Netflix and Tesla’s earnings disappoint

The Dow Jones closed 100 points higher on Wednesday, marking its longest winning streak in nearly four years. Meanwhile, the S&P 500 added 0.2% reaching levels not seen since April 2022, while the Nasdaq finished marginally in the green. Elsewhere, European shares trimmed early gains on Wednesday, with the Euro Stoxx 50 Index edging 0.2% lower. 

Summary for 20.07.2023 

• Most Asian equities firmed slightly on Thursday, although local technology shares were sold off on weak cues from Wall Street. Gains in Asian equities were also capped by weak China shares as the government’s pledge to support the private economy failed to impress investors.  
• European shares are poised to edge lower following the overnight lead from US futures as key technology name’s earnings disappointed the market. Top companies expected to report earnings Thursday include Abbott Laboratories, American Airlines, D.R. Horton, Fifth Third Bancorp, and Johnson & Johnson.  
• Oil prices were little changed this morning as a lower-than-expected drop in US crude inventories and a potentially weaker demand outlook kept investors cautious. 
• Consumer price inflation in the UK dropped to 7.9% in June, marking the lowest level since March 2022 and slightly below the market consensus of 8.2%, mainly due to a slump in fuel prices. Additionally, the core rate eased to 6.9% from May’s 31-year high of 7.1%. On a monthly basis, consumer prices rose by 0.1% in June.  
• The consumer price inflation rate in the Euro Area was confirmed at 5.5% in June, the lowest level since January 2022, mainly due to a decline in energy prices. However, the core rate picked up to 5.5%, above a preliminary estimate of 5.4%, remaining close to a recent peak of 5.7%. Meantime, Malta’s annual inflation rate fell slightly to 6.2% in June from 6.3% in the previous month. This was the lowest rate since June last year. On a monthly basis, consumer prices went up 1.5%, following a 1.6% rise in May. 
• Tesla fell in late trading yesterday after saying profitability shrank in the second quarter and the hits are likely to keep coming. Elon Musk said the company will probably keep slashing the prices of electric vehicles if interest rates continue to rise. 
• Netflix projected third-quarter revenue that fell short of Wall Street estimates after the market close on Wednesday suggesting a crackdown on password sharing and a new advertising tier aren’t yet delivering the sales growth analysts anticipated. The results disappointed investors, who sent the shares down in extended trading late Wednesday. 
• Taiwan Semiconductor Manufacturing Company (TSMC) posted a 23.3% fall in second-quarter net profit this morning as global economic woes dented demand for chips used in applications as varied as cars, mobiles and servers and came off a high base last year. TSMC saw April-June net profit fall to T$181.8 billion from T$237.0 billion a year ago and compared to T$172.55 average analyst estimates. 
• Goldman Sachs shares rose 1% during yesterday’s session after released quarterly results. While second-quarter earnings per share missed analysts’ expectations, revenues surpassed analyst estimates, and the company raised its dividend. During a conference call, CEO David Solomon indicated some improvement in investment banking activity in recent weeks. 
• US Bancorp shares rose 6.5% after the company’s adjusted quarterly earnings of $1.12 per share met expectations and CEO Andy Cecere said the bank ended the quarter with $522 billion in total deposits, up 3.2% from the end of the first quarter. 
• United Airlines on Wednesday lifted its full-year profit outlook after posting the highest-ever quarterly earnings on booming demand for international travel. The carrier said it now expects an adjusted profit of $11 to $12 per share for 2023, compared with $10 to $12 estimated in January. That is well above analysts’ consensus earnings estimate of $9.77 per share. 
• Halliburton shares fell nearly 3% after the oilfield services company reported earnings per share of 68 cents, lower than analysts’ expectations of about 75 cents. 
• Carvana shares jumped 40% after the company said it reached an agreement that will reduce the used car retailer’s total outstanding debt by more than $1.2 billion. The deal “significantly increases our financial flexibility,” Mark Jenkins, Carvana’s Chief Financial Officer, said in a statement.