Netflix's shares were up 6.4% in premarket trading after it lost less subscribers in Q2 than forecast and predicted it would gain 1 million more in the third quarter.

The S&P 500 and the Dow Jones Industrial Average ended the session yesterday 2% higher, while the Nasdaq index climbed 3%.

But new developments in the war in Ukraine fueled fresh insecurities today, after Russian forces shelled eastern and southern Ukraine on Wednesday. US authorities believe that Russia is in the process of annexing areas they occupy, working to install proxy officials and forcing citizens to apply for Russian citizenship.

Investors breathed a sigh of relief yesterday, after Russia announced that it would restart gas flows via the Nord Stream 1 pipeline on Thursday, albeit with a reduction in capacity. But there are still huge doubts about whether this will materialize or not, with many commentators believing that Russia might not pass the chance to retaliate against European sanctions. European Commission President Ursula von der Leyen said today that a full cut-off of Russian gas flows to Europe is "a likely scenario".

Another reason for today's calm on markets is investors' wait-and-see attitude on the eve of the ECB Governing Council meeting, which could back a 50-basis point rate hike tomorrow, instead of the traditional 25-basis point increase. A recession is likely already underway across the bloc, but it must act to curb inflation. The ECB decision may depend on whether or not Russia decides to cut the gas completely. If so, it might prefer to err on the side of caution and stay with 25 bps points, in anticipation of an economic slowdown.

In other news, U.S. existing home sales dropped for a fifth consecutive month in June to the lowest level in two years as buyers feel the pinch of inflation. Sales of previously owned homes were down 5.4% to a seasonally adjusted annual rate of 5.12 million units last month, according to the National Association of Realtors.

 

Economic highlights of the day:

In the United States, housing data and oil inventories are the main events of the day. All the macro agenda here.

The dollar is trading at EUR 0.9788. The ounce of gold is stagnating at USD 1,709. Oil is stabilizing with North Sea Brent at USD 105.80 a barrel and US WTI light crude at USD 99.12. The yield on 10-year US debt climbs to 3.02% over 10 years. Bitcoin is trading at USD 23800.

 

On markets:

* Netflix - The U.S. streaming giant is gaining 7.9% in pre-market trading after reporting a loss of 970,000 subscribers in the April-June period on Tuesday, avoiding the worst-case scenario the group had feared. Netflix further expects its subscriber base to grow again in the current quarter. The group also announced the acquisition of the Australian animation studio, Animal Logic.

* Abbott gained 2% in pre-market trading after raising its annual earnings guidance on strong demand for its medical devices and diagnostics products.

* Biogen saw its profit more than double in the second quarter as it sold its stake in the Samsung Bioepis joint venture for $1.5 billion. However, the pharmaceutical company was losing 3% before the stock market.

* Baker Hughes widened its losses in the second quarter, due to a $365 million charge related to the shutdown of its activities in Russia and inflation. The stock was down 6% in pre-market trading.

* Nasdaq - The U.S. stock exchange operator reported a 10% drop in second-quarter profit on Wednesday due to higher expenses.

* The Boeing Company - Air India said it was close to a decision on a $50 billion aircraft order to be split between Airbus and Boeing under its new owner, Tata Group. The order is expected to include up to 70 wide-body jets, including Airbus A350s and Boeing 787s and 777s, and up to 300 single-aisle aircraft, the two manufacturers said.

* Merck said Wednesday that its Keytruda treatment failed to meet the primary endpoint of a late-stage trial in cancer patients. The stock was down 2% in premarket trading.

* Elevance Health raised its full-year profit forecast after posting a better-than-expected profit in the second quarter on a strong performance by its pharmacy benefit management unit, IngenioRx.

* Tesla - A Florida jury found the electric car maker only 1% responsible for the death of an 18-year-old man whose Model S sedan crashed into a concrete wall after the speed limiter was disabled, with the driver and his father found 99% responsible.

* Novavax - The U.S. Centers for Disease Control and Prevention (CDC) on Tuesday recommended the use of the pharmaceutical company's COVID-19 vaccine for people aged 18 and older. The stock was up 1.2% in pre-market trading.

* Omnicom - The stock was up nearly 7% in premarket trading after the U.S. advertising group reported better-than-expected quarterly revenues and earnings.

 

Analyst recommendations:

  • Alphabet: BNP Paribas cut the recommendation to neutral from outperform. PT up 3.8% to $118.
  • Amazon: Jefferies gives a buy rating. Target price is lowered from USD 163 to USD 150.
  • Chevron: HSBC gives a buy rating. PT up 15% to $167.
  • Datadog: Bernstein starts at outperform with $172 price target.
  • Eagle Materials: J.P. Morgan decreases to neutral from overweight. PT set to $130.
  • Equity Residential: Piper Sandler decreased to underweight from neutral. PT up 3.5% to $70.
  • FMC Corp: KeyBanc Capital Markets raised the recommendation to overweight from sector weight. PT up 18% to $122.
  • Incyte Corporation: Goldman Sachs adjusts price target to $127 from $124 Maintains buy rating.
  • Marathon Petroleum: Goldman Sachs reiterates neutral rating. PT up to $99 from $98.
  • Micro Focus International: Goldman Sachs cuts to sell from buy. PT down 11% to 255 pence.
  • Netflix: Jefferies gives a neutral rating. Target price is lowered from USD 280 to USD 243.
  • Range Ressources Corporation: BofA Securities maintains buy rating. PT ugraded to $49 from $37.
  • Rio Tinto: Goldman Sachs maintains a buy rating. PT is lowered from GBX 5700 to GBX 5680.
  • Sage Group: Goldman Sachs upgrades to neutral from sell. PT set to 670 pence.
  • Sea Limited: Barclays adjusts price target to $125 from $157. Maintains overweight rating.
  • Schroders: Goldman Sachs initiated coverage with a recommendation of sell. PT set to 2.530 pence.
  • Synchrony Financial: J.P. Morgan maintains neutral rating and price target upgrades to $41 from $39.
  • Tenet Healthcare: Wolfe lowers price target to $58 from $82, it maintains perform rating.
  • Ultragenyx Pharmaceutical: Goldman Sachs adjusts price target to $75 from $101. Maintains neutral rating.
  • Woodward: Truist Securities maintains a buy rating. PT up 34% from last price.