European equities closed mostly higher as the dust continued to settle from yesterday’s monetary policy decision from the European Central Bank to raise rates by a larger amount than expected. The ECB’s decision comes as global inflation remains high and is persisting, and despite the risk of recession and the ensuing energy crisis in the region due to https://dotbig.com/ the ongoing war in Ukraine. This was the first rate increase in 11 years and the biggest since 2000, and the central bank unveiled a tool to try to combat fragmentation in bond yields across the region. The markets also showed some resiliency in the face of some preliminary July manufacturing and services sector reports out of the Eurozone and the U.K.
Its broker-dealer subsidiary, Charles Schwab & Co., Inc. , offers investment services and products, including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank, SSB , provides deposit and lending services and products. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons. Japan’s Nikkei 225 Index rose 0.4%, following the data and amid the yen’s rebound. The yen has fallen to multi-decade lows since March as the Fed gets aggressive with its monetary policy while the BoJ has abstained from tightening its policy aimed at meeting its target for its 10-year bond rate.
The markets accelerated to the downside after a host of global preliminary July manufacturing and services sector reports all signaled slowing business activity, notably a drop into contraction territory for the DotBig U.S. services sector. Defensive stocks fared well on the day as the markets appeared to take a risk off posture following the soft economic data, while the Communication Services sector was the notable laggard.
The business activity reports capped off the week and set the stage for next week that will see some key data and events, headlined by the Federal Open Market Committee’s monetary policy decision on July 27. The FOMC is expected to raise its target for the fed funds rate by 75 bps for a second-straight meeting, but there is speculation that it could go larger to try to stomp out persistently high inflation. The decision will not have updated economic projections but will offer the customary DotBig press conference from Fed Chairman Jerome Powell, which will likely be highly scrutinized. Q2 earnings season has kicked into a higher gear and the markets rallied this week despite some mixed results. So far, of the 104 S&P 500 companies that have reported, 56% have topped revenue forecasts and approximately 72% have bested profit projections, per data compiled by Bloomberg. Compared to the same period last year, revenue growth is around 7% but earnings are down nearly 6%.
SNAP said it is not satisfied with its results, which were impacted by macroeconomic headwinds, platform policy changes, and increased competition that have limited advertising spending. SNAP added that its Q3 revenues so far are flat y/y, and its share repurchase program, which it announced today may repurchase up to $500 million, could be modified, suspended, or terminated at any time. S&P Global https://dotbig.com/markets/stocks/LVMH/ added that the downturn was led by a steep drop in service sector activity, though production at manufacturers also fell marginally, down for the first time in over two years. Dow member Verizon Communications Inc. (VZ $44) announced adjusted Q2 EPS of 1.31, one penny below the Street’s expectations, as revenues were relatively flat y/y to $33.80 billion, above the estimated $33.74 billion.
Eurozone manufacturing output unexpectedly fell into contraction territory, and the region’s services sector growth slowed by a larger amount than anticipated. In the U.K., manufacturing and services sector growth both decelerated but by smaller amounts than anticipated. Retail sales came in louisvuitton mostly better than anticipated for June. The euro and the British pound were little changed versus the U.S. dollar, while bond yields in the Eurozone and U.K. U.S. stocks closed the day lower as they limped across the finish line; however, were still able to post a sharp weekly advance.
The toy company reaffirmed its FY22 guidance for net sales, adjusted EPS, and 2023 goals, but its EPS guidance came in slightly below expectations. Snap shares are plunging 28% in premarket trading after the company posted its weakest-ever quarterly sales growth as a public company. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries.
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Dow component American Express Company (AXP $153) posted Q2 earnings-per-share of $2.57, above the expected $2.42, as revenues rose 31.0% y/y to $13.40 billion, north of the forecasted $12.51 billion. The company said cardmember spending was up 30.0% y/y, driven by the robust rebound in global travel and entertainment spending, which surpassed pre-pandemic levels for the first time. The preliminary S&P Global U.S. Manufacturing PMI Index for July declined to 52.3 from June’s unrevised 52.7 figure, and versus the Bloomberg estimate of a decrease to 52.0.
VZ lowered its full-year earnings and revenue outlooks. VZ’s net customer additions fell short of analysts’ forecasts. The company noted a "very competitive industry," and due to recent actions, including recent pricing https://www.huntington.com/ actions, it is being deliberate in its decisions to improve its profitable growth opportunities. VZ added that although recent performance did not meet its expectations, it remains confident in its long-term strategy.
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The major futures indexes suggest a decline of 0.3% when the final trading day of the week gets underway on Wall Street. U.S. stocks on Friday ended the final trading session of the week in the red.
The preliminary S&P Global U.S. Services PMI Index showed growth for the key U.S. sector this month unexpectedly fell into contraction territory, dropping to 47.0, compared to expectations to remain at June’s 52.7 figure. Readings of 50 for both indexes https://dotbig.com/ are the demarcation point between expansion and contraction. Mattel Inc. (MAT $22) reported Q2 EPS of $0.18, higher than Factset’s $0.06 per share estimate, as net sales increased 20% y/y to $1.24 billion, beating revenue expectations of $1.10 billion.
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