Tuesday July 19th


Stock futures rise after Monday’s Dow reversal as a busy earnings week continues

U.S. stock index futures rose rose Tuesday as traders pored through more corporate earnings reports a day after the market failed to sustain a sharp rally. Dow Jones Industrial Average futures climbed 184 points, or 0.59%. S&P 500 futures ticked up 0.78%, and Nasdaq 100 futures rose 0.85%. Investors continued to assess second-quarter reports from major companies this week for clues on how businesses will handle economic pressures — including greater inflation and a stronger dollar — as recession fears persist. Johnson & Johnson reported better-than-expected quarterly earnings and revenue, although the pharmaceutical giant also cut its full-year revenue and profit guidance. Hasbro’s revenue for the previous quarter came in a tad below expectations, while the toymaker’s earnings per share beat a Refinitiv forecast. IBM shares fell 5% in the premarket, after the tech company lowered its forecast for cash flow, even while reporting earnings that beat Wall Street’s earnings and revenue estimates. Shares of Halliburton rose 1% in the premarket on the back of sharply rising oil prices this year that boosted profits for the company. Netflix is set to report after the close Tuesday. Later in the week, Tesla, United Airlines, American Airlines, Snap, Twitter and Verizon are among those scheduled to report. So far, roughly 8% of S&P 500 companies have reported calendar second-quarter earnings. Of those companies, about two-thirds have beaten analyst expectations, FactSet data shows. Some investors believe that stocks have mostly priced in a downturn after their sharp declines this year. However, others warned investors to hold on to some cash and prepare for more losses ahead. ″[While] I acknowledge sentiment is bad and we could see a large, tactical rally, I am currently more concerned about protecting downside than missing upside, in the aggregate,” Wedbush analyst Kevin Merritt wrote in a Tuesday note. On Monday, the Dow shed more than 200 points to end the day in the red, reversing a morning rally fueled by solid earnings reports from Goldman Sachs and Bank of America. Oil broke above $100 a barrel, and bitcoin surged to the highest levels seen since mid-June. Late in Monday’s session, stocks were dragged down on a Bloomberg report that Apple would slow hiring and spending on growth next year to prepare for a potential economic downturn. Shares of the iPhone maker ended the day about 2.1% lower. Shares in the Asia-Pacific were mostly lower Tuesday after a positive start to the week, and as investors digested Australia’s central bank’s meeting minutes. Hong Kong’s Hang Seng index dropped 0.43%, and the Hang Seng Tech index fell 0.88% in the final hour of trade. Mainland China and South Korea markets were mixed. The Shanghai Composite was mildly higher at 3,279.43 and the Shenzhen Component slipped 0.3% to 12,494.77. The Kospi shed 0.18% to 2,370.97 while the Kosdaq gained 0.72% to 782.33. Japanese markets returned to trade Tuesday after a holiday on Monday and bucked the trend in the region. The Nikkei 225 rose 0.65% to 26,961.68 while the Topix index climbed 0.54% to 1,902.79. Oil prices ran out of steam on Tuesday after gaining more than $5 a barrel in the previous session with concerns that surging crude will feed into a demand-killing recession slightly outpacing continued worries about tight supply. Brent crude futures for September settlement fell 1.5% to $104.67 per barrel. The contract rose 5.1% on Monday, the biggest percentage gain since April 12. WTI crude futures for August delivery dipped 1.71% to $100.84. The contract climbed 5.1% on Monday and the largest percentage gain since May 11. The August WTI contract expires on Wednesday and the more actively traded September future was at $98.98 a barrel, down 44 cents. Gold edged up on Tuesday as an easing dollar made it cheaper for overseas buyers, with investors looking past potential headwinds from the expected policy tightening by central banks globally. Spot gold rose 0.2% to $1,712.79 per ounce by 0930 GMT. U.S. gold futures were little changed at $1,710.20.