The big picture today
Asia-Pacific equity indices ended today’s session on a mixed note. India’s Sensex and Australia’s ASX All Ordinaries were mostly flat, returning -0.09% and 0.06% on the day, while Taiwan’s TAIEX fell 1.47% as names materials were lying around. Japan’s Nikkei rose 0.69%, China’s Shanghai Composite gained 0.80% and Hong Kong’s Hang Seng rose 2.06%. South Korea’s KOSPI gained 2.38% on strength in technology and business services. By midday, European equity indices are up across the board and US futures are pointing to a positive open later this morning.
With weak economic data today, investors will again be chewing on a deluge of quarterly earnings reports today, ahead of the July jobs report due out tomorrow. In total, nearly 600 companies will publish their latest quarterly results and forecasts today. Beyond the benefits, we are witnessing the return of geopolitical tensions. Following US House Speaker Nancy Pelosi’s trip to Taiwan, China fired several missiles around Taiwan as part of extensive drills set to end on Sunday, and after the US Senate and the Italian parliament approved Finland and Sweden’s NATO membership, Ukraine said Russia had started creating a military strike force targeting President Volodymyr Zelenskiy’s hometown of Kryvyi Rih .
German factory orders fell 0.4% in June, better than the consensus forecast of -0.8%, but still below May’s 0.2% drop. The June figure marks the fifth consecutive month of declining data.
Following recent interest rate hikes by the Fed and the European Central Bank to ease inflationary pressures, as it concludes its final monetary policy meeting today, the Bank of England conducted its sixth rate hike since December, raising rates by 50 basis points (0.50%), its biggest move since 1995.
The Consumer Expectations Survey, used by the European Central Bank (ECB) to inform its deliberations, showed that households were beginning to lose faith in the ECB’s ability to bring inflation back to its 2% target. The survey, which was conducted in June, found that median consumer prices are expected to rise 5% over the next year and that inflation hit 2.8% three years from now. Consumers also expected the economy to contract by 1.3% over the next 12 months. By way of comparison, the ECB forecasts average inflation of 6.8% in 2022 before falling to 3.5% in 2023 and 2.1% in 2024. It expects growth of 3.7% this year, of 2.8% next year and 1.6% in 2024.
Following recent headlines of companies cutting staff, readers will want to compare the data found in July’s Challenger job cuts report with that of previous months. At 8:30 a.m. ET, we’ll have the latest reading on weekly initial and continuing unemployment claims; initial jobless claims are expected to rise to 259K from 256K the previous week.
Strong US manufacturing results (durable, factory orders) and earnings of PayPal (PYPL)and CVS Health (CVS) coupled with a nearly 61% pop of Identity Ping (PING) news of an acquisition by Thoma Bravo helped put the markets into risk aversion mode. The Dow Jones rose 1.29%, the Russell 2000 gained 1.41%, the S&P 500 rose 1.56% and the Nasdaq Composite jumped 2.59%. The only sector to see red yesterday was energy as even interest rate sensitive real estate was picked up in the dizziness of the day, up 0.40%.
Here’s how the major market indicators stack up since the start of the year:
- Dow Jones Industrial Average: -9.70%
- S&P 500: -12.82%
- Nasdaq compound: -19.03%
- Russell 2000: -16.00%
- Bitcoin (USD-BTC): -51.50%
- Ether (ETH-USD): -56.22%
Stocks to Watch
Prior to the start of trading for stocks listed in the United States, ACI Worldwide (ACIW), ADT (ADT), Alibaba (BABA), ChipMOS Technologies (IMOS), ConocoPhillips (COP), Crocs (CROX), Datadog (DDOG), Dentsply Sirona (XRAY), Fiverr (FVRR), InterDigital ( IDCC), Kellogg (K), Lordstown Motors (RIDE), Nikola Corp. (NKLA), Papa Johns (PZZA), Restaurant Brands (QAR), Shake Shack (SHAK), WeWork (WE), and YETI Holdings (YETI) will be among the companies releasing their latest quarterly results and forecasts.
A week after downgrading its outlook for the rest of the year, Walmart (WMT) began laying off company employees to “better position the company for a strong future”. The company declined to say how many workers will be affected and which divisions have suffered cuts. Chances are if Walmart makes such cuts, it won’t be the only company to do so. According to data released by S&P Global, U.S. businesses spent 83.1% of their total revenue on operating expenses in the March 2022 quarter, up from 82.6% in the year-ago quarter.
Tesla (TSLA) will hold its final annual shareholder event today at its Gigafactory in Austin, Texas. The event, which has been rebranded as “Cyber Roundup,” will begin at 5:30 p.m. ET. The corresponding shareholder vote should pave the way for the company to complete its second stock split in about two years.
United Microelectronics (UMC) announced that its July sales increased 35.2% year-on-year to NT$24.8 billion.
Lufthansa (DLAKF) sees demand for short-haul flights in Europe driving growth for its passenger airlines this year, forecasting a return to operating profit for the group for the full year.
As of now, no IPO is expected to be priced this week. 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
Air Lease (AL), Allscripts Healthcare (MDRX) AMN Healthcare (AMN), Beyond Meat (BYND), Block (SQ), Cambium Networks (CMBM), Carvana (CVNA), Citrix Systems (CTXS), Corsair Gaming (CRSR) , DoorDash (DASH), Dropbox (DBX), Expedia Group (EXPE), Funko (FNKO), Insulet (PODD), Live Nation (LYV) Lyft (LYFT), Redfin (RDFN), Skyworks (SWKS), Twilio (TWLO ) and Universal Display (OLED) are expected to report quarterly results after the shares halted trading today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.
on the horizon
friday august 5
- Japan: household spending, coincident indicator, leading index – June
- Germany: Industrial production – June
- United States: Employment report – July
- United States: Consumer credit – June
Thought of the day
“Some things must cease for better things to be.” ~ Anonymous
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.