Brendan McDermid | Reuters credited to cnbc.com
The long-term rating of the United States was recently lowered by Fitch, which made traders nervous. Traders also looked at the most recent quarterly results.
Futures for the S&P 500 fell 0.3%, and futures for the Nasdaq 100 also fell 0.4%. The Dow Jones Industrial Average futures fell by 95 points or 0.3%.
Shares of chipmaker Qualcomm fell 8% after the company’s fiscal third-quarter revenue and guidance for the current period fell short of what analysts had expected. DoorDash went up 3.6% after its sales were better than expected.
A tech indicator Apple and Amazon, a giant online store, are set to report after the market closes. So far, nearly 67% of the companies in the S&P 500 have released their most recent quarterly reports. According to FactSet, about 81% of these companies have done better than expected.
Wednesday, stocks went down, with the tech-heavy Nasdaq Composite losing more than 2%. It was the worst day for the index since February. Tech stocks fell, and bond yields went up. The S&P 500 and the Dow Jones Industrial Average ended the day with losses.
Fitch Ratings lowered the United States’ long-term foreign-currency issuer default rating from AAA to AA+ on Tuesday night, citing “expected fiscal deterioration” over the next three years and weakening governance. Before, growth stocks led to solid gains in the stock market.
“Sometimes markets need to digest a [torrent] of gains,” said Quincy Krosby, chief global strategist for LPL Financial. “This, along with a choppy seasonal background, set the stage for a pullback.” “Fitch gave the reason why.”
Regarding economic data, traders will be looking forward to weekly initial jobless claims and durable goods orders. On Friday, the July payroll report will be the most important thing.
AGO 3 HOURS
Europe’s stock markets start lower.
European markets opened down because investors are still looking at earnings reports and waiting for the Bank of England’s decision on interest rates, due Thursday at noon.
Around the time the market opened, the pan-European Stoxx 600 index was down 0.6%, and most sectors were trading in the red. With a 1.8% drop, tech stocks lost the most, followed by financial services, which lost 1.4%. In early trading, bank stocks went against the trend and were up 0.1%.
China’s services sector grows for the seventh month in a row.
According to the Caixin survey put together by S&P Global, China’s service sector grew faster in July.
The purchasing managers index for the service sector came in at 54.1, a slight rise from June’s reading of 53.9.
The survey report said that the stronger growth was due to business activity in the sector as a whole rising steadily.
This was helped by a “marked and accelerated” rise in new business, which pushed companies to hire more people for the sixth month.
— Hui Jie Lim
A WEEK AGO
Australia had a bigger trade surplus than expected in July, even though imports and exports fell.
In June, Australia’s trade surplus went down from AU$11.7 billion in May to AU$11.3 billion, or $7.4 billion.
But this was more than the AU$11 billion that a Reuters poll said would be made.
Exports from the country went down by 2%, primarily because of a drop in liquefied natural gas and other mineral fuels.
Imports, on the other hand, went down by 4% compared to May. This was due to a drop in non-industrial transportation equipment.
— Hui Jie Lim
AGO 9 HOURS
In 2023, business activity in Hong Kong falls for the first time.
Private surveys from S&P Global show that Hong Kong’s business activity fell into the “contraction” zone in 2023 for the first time.
In July, the purchasing managers index came in at 49.4, less than June’s figure of 50.3, which showed growth.
S&P Global said a continued drop in new orders caused lower output in July. But the report also said that business activity was slowing down and that “new business from overseas and Mainland China continued to grow.”
— Hui Jie Lim
BEFORE 10 HOURS
In the second quarter, Kakao’s net profit fell 44% year over year.
The profits of South Korean internet giant Kakao Corporation fell by 44% from the same time last year to 43.4 million dollars or 56.3 billion South Korean won.
The company said that the drop in profits was because at the same time last year, they made a lot of money when they sold some stocks.
From one quarter to the next, net profit fell by 12%. Still, sales for the second quarter were up 12% from last year, reaching 2.04 trillion won.
This is also the first quarter since Kakao Entertainment, a subsidiary of Kakao, bought a 39.9% stake in the K-pop agency SM Entertainment, ending a high-profile takeover battle with Hybe, which manages the supergroup BTS.
— Hui Jie Lim
AGO 5 HOURS
Here are the first calls for the European markets.
IG data shows that Thursday will be a mixed start for the European markets. The FTSE should go up 16.7 points to 7553.8, the DAX should go up 2.5 points to 16007.2, and the CAC should go up 2 points to 7305.5.
Italy’s MIB is expected to drop by 59.5 points to 29,043.
— H. Ward-Glenton
A YEAR AGO
Investors Intelligence says that growing optimism is “now a growing concern.”
At least through Monday’s trading, the weekly Investors Intelligence survey of financial newsletter editors and advisors found that bullish “sentiment continues to show more optimism, with the reading now clearly in the initial caution zone.”
The number of people who said they were bullish grew to 57.1%, up from 55.6% a week ago. This is just a hair below the peak of 57.2% in November 2021, which pointed to an all-time high in stocks in January 2022. “The bull count is now above the initial caution level of 55%, which means that a more defensive strategy should be prepared,” II said.
The number of people who think prices will go down in the short term went down from 25.0% to 24.3%. The number of people who think prices will go up in the short term went down from 25.0% to 24.3%.
The so-called “bull-bear spread” went up again, from 36.2 points in the last two weeks to 38.5 points, the highest since the summer of 2021. It is also higher than the recent high of 36.6 points, which was reached at the end of June 2023. In the middle of May, the spread was only 21 points, and II said that a difference of more than 30 points is “the first sign of elevated risk” for advisors who go against the crowd.
– Scott Schipper
A YEAR AGO
Stock futures don’t change much at the open.
Stock futures didn’t change much Wednesday night after selling off right before the regular trading day ended.
Futures for the S&P 500 were flat, and futures for the Nasdaq 100 went down by 0.03%. The Dow Jones Industrial Average futures went up by 24 points or 0.04%.