Morning Reads
- Pushed Higher by Food Prices
- German Utility Reports Huge Loss as Russia Slashes Gas Flows
- A $379 Billion Hole Emerges in Developing Nations’ War Chests
- China’s Worst Heatwave in 60 Years is Forcing Factories to Close
- Australia’s Santos Surprises with Backing for Alaska Oil Project
- Biden Signs Bill Aimed at Lowering Drug Costs
- Yellen Directs I.R.S. to Embark on $80 Billion Overhaul Plan
- Can the Texas Power Grid Survive the Crypto Mining Boom?
- Why the 1 Percent Buyback Tax Doesn’t Scare Investors
- Boost Sales
- American Airlines Buys Supersonic Jets Twice as Fast
- Target Misses Lowest Profit Estimate, Still Predicts Rebound
- AMC’s CEO Will Do Whatever It Take
- China’s Tencent Reports First Revenue Drop
- Tech Companies Are Relinquishing Some
- Tweak Marketing as NFL Season Arrives
Futures
Options
PREMIUM
This Morning
S&P 500 futures are down 35 points and are trading 0.9% below fair value. The Nasdaq 100 futures are down 132 points and are 1.1% below fair value. The Dow Jones Industrial Average futures are down 220 points and are trading 0.5% below fair value.
Futures for the major indices are down this morning ahead of the July 26-27 FOMC Minutes release at 2:00 p.m. ET today. Target's (TGT) weaker-than-expected quarterly results are adding to the hesitation in premarket action.
Overseas, the UK's CPI report was the highest reading in 40 years, up 10.1%year-over-year. The Reserve Bank of New Zealand raised its official cash rate by 50 bps to 3.00%, as expected, continuing a slate of aggressive rate hikes.
The weekly MBA Mortgage Applications Index was down 2.3% with weakness in both purchase and refinancing applications.
Other economic releases today include July retail sales (Briefing.com consensus 0.2%; prior 1.0%) and retail sales excluding auto's (Briefing.com consensus 0.1%; prior 1.0%) at 8:30 a.m. ET, June Business Inventories (Briefing.com consensus 1.5%; prior 1.4%) at 10:00 a.m. ET, weekly EIA Crude Oil Inventories (prior +5.45 million), and July 26-27 FOMC Minutes release at 2:00 p.m. ET.
WTI crude oil futures are down 0.2% to $86.42/bbl. Natural gas futures are up 2.3% to $9.54/mmbtu.
The 2-yr note yield is up eight basis points to 3.32% while the 10-yr note yield is up seven basis points to 2.89%.
In corporate news:
- Lowe's (LOW 216.99, +2.87, +1.34%): beats by $0.08, misses on revs; Q2 US comps +0.2%; sees FY23 total sales and comp sales toward low end of prior guidance; sees FY23 EPS toward top end of its prior range
- Target (TGT 173.60, -6.59, -3.66%): misses by $0.33, misses on revs; Q2 comps +2.6%; Q2 operating margins below guidance; reaffirms revenue and operating margin guidance
- Stanley Black & Decker (SWK 102.13, -1.45, -1.40%): Deutsche Bank downgraded to Hold from Buy
- Krispy Kreme, Inc. (DNUT 12.65, -1.87, -12.88%): misses by $0.02, misses on revs; lowers FY22 EPS, revs guidance
- Analog Devices (ADI 174.00, -5.04, -2.82%): beats by $0.09, beats on revs; guides Q4 EPS in-line, revs in-line
- Agilent (A 140.19, +7.42, +5.59%): beats by $0.13, beats on revs; guides OctQ EPS above consensus, revs in-line
- Bed Bath & Beyond (BBBY 25.27, +4.62, +22.37%): continues to surge following yesterday's nearly 30% gain
- The Children's Place (PLCE 53.03, -1.92, -3.49%): misses by $1.52, misses on revs; guides Q3 EPS above consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus
- TJX (TJX 65.74, -0.91, -1.37%): beats by $0.02, misses on revs; guides Q3 EPS below consensus; guides Q4 (Jan) EPS in-line; Q2 comps -5%; lowers FY23 comp guidance
Reviewing overnight developments:
- Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: +1.2%, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: +0.5%, India's Sensex: +0.7%, South Korea's Kospi: -0.7%, Australia's ASX All Ordinaries: +0.3%.
- In economic data:
- Japan's July trade deficit JPY1.44 trln (expected deficit of JPY1.41 trln; last deficit of JPY1.40 trln). July Imports 47.2% yr/yr (expected 45.7%; last 46.1%) and Exports 19.0% yr/yr (expected 18.2%; last 19.3%). June Core Machinery Orders 0.9% m/m (expected 1.3%; last -5.6%); 6.5% yr/yr (expected 7.5%; last 7.4%)
- Singapore's July non-oil exports 1.4% m/m (expected -3.8%; last 3.2%); 7.0% yr/yr (expected 6.0%; last 8.5%)
- Hong Kong's July Unemployment Rate 4.3% (last 4.7%)
- Australia's Q2 Wage Price Index 0.7% qtr/qtr (expected 0.8%; last 0.7%); 2.6% yr/yr (expected 2.7%; last 2.4%). July MI Leading Index -0.2% m/m (last -0.2%)
- New Zealand's Q2 Input PPI 3.1% qtr/qtr (last 3.4%) and Output PPI 2.4% (last 2.6%)
- In news:
- Chinese authorities ordered a halt to this week's production at Toyota's factory in Sichuan due to a power shortage.
- China's Premier Li reportedly requested local officials from six major provinces to increase pro-growth measures after weak July data.
- Australia's wage price index for Q2 increased at its fastest yr/yr pace since 2014.
- The Reserve Bank of New Zealand raised its official cash rate by 50 bps to 3.00%, as expected. The central bank increased its peak rate forecast for Q3 of next year to 4.10% from 3.95%.
- In economic data:
- Major European indices trade in the red. STOXX Europe 600: -0.3%, Germany's DAX: -1.1%, U.K.'s FTSE 100: -0.4%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: -0.7%.
- In economic data:
- Eurozone's Q2 GDP 0.6% qtr/qtr (expected 0.7%; last 0.7%); 3.9% yr/yr (expected 4.0%; last 4.0%). Q2 Employment Change 0.3% qtr/qtr (last 0.6%); 2.4% yr/yr (last 2.9%)
- U.K.'s July CPI 0.6% m/m (expected 0.4%; last 0.8%); 10.1% yr/yr (expected 9.8%; last 9.4%). July Core CPI 0.3% m/m (expected 0.2%; last 0.4%); 6.2% yr/yr (expected 5.9%; last 5.8%). July House Price Index 7.8% yr/yr (last 12.8%)
- In news:
- The U.K.'s CPI increased 10.1% yr/yr in July, representing the sharpest rate of growth in over 40 years.
- The Bank of England expects that the inflation rate will accelerate to 13.0% by October.
- The German government refuted reports that a decision has been made to keep the country's last remaining three nuclear plants operational past the end of this year.
- In economic data: