Today’s Big Picture Asia-Pacific equity indexes ended today’s session mixed in a relatively quiet session.China’s Shanghai Composite, Australia’s ASX All Ordinaries, and Taiwan’s TAIEX were all essentially flat returning -0.06%, -0.09%, and 0.08% on the day.South Korea’s KOSPI fell 0.66% while Hong Kong’s Hang Seng gained 0.17%, Japan’s Nikkei rose 0.40% and India’s Sensex advanced 0.70%.By mid-day trading, major European equity indices are up modestly across the board and U.S.futures point to a soft open later this morning.
This past week has been interesting as investors seem to have been more focused on earnings, especially forward guidance, and having seemingly little to no reaction to the broader macroeconomic picture from a housing and employment perspective.There has been some relief in the form of lower gas prices, which has provided optimism even in the face of continually record high inflation prints.
So far, there haven’t been any serious earnings blowups (except maybe for yesterday’s Snap ( SNAP ) results), so the general feeling seem to be one of cautious optimism.Reuters reports companies like Target ( TGT ) and Walmart ( WMT ) are feeling the weight of bloated inventories but so far have managed to apply pressure on suppliers to have them absorb at least some shipping and fuels costs as the retailers gear up for, dare we say it this early in the summer, back-to-school.
Overall, it seems like much of what is unfolding is priced in and it seems like companies are being proactive in managing their way through this part of the economic cycle.
Data Download International Economy
Last night saw the release of preliminary Japanese Manufacturing and Service PMI for July with Manufacturing at 52.2, coming in slightly below estimates, and Services at 51.2 dropping from the previously reported 54.0 as resurgent Covid cases had an impact.
June CPI and Core CPI were also released at 2.4% and 1%, respectively.The broad measure came in 0.10% under expectations while Core CPI ticked up 0.20% from the previously reported figure.
Eurozone preliminary Manufacturing & Services PMI for July were released with Manufacturing dipping below 50 to 49.6 and services just above at 50.6 bringing the Composite figure, due to weighting, to 49.4 signaling a slight overall contraction in activity for the region.UK PMI came in stronger than the EU with Manufacturing at 52.2 and Services at 53.3 for July.
Domestic Economy
9:45 AM ET will see the release of preliminary (flash) Manufacturing & Services PMI for July.Expectations for both are to come in slightly (0.04 – 0.05) under the previously reported figures.These numbers have been trending down after the burst of activity we saw exiting the worst of the pandemic but despite what is being forecast as a second quarter of economic contraction, remain above 50 and continue to point to growth in both areas.If these numbers surprise below 50 then we would expect the week to end on a sour note but given the recent reductions in energy costs, it is not clear to us that a sub-50 print is in the offing.
Markets
Initial Unemployment Claims came in slightly higher than expectations, continuing the trend this week of economic releases performing under expectations but not enough to spook the markets.The Dow gained 0.15%, the Russell 2000 was up 0.48%, the S&P 500 advanced 0.99% and the Nasdaq Composite closed ahead 1.36%.While the rest of us are enjoying a reprieve from historically high energy prices, traders took some profits today as, aside from Communication Services closing down a mere 0.05%, Energy traded off 1.70% and was the only sector to close notably down.
Still, on a YTD basis, energy remains the only sector in positive territory, up almost 30%.
Here’s how the major market indicators stack up year-to-date:
Dow Jones Industrial Average: -11.84% S&P 500: -16.10% Nasdaq Composite: -22.92% Russell 2000: -19.18% Bitcoin (BTC-USD): -51.57% Ether (ETH-USD): -58.14% Stocks to Watch Before trading kicks off for U.S.-listed equities, American Express ( AXP ), Gentex ( GNTX ), HCA ( HCA ), NextEra Energy ( NEE ), Sensient ( SXT ), Twitter ( TWTR ), and Verizon ( VZ ) are expected to report their latest quarterly results.
Robert Half International ( RHI ) reported Q2 diluted earnings late Thursday of $1.60 per share, up from $1.33 a year earlier as compared to a projected $1.59.Revenue for the quarter ended June 30 rose to $1.86 billion from $1.58 billion against estimates of $1.89 billion.
Mattel ( MAT ) announced second quarter net sales of $1.236 billion, an increase of 20%.Management noted that the currency adjusted increase was 24% meaning the strong U.S.dollar took a toll of sorts this quarter.The company also saw inflationary headwinds as adjusted gross margin declined by 260 basis points (2.60%).Adjusted operating income was $121 million, up 82%, with the benefit of top line growth partly offset by the gross margin decline.
PPG Industries ( PPG ) reported Q2 adjusted earnings of $1.81 per share, down from $1.94 per share a year earlier but beating estimates of $1.72 per share.Revenue for the quarter ended June 30 totaled $4.69 billion, up from $4.36 billion a year earlier and eclipsing the estimate of $4.66 billion.The company anticipates Q3 adjusted EPS to range between $1.75 to $2.00 against the consensus estimate of $2.03 per share.
Snap ( SNAP ) disappointed in their earnings release yesterday and took down its ad revenue forecast which saw the stock get pummeled, down over 25% in after hours trading.
The stock continues to drift lower in pre-market trading today but if longer-term investors see value in this name, it might end up bouncing off these lows by the close.
IPOs
As of now, no IPOs are slated to be priced this week.Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page .
After Today’s Market Close
No companies 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 Monday, July 25
Germany: Business Expectations, Ifo Business Climate – July Tuesday, July 26
US: S&P Housing Price Index – May US: New Home Sales – June Wednesday, July 27
China: Industrial Profit – June Germany: GfK German Consumer Climate – August US: Weekly MBA Mortgage Applications US: Durable Orders – June US: Retail Inventories (Ex-Auto) – June US: Pending Home Sales – June US: Weekly EIA Crude Oil Inventories US: Federal Reserve Monetary Policy Statement Thursday, July 28
France: PPI – June Eurozone: Business and Consumer Survey, Consumer Confidence, Consumer Inflation Expectations – July US: Weekly Initial & Continuing Jobless Claims (8:30 AM ET) US: PCE Prices – 2Q 2022 (8:30 AM ET) US: Weekly EIA Natural Gas Inventories (10:30 AM ET) Friday, July 29
Japan: Tokyo Core CPI, Household Confidence – July Japan: Unemployment Rate, Retail Sales – June France, Germany, Italy, Spain: 2Q 2022 GDP Eurozone: CPI – July US: Personal Consumption & Spending, PCE Price Index – June US: Michigan Consumer Sentiment Index – July Thought for the Day “He who is everywhere is nowhere.” ~ Seneca
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