📆 Wednesday, July 24
► European stock futures fell as investors processed key earnings reports from major companies and another round of disappointing PMI data. Deutsche Bank reported its first quarterly loss in four years due to slowed trading and a charge related to its Postbank retail unit. In contrast, BNP Paribas saw its profit rise in the second quarter thanks to increased equities trading revenue. The HCOB Germany Composite PMI fell to 48.7 in July, signaling contraction, while France's composite PMI rose to 49.5, indicating a modest recovery led by the services sector. However, the French stock market came under pressure from sharp losses in the luxury sector as LVMH fell 5% after sales in China plummeted during the quarter, adding evidence that the Chinese economic slowdown is hurting European companies.
► U.S. stock futures declined following mixed earnings reports from Tesla and Alphabet. Tesla's stock is trading 7% lower in pre-market trading after missing profit estimates and delaying its Robotaxi event. Despite Tesla's significant growth in energy storage revenue, the company faces increased competition in China and Europe, leading to a cautious outlook. Alphabet's shares also retreated (-2.5%) as the company indicated that patience is needed to see returns from its AI investments. However, Alphabet reported a 14% increase in revenue year-over-year, driven by strong performance in Google Search and Cloud services, showing resilience in its core business and ongoing impressive revenue growth. In addition to this, Visa’s fiscal Q3 results were mixed with earnings meeting expectations but revenue falling short, while growth slowed in key metrics; however, the company expects continued growth in EPS, net revenue, and operating expenses for Q4. We see the earnings season continue with reports from tech giants Qualcomm and IBM due after market hours. Bank of Canada is expected to cut rates by 25bp later today.
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