The big picture today
Asia-Pacific equity indices ended today’s session on a mixed note. Hong Kong’s Hang Seng fell 1.05% on weak health services, while a few markets remained mostly flat, with Japan’s Nikkei down 0.01%, Taiwan’s TAIEX 0 .02% and China’s Shanghai Composite by 0.05%. South Korea’s KOSPI rose 0.22% and Australia’s ASX All Ordinaries rose 0.51%, while India’s Sensex closed with a 1.68% lead on energy strength and finances. By midday, major European equity indices are up across the board and US futures are pointing to a soft open later this morning.
Before President Biden signs the $750 Billion Inflation Cut Act today, investors will dig into the quarterly results of Home Depot and Walmart (WMT), two top retailers who will lead the wave of consumer-focused corporate earnings reports. In addition to the relationship between their results and consensus expectations, reading efforts to reduce bloated inventory, the corresponding impact on margins, consumer feedback and expectations for the seasonally strong shopping season will be central to the concerns. These results, commentary and advice will likely reshape expectations for days to come, as will tomorrow’s July retail sales report, whose data for the past three months offers a yardstick against which to gauge the trade’s quarterly earnings. Retail. Underlying all of this will be the publication tomorrow of the minutes of the Fed’s monetary policy meeting in July.
The ZEW Economic Sentiment Indicator for the Eurozone slipped to -54.9 in August from -51.1 the previous month, but came ahead of the expected reading of -57. The August figure marked the lowest reading since November 2011 as the economic outlook is set to deteriorate further amid lingering concerns over Europe’s energy crisis and the ECB’s ongoing bullish cycle.
The German ZEW indicator of economic sentiment for Germany fell to -55.3 in August from -53.8 in July, the lowest since October 2008 and below market expectations of -53.8. The current conditions sub-index fell to -47.6 from -45.8 the previous month. High inflation rates and expected additional costs for heating and energy lead to lower profit forecasts for the private consumer sector.
At 8:30 a.m. we will have two July economic data. Housing starts in July are expected to dip 2% month-on-month to 1.54 million from 1.559 million the previous month, while building permits are also expected to fall to 1.650 million from 1.696 million in June.
Minutes before the opening bell rings to begin today’s trading, the July Industrial Production report will be released, and it is expected to rise 0.3% from the 0.2 decline. % reported in June. We remind readers who wish to focus on the manufacturing sector to analyze the data contained in this report, as the overall figure combines production data from manufacturing, utilities and mining.
Energy names fell 2.00% yesterday and materials were down slightly, but the rest of the market had a moderately positive day. As a result, we saw the Russell 2000 gain 0.23%, the S&P 500 advance 0.40%, the Dow Jones rise 0.45% and the Nasdaq Composite end the day up 0.62%. Looking at the companies that stood out yesterday, Walt Disney Company (DIS) posted strong profits during the day off and contributed about 38% of returns in the communications services sector. Tesla (TSLA) was once again a strong contributor to the consumer discretionary sector with its 3.10% gain accounting for just over 109% of the sector’s returns.
Here’s how the main market indicators stack up since the start of the year:
- Dow Jones Industrial Average: -6.68%
- S&P 500: -9.84%
- Nasdaq compound: -16.09%
- Russell 2000: -9.97%
- Bitcoin (USD-BTC): -49.62%
- Ether (ETH-USD): -39.92%
Stocks to Watch
Prior to the start of trading for stocks listed in the United States, Home Depot (HD), Melco Resorts & Entertainment (CLCO), and Walmart (WMT) will be among the companies releasing their latest quarterly results and forecasts.
Whereas ZipRecruiter (ZIP) June quarter results beat consensus expectations, with the company issuing lower guidance for the current quarter and 2022 citing a “challenging macro backdrop of rising inflation, rising labor costs and interest rates” having a more pronounced impact on the hiring environment in the second half of 2022. The company now expects 2022 revenue in the $883-897 million range versus the consensus of $912.7 million.
Uber (UBER) announced it would increase driver fares in London and the UK, as well as change peak hours and minimum fares, as it seeks to attract 8,000 additional drivers to meet growing demand.
Clinical Diagnostics Company Stock SomaLogic (SLGC) has been under pressure after cutting its 2022 revenue forecast due to continued variability in core services business, macroeconomic and business factors.
Shares of Warner Bros. Discovery (WBD) rose in secondary trading last night following a report of Variety HBO Max is going to cut its reality TV programming staff.
Navitas Semiconductor (NVTS) announced the acquisition of GeneSiC Semiconductor, a silicon carbide pioneer with expertise in the design and process of SiC power devices, for $100 million, 24.9 million NVTS shares and a possible top-up payment .
GigaCloud Technology (GCT) and Innovative Eyewear (LUCY) could price their respective IPOs 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
Agilent (A) and Jack Henry (JKHY) are expected to release their quarterly results after the shares halt trading today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.
on the horizon
Wednesday August 17
- Japan: Basic machine orders – June
- Japan: Imports/Exports – July
- United Kingdom: CPI, PPI – July
- Euro zone: 2Q 2022 GDP
- US: Weekly MBA Mortgage Applications
- United States: Retail sales – July
- United States: Business inventories – June
- United States: EIA Weekly Crude Oil Inventories
- US: Federal Reserve FOMC Meeting Minutes – July
Thursday August 18
- Euro zone: CPI – July
- United States: Initial and Continuing Weekly Unemployment Claims
- United States: Philadelphia Fed Index – August
- United States: Sales of existing homes – July
- United States: EIA Weekly Natural Gas Inventories
friday august 19
- Japan: CPI – July
- United Kingdom: Retail sales – July
- Germany: IPP – July
Thought of the day
“Anyone who isn’t embarrassed about who they were last year probably isn’t learning enough.” ~ Alain De Botton
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.