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Stocks Mixed As Investors Digest Dividends, Wait For The Fed

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Stocks fell sideways on Wednesday, as investors digested a slew of earnings results and looked forward to another set of reports. A monetary policy statement from the Federal Reserve is also scheduled.


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The S&P 500, Dow and Nasdaq struggled for direction, vacillating between little gains and losses.

Shares of Google subsidiary Alphabet (GOOGL) jumped following a solid triumph in quarterly sales and earnings. A recovery in travel-related ad spend and continued growth in YouTube ads helped boost Alphabet’s earnings, excluding traffic acquisition costs, to $51 billion, an increase of 61% over final year.

However, shares of Apple Inc (AAPL) fell following the tech giant easily beat Wall Street estimates in its latest earnings reports. However, Apple executives said they expect a slowdown in top-line growth in the current quarter following the April blast through the June period, and that supply challenges will affect devices like the iPhone.

Meanwhile, investors appeared to shake off a slightly disappointing result from Microsoft (MSFT) Azure Cloud Business, which slowed over the final quarter to 45% sales growth when currency effects were excluded, to focus on the software giant’s overall estimates topping revenue, earnings and quarterly results. . .

Earnings are set to persevere on Wednesday, with major names including Facebook (FB) and PayPal (PYPL) reporting following the close.

Investors are set to closely watch the FOMC’s July monetary policy decision, and Federal Reserve Chair Jerome Powell’s latest public statements on Wednesday afternoon. In the weeks following the Fed’s June meeting, concerns about the delta variable led to additional concerns about the economic outlook. However, inflation was also higher than expected at the consumer and producer level, challenging the Fed’s aptitude to maintain its highly accommodative monetary policy. Inflation mentions during corporate earnings calls this season has already gone up a staggering 1,000% compared to final year, according to Bank of America.

“Since the June meeting, job growth has strengthened more than expected and inflation has continued to rise further. This will no doubt preserve eyes and ears fully prepared for signs that the FOMC may shove forward in a downsizing. Ultimate asset purchases, a topic he has already confirmed will be on the table, Wells Fargo chief economist Sam Pollard wrote in a note.

“Discussions about the pace and composition of tapering will deepen at this week’s meeting, as the divisions in the views of officials remain and it will take some time to build consensus,” he said. “Most Fed officials view the recent spike in inflation as largely ‘temporary,’ although it would be interesting to see if President Powell expresses any additional awareness/caution about rising inflation risks.”

9:31 a.m. ET: Stocks begin higher, Alphabet shares boost Nasdaq

  • Standard & Poor’s 500 (^ Salafist Group for Preaching and Combat): +6.01 points (+0.14%) to 4407.47 points

  • dow (^ DJI): +4.56 points (+0.01%) to 35.063.08

  • Nasdaq (^ ninth): +53.54 points (+0.39%) to 14717.76

  • raw (CL = F.): +0.41 dollars (+0.57%) to 72.06 dollars per barrel

  • gold (GC = F.):- $4.00 (-0.22%) to $1,795.80 per ounce

  • Treasury for 10 years)^ degeneration): +2.9 basis points, return 1.263%

9:25AM ET: US goods trade deficit widened more than expected in June as imports accelerate to record

The US goods trade deficit further yawned in June, beating economists’ expectations as imports surged to meet rising demand among consumers and manufacturers.

The deficit rose to $91.2 billion in June from $88.2 billion in May, which was more than the $88 billion economists had been expecting, according to Bloomberg data.

Imports jumped 1.5% to a record $236.7 billion, led by a jump in industrial supplies. In contrast, exports rose only 0.3% to $145.5 billion.

9:13 a.m. ET: McDonald’s beats second-quarter expectations, but stocks fall as company notes “pandemic-related stops and starts” amid various Delta concerns

McDonald’s (MCD) shares fell more than 1.5% in beforetime trading despite reporting much better-than-expected second-quarter results, with the rapid-food giant signaling continued uncertainty over the pandemic.

Comparable sales in the second quarter grew 40.5%, beating expectations for an increase of 38.7%, according to Bloomberg consensus data. By geography, US comparable sales increased by 25.9%, while comparable sales to international markets grew by 75.1%. Both measures exceeded the ratings.

Adjusted earnings of $2.37 per share were also better compared to estimates of $2.10.

Despite the powerful results, investors appeared to have settled on a number of concerns that executives flagged during the earnings call. McDonald’s noted that order times have increased due to labor shortages, and supply chain issues have complicated equipment manufacturing in Asia. CFO Kevin Ozan also noted that regarding growth momentum around the world, “there remains some uncertainty as we persevere to see pandemic-related pauses and starts in markets around the world, especially now with the delta variable.”

8:30 a.m. ET: Mortgage applications jump 5.7% final week as interest rates drop

The Mortgage Bankers Association said in its weekly report that an index tracking the volume of weekly mortgage applications jumped 5.7% final week following a 4.0% decline during the previous period.

Under the headline, refinancing is up 9% week over week, but down 10% compared to the alike period final year. Purchases are down 2% from final week on a seasonally adjusted basis. On an unadjusted basis, purchases were also down 18% compared to the alike week final year.

According to Joel Kahn, Mortgage Bankers Association vice president for economic and industry forecasts, the increase in refinancing came along with a decline in Treasury yields and mortgage rates.

“The 10-year Treasury produce fell final week, as investors grew increasingly concerned about the increasing number of COVID-19 cases and downside risks to the current economic recovery,” Kan said in a press release. “Refinancing requests jumped, as the 30-year fixed-rate mortgage fell to its lowest level since February 2021, and the 15-year rate fell to another record low going back to 1990.”

8:22 a.m. ET: Boeing shares jump following company reports windfall gain, announces 737 Max production increase

Boeing (BA), a Dow-component company, reported second-quarter earnings results that beat expectations, with the trapped planes posting surprising quarterly earnings and more-than-expected increased sales. Shares are up 6% in beforetime trading.

Revenue of $17 billion grew 44% year-over-year and beat analysts’ consensus estimates of $16.54 billion, based on Bloomberg consensus data. The increase was driven by better-than-expected revenue from Boeing’s defense and global services business, while sales of commercial aircraft were slightly lighter than expected.

Basic earnings per share came in at 40 cents per share, versus a loss of 81 cents per share expected. Boeing also said it expects to increase its production of the 737 to 31 planes per month in beforetime 2022, up from the 16-month rate currently being maintained.

7:20 a.m. ET Wednesday: Stock futures mixed ahead of more earnings, Fed decision

Here’s where the markets are trading on Wednesday morning:

  • S&P 500 futures contracts (ES = F.): +3.25 points (+0.07%) at 4,397.75

  • Dow futures contractsYM = F.): -46 points (-0.13%) to 34907.00

  • Nasdaq futures contractsNQ = F.): +36.25 points (+0.24%) to 14984.00

  • raw (CL = F.): +0.27 dollars (+0.38%) to 71.92 dollars per barrel

  • gold (GC = F.):- $2.10 (-0.12%) to $1,797.70 per ounce

  • Treasury for 10 years)^ degeneration): +1.9 basis points return 1.253%

6:06 PM ET Tuesday: Stock futures add to losses

Here are the main moves in the markets as the evening session began on Tuesday:

  • S&P 500 futures contractsES = F.): -13 points (-0.3%) at 4,381.50

  • Dow futures contractsYM = F.): -95 points (-0.27%) to 34,858.00

  • Nasdaq futures contractsNQ = F.): -70.25 points (-0.47%) to 14,877.5

  • raw (CL = F.): +0.24 dollars (+0.33%) to 72.15 dollars per barrel

  • gold (GC = F.):- $1.80 (-0.1%) to $1,797.40 per ounce

  • Treasury for 10 years)^ degeneration): unchanged, produce 1.295%

Sign on a pole on a city street: New York, NY - June 02: An outside view of the New York Stock Exchange and Wall St.  As the unused Organon company begins trading next Thursday in New York on June 02, 2021. Organon is looking to expand to provide treatments for other conditions specific to women, about 80% of the unused company's revenue will come from outside the US (Photo by Kina Bettencourt/Watch)

© Submitted by Yahoo! finance
NEW YORK, NY – JUNE 02: An outside view of the New York Stock Exchange and Wall Street With unused Organon starting trading next Thursday in New York on June 02, 2021. Organon is looking to expand to provide treatments for other conditions specific to women, about 80% of the unused company’s revenue will come from outside United States (Photo by Kina Bettencourt/Watch)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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