the Federal Reserve’s next policy meeting, saying the Fed is “far from done yet” in bringing down inflation. Fed Governor and voting Federal Open Market Committee Member Michelle Bowan shared she supported the Fed’s latest 75-basis point rate hike and has the view that similarly-sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way. Markets Friday markets initially sold off on strong employment numbers made gains through midday only to draw down slightly and rally into the close as the market debated which sectors would best weather anticipated Fed moves. There was a split decision of sorts as the S&P 500 and Nasdaq composite lost ground on the day, down 0.16% and 0.50% while the Dow and Russell 2000 gained 0.23% and 0.81%. Energy and Financials were Friday’s big winners and Communications Services, and Consumer Discretionary names were under the most pressure. Here’s how the major market indicators stack up year-to-date: Dow Jones Industrial Average: -9.73% S&P 500: -13.03% Nasdaq Composite: -19.10% Russell 2000: -14.41% Bitcoin (BTC-USD): -51.42% Ether (ETH-USD): -54.95% Stocks to Watch Before trading kicks off for U.S.-listed equities, Avaya Holdings (AVYA), Barrick Gold (GOLD), Dentsply Sirona (XRAY), Energizer (ENR), Palantir Technologies (PLTR), Radware (RDWR), and Tyson Foods (TSN) will be among the companies issuing their latest quarterly results and guidance. Pfizer (PFE) agreed to buy Global Blood Therapeutics (GBT) for $5.4 billion in cash, roughly $68.50 per GBT share. Walmart (WMT) is acquiring Volt Systems, a technology company that provides suppliers with enhanced on-demand visibility into merchandising resources. The Wall Street Journal reports CVS Health (CVS) is interested in buying home healthcare company Signify Health (SGFY). Reports suggest Apple (AAPL) may be in the early stages of building its own mobile-ad platform that could end up being a meaningful driver of earnings and revenue for its services business. Dominion Energy (D) shared Virginia regulators approved its application to build the 2.6 GW Coastal Virginia Offshore Wind project and recover the cost from ratepayers. Reports indicate Tesla (TSLA) signed contracts worth about $5 billion to buy materials for their batteries from nickel processing companies in Indonesia. Baidu (BIDU) secured the first permits in China to offer commercial fully driverless robotaxi services to the public on open roads. According to Kelley Blue Book, the average new car in America sold for just over $48K, an all-time high. While used car prices fell slightly from their peak in May, the average price remains just above $28K. IPOs The downsized IPO for electric sport boat developer Forza X1 (FRZA) is expected to start trading on August 11. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page. After Today’s Market Close 23andMe (ME), 3D Systems (DDD), Allbirds (BIRD), Blink Charging (BLNK), CarGurus (CARG), Digital Turbine (APPS), eHealth (EHTH), Freshpet (FRPT), GoodRX (GDRX), Groupon (GRPN), International Flavors & Fragrances (IFF), Lemonade (LMND), SmileDirectClub (SDC), Take-Two (TTWO), Trex (TREX), and Vroom (VRM) are expected to report their quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. On the Horizon Tuesday, August 9 US: Productivity and Unit Labor Cost – 2Q 2022 Wednesday, August 10 Japan: Producer Price Index - July China: Consumer Price Index, Producer Price Index - July Germany: Consumer Price Index - July Italy: Consumer Price Index - July US: Weekly MBA Mortgage Applications US: Consumer Price Index – July US: Wholesale Inventories - June US: Weekly EIA Crude Oil Inventories Thursday, August 11 Germany: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August US: Weekly Initial & Continuing Jobless Claims US: Producer Price Index – July US: Weekly EIA Natural Gas Inventories Friday, August 12 Japan: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August China: China Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August Eurozone: Industrial Production - June US: Import/Export Prices – July US: University of Michigan Consumer Sentiment Index (Preliminary) – August Thought for the Day “How long are you going to wait before you demand the best for yourself?” – Epictetus Disclosures Radware (RDWR) is a constituent of the Foxberry Tematica Research Cybersecurity & Data Privacy Index International Flavors & Fragrances (IFF) is a constituent of the Foxberry Tematica Research Sustainable Future of Food Index Allbirds (BIRD), Blink Charging (BLNK), Freshpet (FRPT), Tesla (TSLA), Trex (TREX) are constituents of the Tematica BITA Cleaner Living Index Allbirds (BIRD), Blink Charging (BLNK), Freshpet (FRPT), Tesla (TSLA), Trex (TREX) are constituents ofthe Tematica BITA Cleaner Living Sustainability Screened Index Apple (AAPL), Walmart (WMT) is a constituent of the Tematica Research Thematic Dividend All-Stars Index The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue