MARKET WRAPS
Watch For:
Weekly Jobless Claims; Existing Home Sales for June; Leading Indicators for June; earnings from American Airlines, Blackstone, Capital One Financial, Johnson & Johnson
Today's Headlines/Must Reads
- Charles Schwab Survived the Deposit Crisis. What Comes Next?
- Mining Deploys Innovative Tech to Find Copper, Other EV Metals
- The Biggest Winners in America's Climate Law: Foreign Companies
Follow WSJ markets coverage here .
Opening Call:
Nasdaq futures were underperforming early on Thursday, after results from Tesla and Netflix were not very well received by traders.
Investors were being reminded that when stocks rise swiftly and are afforded rich valuations, earnings results that are good on the surface still may not be good enough.
"Netflix missed sales estimates and issued lower-than-expected Q3 guidance, while Tesla's results showed shrinking profitability with a squeeze on margins," Deutsche Bank said.
Hargreaves Lansdown said that both stocks could be vulnerable to a deterioration in household sentiment.
"Concerns are growing that a slowing economy, combined with the erosion of lockdown savings will weigh further on spending on discretionary goods and services, particularly big-ticket items like cars and nice to have but not necessary streaming accounts in the months ahead," Hargreaves Lansdown said.
Premarket Movers
Discover Financial Services said it would pause share repurchases as it investigates a misclassification of credit card accounts from around mid-2007. Shares were down 13.8%.
Las Vegas Sands reported second-quarter earnings and revenue that topped expectations but the stock was down 2%.
Netflix added about 5.9 million paid subscribers during the second quarter, but revenue fell short of the company's projections. Shares stood about 7% lower ahead of the opening bell.
Oddity Tech had a successful trading debut Wednesday in a generally depressed IPO market. Shares were down 1.5% premarket, after closing up 36%.
ADRs of Taiwan Semiconductor Manufacturing fell 2.7% after second-quarter profit and revenue declined as it grapples with a slump in demand for chips in electronic devices.
Tesla reported a jump in second-quarter profit, but Elon Musk cautioned investors that more price reductions might be required. Shares were down 3.7%.
Forex:
The dollar edged lower as its recovery after sterling's drop on Wednesday following weaker-than-expected U.K. inflation data, proved short-lived, showing investors aren't ready to buy into the U.S. currency yet, UniCredit Research said.
"Investors might have taken more profit but continued to show little conviction in reversing the recent dollar tumble," UniCredit said, noting the DXY dollar index is "still struggling at around 100."
Having recently scaled back expectations of aggressive tightening in the U.S., pushing the dollar sharply lower, investors were forced to do the same for the U.K. after the inflation data, suggesting that retreats in rate expectations might not be confined to the U.S., UniCredit said.
Read http://Barrons.com: Bitcoin Is Stuck at $30,000. Here's What Is Needed to Push the Crypto Higher .
Energy:
Oil was little changed following the smaller-than-expected drop in U.S. crude stocks.
Investor sentiment about the U.S. economy has turned more positive in recent weeks while Russian exports have weakened helping to drive oil prices higher.
"The U.S. economy remains resilient, production cuts continue, the Fed appears closer to finishing its rate hike cycle" while China could be poised to set out new stimulus measures, LPL Financial said.
Metals:
Metal prices inched higher as a weaker dollar helped provide support for some risk assets.
"Disappointing economic data out of China are weighing on market sentiment, while supply-side fundamentals remain tight," ANZ said.
Short supply of copper and aluminum is giving the two metals more upside potential, ANZ added.
"Renewed supply issues in South American mines and energy shortages should limit their respective downsides."
TODAY'S TOP HEADLINES
Elliott Takes Big Stake in Drugmaker Catalent
Activist shareholder Elliott Investment Management has built a significant stake in Catalent and is pushing for a shake-up on the contract drugmaker's board.
Elliott has been talking to potential director candidates about joining a slate of nominees to run in a proxy contest, people familiar with the matter said.
J&J Ordered to Pay Talc Victim $18.8 Million in Baby Powder Lawsuit
A California jury ordered Johnson & Johnson to pay a cancer patient $18.8 million in a lawsuit alleging that the 24-year-old man developed mesothelioma because of his exposure to J&J's talcum powder product from childhood.
The jury in the state court in Oakland, Calif., issued the verdict on Tuesday, siding with Emory Hernandez Valadez, who sued J&J last year alleging that he was exposed to asbestos and other carcinogens through J&J's baby powder. J&J is liable for Valadez's economic damages of $3.8 million and his noneconomic damages of $15 million, according to the verdict.
L Catterton Chalks Up a Home Run on Oddity IPO
Consumer-focused private-equity firm L Catterton banked nearly triple its investment in online beauty-products retailer Oddity Tech by selling a portion of its stake in the company's initial public offering Wednesday.
L Catterton's roughly $50 million investment in the company behind the Il Makiage and SpoiledChild brands was valued at about $900 million based on the closing price of $47.53 an Oddity share following its trading debut in New York, according to a document the Greenwich, Conn.-based firm sent to its fund investors that was viewed by The Wall Street Journal. That would represent a roughly 18-fold return on invested capital, L Catterton said.
Nokia 2Q Net Profit Weighed by Macroeconomic Uncertainty, Lower US Spending
Nokia on Thursday posted a 29% drop in its second-quarter comparable net profit as macroeconomic uncertainty weighed on sales in its network-infrastructure business while North American customers continued to evaluate overall spending and deplete inventories in mobile networks.
The company said it sees second-half sales broadly similar to the first half in network infrastructure and mobile networks, with some sequential improvement into the fourth quarter.
China Keeps Benchmark Lending Rates Unchanged
China's benchmark lending rates were kept unchanged, as expected on Thursday, following a hold of policy rates earlier this month. However, economists say Beijing will need to ramp up support to shore up the country's sputtering economy.
The one-year loan prime rate was held steady at 3.55%, while the five-year LPR was unchanged at 4.2%, the People's Bank of China said. The loan prime rates are calculated monthly based on the interest rates which 18 designated commercial banks charge their best clients.
That Extreme Heat Hasn't Budged Natural-Gas Prices
Americans are burning more natural gas than ever to stay cool this summer. Unlike the past two summers, when sweltering weather sent gas surging, the continuing heat wave has hardly moved prices for the power-generation fuel.
Benchmark natural-gas prices have stayed in a tight range that is roughly 60% lower than a year ago, when prices exploded to shale-era highs. Prices are 30% less than in July 2021.
Supreme Court Has Worked on Code of Conduct but Gotten Nowhere
WASHINGTON-An internal plan for the Supreme Court's first-ever code of conduct has been stalled for years, people familiar with the matter said, and justices are deeply divided despite increased scrutiny surrounding their ethical behavior.
The standstill persists despite drops in the court's public approval and pressure from lawmakers for the high court to adopt the practice of other courts that hold their members to binding ethical rules beyond the minimum required by anticorruption and transparency laws.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Mullen Group 2Q
Newmont 2Q
Economic Calendar:
0830 May Employment Insurance
Expected Major Events for Thursday
05:00/JPN: Jun Convenience Store Sales
06:00/GER: Jun PPI
06:00/JPN: Jun Revised Machine Tool Orders
06:45/FRA: Jul Monthly business survey (goods-producing industries)
09:00/ITA: May Balance of Payments
10:00/UK: Jun Aluminium Production report
12:30/US: Jul Philadelphia Fed Business Outlook Survey
12:30/CAN: May Employment Insurance
12:30/US: 07/15 Unemployment Insurance Weekly Claims Report - Initial Claims
12:30/US: U.S. Weekly Export Sales
13:00/RUS: Weekly International Reserves
14:00/US: Jun Existing Home Sales
14:00/US: Jun Leading Indicators
14:30/US: 07/14 EIA Weekly Natural Gas Storage Report
20:30/US: Federal Discount Window Borrowings
20:30/US: Foreign Central Bank Holdings
23:01/UK: Jul UK Consumer Confidence Survey
23:30/JPN: Jun CPI (Nation), CPI ex-food (Nation)
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Abbott Laboratories (ABT) is expected to report $0.76 for 2Q.
American Airlines Group Inc (AAL) is expected to report $1.57 for 2Q.
American National Bankshares Inc (AMNB) is expected to report $0.72 for 2Q.
Badger Meter Inc (BMI) is expected to report $0.65 for 2Q.
Bank7 Corp (BSVN,GMAR.XX) is expected to report $0.97 for 2Q.
Berkshire Hills Bancorp (BHLB) is expected to report $0.58 for 2Q.
Blackstone Inc (BX) is expected to report for 2Q.
Cass Information Systems (CASS) is expected to report $0.67 for 2Q.
D.R. Horton (DHI) is expected to report $2.78 for 3Q.
East West Bancorp (EWBC) is expected to report $2.21 for 2Q.
Fifth Third Bancorp (FITB) is expected to report $0.83 for 2Q.
Freeport-McMoRan Inc (FCX) is expected to report $0.32 for 2Q.
Genuine Parts Co (GPC) is expected to report $2.38 for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
07-20-23 0614ET
