U.S. equity futures edged higher, potentially lifting Wall Street to fresh record peaks again this week, as investors await the first of six major tech sector earnings reports later today that could make-or-break the recent stock market rally. Here are five things you need to know before the start of trading on Wednesday July 17.
1. -- Netlfix and FAANG
Netflix (NFLX - Get Report) , the first of the six major tech companies -- along with Microsoft (MSFT - Get Report) -- in the so-called FAANG complex of stocks will report second quarter earnings after the close trading today, with analysts likely keying on it outlook for online streaming subscriber additions in a suddenly competitive market.
Netflix itself is forecasting online subscriber growth of 5 million for the three months ending in June, a figure that would boost its worldwide total to just under 155 million, but the near-term loss of hits such as 'Friends' and 'The Office' could take its toll on growth rates in the coming months, as will the addition of rival streaming services from Disney DIS, Apple AAPL, and Comcast (CMCSA - Get Report) .
Microsoft will follow with its earnings report Thursday, while Facebook (FB - Get Report) , Amazon (AMZN - Get Report) , Google parent Alphabet (GOOGL - Get Report) and Apple will all update investors will quarter reports over the next two weeks.
The FAANG stock earnings -- which comprise nearly a fifth of the S&P 500's $26 trillion market cap --are expected to be a crucial test for Wall Street as benchmark test fresh record highs, thanks in part to hopes of deeper monetary support from the Federal Reserve, even as broader corporate profits suggest slowing growth in the months ahead as the U.S.-China trade war takes its toll on American businesses.
2. -- Banking at the Margins
Bank of America (BAC - Get Report) will publish second quarter earnings Wednesday, with Morgan Stanley (MS - Get Report) rounding out the sector's biggest players with three months results on Thursday, as investors digest a mixed bag of readings of the health of the country's lenders amid a slowing -- but solid -- domestic economy and the likelihood of even lower interest rates.
Tuesday's trio of big bank earnings -- JPMorgan (JPM - Get Report) , Goldman Sachs (GS - Get Report) and Wells Fargo (WFC - Get Report) -- all managed to top Wall Street forecasts for top and bottom line growth, but each signaled concern that Fed rate cuts would likely make near-term profits even more difficult to achieve.
Investors today will be looking at one of the sector's key measurements -- net interest margin -- for signs of weakness in not only Bank of America, but also smaller rivals such as U.S. Bancorp (USB - Get Report) , PNC Financial (PNC - Get Report) and BNY Mellon (BK - Get Report) .
3. -- Bitcoin Bashed
Bitcoin prices tumbled well below $10,000 in overnight trading Wednesday as lawmakers on Capitol Hill grilled big tech executives and hounded social media giant Facebook FB over its plans to launch a its new 'Libra' digital currency next year.
Facebook's unveiling of Libra earlier this month helped bitcoin rise past $14,000 amid a renewed rally in cryptocurrency markets linked to the hope that wider use of various digital coins would allow for faster adoption of bitcoins in everyday transactions.
However, with regulators and central bankers around the world expressing doubts -- or outright hostility -- to Facebook's Libra ambitions, and President Donald Trump suggesting cryptocurrencies are "based on thin air", bitcoin prices have fallen more than $5,000 from their early July peak.
"I know we have to earn people's trust for a very long period of time," Facebook's David Marcus told lawmakers Tuesday. "We know we need to take the time to get this right."
Marcus will appear before the Senate Banking Committee later today.
4. -- Oil's Well?
U.S. oil prices bounced higher in early trading following data late Tuesday from the American Petroleum Institute which showed domestic crude inventories fell by 1.4 million barrels in the week ending July 12. If confirmed later today by the Energy Information Administration, the declines will stretch to a fifth consecutive week, the longest in at least 18 months.
Prices were further pressured by the slow return of production capacity in the Gulf of Mexico, where more than half of the area's output, or around 1.1 million barrels per day, remains offline in the wake of storm Barry, which hammered the Louisiana coast this past weekend.
WTI futures contracts for August delivery, which typically dictate the direction of U.S. gas prices, were marked 29 cents higher in early New York trading at $57.91 per barrel.
5. -- Apollo Holo
The Smithsonian National Air and Space Museum will celebrate the 50th anniversary of the Apollo 11 moon landing mission with a with a life-size projection of the Saturn V rocket on the Washington Monument in a three-day tribute to astronauts Neil Armstrong, Buzz Aldrin and Michael Collins.
A 17-minute program outside the Smithsonian Castle, slated for July 19 and 20 will also recreate the Apollo 11 mission's launch following Congressional approval for the displays earlier this year.