The S&P 500 Index ($SPX) (SPY) is up +0.16%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.32%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.16%.
Market Overview
Stock indexes are showing mixed performance as they rebound from overnight losses caused by a global IT outage. The outage, triggered by a botched update of CrowdStrike Holdings’ cybersecurity software, took down Microsoft’s Windows operating systems, affecting companies and public service organizations worldwide. Travel stocks are particularly under pressure due to flight delays and cancellations. Additionally, several international companies, including banks, insurers, and healthcare systems, reported technical issues due to the outage.
Positive corporate news has mitigated some losses in the broader market. Cybersecurity stocks are climbing following the IT outage, and Intuitive Surgical shares have surged by more than +7% after reporting better-than-expected Q2 adjusted EPS.
Markets are currently pricing in a 5% chance of a -25 bp rate cut at the next FOMC meeting on July 30-31, and a 99% chance at the subsequent meeting on September 17-18.
Global Market Performance
Overseas stock markets are mixed. The Euro Stoxx 50 fell to a 5-week low, down -0.70%. China’s Shanghai Composite climbed to a 2-week high, closing up +0.17%. Japan’s Nikkei 225 Index fell to a 2-1/2 week low, closing down -0.16%.
Interest Rates
September 10-year T-notes (ZNU24) are down -8 ticks, with the 10-year T-note yield up +2.9 bp at 4.231%. T-notes are under pressure due to a slide in European government bonds and rising US inflation expectations, with the 10-year breakeven inflation rate hitting a 2-week high of 2.310%. Additionally, upcoming supply pressures from a $213 billion auction of T-notes and floating-rate notes next week are weighing on the market.
European government bond yields are moving higher, with the 10-year German bund yield up +3.5 bp at 2.466% and the 10-year UK gilt yield up +4.8 bp at 4.112%.
Economic Data
The German June PPI fell -1.6% y/y, in line with expectations, marking the twelfth consecutive month of year-over-year price declines. ECB Governing Council member Simkus indicated that if inflation converges as expected and no unforeseen events occur, monetary-policy easing will be considered in upcoming ECB meetings. Markets are pricing in a 78% chance of a -25 bp rate cut by the ECB at the September 12 meeting.
US Stock Movers
Cybersecurity stocks are rising after CrowdStrike Holdings’ botched update caused a global IT outage. SentinelOne (NYSE:S) is up more than +9%, and Palo Alto Networks (NASDAQ:PANW) is up more than +2%.
CrowdStrike Holdings (NASDAQ:CRWD) is down more than -11%, leading losses in the S&P 500 and Nasdaq 100, following the cybersecurity software failure. Microsoft (NASDAQ:MSFT) is also down more than -2%.
Airline stocks are under pressure due to global IT outages causing flight delays and cancellations. American Airlines Group (NYSE:AAL), Delta Air Lines (NYSE:DAL), United Airlines Holdings (NYSE:UAL), and Southwest Airlines (NYSE:LUV) are down nearly -1%.
Intuitive Surgical (NYSE:ISRG) is up more than +7%, leading gains in the S&P 500 and Nasdaq 100, after reporting Q2 adjusted EPS of $1.78, beating the consensus of $1.54.
Huntington Bancshares (NYSE:HBAN) is up more than +3% after reporting Q2 total deposits of $154.37 billion, above the consensus of $152.72 billion.
Eli Lilly (NYSE:LLY) is up more than +2% after China approved its tirzepatide treatment for weight loss.
Accenture Plc (NYSE:ACN) is up more than +2% after UBS upgraded the stock to buy from neutral.
Hawaiian Electric Industries (NYSE:HE) is up more than +40% following reports that the company has tentatively agreed to a $4 billion settlement for lawsuits over the Maui wildfires last year.
Surgery Partners (NYSE:SGRY) is up more than +2% after Bain Capital-backed chain of surgical facilities announced exploring strategic options, including a potential sale.
Netflix (NASDAQ:NFLX) is up nearly +1% after reporting Q2 streaming paid memberships of 277.65 million, exceeding the consensus of 273.78 million.
Halliburton (NYSE:HAL) is down more than -7% after reporting Q2 revenue of $5.83 billion, missing the consensus of $5.95 billion.
Travelers Cos (NYSE:TRV) is down more than -4%, leading Dow Jones Industrials’ losses, after reporting Q2 revenue of $11.28 billion, below the consensus of $11.46 billion.
American Express (NYSE:AXP) is down more than -3% after reporting Q2 revenue of $16.3 billion, below the consensus of $16.6 billion.
Comerica (NYSE:CMA) is down more than -10% after revising its full-year net interest income loss estimate to -14% from a prior estimate of -11%.
PPG Industries (NYSE:PPG) is down more than -2% after cutting its full-year adjusted EPS estimate to $8.15-$8.40 from $8.34-$8.59, below the consensus of $8.41.
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