>>> What to look at today - 27th of July 2022

US equity futures rallied Wednesday after resilient earnings from Google parent Alphabet Inc. and an upbeat outlook from Microsoft Corp. helped alleviate some of the wider caution in markets. Contracts on the tech-heavy Nasdaq 100 added over 1%, while S&P 500 futures were up more than 0.5%. Microsoft jumped in extended trading on a strong sales forecast, while Alphabet’s revenues assuaged investors’ worst fears. Still, the mood remains edgy ahead of a much-anticipated Federal Reserve interest-rate increase -- part of a global wave of monetary tightening to quell inflation that’s stoking concerns about a worldwide economic slowdown.
Asian shares retreated amid falls in Hong Kong, tracking a close in the red for US stocks Tuesday before earnings lifted spirits after the bell. Australia’s bond yields and currency declined on lower than expected inflation. Treasury yields were little changed as traders brace for a widely telegraphed 75 basis-point Fed hike later Wednesday. The dollar dipped, oil was around $95 a barrel and Bitcoinpeeked above $21,000. he projected Fed move to tackle price pressures would cement a combined 150 basis points increase over June and July -- the steepest rise in rates since the 1980s, when then chairman Paul Volcker wrestled with sky-high inflation. Monetary tightening, Europe’s energy woes amid Russia’s invasion of Ukraine and China’s property sector and Covid challenges are among the risks darkening the global outlook. The International Monetary Fund warned the world economy may soon be on the cusp of an outright recession.
US company earnings are providing a sliver of hope -- more than three-quarters of firms that have reported so far either beat or met expectations. But there are doubts about how long they can weather economic challenges. President Joe Biden will speak with Chinese leader Xi Jinping on Thursday amid fresh tensions over Taiwan. The White House is also considering whether to lift some tariffs on Chinese imports to stem inflation. 

Nikkei +0,11% Hang Seng -1,54% CSI -0,46% Shanghai -0,12% Shenzen +0,10%

Eur$ 1.0149 CNH 6,7651 CNY 6,7645 JPY 136,94 GBP 1,2054 CHF 0,9617 RUB 60,15 TRY 17,9746 WTI$ 95,19 GOld 1,715,59 BTC 21,212 +&% ETH 1,445,62 +4%

S&P +0,89 Nasdaq +1,45% EuroStoxx +0,17% FTSE +0,32% Dax +0,36% SMI

Macro :
- Biden Will Speak to Xi on Thursday as US-China Ties Worsen
- Wuhan Locks Down 1 Million Residents in Echo of Pandemic’s Start

Keep an eye on :
- ADS GY : Adidas Sees FY Net Income From Continuing Ops EU1.3B
- AENA SM : Aena 1H Net Income Misses Estimates
- AA US : Alcoa Nederland Holding Raised to Investment Grade by Moody’s
- ATO FP : Atos 1H Net Loss EU503M, Est. Loss EU117.7M
- ATO FP : Atos Secures 1.5 Billion Euros to Finance Split Plan
- AUTN SW : Autoneum 1H Sales Beats Estimates
- BAS GY : BASF Boosts FY Sales Forecast, Beats Estimates
- EN FP : Bouygues: FCA Investigators Issue Report on TF1 & M6 Deal
- CSGN SW : Credit Suisse Set to Name Ulrich Koerner as Chief Executive: FT
- BN FP : Danone Boosts FY Like-for-Like Sales Forecast
- DBK GY : Deutsche Bank Cuts FY Investment Bank Revenue Goal
- DB1 GY : Deutsche Boerse 2Q Ebitda Beats Estimates
- EOM B C : Econocom Sees FY Organic Revenue +5%
- ELIOR FP : Elior Group Sees FY Organic Revenue at Least +16%
- ENG SM : Enagas 1H Revenue EU478.2M Vs. EU480.6M Y/y
- ENG SM : Zara’s Amancio Ortega Buys 5% Stake in Enagas’s Renewable Unit
- RF FP : Eurazeo SE 1H NAV/Shr EU115.50 Vs. EU117.80 H/H
- ERF FP : Eurofins Scientific Boosts FY Adjusted Ebitda View, Beats Est.
- FCT IM : Fincantieri 1H Revenue Meets Estimatesµ
- HOLN SW : Holcim 2Q Sales Beats Estimates
- OIG IM : Italgas Unit in Pact With Energetica for Energie Rete Stake
- MT PL : J. Martins 1H Net Income EU261M Vs. EU186M Y/y
- KAMBI SS : Kambi 2Q Revenue Misses Estimates
- LI FP : Klepierre 1H Net Rental Income Beats Estimates
- KCR FH : Konecranes 2Q Adj. Ebita, Net Sales Miss Ests; Orders Grow (1)
- KPN NA : KPN Sees FY Adj. EBITDA AL Above EU2.40B, Saw About EU2.40B
- MMT FP : Lagardere 1H Revenue EU3.03B Vs. EU2.08B Y/y
- MC FP : LVMH 2Q Beat in Fashion, Wines & Spirits Impresses: Street Wrap
- LHA GY : Lufthansa Passengers Face Day of Turmoil as Ground Staff Strike
- LHA GY : ITA Airways Board May Call For EU400m Cash Injection: MF
- MELE BB : Melexis Boosts FY Revenue Forecast
- MEL SM :Melia Hotels 1H Net Income EU3.74M Vs. Loss EU156.1M Y/y
- MBG GY : Mercedes Boosts FY Cars Adjusted Return on Sales Forecast
- MMT FP : M6 1H Revenue Meets Estimates
- ML FP : Michelin Can Rejig European Plants to Use Oil, Coal, CEO Says
- NESTE FH : Neste to Acquire Walco Foods to Boost Raw Material Sourcing
- NEX FP : Nexans FY Ebitda Forecast Beats Estimates
- NYR BB : Belgian Court to Rule on Trafigura, Nyrstar Case in Its Totality
- PYPL US : Activist Elliott Management Holds Stake in PayPal -- WSJ
- QIA GY : Qiagen Boosts FY Adjusted EPS Forecast
- RAND NA : Great Resignation Is Slowing Amid High Inflation, Randstad Says
- RED SM : Red Electrica 2Q Net Income EU180.9M Vs. EU177.1M Y/y
- ROVI SM : Rovi 1H Net Income Beats Estimates
- SANOMA FH : Sanoma 2Q EPS Misses Estimates
- SOW GY : Software AG 2Q Adjusted Ebita Beats Estimates
- TKTT FP : Tarkett 1H Adjusted Ebitda EU126.2M Vs. EU112.7M Y/y
- O2D GY : Telefonica Deutschland 2Q Mobile Service Revenue Meets Estimates
- UNI SM ; Unicaja 2Q Net Income Beats Estimates
- UCG IM : UniCredit Agrees to Sell 49% of CNP Vita Assicura for EU500m
- UPONOE FH : Uponor 2Q Operating Profit Misses Estimates
- FR FP : Valeo 1H Ebitda Beats Estimates
- VK FP : Vallourec Sees FY Ebitda EU650M to EU750M, Est. EU662.1M
- VPK NA : Vopak 2Q Revenue EU338.0M Vs. EU303.1M Y/y
- VOW3 GY : Porsche IPO Draws Scrutiny Over New Role for Top Boss: ECM Watch
- WIZZ LN : Wizz Air 1Q Net Loss EU452.5M, Est. Loss EU459.8M
- WLN FP : Worldline 1H OMDA Beats Estimates

>>> US After Hours Summary: MSFT +5.4% missed EPS, but pops on bullish guidance

After Hours Summary: MSFT +5.4% missed EPS, but pops on bullish guidance on call; CMG +8.6%, ENPH +8.3%, GOOG +5.1%, TXN +2.8% also higher on earnings; TENB -9.4%, AXTA -6.6%, JNPR -4.6% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: TEVA +18.8% (also announces agreement for opioids settlement), CMG +8.6%, ENPH +8.3%, MANH +7.2%, TNET +6.9%, NAVI +6.8%, MSFT +5.4%, CNI +5.3%, GOOG +5.1%, EQR +3.9%, PEB +3.8%, MTDR +3.7%, BYD +3.2%, TXN +2.8%, NEX +2.3%, CSGP +2.1%, WH +1.5%, SYK +0.9%, CB +0.8%, LXFR +0.4%, SKX +0.4%, BXP +0.1%, HPP +0.1%, IEX +0.1%

Companies trading higher in after hours in reaction to news: AMSC +13.2% (announces $40 mln of new energy power systems orders), SIGA +5.2% (US may need $7 bln for monkeypox, according to WaPo), STRO +4.3% (first patient has been dosed in a Phase 1 study), CODX +2.6% (US may need $7 bln for monkeypox, according to WaPo), CS +1.4% (to name Ulrich Körner as CEO following reported exit of Thomas Gottstein, according to FT), ET +1.3% (increases dividend), WFC +1.2% (increases dividend), XOM +0.3% (has made two new discoveries offshore Guyana), PEP +0.3% (files mixed securities shelf offering), ASTL +0.1% (union successfully ratifies labor agreement)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FXLV -50.9% (lowers FY revs outlook; also announces restructuring), TENB -9.4%, AXTA -6.6% (also CEO to step down), NXGN -4.7%, JNPR -4.6%, TER -4.2%, V -1%, ZWS -0.9%, AMP -0.4%, HA -0.3%, PGRE -0.3%, USNA -0.3%, EGP -0.2%, HIW -0.2%, MDLZ -0.2% (also increases dividend), AXS -0.1%, ESS -0.1%, FCF -0.1%

Companies trading lower in after hours in reaction to news: RXDX -1.4% (plans to file an IND for PRA052 in Q3; also to advance PRA052 into a Phase 1 trial in Q4), BBW -0.1% (Cannell Capital affirms 10.7% active stake and discloses prior conversation with the co)

>>> US Close Dow -0,71% S&P -1,15% Nasdaq -1,87% Russell -0,69%

Closing Stock Market Summary

The stock market opened on a softer note and headed lower from there. There were several relatively negative corporate headlines before the open, which only added to the nervous sentiment ahead of the FOMC decision tomorrow. The S&P 500 tested its 50-day moving average (3,919) around midday where it found support from buyers. That support soon wavered and the S&P 500 traded below that level for most of the afternoon before a late session rally left the index just a hair above its 50-day moving average.

Walmart's (WMT 121.98, -10.04, -7.6%) warning ahead of the open was the through-line for the price action in the indices today. The company cut its earnings outlook and said increasing levels of food and fuel inflation negatively affected customers' discretionary spending capacity. That led to a buildup in inventories on things like apparel. Walmart's CEO said this shift in spending will force the company to cut prices on general merchandise.

This warning created a ripple effect for other retailers. Target (TGT 151.81, -5.86, -3.6%) and Ross Stores (ROST 77.96, -4.67, -5.7%), among others, traded down today in solidarity. Adding more context, the SPDR S&P Retail ETF (XRT) closed behind the broader market, down 4.2%.

Other corporate headlines included Shopify (SHOP 31.55, -5.16, -14.1%) announcing it is going to reduce its workforce by approximately 10% by the end of the day. This comes ahead of the company's earnings report tomorrow morning. McDonald's (MCD 257.09, +6.71, +2.7%) reported better-than-expected earnings before the open but noted that "the operating environment across the competitive landscape remains challenging." This sent some restaurant names lower in solidarity.

In addition, Alphabet (GOOG 105.44, -2.77, -2.7%) and Microsoft (MSFT 251.90, -6.93, -2.7%) traded lower in front of their earnings reports after the close on concerns that their guidance would not live up to high expectations.

All this corporate news combined with existing rate-hike concerns ahead of the FOMC decision tomorrow at 2:00 p.m. ET. The worry is that inflation will remain sticky, so the Fed will remain aggressive. 

On a related note, some weaker than expected new home sales and consumer confidence data exacerbated existing growth concerns and worries about the Fed's rate hikes leading to a possible recession. The 2-yr note yield ended the day unchanged at 3.04% while the 10-yr note yield fell three basis points to 2.79%.

The advance-decline line further illustrated the buyer trepidation today. Decliners led advancers by a roughly 8-to-5 margin at both the NYSE and the Nasdaq.

Energy futures settled mixed. WTI crude oil futures fell 1.9% to $94.92/bbl. Natural gas futures rose 1.4% to $8.75/mmbtu. Unleaded gasoline futures fell 1.1% to $3.08/gal.

Earnings reports tomorrow morning are headlined by Automatic Data (ADP), Boeing (BA), Bristol-Myers (BMY), General Dynamics (GD), Hilton (HLT), Humana (HUM), Kraft-Heinz (KHC), Norfolk Southern (NSC), Rockwell Automation (ROK), Sherwin-Williams (SHW), Shopify (SHOP), Spotify (SPOT), T-Mobile US (TMUS), and Waste Management (WM).

Tomorrow, market participants will receive the following economic data:

  • 7:00 ET: Weekly MBA Mortgage Index (prior -6.3%)
  • 8:30 ET: June Durable Orders (consensus -0.5%; prior 0.7%), Durable Orders ex-transportation (consensus 0.3%; prior 0.7%), June advance Retail Inventories (prior 1.1%), June advance Wholesale Inventories (prior 2.0%), and June advance goods trade deficit (prior -$104.0 bln)
  • 10:00 ET: June Pending Home Sales ( consensus -1.5%; prior 0.7%)
  • 10:30 ET: Weekly crude oil inventories (prior -0.45 mln)
  • 14:00 ET: July FOMC Rate Decision ( consensus 2.25-2.50%; prior 1.50-1.75%)
  • Dow Jones Industrial Average: -12.6% YTD
  • S&P 400: -15.7% YTD
  • S&P 500: -17.7% YTD
  • Russell 2000: -19.6% YTD
  • Nasdaq Composite: -26.1% YTD

>>> US Early premarket gappers


Early premarket gappers

  • Gapping up:
    • LBRT +11.4%, SHLX +8.9%, FFIV +7.6%, WIRE +6.5%, NTB +5%, AIN +5%, BDN +4.9%, BABA +4.3%, RRC +4.2%, CLS +4%, CALX +3.4%, SGEN +3.3%, UHS +3.2%, KREF +2.6%, BRO +2.3%, PCH +2.3%, WHR +2%, CDNS +2%, UL +1.8%, TBI +1.6%, IRTC +1.3%, ARE +1.1%, SSD +1%
  • Gapping down:
    • AAN -25.9%, ALGT -18.5%, BBIG -13%, PETS -10.6%, WMT -9.1%, UBS -7%, HXL -6.3%, WAB -5.4%, TGT -5.1%, LEGN -5%, KSS -4.4%, DLTR -4%, TJX -3.9%, ROST -3.8%, M -3.7%, AMZN -3.5%, DG -3.3%, JWN -3.2%, SUI -2.6%, AGNC -2.5%, VERV -2.3%, WALD -2.3%, DKL -2.2%, NXPI -2%, NKTX -1.8%, CNC -1.7%, BURL -1.5%, TRMR -1.3%, CONN -1.2%, GM -1.1%, UPS -1%, KALU -0.8%, LOGI -0.7%

>>> Europe : Brokers Upgrades & Downgrades - 26th of July 2022

>>> Up
* Awilco LNG Raised to Buy at Arctic Securities; PT 8 kroner

>>> Down
* Basic-Fit Cut to Sell at Berenberg; PT 33 euros
* Fiskars Cut to Hold at SEB Equities; PT 20 euros
* HeidelbergCement Cut to Neutral at Exane; PT 56.50 euros
* Sinch Cut to Hold at Berenberg; PT 30 kronor
* Stora Enso Cut to Neutral at Exane; PT 17 euros
* Vicat Cut to Neutral at Exane; PT 32 euros

>>> Initiation
* CVG IM Rated New Outperform at EnVent S.p.A.; PT 5.06 euros
* Havila Kystruten Rated New Neutral at SpareBank; PT 20 kroner
* ITM Power Rated New Buy at Peel Hunt; PT 500 pence
* Teleperformance Rated New Outperform at RBC; PT 400 euros
* Veolia Reinstated Underweight at JPMorgan; PT 22.50 euros

>>> CallMargin Pressures Spark Europe Profit Cuts, Morgan Stanley Says
*
* Basic-Fit Gets Only Sell as Berenberg Says Lots ‘Could Go Wrong’
* DSV Raises Profit Outlook as Trade-Lane Congestion Boosts Prices
* ITM Power Has ‘Commanding’ Attributes, New Buy at Peel Hunt
* Morgan Stanley Warns Stock Bulls Deluded by ‘Wishful Thinking’
* Sinch Cut to Hold at Berenberg With Sentiment Now ‘Tarnished’
* Stora Enso Cut to Neutral at Exane on Cautious Pulp Outlook
* Teleperformance a New Outperform at RBC as Long-Term Winner
* Veolia Rated Underweight at JPMorgan on Energy Crisis Pressures

>>> What to look at today - 26th of July 2022

Stocks in Asia received a fillip Tuesday from China’s technology sector, helping to alleviate some of the caution in global markets ahead of a hotly anticipated Federal Reserve interest-rate hike. An Asian share index pushed higher, with Alibaba Group Holding Ltd. leading the advance in China tech. The e-commerce giant plans to seek a primary listing in Hong Kong, paving the way for investors in China to directly buy its shares.
S&P 500 and Nasdaq 100 futures were in the red but off the day’s lows. Sentiment had taken a knock from a late-day slide in retailer Walmart Inc. on a disappointing profit outlook. Its projection could fan worries about corporate prospects as the US flirts with a recession amid tightening monetary settings. The 10-year US Treasury yield was little changed, oscillating around 2.79%. Traders are braced for a wave of debt sales and a widely expected 75 basis points Fed rate rise on Wednesday, part of campaign to tackle inflation. A dollar gauge is near the lowest level since early July. Commodities rallied, taking oil to $98 a barrel. But Bitcointumbled to the brink of $21,000. Markets are bracing not just for the Fed and any policy signals from Chair Jerome Powell, but also corporate reports from the likes of Apple and Alphabet. Other risks include ongoing disruptions to European gas supplies from Russia as well as China’s Covid curbs and property woes. Ed Yardeni, president of Yardeni Research, argues the S&P 500’s plunge last month to a 3,666.77 low likely marked the trough of the 2022 equity rout. He cites the resilience in corporate earnings and the still-healthy outlook for consumers and businesses even as the US economy slows. US After Hours WMT -10% falls on lowered profit outlook, takes other retailers with it TGT -5.2%; FFIV +5.7%, WIRE +5.6%, TBI +4.9% higher on earnings

Nikkei -0,09% Hang Seng +1,52% CSI +0,84% Shanghai +0,76% Shenzen +0,84%

Eur$ 1,0226 CNH 6,7563 CNY 6,7527 JPY 136,54 GBP 1,2062 CHF 0,9647 RUB 58,50 TRY 17,8460 WTI$ 97,94 Gold 1,721,40 +0,80% BTC 21,112 ETH 1,425,79 -0,60%

S&P -0,27% Nasdaq -0,33% EuroStoxx -0,11% FTSE +0,12% Dax -0,04% SMI

Macro :
- Bitcoin Sinks to One-Week Low Amid Bout of Global Market Nerves
- CS Sees Opportunities in VIX as VVIX Falls to Almost 3-Year Low
- *BILL TO REGULATE STABLECOIN DELAYED UNTIL SEPTEMBER: DJ
- Morgan Stanley Warns Stock Bulls Deluded by ‘Wishful Thinking’

Keep an eye on :
- ACS SM : *ACS, ACCIONA, ABERTIS WIN EU550M TOLL ROADS LAWSUIT: EXPANSION
- AAD GY : Amadeus Fire Maintains FY Operating Ebita Forecast
- AMBUB DC : Ambu Gets US FDA Clearance of Single-Use Bronchoscope
- COIN US : Coinbase Faces SEC Investigation Over Cryptocurrency Listings
- DSY FP : Dassault Systemes Boosts FY Non-IFRS EPS Forecast
- DSY FP : Dassault Systemes Extends Pact With Hyundai Motor by Five Years
- DSV DC : DSV Boosts FY Ebit Before Significant Items Forecast
- EDEN FP : Edenred Sees FY Ebitda EU770M to EU820M, Est. EU787.2M
- ELUXB SS : Whirlpool Cuts FY Ongoing EPS Forecast (10
- ENR GY : Siemens Says Transport of Nord Stream 1 Turbine Can Start: Rtrs
- ETL FP : Eutelsat FY Revenue Matches Estimates
- ETL FP : Eutelsat, OneWeb to Combine in $3.4B All-Share Deal
- FUR NA : Fugro 2Q Adjusted Ebit EU40.7M Vs. EU31.7M Y/y
- G IM : Generali's $65 Billion Problem Is Both Political and Sentimental
- IDIA SW : Idorsia 2Q Operating Loss CHF212M, Est. Loss CHF209.8M
- KESKOB FH : Kesko 2Q Adjusted Ebit Beats Estimates
- LISN SW : Lindt & Spruengli 1H Ebit Beats Estimates, Plans 1 Billion Franc Share Buyback Program
- LOGN SW : Logitech Guidance Cut Shows 2023 Hiccup; Long Term Intact: React
- MC FP :
- MBG GY : Mercedes Rastatt Plant to Pause This Week Over Microchips: DPA
- NDX1 GY : Nordex Gets Contract for 148-MW Wind Farm in Finland
- RAND NA : Randstad 2Q Organic Revenue Beats Estimates
- RCO FP : Remy Cointreau 1Q Revenue Beats Estimates
- RIO LN : Rio Tinto’s China Demand, Dividend, Shipments in Focus: Preview
- SCATC NO : Scatec 2Q Ebitda Misses Estimates
- SIGN SW : SIG Group 1H Revenue Beats Estimates
- SOF BB : Sofina Prelim 1H Net Asset Value per Share EU302
- SOI FP : SOITEC 1Q Like-for-Like Sales +6%
- UBSG SW : UBS Group 2Q Net Income Misses Estimates
- UCG IM : Italy’s FSI, Bancomat sign MoU For Possible Partnership
- UNA NA : *UNILEVER 2Q UNDERLYING SALES +8.8%, EST. +7.39%
- VALN SW : Femsa Publishes Prospectus on Public Tender Offer for Valora
- VAR NO : Var Energi 2Q Avg Production 210,000 BOE/D
- WAC GY : Wacker Neuson Narrows FY Ebit Margin Forecast
- WMT US : Walmart Lowers Profit Outlook for 2Q and 2023