Morning Reads

Morning Reads




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 ( consensus 0.2%; prior 1.0%) and retail sales excluding auto's ( consensus 0.1%; prior 1.0%) at 8:30 a.m. ET, June Business Inventories ( 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 (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%.
  • 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.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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