Stock Market Update

Equity futures are higher this morning following another round of earnings reports and news that the U.S. and Japan have struck a trade deal.

President Trump announced via Truth Social that a 15% tariff on Japanese imports will go into effect August 1, which is notably lower than the 25% threatened rate. Additionally, Japan will invest $550 billion into the U.S. economy. 

In other trade news, Bloomberg reports that the EU is readying a reciprocal 30% tariff on $117 billion worth of goods if a trade deal is not struck before the U.S.-implemented tariffs go into effect on August 1. 

Yesterday's action was notably light on trade developments, with earnings being the main driver of the action. The major averages were able to rebound from early losses in the technology sector, with small-cap and mid-cap stocks leading improved buying activity throughout the session.

In addition to a fresh batch of earnings reports, the market will also receive Existing Home Sales data for June at 10:00 ET.

The MBA Mortgage Applications Index for the week ended July 19 registered at 0.8%, up from a 10.0% decrease the prior week.

In corporate news:

• AT&T (T 26.49, -0.93, -3.4%) beat EPS expectations by $0.01 and beat on revenues, while guiding FY25 EPS mostly below consensus. 
• Capital One Finance (COF 223.21, +5.79, +2.7%) beats EPS expectations by $1.45, the company also reported its June card metrics, which saw a domestic net charge-off rate of 5.29% vs 5.57% last month (-28 bps sequential change) with a delinquency rate of 3.92% vs 3.85% last month (+7 bps change).
• GE Vernova (GEV 573.99, +25.00, +4.6%) beats EPS expectations by $0.35 and beats on revenues; guides FY25 revenues toward the higher end of guidance.
• Hilton (HLT 268.90, -4.94, -1.8%) beats EPS expectations by $0.15, beats on revenues, and guides Q3 EPS below consensus; FY 25 EPS in-line. 
• Lennox International (LII 638.04, +18.07, +2.9%) beat EPS expectations by $0.96 and beat on revenues. The company raised FY25 EPS and revenues above consensus.
• Moody's (MCO 498.01, -1.11, -0.2%) beat EPS expectations by $0.17 and beats on revenues, while guiding FY25 EPS in-line.
• Texas Instruments (TXN 193.60, -21.32, -9.9%) beats EPS expectations by $0.05 and beats on revenues. The company guided Q3 EPS and revenues in-line. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Wednesday on a higher note, with Japan's Nikkei (+3.5%) leading the way after the announcement of a trade deal with the U.S. Japan's Nikkei: +3.5%, Hong Kong's Hang Seng: +1.6%, China's Shanghai Composite: UNCH, India's Sensex: +0.7%, South Korea's Kospi: +0.4%, Australia's ASX All Ordinaries: +0.7%.

In news:

• Japanese automakers had a strong showing with Toyota jumping nearly 15.0%.
• Expectations are on the rise for Japan's Prime Minister Ishiba to resign by the end of August.
• Japan sold 40-yr bonds to weak demand.

In economic data:

• Japan's May BoJ Core CPI 2.3% yr/yr (expected 2.5%; last 2.5%)
• South Korea's July Consumer Confidence 110.8 (last 108.7)
• Singapore's June CPI -0.1% m/m (last 0.7%); 0.8% yr/yr (expected 0.9%; last 0.8%). June Core CPI 0.6% yr/yr (expected 0.7%; last 0.6%)
• Australia's June MI Leading Index 0.0% m/m (last 0.1%)

Major European indices trade in the green. STOXX Europe 600: +0.9%, Germany's DAX: +0.6%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +1.0%, Italy's FTSE MIB: +1.3%, Spain's IBEX 35: +0.9%.

In news:

• Business software provider SAP reported solid results for the quarter, but expressed some caution about the second half of the year.
• Unicredit reported solid results and withdrew its bid for Banco BPM.
• Volvo and Stellantis are on the rise after the announcement of a U.S. trade deal with Japan.

No data today