Wednesday Morning Market Prepper
- Plan to Attract Battery Makers
- Markets Are Wrong to Cheer Fed Cuts
- ‘I Don’t Trust You Guys'
- Making Sense of Chaos?
- ‘Way in the Future’
- Ready for Brain Surgery
- Libra Hype Fades
- Losing Dollars vs. Losing Percentages
- Futures rise ahead of key earnings
- EU opens antitrust probe against Amazon
- European tech earnings: ASML, Ericsson
- Bank of America EPS beats by $0.03, misses on revenue
- Realty Income declares $0.2265 dividend
- Bank of New York Mellon EPS beats by $0.05, revenue in-line
- U.S. to withhold F-35 fighters from Turkey
- IBM Q2 2019 Earnings Preview
- Bank of America Q2 2019 Earnings Preview
- North Dakota seeks to block Washington state crude-by-rail law
- Omnicom EPS beats by $0.08, revenue in-line
- Textron EPS beats by $0.07, misses on revenue
Earnings This Week:
Open Interest Changes
Mixed bank earnings and comments from President Trump that the trade war has a "long way to go" put a halt to the five-day rally in U.S. shares on Tuesday, though fresh records are back in focus. Dow and S&P 500 futures are up 0.2%, while contracts tied to the Nasdaq are pointing to gains of 0.3% at the open. A wave of quarterly reports from Netflix (NASDAQ:NFLX) and other top-tier, high-growth companies starting today could fuel more stock gains or put an end to the market's recent strength. FAANGs and Microsoft (NASDAQ:MSFT) account for about 17% of the S&P 500's $26T market cap, making reaction to their quarterly results key to Wall Street sentiment.
Earnings season in Europe is also kicking into high gear, led by Dutch semiconductor giant ASML (NASDAQ:ASML) and Swedish telecom equipment supplier Ericsson (NASDAQ:ERIC). ASML's forecasts for sales and margins in the third quarter both missed consensus, though it maintained its overall outlook, lifting shares 5.4% premarket in the U.S. Ericsson meanwhile fell 5.3% ahead of the open, posting earnings that missed analyst estimates for the first time in six quarters and warning its rollout of 5G mobile networks in Asia would weigh on profits. CEO Borje Ekholm said that while Ericsson is gaining market share, it hasn’t won any contracts as a direct result of rival Huawei's troubles.
Taking action to appease regulators, Amazon (NASDAQ:AMZN) has reached a deal with Germany's antitrust authority to overhaul its terms of service for third-party merchants. While neighboring Austria ended a similar probe, the EU overnight opened a formal investigation into Amazon's "dual role" as both a merchant and a marketplace. U.S. lawmakers separately grilled the retail giant on Tuesday over how the company treats merchants, with Amazon associate general counsel Nate Sutton denying the company uses individual data to directly compete with smaller sellers.
The multi-year strategic deal will enable AT&T (NYSE:T) Business Solutions to migrate internal applications to the IBM (NYSE:IBM) cloud, while the latter will make AT&T Business its primary provider of software defined networking. The partnership builds on IBM's $34B acquisition of open-source software firm Red Hat, which closed last week, and strengthened IBM's standing in the hybrid cloud market that manages software and other systems across different cloud services and their own data centers.
In the midst of the prestige-TV battle, HBO (T) reclaimed one crown from Netflix (NFLX) by taking the most Emmy nominations for 2019. The 137 figure breaks its own record of 126 that AT&T's premium cable network set in 2015, thanks in no small part to the return this year of Game Of Thrones for its final season. The series itself wrecked its own record for nominations overall and set a record for nominations in a single season, drawing 32 nods (which beats 26 nominations for NYPD Blue in 1994).
Putting new strains on NATO, the U.S. will begin withholding sales of the advanced F-35 to Turkey after Ankara received the new S-400 missile defense system from Russia. Lockheed Martin (NYSE:LMT), which derives around 30% of its sales from the F-35, has played down the impact of Turkey's potential expulsion from the program in recent weeks, saying other countries are awaiting planes that would have been sold to Turkey. The development stands to affect the Turkish economy, however, with many local companies manufacturing hundreds of parts for the fighter.
The Trump administration has blasted a WTO decision that could let China levy sanctions on the U.S. if the latter doesn't recalculate its anti-subsidy tariffs dating to 2007. The surprise is that the case dates back to the Obama-era and is unrelated to the current levies placed on $250B in Chinese goods. The U.S. had slapped anti-subsidy tariffs on Chinese exports including solar panels, wind towers, steel cylinders and aluminum extrusions - exports that it valued at $7.3B at the time.
What else is happening...
G7 finance ministers look to rein in tech giants.
Canadian Pacific Railway (NYSE:CP) +3.9% topping expectations.
Charles Schwab (NYSE:SCHW) +3.3% beating earnings estimates.
CSX (NASDAQ:CSX) -6.3% AH on trade-related weakness.
Domino's Pizza (NYSE:DPZ) -8.7% on soft U.S. same-store sales.
Goldman Sachs (NYSE:GS) +1.9% boosted by investing & lending unit.
Johnson & Johnson (NYSE:JNJ) -1.6% amid talc, opioid litigation fears.
JPMorgan (NYSE:JPM) +1.1% with a strong consumer business.
United Airlines (NASDAQ:UAL) +0.4% AH amid Q2 beats, $3B buyback.
Wells Fargo (NYSE:WFC) on higher deposit costs, lower rate environment.
In Asia, Japan -0.3%. Hong Kong -0.1%. China -0.2%. India +0.2%.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt flat.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude +0.8% to $58.05. Gold -0.6% to $1402.60. Bitcoin -12.6% to $9359.
Ten-year Treasury Yield -2 bps to 2.1%