Nasdaq Futures Climb on Upbeat Alphabet Results and Trade Deal Optimism, U.S. PMI Data in Focus
Alphabet (GOOGL) rose over +3% in pre-market trading after the Google parent reported stronger-than-expected Q2 results, boosted by demand for AI products. The company also projected a $10 billion increase in its capital spending for the year, with CEO Sundar Pichai attributing the move to the 'strong and growing demand for our cloud products and services.'
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Also aiding sentiment, reports emerged that the European Union and the U.S. are making headway on a deal that would impose a 15% tariff on most EU imports. In addition, Bloomberg reported that the U.S. and South Korea have discussed creating a fund to invest in American projects as part of a trade agreement.
Investors now look ahead to U.S. business activity data and the next round of corporate earnings reports.
In yesterday's trading session, Wall Street's three main equity benchmarks ended higher. Lamb Weston Holdings (LW) surged over +16% and was the top percentage gainer on the S&P 500 after the producer of frozen potato products posted upbeat FQ4 results and introduced a new cost savings program. Also, Baker Hughes (BKR) climbed more than +11% and was the top percentage gainer on the Nasdaq 100 after the company reported better-than-expected Q2 results. In addition, GE Vernova (GEV) advanced over +14% after the company reported stronger-than-expected Q2 results and said it expects full-year revenue to trend toward the 'higher end' of its $36B-$37B guidance. On the bearish side, Texas Instruments (TXN) plunged more than -13% and was the top percentage loser on the Nasdaq 100 after the semiconductor company issued disappointing Q3 earnings guidance.
Economic data released on Wednesday showed that U.S. June existing home sales fell -2.7% m/m to a 9-month low of 3.93M, weaker than expectations of 4.00M.
'With the Aug. 1 deadline looming, investors have been encouraged by the recent trade-deal announcements,' said Ian Lyngen and Vail Hartman at BMO Capital Markets. 'The progress on the trade war will provide clarity and help the market move forward to incorporate the new global trade environment.'
Second-quarter corporate earnings season continues in full flow, and investors look forward to fresh reports from notable companies today, including Blackstone (BX), Honeywell (HON), Union Pacific (UNP), Intel (INTC), and L3Harris Technologies (LHX). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +3.2% increase in quarterly earnings for Q2 compared to the previous year, slightly above the pre-season forecast of +2.8%.
On the economic data front, all eyes are focused on S&P Global's flash U.S. purchasing managers' surveys, set to be released in a couple of hours. Economists, on average, forecast that the July Manufacturing PMI will come in at 52.7, compared to last month's value of 52.9. Also, economists expect the July Services PMI to be 53.0, compared to 52.9 in June.
Investors will also focus on U.S. New Home Sales data. Economists foresee this figure coming in at 649K in June, compared to 623K in May.
U.S. Initial Jobless Claims data will be released today as well. Economists estimate this figure will come in at 227K, compared to last week's number of 221K.
Meanwhile, U.S. President Donald Trump is set to visit the Federal Reserve's headquarters later today. President Trump has repeatedly criticized Fed Chair Jerome Powell for his reluctance to cut interest rates.
U.S. rate futures have priced in a 97.4% probability of no rate change and a 2.6% chance of a 25 basis point rate cut at next week's policy meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.396%, up +0.16%.
The Euro Stoxx 50 Index is up +0.52% this morning, buoyed by a slew of upbeat earnings reports and optimism over the EU-U.S. trade agreement, with attention now shifting to the European Central Bank's monetary policy decision. Bank stocks led the gains on Thursday. Telecom, healthcare, and industrial stocks also gained ground. The European Union and the U.S. are making headway on a deal that would impose a 15% tariff on most EU imports, avoiding a steeper 30% duty set to take effect on August 1st, according to diplomats familiar with the talks. Adding to the positive sentiment, a survey released on Thursday showed that Eurozone business activity expanded at the fastest pace in 11 months in July, driven by a notable improvement in the services sector and continued signs of stabilization in manufacturing. At the same time, a separate survey showed that German consumer sentiment is set to weaken heading into August, as rising economic uncertainty prompted households to prioritize saving over spending. Meanwhile, investors are awaiting the ECB's interest rate decision later in the session, with the central bank widely expected to keep the deposit rate unchanged at 2.00% following seven straight cuts. Market participants will be watching for any hints on when it might lower interest rates again, though analysts said the central bank will likely seek to avoid sending signals about the September meeting. 'There is just too much uncertainty clouding policy right now, with the EU and U.S. still not finalizing a trade deal,' said FP Markets' Aaron Hill. In corporate news, Deutsche Bank AG (DBK.D.DX) climbed over +6%, and BNP Paribas SA (BNP.P.DX) rose more than +2% after both lenders reported stronger-than-expected Q2 earnings. At the same time, STMicroelectronics (STMPA.FP) plunged over -9% after the chipmaker posted its first quarterly loss in more than a decade.
Germany's GfK Consumer Climate Index, Eurozone's Composite PMI (preliminary), Eurozone's Manufacturing PMI (preliminary), and Eurozone's Services PMI (preliminary) data were released today.
The German August GfK Consumer Climate Index stood at -21.5, weaker than expectations of -19.4.
Eurozone's July Composite PMI has been reported at 51.0, stronger than expectations of 50.8.
Eurozone's July Manufacturing PMI came in at 49.8, stronger than expectations of 49.7.
Eurozone's July Services PMI arrived at 51.2, stronger than expectations of 50.6.
Asian stock markets today settled in the green. China's Shanghai Composite Index (SHCOMP) closed up +0.65%, and Japan's Nikkei 225 Stock Index (NIK) closed up +1.59%.
China's Shanghai Composite Index ended higher today as signs of improvement in U.S.-China relations boosted sentiment. Rare earth stocks led the gains on Thursday. Tourism stocks also advanced, with China Tourism Group Duty Free climbing +10% after a launch plan was announced for the Hainan Free Trade Port. The benchmark index closed above the 3,600 level for the first time since January 2022. Chinese stocks have been climbing in recent weeks, supported by Beijing's measures to rein in excessive competition and overcapacity, along with signs of improving U.S.-China trade ties. U.S. President Donald Trump said on Wednesday that the U.S. was in the process of finalizing a trade agreement with China and would implement straight tariffs for most countries. Meanwhile, U.S. Treasury Secretary Scott Bessent will meet his Chinese counterparts in Stockholm next week for economic and trade talks. In other news, European Commission President Ursula von der Leyen called for an 'essential' recalibration of trade relations with China during a tense summit on Thursday with President Xi Jinping. Investors are also looking to the country's July Politburo meeting, where policymakers will deliberate on economic policies for the second half of the year. In corporate news, WuXi Biologics rose over +3% in Hong Kong after projecting higher first-half profits.
Japan's Nikkei 225 Stock Index closed sharply higher and hit a new one-year high today, extending yesterday's gains after Tokyo struck a long-awaited trade deal with Washington. Bank stocks led the gains on Thursday as investors speculated that the economic clarity provided by the trade agreement would enable the Bank of Japan to resume interest rate hikes later this year. The trade deal unveiled late Tuesday by U.S. President Donald Trump lowered the reciprocal tariff and auto-specific duties to 15%, down from the 25% Trump had previously threatened in a letter to the Japanese government. U.S. Treasury Secretary Scott Bessent cautioned that the U.S. will review the implementation of the trade agreement on a quarterly basis, and if Trump is unhappy, tariffs will return to the 25% rate for both automobiles and other Japanese goods. On the economic front, preliminary business surveys released on Thursday showed that Japan's manufacturing activity unexpectedly fell into contraction territory in July amid uncertainty over U.S. tariffs, while the country's service sector expanded at the quickest rate in five months, driven by strong demand. Meanwhile, concerns persist over Japan's domestic politics. Prime Minister Shigeru Ishiba has rejected local media reports claiming he plans to resign following his party's loss of an upper house majority, while uncertainty surrounding the country's fiscal policy remains. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +1.63% to 23.10.
The Japanese July au Jibun Bank Manufacturing PMI (preliminary) stood at 48.8, weaker than expectations of 50.2.
Pre-Market U.S. Stock Movers
Alphabet (GOOGL) rose over +3% in pre-market trading after the Google parent reported stronger-than-expected Q2 results, boosted by demand for AI products. The company also projected a $10 billion increase in its capital spending for the year, with CEO Sundar Pichai attributing the move to the 'strong and growing demand for our cloud products and services.'
Tesla (TSLA) slid more than -6% in pre-market trading after CEO Elon Musk cautioned about tough times ahead for the company as incentives such as the EV tax credit phase out in the U.S. 'We probably could have a few rough quarters,' Musk said.
ServiceNow (NOW) climbed more than +7% in pre-market trading after the enterprise software company posted upbeat Q2 results and raised its full-year subscription revenue guidance.
Las Vegas Sands (LVS) gained over +6% in pre-market trading after the casino company reported stronger-than-expected Q2 results.
Chipotle Mexican Grill (CMG) plunged over -11% in pre-market trading after the burrito chain reported weaker-than-expected Q2 revenue and cut its full-year comparable restaurant sales growth forecast.
You can see more pre-market stock movers here
Today's U.S. Earnings Spotlight: Thursday - July 24th
Blackstone (BX), Honeywell (HON), Union Pacific (UNP), Intel (INTC), Newmont Goldcorp (NEM), Digital (DLR), Ameriprise Financial (AMP), Nasdaq Inc (NDAQ), L3Harris Technologies (LHX), Valero Energy (VLO), Keurig Dr Pepper (KDP), Edwards Lifesciences (EW), Westinghouse Air Brake (WAB), Tractor Supply (TSCO), STMicroelectronics (STM), VeriSign (VRSN), Dover (DOV), CenterPoint Energy (CNP), Dow (DOW), Labcorp Holdings (LH), Flex (FLEX), Teck Resources (TECK), Comfort Systems (FIX), Weyerhaeuser (WY), TransUnion (TRU), Deckers Outdoor (DECK), West Pharmaceutical Services (WST), Textron (TXT), RPM (RPM), TechnipFMC (FTI), Healthpeak Properties (DOC), Gaming & Leisure Properties (GLPI), Mobileye Global (MBLY), Lincoln Electrics (LECO), Pool (POOL), Kinsale Capital (KNSL), Ovintiv (OVV), AO Smith (AOS), LKQ (LKQ), South State (SSB), Old Republic (ORI), American Airlines (AAL), FirstService (FSV), Mohawk Industries (MHK), Ryder System (R), ADT (ADT), SLM (SLM), Boyd Gaming (BYD), FirstCash (FCFS), Darling Ingredients (DAR), Moelis & Co (MC), FTI Consulting (FCN), Valley National (VLY), Glacier (GBCI), Group 1 Automotive (GPI), Lazard (LAZ), Columbia Banking (COLB), Hexcel (HXL), Phillips Edison Co (PECO), CNX Resources (CNX), AllianceBernstein Holding LP (AB), SkyWest (SKYW), Brunswick (BC), Associated Banc-Corp (ASB), Integer Hld (ITGR), Iridium (IRDM), WSFS (WSFS), The Bancorp (TBBK), Eastern Bankshares (EBC), TRI Pointe Homes (TPH), Visteon (VC), Bread Financial Holdings (BFH), Enova International Inc (ENVA), CVB Financial (CVBF), McGrath (MGRC), Ardagh Metal Packaging (AMBP), Sonic Automotive (SAH), Atlantic Union (AUB), Seacoast Banking Florida (SBCF), HNI (HNI), Garrett Motion (GTX), Provident (PFS), WNS Holdings (WNS), First Financial Bancorp (FFBC), Boston Beer (SAM), Liberty Oilfield (LBRT), Customers Bancorp (CUBI), Minerals Technologies (MTX), Phinia (PHIN), Novocure Ltd (NVCR), Knowles Cor (KN), Imax (IMAX), 1st Source (SRCE), S&T Bancorp (STBA), Coursera (COUR), Ladder Capital (LADR), Alexander&Baldwin (ALEX), Dime Community (DCOM), CTS Corp (CTS), Byline Bancorp (BY), Berkshire Hills Bancorp (BHLB).
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. This article was originally published on Barchart.com
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