Mixed Earnings News May Lead To Mixed Open On Wall Street

The major U.S. index futures are currently pointing to a mixed open on Friday, with stocks likely to turn in a lackluster performance following the strong upward move seen over the past several session.

A steep drop by shares of Snap Inc. (SNAP) is likely to weigh on the tech-heavy Nasdaq, with the Snapchat parent plunging by 32.6 percent in pre-market trading.

The nosedive by Snap comes after the company reported weaker than expected second quarter revenues and declined to provide guidance due to “incredibly challenging” conditions.

Social media giant Twitter (TWTR) may also come under pressure after reporting second quarter results that missed analyst estimates, citing advertising industry headwinds and uncertainty related to the pending acquisition by Elon Musk.

Meanwhile, the Dow may benefit from a notable advance by shares of American Express (AXP), with the credit card giant surging by 5.1 percent in pre-market trading.

The jump by American Express comes after the company reported second quarter results that beat analyst estimates on both the top and bottom lines.

A notable decline by shares of Verizon (VZ) may limit the upside for the Dow, however, as the telecom giant is slumping by 4.3 percent in pre-market trading after reporting weaker than expected second quarter earnings and lowering its full-year guidance.

Overall trading activity may also be somewhat subdued, as a lack of major U.S. economic data keeps some traders on the sidelines ahead of the Federal Reserve’s monetary policy decision next week.

The Fed is widely expected to raise interest rates by at least 75 basis points as part of its ongoing efforts to combat elevated inflation.

Stocks saw significant volatility over the course of the trading session on Thursday but managed to end the day notably higher. The major averages extended a recent upward trend, reaching their best closing levels in over a month.

The major averages saw further upside going into the close, reaching new highs for the session. The Dow climbed 162.06 points or 0.5 percent to 32,036.90, the Nasdaq surged 161.96 points or 1.4 percent to 12,059.61 and the S&P 500 jumped 39.05 points or 1 percent to 3,998.95.

The volatility on Wall Street came as traders expressed some uncertainty about the outlook for the markets following the recent upward move.

The Nasdaq benefitted from a significant advance by shares of Tesla (TSLA), with the electric vehicle marker spiking by 9.8 percent after reporting second quarter earnings that beat expectations.

The latest U.S. economic data may have also helped ease concerns about the outlook for interest rates, with a report from the Labor Department showing initial jobless claims unexpectedly rose to an eight-month high in the week ended July 16th.

The report showed initial jobless claims crept up to 251,000, an increase of 7,000 from the previous week’s unrevised level of 244,000. The uptick surprised economists, who had expected jobless claims to edge down to 240,000.

Jobless claims inched higher for the third straight week, reaching their highest level since hitting 265,000 in the week ended November 13, 2021.

A separate report released by the Federal Reserve Bank of Philadelphia showed regional manufacturing activity unexpectedly contracted at a faster rate in the month of July.

The Philly Fed said its current general activity index slumped to a negative 12.3 in July from a negative 3.3 in June, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to rebound to a positive 0.4.

The Conference Board also released a report showing its index of leading economic indicators decreased for the fourth straight month in June.

The Conference Board said its leading economic index slumped by 0.8 percent in June after falling by a revised 0.6 percent in May.

Economists had expected the leading economic index to decline by 0.5 percent compared to the 0.4 percent drop originally reported for the previous month.

Meanwhile, the European Central Bank announced its decision to raise interest rates by a larger-than-expected 50 basis points, marking the first rate hike in over a decade.

“The Governing Council judged that it is appropriate to take a larger first step on its policy rate normalisation path than signalled at its previous meeting,” the ECB said.

Computer hardware stocks moved sharply higher over the course of the session, with the NYSE Arca Computer Hardware Index surging by 2.3 percent to its best closing level in well over a month.

Substantial strength also emerged among housing stocks, as reflected by the 2.3 percent spike by the Philadelphia Housing Sector Index. The index also reached a well over one-month closing high.

Homebuilder D.R. Horton (DHI) has helped to lead the housing sector higher after reporting better than expected fiscal third quarter earnings.

Tobacco, networking and semiconductor stocks also saw considerable strength on the day, while energy stocks moved sharply lower along with the price of crude oil.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 3.6 percent and the NYSE Arca Oil Index slumped by 2 percent.

Airline stocks also showed a significant move to the downside, resulting in a 2.5 percent nosedive by the NYSE Arca Airline Index.

United Airlines (UAL) and American Airlines (AAL) posted steep losses after reporting weaker than expected second quarter earnings.

Commodity, Currency Markets

Crude oil futures are falling $0.90 to $95.45 a barrel after plunging $3.53 to $96.35 a barrel on Thursday. Meanwhile, after climbing $13.20 to $1,713.40 an ounce in the previous session, gold futures are rising $9.80 to $1,723.20 an ounce.

On the currency front, the U.S. dollar is trading at 136.74 yen versus the 137.36 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0187 compared to yesterday’s $1.0230.

Asia

Asian stocks ended mixed on Friday but logged their best week in months on receding concerns over the Federal Reserve’s aggressive interest rate hikes.

The euro fell from a more than two-week high reached on Thursday after the European Central Bank surprised markets by lifting policy rates by 50 basis points – marking its first hike in 11 years and ending a policy of negative interest rates that had been in place since 2014.

U.S. futures fell as the earnings optimism came to a pause following disappointing earnings results from Snapchat owner Snap.

After missing on the top and bottom lines in its second quarter earnings report, the social media giant unveiled plans to “substantially” slow recruitment.

Oil prices rose in Asian trading and were on course for their first weekly gain in more than a month on concerns of tight supply amid lower OPEC output.

Chinese stocks ended on a flat note as the country’s cyberspace regulator fined Didi Global just over 8 billion yuan ($1.2 billion) for violating cybersecurity and data laws. Hong Kong’s Hang Send Index closed 0.2 percent higher at 20,609.14.

Japanese shares advanced for a seventh straight day on hopes for solid corporate earnings. The Nikkei 225 Index rose 0.4 percent to 27,914.66 and added more than 4 percent for the week. The broader Topix edged up 0.3 percent to settle at 1,955.97.

Shipping firm Kawasaki Kisen surged 11.3 percent after raising its fiscal year earnings guidance. Similarly, Mitsui O.S.K. Lines jumped 2.9 percent and Nippon Yusen climbed 4 percent after announcing upward revisions to their full-year profit forecasts.

Japan’s core consumer inflation remained above the central bank’s 2 percent target for a third straight month in June, while a measure of manufacturing slowed to a 10-month low in July, separate reports showed.

Seoul stocks ended notably lower after data showed producer prices rose at a faster pace in June. The Kospi fell 0.7 percent to 2,393.14, after having ended at over a three-week high the previous day. Tech stocks dragged, with SK Hynix losing 2.4 percent.

Australian markets finished marginally lower after the release of weak manufacturing and business confidence readings, as the economy faced pressure from high global raw material prices.

Europe

European stocks have moved mostly higher on Friday despite Snap Inc. posting disappointing second quarter results and the latest PMI survey data suggesting slowing growth in the Eurozone. Elsewhere, U.K. retail sales fell less than expected in June.

While the U.K.’s FTSE 100 Index has risen by 0.3 percent, the French CAC 40 Index is up by 0.5 percent and the German DAX Index is up by 0.6 percent.

Aluminum maker Norsk Hydro has shown a substantial move to the upside following share buyback news.

Delivery Hero SE shares have also soared. The German online delivery service reported higher Gross Merchandise Value and revenues in the second quarter.

British insurer Beazley has also moved sharply higher after raising its full-year profitability outlook.

MTU Aero Engines has also moved higher. The engine maker has won contracts totaling almost $600 million at the Farnborough International Air Show.

Meanwhile, Danske Bank has slumped. The Danish lender said it won’t pay 2021 dividends tied to second quarter results, as discussions with authorities to end a money laundering scandal are still underway.

Schindler has also fallen after the Swiss elevator and escalator manufacturer cut its 2022 revenue guidance, citing China market contraction and COVID-related restrictions.

Ceconomy shares have plummeted after the owner of retail chains Saturn and Media Markt slashed its outlook for full-year results.

U.S. Economic Reports

No major U.S. economic data is scheduled to be released today.

Stocks In Focus

Shares of Seagate Technology (STX) are moving sharply lower in pre-market trading after the disk drive maker reported weaker than expected fiscal fourth quarter results and provided disappointing guidance.

Sam Adams brewer Boston Beer (SAM) is also likely to come under pressure after reporting second quarter results that missed analyst estimates and lowering its full-year earnings guidance.

Meanwhile, shares of HCA Healthcare (HCA) are seeing substantial pre-market strength after the hospital operator reported second quarter results that beat expectations on both the top and bottom lines.

Fellow hospital operator Tenet Healthcare (THC) is also likely to see initial strength after reporting much better than expected second quarter earnings.