Stock Market Update

The S&P 500 futures are down ten points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 70 points and are trading 0.4% below fair value, and the Dow Jones Industrial Average futures are down 30 points and are trading 0.1% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow Jones Industrial Average are slightly lower after yesterday's sell off. Earnings news since yesterday's close has garnered mostly negative responses. Ford (F) is a standout in that respect while IBM (IBM) goes against the grain.

Today's economic lineup features:

• 8:30 ET: Advance Q2 GDP (Briefing.com consensus 1.9%; prior 1.4%), Advance Q2 GDP Deflator (Briefing.com consensus 2.6%; prior 3.1%), weekly Initial Claims (Briefing.com consensus 240,000; prior 243,000), Continuing Claims (prior 1.867 mln), June Durable Orders (Briefing.com consensus 0.4%; prior 0.1%), and Durable Orders ex-transport (Briefing.com consensus 0.2%; prior -0.1%)
• 10:30 ET: Weekly natural gas inventories (prior +10 bcf)

The 10-yr note yield is down seven basis points to 4.22% and the 2-yr note yield is down five basis points to 4.37%.

In corporate news:

• Ford (F 11.92, -1.75, -12.8%): misses by $0.21, reports revs in-line; reiterates FY24 adjusted EBIT; Ford Pro business tracking towards $70 billion in revenue this year
• IBM (IBM 190.82, +6.80, +3.7%): beats by $0.25, reports slight beat on revs; raises FY24 free cash flow outlook; reaffirms FY24 CC revenue growth; guides for Q3: Sees CC revenue growth consistent with its FY model of mid-single digits, not comparable to consensus
• Waste Mgmt (WM 210.76, -6.62, -3.1%): misses by $0.01, reports revs in-line
• O'Reilly Auto (ORLY 1024.98, -25.73, -2.5%): misses by $0.43, misses on revs; guides FY24 EPS in-line, revs in-line
• Whirlpool (WHR 99.99, +1.24, +1.3%): reports EPS in-line, revs in-line; guides FY24 EPS below consensus, reaffirms FY24 revs guidance
• ServiceNow (NOW 780.00, +49.13, +6.7%): beats by $0.30, reports revs in-line; COO departing
• KLA Corporation (KLAC 770.01, +14.24, +1.9%): beats by $0.45, beats on revs; guides Q1 EPS in-line, revs in-line
• Chipotle Mexican Grill (CMG 52.80, +0.95, +1.8%): beats by $0.02, beats on revs; Q2 comps +11.1%; reaffirms FY24 comp guidance; Seeing positive feedback on commitment to correct portion sizes; expects margins to be under some pressure over next few quarters

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a lower note with Japan's Nikkei (-3.3%) falling more than 3.0% to its lowest close since late April while the yen continued its bounce against the dollar. Japan's Nikkei: -3.3%, Hong Kong's Hang Seng: -1.8%, China's Shanghai Composite: -0.5%, India's Sensex: -0.1%, South Korea's Kospi: -1.7%, Australia's ASX All Ordinaries: -1.4%.
  • In economic data:
    • Japan's July Corporate Services Price Index 3.0% yr/yr (expected 2.6%; last 2.7%)
    • South Korea's Q2 GDP -0.2% qtr/qtr (expected 0.1%; last 1.3%); 2.3% yr/yr (expected 2.5%; last 3.3%)
    • Hong Kong's June trade deficit $55.7 bln (last deficit of $12.1 bln). June Imports 9.0% m/m (last 9.6%) and Exports 10.7% m/m (last 14.8%)
  • In news:
    • There was ongoing speculation that the Bank of Japan will consider hiking rates at next week's policy meeting and could announce a plan to significantly reduce its asset purchases over the coming years.
    • The People's Bank of China unexpectedly lowered its medium-term lending facility rate by 20 basis points to 2.30%.
    • South Korea's GDP for Q2 contracted for the first time since Q4 of 2022.
• Major European indices trade in the red. STOXX Europe 600: -1.4%, Germany's DAX: -1.2%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -2.0%, Italy's FTSE MIB: -2.6%, Spain's IBEX 35: -1.3%.
  • In economic data:
    • Eurozone's June M3 Money Supply 2.2% yr/yr (expected 1.9%; last 1.6%), Private Sector Loans 0.3% yr/yr (expected 0.5%; last 0.3%), and Loans to nonfinancials 0.7% (last 0.3%)
    • Germany's July ifo Business Climate Index 87.0 (expected 88.9; last 88.6). July Current Assessment 87.1 (expected 88.5; last 88.3) and Business Expectations 86.9 (expected 89.0; last 88.8)
    • U.K.'s July CBI Industrial Trends Orders -32 (expected -19; last -18)
    • France's July Business Survey 95 (expected 99; last 99)
  • In news:
    • STMicroelectronics lowered its outlook due to weak pricing while Stellantis reported weak results and said it is considering price cuts.
    • Fintech company Revolut received a banking license in the U.K. German Chancellor Sholz indicated that he plans to run for another term in the fall.