Fitch Ratings’ unexpected downgrade of the United States’ credit rating upstaged the busiest week of quarterly earnings season so far, sending investors fleeing from riskier assets Wednesday. The S&P 500 Index and tech-focus Nasdaq Composite were both at three-week lows, closing down 1.4% and 2.2%, respectively. Technology, consumer discretionary, and energy were the weaker sectors, with the latter pressured by a more than 2% drop in crude oil futures. 

Summary for 03.08.2023 

  • Most Asian shares fell on Thursday, with the tech sector bearing the brunt of the selling pressure. 
  • European equity futures are flat ahead of the Bank of England’s rate decision later in the day while US futures were little changes overnight ahead of a busy earnings’ day. Some 562 companies are expected to report results in the US today, with Apple and Amazon among the major companies on the list. 
  • Oil prices rose slightly this morning after steep losses in the prior session, with a recovery in the dollar largely offsetting optimism over data showing a substantial drop in US oil inventories over the past week. 
  • The Caixin China General Services PMI unexpectedly rose to 54.1 in July from June’s 5-month low of 53.9, beating market estimates of 52.5. It was the 7th straight month of growth in services activity, amid an accelerated rise in new orders and a further rise in job creation in the summer travel season. Meantime, cost pressures eased. 
  • Private businesses in the US hired 324k workers in July, following a downwardly revised 455k increase and surpassing market expectations of a 189k rise. The service-providing sector added 303k jobs, while manufacturing which is more sensitive to interest rate movements, shed 36k jobs, marking the fifth consecutive month of job losses. 
  • Advanced Micro Devices shares fell 7% yesterday after the chipmaker offered a disappointing outlook for the current quarter. That overshadowed its better-than-expected results for the previous quarter. 
  • Starbucks rose 0.75% after the coffee chain’s quarterly earnings topped expectations, through revenue was lower than expected. 
  • Pinterest shares fell 3.7% after the company offered a disappointing outlook for the current quarter. That overshadowed its better-than-expected results for the previous quarter. 
  • Qualcomm’s fiscal third-quarter revenue fell short of analysts’ expectations when it released results after the market close on Wednesday due to declines in its semiconductor and licensing businesses, while earnings surpassed forecasts. The shares shed 6.6% in after-hours trading. 
  • Societe Generale, France’s third-biggest listed bank, reported better-than-expected quarterly earnings this morning, as cost management and a strong growth of its car leasing division alleviated a steep fall in margins at its retail branch. 

Disclaimer: The article is issued by Calamatta Cuschieri Investment Services Ltd, which is licensed to conduct investment services business under the Investments Services Act by the MFSA. 

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