The S&P 500 futures are down 10 points (0.2% below fair value), Nasdaq 100 futures are down 70 points (0.4% below fair value), and Dow Jones Industrial Average futures are down 30 points (0.1% below fair value).
Futures for these indices are slightly lower following yesterday's sell-off. Most earnings news since yesterday's close has been negative. However, Ford (F) stands out negatively, while IBM (IBM) has positive news.
Today's economic schedule includes:
- 8:30 ET: Advance Q2 GDP (expected 1.9%; prior 1.4%), Advance Q2 GDP Deflator (expected 2.6%; prior 3.1%), weekly Initial Claims (expected 240,000; prior 243,000), Continuing Claims (prior 1.867 million), June Durable Orders (expected 0.4%; prior 0.1%), and Durable Orders ex-transport (expected 0.2%; prior -0.1%)
- 10:30 ET: Weekly natural gas inventories (prior +10 bcf)
The 10-year note yield is down seven basis points to 4.22%, and the 2-year 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 revenue 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, slight revenue beat; raises FY24 free cash flow outlook; reaffirms FY24 CC revenue growth; expects Q3 CC revenue growth consistent with FY model of mid-single digits
- Waste Mgmt (WM 210.76, -6.62, -3.1%): Misses by $0.01, reports revenue in-line
- O'Reilly Auto (ORLY 1024.98, -25.73, -2.5%): Misses by $0.43, misses on revenue; guides FY24 EPS in-line, revenue in-line
- Whirlpool (WHR 99.99, +1.24, +1.3%): Reports EPS in-line, revenue in-line; guides FY24 EPS below consensus, reaffirms FY24 revenue guidance
- ServiceNow (NOW 780.00, +49.13, +6.7%): Beats by $0.30, reports revenue in-line; COO departing
- KLA Corporation (KLAC 770.01, +14.24, +1.9%): Beats by $0.45, beats on revenue; guides Q1 EPS in-line, revenue in-line
- Chipotle Mexican Grill (CMG 52.80, +0.95, +1.8%): Beats by $0.02, beats on revenue; Q2 comps +11.1%; reaffirms FY24 comp guidance; positive feedback on portion sizes; expects margin pressure over next few quarters
Reviewing overnight developments:
Today's News
Q2 U.S. GDP rose at an annualized rate of 2.8%, surpassing the 2.0% consensus estimate and accelerating from 1.4% in Q1. This growth was driven by increased consumer spending, private inventory investment, and nonresidential fixed investment. Notably, consumer spending saw significant contributions from health care, housing, utilities, and recreation services, as well as motor vehicles and parts, recreational goods, furnishings, and gasoline. The Q2 price index for gross domestic purchases rose 2.3%, compared to 3.1% in Q1.
Despite the tech-sector selloff that led to Nasdaq's steepest fall since 2022, Wedbush Securities believes the downturn will be short-lived. The firm highlights the rampant growth of artificial intelligence (AI) and cloud computing as key factors that will drive a recovery. Analysts point to a potential $1 trillion in spending from companies, utilities, and governments on AI, marking it as the fourth industrial revolution.
Weight loss drugmakers Eli Lilly (LLY, Financial) and Novo Nordisk (NVO, Financial) faced declines after Viking Therapeutics (VKTX) announced plans to start a late-stage trial for its obesity candidate VK2735. Viking's stock surged ~18% in premarket trading. Meanwhile, Eli Lilly and Novo Nordisk saw losses of ~3% each, while other competitors like Pfizer (PFE) and Amgen (AMGN) traded flat.
New York Community Bancorp (NYCB, Financial) posted a larger-than-expected Q2 loss due to an expanded review of loans tied to commercial real estate and multifamily properties. The bank reported an adjusted EPS of -$1.05, missing the average analyst estimate of -$0.43. The stock fell 8.0% in premarket trading as the company increased its loan loss provision significantly.
AbbVie (ABBV, Financial) raised its full-year outlook after strong demand for its newer immunology medicines, Skyrizi and Rinvoq, offset the declining sales of its arthritis therapy Humira. The company reported $14.5 billion in net revenue for Q2, with Skyrizi and Rinvoq showing significant year-over-year growth of ~45% and ~56%, respectively.
Chipotle Mexican Grill (CMG, Financial) saw its shares pare gains after management warned of near-term margin pressure due to seasonal and temporary factors, including costs associated with new menu items and higher dairy and avocado prices. Despite this, the company reported an 18.2% increase in total revenue for Q2, driven by higher same-store transaction growth.
Maxlinear (MXL, Financial) shares dropped 26.5% in premarket trading after reporting weaker-than-expected quarterly results and guidance. Investment firm Needham downgraded the stock to Hold from Buy, citing concerns about the company's visibility into a recovery and competitive pressures from Broadcom (AVGO).
Marathon Digital Holdings (MARA, Financial) announced a $100 million purchase of bitcoin, adopting a BTC Buy-and-Hold strategy. The company now holds over 20,000 BTC and plans to retain all bitcoin mined in its operations, periodically making strategic open market purchases.
Royal Caribbean Cruises (RCL, Financial) reported strong Q2 earnings, with revenue rising 16.8% year-over-year to $4.11 billion. The company's strong demand for vacation experiences led to a further improvement in yield and earnings expectations for the rest of the year. Adjusted net income was $882 million, significantly higher than the $492 million reported a year ago.
Southwest Airlines (LUV) reported a 4.5% year-over-year increase in Q2 revenue to a record $7.4 billion. However, unit revenue declined 3.8% due to industry-wide domestic capacity growth outpacing demand. The airline maintained its full-year guidance for 4% capacity growth and announced it will end its policy of open seating next year.
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