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Marketmind: Earnings to the rescue?

07/26/2022 | 03:14am EST
Styrofoam bull figures stand on a counter on the trading floor at the stock exchange in Frankfurt

A look at the day ahead in markets from Tommy Wilkes.

The European corporate earnings season picks up pace on Tuesday and the evidence so far is that rising costs and slowing demand are beginning to bite.

A few weeks back the big concern for traders was that the next leg lower for stock markets would be triggered by the rewriting of lofty earnings expectations.

While this hasn't come to pass thanks to some businesses doing better than expected, the evidence on Tuesday suggests caution.

Swiss bank UBS flagged a smaller-than-expected rise in second-quarter net profit and Logitech International reported a 38% fall in first-quarter adjusted profit and cut its full-year 2023 outlook.

According to Goldman Sachs, around 34% of the European companies reporting results for the second quarter have missed consensus by at least 5%, the highest fraction of misses since the sovereign debt crisis in 2010.

Trading was quiet across markets as investors brace for a slew of European companies to update this week as well as some of the big tech firms in the United States, including Microsoft on Tuesday.

Stocks looked set for modest declines in both Europe and the United States, while the dollar steadied not far from two-decade highs.

The start of a two-day Federal Reserve meeting, which concludes Wednesday, is also keeping traders on the sidelines with policymakers expected to raise interest rates by 75 basis points. Market attention will be squarely focused on the future path of interest rates.

Key developments that should provide more direction to markets on Tuesday:

U.S. Federal Reserve starts two-day meeting 

U.S. May home price index

U.S. June new home sales data

U.S. 5-year Treasury auction 

Federal Reserve Bank of Philadelphia issues July Non-manufacturing Business Outlook Survey for July

Nigeria, Hungarian central bank meetings

Europe earnings: UBS, Lindt, ITV, Unilever, Michelin, Deutsche Boerse, Vivendi, LVMH, Easyjet, Unicredit

U.S. earnings: United Parcel Service Inc, General Electric, 3M Company, Xerox Corp, Coca-Cola, McDonald's, GM, Microsoft, Google, Boston Properties

(Editing by Saikat Chatterjee)

ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
3M COMPANY -0.04% 124.58 Delayed Quote.-29.87%
ALPHABET INC. -2.51% 96.98 Delayed Quote.-31.32%
BOSTON PROPERTIES, INC. -3.70% 65.34 Delayed Quote.-41.09%
BRITISH POUND / US DOLLAR (GBP/USD) 0.05% 1.2138 Delayed Quote.-9.88%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.03% 0.73271 Delayed Quote.-6.97%
DEUTSCHE BÖRSE AG -0.69% 173.4 Delayed Quote.17.88%
EASYJET PLC -0.46% 390.8 Delayed Quote.-29.71%
EURO / US DOLLAR (EUR/USD) -0.01% 1.0466 Delayed Quote.-7.68%
GENERAL ELECTRIC COMPANY 0.73% 85.28 Delayed Quote.-10.38%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.012133 Delayed Quote.-9.07%
ITV PLC 0.03% 76.9 Delayed Quote.-30.44%
LOGITECH INTERNATIONAL S.A. -1.86% 56.96 Delayed Quote.-24.51%
LVMH MOËT HENNESSY LOUIS VUITTON SE -0.04% 714.2 Real-time Quote.-1.76%
MCDONALD'S CORPORATION 0.07% 271.77 Delayed Quote.1.31%
MICHELIN (CGDE) 0.34% 26.87 Real-time Quote.-25.44%
MICROSOFT CORPORATION -2.03% 245.12 Delayed Quote.-27.12%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.04% 0.6327 Delayed Quote.-7.52%
UNICREDIT S.P.A. 0.69% 12.51 Delayed Quote.-8.27%
UNILEVER PLC 0.17% 4186 Delayed Quote.6.10%
UNITED PARCEL SERVICE INC. -3.35% 175.1 Delayed Quote.-15.48%
VIVENDI SE 0.00% 8.904 Real-time Quote.-25.11%
XEROX HOLDINGS CORPORATION -7.87% 15.33 Delayed Quote.-32.29%
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