Nasdaq Futures Plunge as U.S. Tech Earnings Disappoint, PMI Data in Focus

September Nasdaq 100 E-Mini futures NQU2024 are trending down -1.04% this morning as Alphabet’s cautious outlook on AI progress and Tesla’s profit miss, coupled with a delay in its Robotaxi event, weighed on sentiment, while investors awaited U.S. business activity data and the next round of corporate earnings reports.

Tesla TSLA slumped over -7% in pre-market trading after the electric vehicle giant reported weaker-than-expected Q2 adjusted EPS and postponed its Robotaxi event to October. Also, Alphabet GOOGL fell more than -3% in pre-market trading after the tech giant reported higher-than-expected Q2 capital spending, and its chief indicated that patience will be required to see concrete results from artificial intelligence investments.

In yesterday’s trading session, Wall Street’s main stock indexes closed in the red. UPS UPS tumbled over -12% and was the top percentage loser on the S&P 500 after reporting weaker-than-expected Q2 results. Also, NXP Semiconductors NXPI slid more than -7% after the company provided disappointing Q3 guidance. On the bullish side, Pentair PNR climbed +9% and was the top percentage gainer on the S&P 500 after the company posted upbeat Q2 results and updated its full-year adjusted EPS guidance to around $4.25 from $4.15-$4.25. In addition, Arm ARM rose about +5% and was the top percentage gainer on the Nasdaq 100 following a note from M Science stating that all new Arm deployments in the first half of July were powered by Amazon Graviton GPUs.

Economic data on Tuesday showed that U.S. existing home sales fell -5.4% m/m to 3.89M in June, weaker than expectations of 3.99M. Also, the July Richmond Fed manufacturing index came in at -17, weaker than expectations of -7.

Second-quarter corporate earnings season rolls on, with investors awaiting fresh reports from notable companies today, including IBM IBM, AT&T T, Chipotle Mexican Grill CMG, Thermo Fisher Scientific TMO, General Dynamics GD, Ford Motor F, and Las Vegas Sands LVS.

On the economic data front, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading, set to be released in a couple of hours. Economists, on average, forecast that the July Manufacturing PMI will come in at 51.7, compared to last month’s value of 51.6.

Also, investors will focus on the U.S. S&P Global Services PMI, which stood at 55.3 in June. Economists foresee the preliminary July figure to be 54.7.

U.S. New Home Sales data will be reported today. Economists foresee this figure to stand at 639K in June, compared to the previous number of 619K.

The U.S. Building Permits data will come in today. Economists expect June’s figure to be 1.446M, compared to 1.399M in May.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -2.600M, compared to last week’s value of -4.870M.

Meanwhile, investor focus also rests on the U.S. core personal consumption expenditures price index for June, the Fed’s first-line inflation gauge, which is set for release on Friday. The reading could provide insights into whether policymakers might lower interest rates in September.

U.S. rate futures have priced in a 4.7% chance of a 25 basis point rate cut at next week’s monetary policy meeting and a 91.7% probability of a 25 basis point rate cut at the September meeting.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.241%, up +0.05%.

The Euro Stoxx 50 futures are down -0.93% this morning as investors digested a batch of corporate earnings reports from major companies, while disappointing results from U.S. tech giants Tesla and Alphabet also weighed on sentiment. Household goods and technology stocks led the declines on Wednesday. A survey released on Wednesday revealed that German consumer sentiment is set to improve significantly heading into August as households’ income expectations reached their highest level in more than two years. Separately, a survey showed on Wednesday that Eurozone business activity growth stalled in July, with a modest expansion in the region’s leading services industry proving insufficient to counterbalance a more pronounced decline among manufacturers. In corporate news, Lvmh MC slumped over -4% after the world’s biggest luxury group reported weaker-than-expected Q2 sales growth. Also, Deutsche Bank Ag DBK slid more than -6% after reporting its first quarterly loss in four years due to a charge related to a legacy issue at its Postbank division. In addition, Temenos Ag (TEMN.Z.IX) fell over -2% after the Swiss banking software firm cut its full-year guidance.

Germany’s GfK Consumer Climate Index, France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), and Eurozone’s Services PMI (preliminary) data were released today. 

The German August GfK Consumer Climate Index has been reported at -18.4, stronger than expectations of -21.1.

The French July Manufacturing PMI stood at 44.1, weaker than expectations of 45.8.

The French July Services PMI came in at 50.7, stronger than expectations of 49.7.

The German July Manufacturing PMI arrived at 42.6, weaker than expectations of 44.1.

The German July Services PMI was at 52.0, weaker than expectations of 53.2.

Eurozone July Manufacturing PMI stood at 45.6, weaker than expectations of 46.0.

Eurozone July Composite PMI has been reported at 50.1, weaker than expectations of 51.1.

Eurozone July Services PMI came in at 51.9, weaker than expectations of 52.9.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.46% and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.11%.

China’s Shanghai Composite Index closed lower and hit a 5-month low today, extending recent declines amid concerns about the economy and geopolitical risks. Property and automobile stocks underperformed on Wednesday, while telecom stocks gained ground. Meanwhile, China’s yuan fell to its lowest level in over eight months against the dollar on Wednesday as commodities-linked currencies broadly declined on a pessimistic outlook for Chinese demand. In other news, China Securities Journal reported Wednesday that the outstanding balance of short trades on China’s stock exchanges dropped to 27.9 billion yuan ($3.8 billion) on Monday, the lowest level in over four years, as China’s new measures to curb short-selling took effect. In corporate news, Chow Tai Fook slid over -6% in Hong Kong after the jewelry retailer reported that retail sales dropped 20% in the first quarter compared to the same period last year. Investor attention is now centered on the official June data for Chinese companies’ industrial profits, set to be released on Saturday, which is expected to offer insights into second-quarter earnings for Chinese-listed companies.

Japan’s Nikkei 225 Stock Index closed lower today, hitting a 1-month low, as caution remained over the Bank of Japan’s potential rate hikes, while the yen’s continued rally also weighed. Automobile and real estate stocks led the declines on Wednesday. A business survey revealed on Wednesday that Japan’s factory activity unexpectedly contracted in July as output and new orders dropped, with firms continuing to face pressure from higher prices. At the same time, flash data indicated that Japan’s service sector activity expanded in July at its fastest rate since April. Meanwhile, the Japanese yen reached a seven-week high against the dollar as market participants repositioned in anticipation of a potential interest rate increase by the BOJ in the coming months, if not at its policy meeting next week. According to a Bloomberg survey, only around 30% of BOJ watchers expect the authorities to raise rates on July 31st, but over 90% believe there is a risk of such a move. In corporate news, Mitsubishi Motors slumped over -7% after its first-quarter net profit fell due to weaker North American business. At the same time, Eagle Industry Co. surged more than +10% after the company boosted its full-year dividend forecast to 90 yen per share from 80 yen per share. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.26% to 19.01.

The Japanese July au Jibun Bank Japan Manufacturing PMI (preliminary) arrived at 49.2, weaker than expectations of 50.5.

Pre-Market U.S. Stock Movers

Tesla TSLA slumped over -7% in pre-market trading after the electric vehicle giant reported weaker-than-expected Q2 adjusted EPS and postponed its Robotaxi event to October. 

Alphabet GOOGL fell more than -3% in pre-market trading after the tech giant reported higher-than-expected Q2 capital spending, and its chief indicated that patience will be required to see concrete results from artificial intelligence investments.

Seagate Technology STX climbed over +5% in pre-market trading after reporting upbeat Q4 results and providing an above-consensus Q1 forecast.

Texas Instruments TXN gained more than +2% in pre-market trading after the analog semiconductor giant reported better-than-expected Q2 EPS and offered solid Q3 guidance.

Visa V slid over -3% in pre-market trading after the company reported weaker-than-expected Q3 revenue.

Today’s U.S. Earnings Spotlight: Wednesday - July 24th

Thermo Fisher Scientific (TMO), IBM (IBM), ServiceNow Inc (NOW), NextEra Energy (NEE), AT&T (T), Boston Scientific (BSX), KLA Corp (KLAC), Fiserv (FI), Waste Management (WM), General Dynamics (GD), Amphenol (APH), Chipotle Mexican Grill (CMG), CME Group (CME), Republic Services (RSG), O’Reilly Automotive (ORLY), Roper Technologies (ROP), Ford Motor (F), Newmont Goldcorp (NEM), Edwards Lifesciences (EW), United Rentals (URI), Waste Connections (WCN), TE Connectivity (TEL), Old Dominion Freight Line (ODFL), Ameriprise Financial (AMP), Fomento Economico Mexicano (FMX), Vertiv Holdings Co (VRT), Las Vegas Sands (LVS), Westinghouse Air Brake (WAB), Fortive (FTV), Rollins (ROL), Raymond James Financial (RJF), Teradyne (TER), Teck Resources B (TECK), Invitation Homes (INVH), Tyler Technologies (TYL), Carlisle (CSL), Lennox (LII), Rogers Communications (RCI), Check Point Software (CHKP), Teledyne Technologies (TDY), Align (ALGN), Molina Healthcare (MOH), International Paper (IP), Graco (GGG), Tenet Healthcare (THC), Universal Health Services (UHS), Renaissancere (RNR), Flex (FLEX), Lamb Weston Holdings (LW), IPG (IPG), Evercore (EVR), Churchill Downs (CHDN), Annaly Capital Management (NLY), Weatherford (WFRD), KBR (KBR), SEI (SEIC), Stifel (SF), Chemed (CHE), Globe Life (GL), Knight-Swift Trans (KNX), MSA Safety (MSA), Popular (BPOP), Meritage (MTH), South State (SSB), Taylor Morrison Home (TMHC), Robert Half (RHI), Prosperity Bancshares (PB), First American (FAF), Wyndham Hotels (WH), Viking Therapeutics Inc (VKTX), Valmont Industries (VMI), Whirlpool (WHR), Essential Properties (EPRT), Pegasystems (PEGA), SLM (SLM), Moelis & Co (MC), Impinj (PI), Tower (TSEM), Group 1 Automotive (GPI), Quantumscape (QS), Silicon Labs (SLAB), Helmerich Payne (HP), United Community Banks (UCBI), Travel + Leisure Co (TNL), Blackstone Mortgage (BXMT), Plexus (PLXS), Century Communities (CCS), Empire State Realty (ESRT), Simmons First National (SFNC), Pacific Premier (PPBI), Oceaneering International (OII), Nextera Energy Partners LP (NEP), Goosehead Insurance (GSHD), Stewart Info Services (STC), MaxLinear (MXL), Live Oak Bancshares Inc (LOB), Helix (HLX), SJW (SJW), Navient (NAVI), Pebblebrook Hotel (PEB), Getty (GTY), Pathward Financial (CASH), Veris Residential (VRE), PROG Holdings (PRG), Kaiser (KALU), Monarch (MCRI), QCR (QCRH), Origin Bancorp (OBK), Core Laboratories (CLB), Wabash National (WNC).

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. For more information please view the Barchart Disclosure Policy here.