Broader Market Gains on Positive Corporate News

The S&P 500 Index ($SPX) (SPY) today is up +0.36%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +1.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.15%.

Stock indexes today are mixed, with the Dow Jones Industrials posting a new all-time high.  Positive corporate news is boosting the broader market today, with Bank of America up more than +5% after reporting better-than-expected Q2 net interest income and forecasting Q4 net interest income above consensus. Also, Match Group is up more than +8% after Starboard Value said it has built a 6.6% stake in the company.  In addition, UnitedHealth Group is up more than +5% after forecasting full-year adjusted EPS above consensus.  Stock indexes also found support after US June retail sales rose more than expected, indicating the economy was holding up.

On the negative side for stocks, Charles Schwab is down more than -7% after reporting fewer-than-expected new accounts in Q2.  Also, weakness in chip stocks has knocked the Nasdaq 100 into negative territory. 

US June retail sales were unchanged m/m, stronger than expectations of a -0.3% m/m decline. Also, June retail sales ex-autos rose +0.4% m/m, stronger than expectations of +0.1% m/m.

The US June import price index ex-petroleum unexpectedly rose +0.2% m/m versus expectations of a -0.2% m/m decline.

The US July NAHB housing market index unexpectedly fell -1 to a 7-month low of 42, weaker than expectations of no change at 43.

The markets are discounting the chances for a -25 bp rate cut at 7% for the next FOMC meeting on July 30-31 and 100% for the following meeting on September 17-18.

Overseas stock markets today are mixed.  The Euro Stoxx 50 is down -0.60%.  China's Shanghai Composite closed up +0.08%.  Japan's Nikkei Stock 225 Index closed up +0.20%.

Interest Rates

September 10-year T-notes (ZNU24) today are up +3 ticks.  The 10-year T-note yield Is down by -2.7 bp at 4.202%. Sep T-notes today are mildly higher, garnering carryover support from rallies in European government bonds. T-notes also found support after the July NAHB housing market index unexpectedly fell -1 to a 7-month low. Limiting gains in T-notes were the stronger-than-expected US retail sales and import price reports, which were hawkish for Fed policy.

European government bond yields today are moving lower.  The 10-year German bund yield fell to a 2-1/2 week low of 2.417% and is down -3.2 bp at 2.440%.  The 10-year UK gilt yield fell to a 3-week low of 4.048% and is down -2.5 bp at 4.075%.

The German Jul ZEW survey expectations of economic growth index fell -5.7 to a 4-month low of 41.8, stronger than expectations of 41.0.

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 3% for the July 18 meeting and 81% for the September 12 meeting.

US Stock Movers

Chip stocks are falling today and are weighing on the Nasdaq 100. Nvidia (NVDA), Advanced Micro Devices (AMD), ARM Holdings Plc (ARM), Micron Technology (MU), Broadcom (AVGO), and Western Digital (WDC) are down more than -1%.

Bank of America (BAC) is up more than +5% after reporting Q2 net interest income of $13.86 billion, better than the consensus of $13.81 billion and forecasting Q4 net interest income of $14.50 billion, above the consensus of $14.33 billion. 

Match Group (MTCH) is up more than +8% to lead gainers in the S&P 500 after Starboard Value said it has built a 6.6% stake in the company.

UnitedHealth Group (UNH) is up more than +5% to lead gainers in the Dow Jones Industrials after forecasting full-year adjusted EPS of $27.50-$28.00, stronger than the consensus of $27.48.

Epam Systems (EPAM) is up more than +5% after Jeffries upgraded the stock to buy from hold.

Morgan Stanley (MS) is up more than +3% after reporting Q2 net revenue of $15.0 billion, stronger than the consensus of $14.27 billion. 

DoorDash (DASH) is up more than +2% after Wolfe Research initiated coverage on the stock with a recommendation of outperform and a price target of $130.

Datadog (DDOG) is up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $155.

Charles Schwab (SCHW) is down more than -7% to lead losers in the S&P 500 after reporting that it added 985,000 new accounts in Q2, below the consensus of 1.04 million. 

Reddit (RDDT) is down more than -5% after Loop Capital Markets downgraded the stock to hold from buy. 

Zscaler (ZS) is down more than -2% to lead losers in the Nasdaq 100 after Mizuho Securities downgraded the stock to neutral from buy.

Palantir (PLTR) is down more than -2% after Mizuho Securities downgraded the stock to underperform from neutral with a price target of $22. 

Earnings Reports (7/16/2024)

Bank of America Corp (BAC), Charles Schwab Corp/The (SCHW), JB Hunt Transport Services Inc (JBHT), Morgan Stanley (MS), Omnicom Group Inc (OMC), PNC Financial Services Group Inc (PNC), Progressive Corp/The (PGR), State Street Corp (STT), UnitedHealth Group Inc (UNH).

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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.