Morning in New York: foreign trade agenda remains in focus

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The foreign trade agenda remains the main source of infoprovods. Today, the so-called reciprocal duties will come into force in the United States. For Switzerland their rate has been raised to 39%, for Brazil to 50%, for Syria to 41%, other trading partners of the United States have also received double-digit tariffs. In this regard, investors continue to assess the consequences of the decree to double the duty on imports from India, which raised the rate to 50%. Market participants assume that New Delhi will announce retaliatory measures already today, so the key benchmarks will be shares of IT outsourcers and pharma companies with high exposure to the US. Stock players are also assessing the likely impact of a 100% tariff on semiconductor imports. The key detail of this decision is an exemption for companies willing to finance manufacturing in the US. Thus, after the meeting of the head of Apple (AAPL) Tim Cook with President Donald Trump, it became known about the plans of the corporation to invest $100 billion in the American production chain in exchange for the abolition of duties on its goods.

This Thursday will see the release of weekly statistics on the number of initial jobless claims (consensus: 225 thousand, previous value: 218 thousand). The forecast for the total number of applications assumes their growth from 1946 thousand to 1950 thousand. This data may signal the continued cooling of the labor market, which will cause a positive reaction on the markets, as, according to its participants, increases the probability of reducing the Fed rate in September. Preliminary data on labor productivity and labor costs for the second quarter will be released today. FRB New York will release an assessment of inflation expectations in the region. The President of FRB Atlanta Rafael Bostic is scheduled to speak.

Eli Lilly (LLY), Datadog (DDOG), Vistra (VST), Warner Bros. Discovery (WBD), D-Wave (QBTS), Constellation Energy (CEG) and ConocoPhillips (COP), while Block (XYZ), The Trade Desk (TTD), MP Materials (MP), Rocket Lab (RKLB), Gilead (GILD), NuScale Power (SMR) and Take-Two Interactive (TTWO) will release their results after the close.

Futures on US indices indicate a moderately positive opening. We assess the balance of risks for the upcoming session as neutral with an average level of volatility. We focus on S&P 500 movements in the range of 6290-6400 points (from -0.9% to +1% to the closing level of the previous session).

- DoorDash delivery service (DASH) jumped 8% in the postmarket following the release of a strong quarterly report. The company's earnings per share came in at $0.65, significantly beating estimates of $0.44, while revenue rose 25% YoY to $3.28 bln. A key positive for investors was the company's net income of $285 mln, compared to a loss of $157 mln a year earlier. Combined with a 20% YoY increase in orders, this confirmed the sustainability of the business model.

- Shares of Airbnb (ABNB) were down more than 6% after the close of major trading this Wednesday, despite the release of successful second-quarter results. The service's revenue rose 13% YoY to $3.1 billion, with a consensus of $3.03 billion, and EPS nearly doubled to $1.03 versus average expectations of $0.94. The selloff was triggered by a conservative guidance for the second half of the year. Management warned of slowing growth due to the high base effect, which in the eyes of investors offset the positivity of the report.

- Fortinet (FTNT) stock plummeted more than 17% in the postmarket, although its quarterly revenue rose 14% YoY to $1.63 billion and EPS reached $0.64 with a consensus of $0.59. The negative reaction was caused by the company's cautious outlook, putting Q3 revenue in the range of $1.67-1.71 billion, which was below Wall Street's average guidance. The investment community has concerns about the slowdown in the growth of the issuer's business.

August 6 trading on American stock exchanges ended mostly in the plus. The S&P 500 rose 0.73%, the Nasdaq 100 climbed 1.29%, the Dow Jones added 0.18%, but the Russell 2000 corrected down 0.2%. Shares of AAPL, AMZN, AVGO, TSLA, NVDA accounted for 62 of the 77 bps in positive performance of the SPY ETF 500. The cyclical consumer staples sector (XLY: +2.08%) led the gains, supported by shares of apparel manufacturers and quick-service restaurant chains. The healthcare industry (XLV: -1.72%) was the outsider due to selloffs in pharmaceutical and biotechnology companies, especially GLP-1 manufacturers.

The macroeconomic backdrop was relatively calm. FRB Minneapolis President Neel Kashkari made "dovish" comments, noting the need for the Fed to react to the slowdown in the economy. However, this failed to turn the dynamics on the debt market: yields of long-term trejeris grew amid concerns about pressure from the supply of new debt. On the whole, the bulls are supported by strong corporate reports and the development of the AI sector, while the bears are stimulated by the risks of economic slowdown and pressure from import tariffs. The debt market is negatively impacted by weak demand in the placement of ten-year Treasury bonds, which may contribute to a further increase in yields.

 - Walt Disney (DIS: -2.7%) shares reacted with declines on conflicting reports. The media corporation's earnings per share and total Disney+ subscribers beat forecasts, but investors focused on weaker-than-expected revenue and performance within the U.S..

- Shopify's (SHOP: +22%) revenue, gross merchandise turnover and margins exceeded average expectations. Investors were particularly encouraged by management's confident third-quarter guidance for accelerating growth in key geographies.

- McDonald's (MCD: +3%) reported comparable sales that came in 120 basis points above estimates. This was the best result since the end of 2023. It was helped by successful marketing initiatives and menu updates, especially in international markets.

This article was AI-translated and verified by a human editor