Corporate results have generally been tepid, but investors seem better disposed to welcome lackluster performances. Yesterday, Alphabet, posted revenue up 13% in the latest quarter - its slowest pace in two years. Same for Microsoft, which also recorded its slowest profit growth in two years. Still, investors considered these results were better-than-expected. And Microsoft's CEO gave a compelling speech, especially on the forecasts and the dynamics of the Cloud division. Time will tell if this is true, but the marketing spin worked well. For Alphabet, its results are far from the collapse experienced by Snap on advertising, or the layoffs announced by Shopify.
Today's increase is a welcome reprieve for the US Nasdaq, which lost 4% in three sessions, after Walmart lowered, for the second time in a few weeks, its 2022 forecasts. The message is clear: the consumer is under pressure and the company must multiply its commercial efforts, including cutting its margins, to maintain a correct level of activity. All of this fits in quite well with the current economic slowdown, which is already showing signs in some companies. Those with high pricing power are doing better than others. Those that are lowering their targets are generally caught between a rock and a hard place: costs are rising but prices are not rising as fast.
It's the final countdown before the Fed's monetary policy decision at 2pm. Wall Street bookmakers are giving 75% odds for a 75-basis point rate hike, which seems to have become the base rate in the US. The central bank is expected to reiterate its resolve to curb inflation through rate hike policy. Investors will be assessing each and every word in Jerome Powell's speech for clues as to how high the Fed plans to go. A complicated and even futile exercise, as the Fed itself does not know.
Some important corporate results will also be released later today: Meta Platforms and Qualcomm. Tomorrow, it's the long-awaited US GDP data that will be the highlight of the session. It should reveal that the US has entered into a technical recession. Joe Biden and Xi Jinping are scheduled to talk on Thursday as the situation around Taiwan becomes tense again. Some hope that there will be some announcement that many tariffs will be removed on products imported from China to the United States.
Economic highlights of the day:
On the agenda today, wholesale inventories and durable goods orders at 08:30am, Pending Home Sales at 10:00 pm and oil inventories at 10:30 pm. All the macro agenda here.
The dollar is down to EUR 0.9857. The ounce of gold is losing ground at USD 1719. Oil retreats again, with North Sea Brent at USD 105.30 per barrel and US WTI light crude at USD 96.03. US 10-year debt yields 2.80%, still below the 5-year, 2-year and 6-month. Bitcoin is stable around USD 21,375.
* Alphabet gained 3.5% in pre-market trading after reporting advertising revenue above market expectations for search engine Google, easing concerns about the impact of the economic downturn on its main division.
* Microsoft expects double-digit revenue growth for the current year, driven by demand for cloud services.
* The Boeing Company maintained its free cash flow generation target this year despite a quarterly adjusted loss and said it was in the home stretch for resuming deliveries of the 787 Dreamliner. The manufacturer's stock was up 3.6% in pre-market trading.
* The Kraft Heinz Co on Wednesday raised its annual forecast for organic sales growth, benefiting from both price increases and demand.
* T-Mobile US gained 3.8% in premarket trading after raising its subscriber growth forecast for the second time this year on the strength of its relatively cheaper-than-competitive plans.
* Bristol-Myers Squibb fell 2.6% in premarket trading after lowering its annual sales target due to the high dollar.
* Humana - The health insurer raised its annual profit forecast again, citing favorable medical spending trends.
* Chipotle Mexican Grill reported a better-than-expected quarterly profit on Tuesday, as multiple rate hikes helped the restaurant chain cushion the blow of inflation. It was up more than 8% in pre-market trading.
* Visa reported a better-than-expected quarterly profit thanks to strong consumer spending and a summer travel boom.
* Texas Instruments is forecasting sales for the current quarter to be well above expectations, relying in particular on sustained demand from its industrial and automotive customers. The semiconductor maker was up 3.7% in pre-market trading.
* Hilton Worldwide raised its full-year profit forecast after posting a better-than-expected quarterly profit on a rebound in travel demand. The hotel group was up 5% in pre-market trading.
* Mondelez International raised its annual revenue forecast after posting better-than-expected quarterly results thanks to demand.
* Twitter announced Tuesday that its shareholders will vote on Sept. 13 at a special meeting on Elon Musk's $44 billion takeover bid.
* Paypal gained 6% in pre-market trading after news reports that Elliott Investment Management is buying a stake in the payments group.
* Teva was up 23.3% in premarket trading after it offered to pay $4.35 billion to end all lawsuits over its alleged role in the opioid crisis that caused thousands of deaths in the United States.
* Bunge - The grain and agricultural commodities trading group raised its annual earnings guidance.
* Spotify reported Wednesday better-than-expected second-quarter revenue thanks in part to a 14% increase in paying subscribers to its premium service. The world's number one music streaming company was up 9.2% in pre-market trading.
* Shopify on Wednesday reported an adjusted operating loss for the second half of the year due to higher costs and expenses related to the integration of e-commerce fulfillment company Deliverr.
- Allegiant Travel: Wolfe Research cut the target to $117 from $131. Maintains outperform rating.
- Ansys: Oppenheimer & Co initiated coverage with a recommendation of outperform. PT up 12% to $285.
- Autodesk: Oppenheimer & Co increased price target by 19% to $230 after a recommendation of outperform.
- Calix: Barrington Research raises price target to $67 from $63. Maintains outperform rating.
- Covenant Logistics Group: Cowen raised the target to $31.50 from $22. Maintains market perform rating.
- Cheniere Energy Partners: US Capital Advisors raised the recommendation to hold from underweight. PT up 6.9% to $52.
- HCA Healthcare: Deutsche Bank raised the target to $240 from $200. Maintains buy rating.
- HubSpot: Oppenheimer & Co initiated coverage with a recommendation of outperform. PT up 29% to $350.
- Meta Platforms: Itau BBA Securities initiated coverage with a recommendation of market perform. PT up 17% to $188.
- McDonald's: Deutsche Bank downgrades to hold from buy. PT up 0.7% to $259.
- Paramount Global: Goldman Sachs cut the recommendation to sell from buy. PT down 21% to $20.
- Prologis: Deutsche Bank cut the target to $156 from $184. Maintains buy rating.
- Raytheon Technologies: Vertical Research maintains buy rating and lowers price target to $120 from $123.
- Rio Tinto: HSBC reinstated coverage with a recommendation of hold. PT down 2% to $97.
- Seagen: Goldman Sachs maintains price target. PT up to $204 from $195.
- Spire Healthcare Group: Numis Securities raised the recommendation to buy from add. PT up 26% to 300 pence.
- Unilever: DZ Bank AG cut the recommendation to hold from buy. PT up 7.9% to 4.350 pence.
- Unite Group: Peel Hunt downgrades to reduce from add. PT down 3.3% and set to 1.100 pence.