Indicators
Wake Up Call
- Hello ! Stocks stabilized after a tech rout, with traders weighing a fresh reading on inflation as big banks kicked off the earnings season. US producer prices climbed in June slightly more than forecast as a pickup in margins at service providers more than offset declines in the cost of goods. Investors are also eager to hear from the largest banks about the state of the US economy and expectations for the rest of the year, including the potential impact of the presidential elections in November.
- US BIG BANKS - WELLS FARGO sank 5.6% after warning it won’t be able to whittle away costs as fast as forecast amid higher than exp expenses. JPM fluctuated after reporting record profit while missing on a few key metrics, like net interest income. CITIGROUP climbed 2% as equities trading beat estimates even as the lender said costs for the year are likely to be at the high end of the range previously provided.
- STILL ON TAP - Consumer sentiment, slated for 3pm UK, is expected to come in at 68.5 in July versus June's 68.2.
Wall Street Movers
- CITIGROUP +2.20% 2Q profit climbs on investment banking surge, services strength. Q2 revenue $20.14b, est $20.11b; FICC sales & trading revenue $3.56b, est $3.61b ; Equities sales & trading revenue $1.52b, est $1.13b; IB revenue $853m, est $870.4m. Plans to buyback ~$1b of common stock this quarter. CEO says markets had a strong finish to quarter.
- JPMORGAN flat after its quarterly results got a boost related to a Visa share exchange, while the lender reported an $821m net reserve build. 2Q adj revenue $50.99b, est $42.34b ; EPS $4.40, est $4.19 ; Managed NII $22.86b, est $22.82b ; IB Revenue $2.46b, est $2.13b. Provision for credit losses $3.05bn (exp $2.83b) ; Return on equity 23% (exp 17.4%). Total deposits $2.40tln ($2.43tln) ; Loans $1.32tln (exp. $1.32tln). Still sees FY net interest income about $91b, est $91.33b. CFO says little more cautious about debt capital markets; economy appears to be heading for a soft landing.
- WELLS FARGO -5.6% warned it won’t be able to whittle away costs as fast it previously forecast this year after the banking giant posted higher than exp expenses in 2Q. 2Q revenue $20.69b, est $20.29b ; EPS $1.33, est $1.29. Reaffirms FY24 NII view Net Income $4.9b (exp $4.56b) ; NII $11.9b (exp. $12.1b) ; Credit Loss Provision $1.23b (exp. $1.28b) ; Net interest income $11.92b (exp. $12.12b. Net interest margin 2.75%, est 2.77%. FY NII $48.6b missing est $48.7b.
- AT&T -2.20% disclosed massive hack of call data for most mobile users; does not believe the hack is reasonably likely to materially impact Co's financial condition or results of operations >> SNOW -4%
- BANK OF NY MELLON +0.5% 2Q Adj revenue $4.60b, est $4.52b. Adj EPS $1.51, est $1.43 as financial market values rose and a jump in client activity produced more fees for the bank. Net Interest revenue $1.03 b, est $1.01b. Provision for credit losses $0 vs. $5m y/y, est $14m. CET1 ratio 11.4%, est 11.1%. AUM $2.05 trillion, est $2.03 trillion.
At A Glance
- ABBVIE submits regulatory applications to FDA and EMA for Upadacitinib (RINVOQ(R)) in giant cell Arteritis
- APPLE India antitrust body finds Apple engaged in abusive practices in the apps market, according to Reuters citing documents
- BOEING warned customers in recent weeks of further delays on 737 MAX amid crisis
- BROADCOM - stock split 10 for 1 on Monday ; adjustement factor 10.
- CONOCOPHILLIPS and MARATHON continue to work constructively with FTC in its review of merger, according to an SEC filing
- EQUINIX reportedly considering sale of minority stake in Hong Kong assets, according to Reuters citing sources
- FASTENAL reports Q2 EPS 51c & net sales $1.92b, both matching exp. Saw 'growth with larger customers' in Q2
- TECK RESOURCES Rio Tinto Group is studying proposals for potential bids for companies including Teck Resources, Sky News reported, citing people it didn’t identify.T he mining giant has drawn up a list of possible targets in the wake of BHP’s failed bid for Anglo American, and has held talks with bankers, Sky said. It’s unclear whether Rio will choose to make a move on Teck, it said, also citing a person close to the company who said no offer was imminent.
Broker Moves
UPGRADES
- BOOKING raised to buy at Benchmark
- INTER PARFUMS raised to buy at Jefferies; PT $140
DOWNGRADES
- DARDEN RESTAURANTS INC downgraded by Jefferies to underperform from hold
- MARATHON OIL cut to sector perform at Scotiabank; PT $29
- SPIRIT AERO cut to neutral at Baird; PT $37.25
- TESLA cut to sell at UBS; PT $197
- VISTEON cut to neutral at Baird; PT $120
INITIATIONS
- WARNER MUSIC initiated with an Outperform at Wolfe Research
Today's Key Events (UK Time)
- 3:00pm U. of Mich. Consumer Sentiment, Current Economic Conditions, Consumer Expectations, 1 Yr Inflation, 5-10 Yr Inflation indexes
Game Of Corporate Actions
DIV EX DATE
- Today : IDEX Corp($0.69)
- Monday : Abbott Laboratories($0.55); AbbVie ($1.55); Freeport-McMoRan ($0.15); Hormel Foods Corp($0.2825); Mid-America Apartment Communities ($1.47); PNC Financial Services /The($1.6)
EARNINGS
- Monday bef mkt : Goldman Sachs (@ 12.30am); BlackRock Inc