Morning in New York: news background balances quotations

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

Investors will focus today on the aftermath of the US President's unprecedented visit to the Federal Reserve. Donald Trump got into a sharp public polemic with the head of the regulator Jerome Powell, accusing him of overspending on the reconstruction of the headquarters to $3.1 billion. In response, Powell pointed out the incorrectness of the calculations. The U.S. leader seized the moment to once again directly call for lower rates. He later said that he saw no grounds for firing the Fed chairman, but the incident itself, which occurred ahead of the FOMC meeting, brings political pressure to a new level and makes investors reassess the risks associated with the independence of the regulator.

At the same time, there was good news from the US import duty negotiations. India's Minister of Commerce and Industry Piyush Goyal expressed confidence that his country will be able to conclude an agreement with the States on terms better than those of other states in the region. This will contribute to the decline in overall foreign trade tensions, so it is considered by investors as a factor reducing the risks associated with tariff policy.

This Friday will see the release of preliminary data on the dynamics of durable goods orders for June (consensus: -10.3% mom, previous value: +16.4% mom). The expected decline in the indicator is largely due to the high base effect after the May jump. In this regard, for market participants it will be more important not the volatile overall indicator, but the statistics of applications for capital goods (excluding products of the defense and aviation sectors), which is an indicator of investment activity of businesses. If deterioration is registered here, it will be an argument for the investment community in favor of sooner easing of monetary conditions;

Prior to the opening of the main session, Centene (CNC), HCA Healthcare (HCA), Charter Communications (CHTR), Aon (AON), Phillips 66 (PSX) and Booz Allen Hamilton (BAH) will release quarterly reports.

Futures on US indices show near-zero dynamics. We assess the balance of risks as neutral (political pressure on the Fed creates uncertainty, while progress in trade negotiations provides support) with moderate volatility. We focus on S&P 500 fluctuations in the range of 6320-6410 points (from -0.7% to +0.7% to the previous session's closing level).

- RevenueIntel (INTC)for the second quarter according to the FactSet consensus was $12.86 billion, and the company's own guideline for the figure for the next comparable period exceeded average expectations. Nevertheless, the stock fell about 5% in the postmarket after CEO Lip-Boo Tan announced drastic cost cuts, including not building new plants in Europe and rescheduling projects in the US. These moves, as well as the third-quarter earnings guidance assuming only no losses, were taken by investors as a signal that a major restructuring had begun, creating near-term uncertainty.

- Deckers Outdoor (DECK) FY2011 revenue grew 17% YoY to $965 million, EPS was $0.93 with FactSet consensus of $960 million and $0.91, respectively. A key reason for the strong results was continued strong demand for the HOKA footwear brands with sales up 20% YoY and UGG (+19% YoY). The quarterly results, coupled with an increase in the forecast for the current fiscal year, caused DECK's quotations to jump by 8.7%.

- EPS Newmont (NEM) for the second quarter was $1.43 (FactSet consensus: $1.38), with revenue in line with average expectations at $5.32 billion. Investors focused on the issuer's strong financial results, including record free cash flow of $1.7 billion and the announcement of a $3 billion share repurchase program. Shares of the mining giant were up 4.3% after the close of the main session.

July 24 trading on the U.S. stock exchanges ended mixed. S&P 500 and Nasdaq 100 added a modest 0.07% and 0.25%, respectively, but managed to update historical highs. The Dow Jones declined by 0.7%, and the Russell 2000 fell by 1.36%. Mixed dynamics of quotations was determined by the reaction of investors to the first reports of the companies of the "Magnificent Seven". The general volatility was low. Out of 11 sectors included in the broad market index, only three closed on the positive territory. The energy sector (XLE: +1.24%) was the leader of the growth on the background of WTI oil price increase. Consumer staples (XLY: -1.66%) were the outsiders, pressured by a drop in restaurant stocks, particularly Chipotle (CMG), after a disappointing report;

Alphabet (GOOGL) shares reacted positively to a successful quarterly report.  Revenues and profits for its Internet search, YouTube and cloud services exceeded expectations. Positive comments from management about AI monetization dispelled some of the competition concerns.

Tesla (TSLA) is under pressure following Ilon Musk's statement about "several tough quarters" ahead. The company's earnings figures broadly matched subdued expectations. At the same time, investors were concerned about a 12% YoY drop in revenue and a more than halving of regulatory revenue. To smooth the impression from the weak report, Musk tried to shift investors' attention to the long-term outlook, including projects in the field of AI, robotaxis and the Optimus robot.

Macroeconomic statistics published during the day were mixed. The number of initial jobless claims fell to the lowest since April, 217 thousand, indicating the continued strength of the labor market. New home sales in June fell short of average expectations.  Preliminary manufacturing business activity index (PMI) data for July recorded a decline. Increased import tariffs continue to put pressure on companies' costs, creating inflationary risks.

- Strong results in the alternative investments segment supported Blackstone (BX: +3.6%). The largest asset manager exceeded expectations for distributable earnings per share and posted strong growth in total assets under management (AUM), which was positively received by investors.

- The collapse of chemical giant Dow (DOW: -17.5%) was not only caused by weak second-quarter EBITDA, but also by the announcement of a 50% dividend cut. This signals serious pricing pressure and cash flow problems.

- Quotes of UnitedHealth (UNH: -4.8%) fell on news that it has received formal requests from the U.S. Department of Justice (DOJ) as part of a criminal and civil investigation related to billing practices in the Medicare program.

- Shares of Southwest Airlines (LUV: -11.2%) collapsed as its second-quarter revenue and EPS fell below consensus. The main disappointment for investors was the revision of the annualized operating profit (EBIT) guidance from $1.8 billion to $700 million.

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