Nasdaq 100 E-Mini futures (NQU23) fell by 0.67% this morning due to disappointing earnings reports from Tesla and Netflix, causing negative sentiment among investors. Market participants are also anticipating upcoming corporate earnings.
Netflix Inc (NASDAQ:NFLX) experienced a sharp decline of over 6% in pre-market trading as it reported weaker-than-expected Q2 revenue and issued a disappointing Q3 revenue forecast. Similarly, Tesla Inc (NASDAQ:TSLA) saw a drop of more than 2% in pre-market trading due to reduced profitability in Q2 and CEO Elon Musk’s indication of potential price cuts during turbulent times.
In yesterday’s trading session, major Wall Street averages closed higher. AT&T (NYSE:T) surged over 8%, among the top gainers on the S&P 500, after announcing no immediate plans to remove lead cables from below Lake Tahoe. Elevance Health Inc (NYSE:ELV) climbed more than 4% following upbeat Q2 results and improved full-year guidance. Carvana Co (NYSE:CVNA) rose about 40% after reporting better-than-expected Q2 revenue and announcing a debt restructuring agreement with noteholders. However, Omnicom Group Inc (NYSE:OMC) plunged more than 10% due to weaker-than-expected Q2 results.
Economic data on Wednesday showed U.S. June Building Permits unexpectedly falling to 1.440M, below expectations of 1.490M. U.S. housing starts in June were also weaker than anticipated, coming in at 1.434M compared to expectations of 1.480M.
Market strategist Rhys Williams from Spouting Rock Asset Management pointed out that the market is currently in a Goldilocks scenario where both good and bad news is being positively received in the short term.
Investors are keeping an eye on the upcoming U.S. Philadelphia Fed Manufacturing index, with economists expecting a reading of -10.0 for July, compared to the previous value of -13.7. U.S. Existing Home Sales data and Initial Jobless Claims data are also anticipated.
In the bond markets, United States 10-Year rates are currently at 3.785%, up 1.10%
In the Euro Stoxx 50 futures, losses in technology stocks are leading the market lower, with Asml Holding NV (ASML.A.DX) falling over 3% after Taiwan Semiconductor Manufacturing Co. cut its 2023 revenue outlook. Electrolux Ab (ELUXB.S.DX) also experienced a significant drop of over 16% after reporting a Q2 loss. However, Saab Ab (SAABB.S.DX) rose over 3% after the Swedish defense group increased its organic sales growth guidance.
In Asia, stock markets closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down 0.92%, while Japan’s Nikkei 225 Stock Index (NIK) closed down 1.23%.
China’s Shanghai Composite extended losses for a fourth consecutive session as investors were unimpressed with the government’s pledge to support the private economy. BofA Global Research downgraded China’s economic growth forecast for this year to 5.1% from 5.7%, and 57% of investors in a recent survey anticipate new lows in China equities. However, shares of Chinese property developers listed in Hong Kong climbed following reports of potential easing of home-buying restrictions in major cities.
Japan’s Nikkei 225 Stock Index closed lower, primarily due to losses in chip-related stocks. The country’s trade data for June showed weaker-than-expected annual exports and a larger-than-expected decline in imports, suggesting sluggish global demand. Nevertheless, Nissan Motor Co Ltd rose over 1% after deciding to adopt Tesla’s charging network in North America.
Pre-Market U.S. Stock Market Movers
In pre-market U.S. trading, International Business Machines (NYSE:IBM) reported mixed Q2 results, Equity Lifestyle Properties Inc (NYSE:ELS) was named to join the S&P Midcap 400, United Airlines Holdings Inc (NASDAQ:UAL) posted upbeat Q2 results and lifted its Q3 and FY23 adjusted EPS guidance, Discover Financial Services (NYSE:DFS) reported downbeat Q2 results, Zions Bancorporation (NASDAQ:ZION) saw strong growth with better-than-expected Q2 results, and Cadence Design Systems Inc (NASDAQ:CDNS) received an upgrade from Stifel.
Featured Image: Unsplash @ Clay Banks
