The Wednesday Market Minute
- Global stocks mixed as Asia gains checked by record Delta-variant infections in South Korea, while Europe rebounds on the back of solid tech outlooks and travel stocks.
- US markets shift focus to corporate earnings, with bluechip updates over the next two days and more than 100 companies reporting next week.
- Netflix shares edge lower after disappointing subscriber additions cloud a mixed second quarter earnings report
- Benchmark 10-year note yields hold at 1.248% while the dollar index trades near a three-month high of 93.018 against its global peers.
- U.S. equity futures suggest a firmer open on Wall Street ahead second quarter earnings from Johnson & Johnson, Verizon, Coca-Cola and Harley-Davidson.
U.S. equity futures powered higher again Wednesday, talking all three benchmarks back to the levels seen prior to Monday's sell-off, as investor focused shifted to busy stretch of corporate earnings and bullish outlooks in the tech sector.
Delta-variant infection rates, which triggered the worst sell-off on Wall Street in months earlier this week, continued to rise overnight, with record rates in South Korea and Thailand and a warning from health officials in Japan. Here in the U.S., infection rates are spiking in states with low vaccination rates, with the Delta variant comprising around 83% of new cases, according to CDC data.
Still, with a slew of earnings expected over the coming days -- and more than 100 companies reporting next week -- Wall Street has set aside its concerns for near-term economic growth to focus on corporate profitability, with analysts forecasting a 72% increasing in collective S&P 500 earnings over the June quarter.
Two key European tech companies also published solid near-term forecasts Wednesday, with business software giant SAP SE (SAP) - Get Report lifting its cloud revenue projections and semiconductor supplier ASML (ASML) - Get Report, which makes $250 million lithography systems for the world's biggest chipmakers, boosting its profit outlook.
On Wall Street, investors will be focused on second quarter updates from Johnson & Johnson (JNJ) - Get Report, Coca-Cola (KO) - Get Report, Verizon (VZ) - Get Report and Harley-Davidson (HOG) - Get Report, with Microsoft (MSFT) - Get Report and Texas Instruments (TXN) - Get Report reporting after the closing of trading later today.
Harley-Davidson lifted its full-year sales forecast after and end to EU tariff threats and posted stronger-than-expected second quarter earnings, pushing shares 2.4% higher in pre-market trading.
Johnson & Johnson rose 1.2% after topping second quarter earnings forecasts thanks to a boost in pharmaceutical and medical device sales, while Coca-Cola got a re-opening bounce for 'away from home' beverage sales that also allowed it to lift full-year profit forecasts.
Futures contracts tied to the Dow Jones Industrial Average suggest a 120 point opening bell gain for the 30-stock benchmark, with those tied to the S&P 500 priced for an 8 point advance.
Tech stocks are also on the move, with futures linked to the Nasdaq Composite indicating a modest 22 point opening bell dip as benchmark 10-year Treasury note yields hold at 1.238% in overnight trading.
Netflix (NFLX) - Get Report shares are also in focus after the streaming content provider posted its sharpest slowdown in new subscriber additions in years last night as part of a tepid second quarter earnings report that included plans to add video game services alongside its suite of movies and television shows.
Oil prices were also on the rebound Wednesday, with WTI rising $1.16 a barrel to $68.36, ahead of Energy Department data on domestic stockpiles -- which are sitting at the lowest levels since February of last year -- later this morning.
In overseas markets, bullish tech outlooks and a snap-back for travel and leisure stocks extended gains for the Stoxx 600 in Frankfurt, which was marked 1.3% higher in early Wednesday trading. Britain's FTSE 100 was marked 1.6% higher, thanks in part to firmer energy and commodity stocks.
Overnight in Asia, stocks were more muted following reports of record infections in South Korea and Thailand and ongoing concerns for the fate of the Olympic Games in Tokyo, which are set to open on Friday.
Japan's Nikkei 225 edged 0.58% higher to close out its holiday-shortened week at 27,548.00 points, while the region-wide MSCI ex-Japan benchmark drifted 0.01% lower heading into the final hours of trading.