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U.S. Stock Futures in Green After Three Days of Devastation
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U.S. stock futures are trying to crawl back to normalcy after three days of mayhem. Although the meltdown was predominantly led by technology behemoths, especially AI giants, other sectors have also borne the brunt. The so-called “magnificent 7” stocks witnessed a market capitalization of nearly $1.5 trillion being wiped out during this devastation.
The Wall Street rout started primarily due to two factors. First, a few key economic data for July, especially labor market data, came in significantly lower than expected. This raised concerns about a near-term recession in the U.S. economy.
The second reason was the unwinding of “Yen carry-trade” after the Bank of Japan unexpectedly hiked the benchmark interest rate last week. Large institutional investors, especially hedge funds used to borrow massively in low interest rate currencies like Japanese Yen to purchase high-yielding assets like equities. A higher interest rate in Japan suddenly raised the cost of borrowing for these institutions prompting them to unwind Yen-funded purchases.
In the United States, at the start of July, the CME FedWatch showed a 68% probability of a 25 basis-point rate cut by the Fed in September. On Jul 31, after the Fed Chairman signaled a possible rate cut in September, that probability jumped to 100%. Following the release of weak labor market data for July, the CME FedWatch currently shows a 71.5% chance of a 50 basis-point rate cut in September.
This morning, the yield on the benchmark 10-Year U.S. Treasury Note rose 3.855% after declining to 3.765%, the lowest level since June 2023. The yield on the short-term 2-Year U.S. Treasury Note also traded higher at 3.992%, after sliding to 3.875% the previous day.
Moreover, Japan’s Nikkei 225 index has climbed 10% today, recording its best single-day performance since October 2008. Yesterday, the Nikkei 225 index plummeted 12.4%, marking its worst single-day performance since the “Black Monday” of 1987.
On the earnings front, Caterpillar Inc. (CAT - Free Report) reported second-quarter 2024 adjusted earnings per share of $5.99, outpacing the Zacks Consensus Estimate of $5.53. The mining and construction behemoth posted revenues of $16.69 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.45%. For a detailed discussion of CAT earnings, click here.
Major electric power operator, Duke Energy Corp. (DUK - Free Report) has come up with quarterly adjusted earnings of $1.18 per share, surpassing the Zacks Consensus Estimate of $1.01. The company posted revenues of $7.17 billion, beating the Zacks Consensus Estimate by 5.78%. For a detailed analysis of DUK earnings, click here.
Restaurant giant Yum! Brands Inc. (YUM - Free Report) has registered quarterly adjusted earnings per share of $1.35, outpacing the Zacks Consensus Estimate of $1.32. The company posted revenues of $1.76 billion, missing the Zacks Consensus Estimate by 1.89%. For knowing more on YUM earnings, click here.
Zoetis Inc. (ZTS - Free Report) , a leader in the animal health space, has posted quarterly adjusted earnings per share of $1.56, exceeding the Zacks Consensus Estimate of $1.49. The company generated revenues of $2.36 billion, beating the Zacks Consensus Estimate by 2.53%. To get more information on ZTS earnings, click here.
Meanwhile, Trade Deficit in June came in at $73.1 billion compared with $75.1 billion in May. The consensus estimate was for a deficit of $72.5 billion. Month over month, exports rose $3.9 billion in June, while imports increased $2 billion.
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U.S. Stock Futures in Green After Three Days of Devastation
U.S. stock futures are trying to crawl back to normalcy after three days of mayhem. Although the meltdown was predominantly led by technology behemoths, especially AI giants, other sectors have also borne the brunt. The so-called “magnificent 7” stocks witnessed a market capitalization of nearly $1.5 trillion being wiped out during this devastation.
The Wall Street rout started primarily due to two factors. First, a few key economic data for July, especially labor market data, came in significantly lower than expected. This raised concerns about a near-term recession in the U.S. economy.
The second reason was the unwinding of “Yen carry-trade” after the Bank of Japan unexpectedly hiked the benchmark interest rate last week. Large institutional investors, especially hedge funds used to borrow massively in low interest rate currencies like Japanese Yen to purchase high-yielding assets like equities. A higher interest rate in Japan suddenly raised the cost of borrowing for these institutions prompting them to unwind Yen-funded purchases.
In the United States, at the start of July, the CME FedWatch showed a 68% probability of a 25 basis-point rate cut by the Fed in September. On Jul 31, after the Fed Chairman signaled a possible rate cut in September, that probability jumped to 100%. Following the release of weak labor market data for July, the CME FedWatch currently shows a 71.5% chance of a 50 basis-point rate cut in September.
This morning, the yield on the benchmark 10-Year U.S. Treasury Note rose 3.855% after declining to 3.765%, the lowest level since June 2023. The yield on the short-term 2-Year U.S. Treasury Note also traded higher at 3.992%, after sliding to 3.875% the previous day.
Moreover, Japan’s Nikkei 225 index has climbed 10% today, recording its best single-day performance since October 2008. Yesterday, the Nikkei 225 index plummeted 12.4%, marking its worst single-day performance since the “Black Monday” of 1987.
On the earnings front, Caterpillar Inc. (CAT - Free Report) reported second-quarter 2024 adjusted earnings per share of $5.99, outpacing the Zacks Consensus Estimate of $5.53. The mining and construction behemoth posted revenues of $16.69 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.45%. For a detailed discussion of CAT earnings, click here.
Major electric power operator, Duke Energy Corp. (DUK - Free Report) has come up with quarterly adjusted earnings of $1.18 per share, surpassing the Zacks Consensus Estimate of $1.01. The company posted revenues of $7.17 billion, beating the Zacks Consensus Estimate by 5.78%. For a detailed analysis of DUK earnings, click here.
Restaurant giant Yum! Brands Inc. (YUM - Free Report) has registered quarterly adjusted earnings per share of $1.35, outpacing the Zacks Consensus Estimate of $1.32. The company posted revenues of $1.76 billion, missing the Zacks Consensus Estimate by 1.89%. For knowing more on YUM earnings, click here.
Zoetis Inc. (ZTS - Free Report) , a leader in the animal health space, has posted quarterly adjusted earnings per share of $1.56, exceeding the Zacks Consensus Estimate of $1.49. The company generated revenues of $2.36 billion, beating the Zacks Consensus Estimate by 2.53%. To get more information on ZTS earnings, click here.
Meanwhile, Trade Deficit in June came in at $73.1 billion compared with $75.1 billion in May. The consensus estimate was for a deficit of $72.5 billion. Month over month, exports rose $3.9 billion in June, while imports increased $2 billion.