Friday, July 22, 2022
Pre-market futures are mixed this morning, looking to hang onto another strong week of trading. The farther in the distance our trading lows get in this cycle — five weeks ago, and counting — the better. As we all know, the stock market is a forward-looking assessment of the economy overall, and currently market participants are betting that calendar Q1 of next year looks pretty strong.
The Nasdaq and S&P 500 are in the red somewhat — -44 points and -6 points, respectively — an hour ahead of the opening bell. The Nasdaq in particular has enjoyed an excellent trading week thus far, +5%. But it’s the Dow that currently trades in the green this morning — +56 points at this hour — partially on strong Dow-component results from
American Express
AXP
, its seventh-straight positive earnings surprise.
AmEx posted earnings of $2.57 per share, 20 cents higher than anticipated for a +8.4% surprise. This is trimmer than the trailing four-quarter average of +33%, but still strong on +30% spending on credit cards in the quarter, particularly on travel. Revenues of $13.4 billion in the quarter came in +7.77% from the Zacks consensus; AmEx also continues a string of top-line outperformance.
For more on AXP’s earnings, click here.
Twitter
TWTR
, on the other hand, posted its worst-ever revenue miss in its Q2 report released this morning, to go with a bottom line figure of -$0.08 per share, when earnings of +$0.14 was expected. This is well off the pace of +20 cents per share reported a year ago. Revenues of $1.18 billion came in well below the $1.32 billion in the Zacks consensus. The company is not hosting a conference call.
Part of the difficulties Twitter saw in the past quarter were the same macro issues we saw hamper
Snap
SNAP
in its Q2 miss yesterday afternoon, which have created a difficult environment for social media companies overall. But one issue particularly related to Twitter is in its distraction of a pending acquisition by Tesla CEO Elon Musk, which will now come down to a court’s decision. The uncertainties surrounding this deal — which Twitter in its Q3 statement still sees as going through at $54.20 per share — have mired growth in the social media staple in Q2.
Elsewhere, we see President Biden has contracted Covid, as the BA 5 variant carves a path through the Atlantic Coast of the U.S. The 79-year-old president is vaccinated and double-boosted, was diagnosed early into his bout with the coronavirus. He is also taking
Pfizer’s
PFE
oral antiviral drug Paxlovid, which curbs negative effects of the illness, and is expected to make a full recovery.
After today’s open, we see new July reads for PMI Manufacturing and Services. Both are expected to be relatively in-line month over month, and still comfortably over the 50 line between growth and contraction. Next week, in addition to an accelerated Q2 earnings season, we’ll get new looks at Consumer Confidence, New Home Sales, Durable Goods Orders, Jobless Claims, PCE Inflation and a first look at Q2 GDP. We also get another likely 75 basis-point interest rate hike from the Fed mid-week.
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