Wall Street Looks to Extend Lackluster Start to August

Investors are unpacking earnings, jobs figures, and an update from Fitch Ratings

Deputy Editor
Aug 2, 2023 at 9:20 AM
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Stock futures are indicating a lackluster response to an uninspired start to August, with all three major indexes lower before the open as earnings reports flood in. Futures on the Dow Jones Industrial Average (DJI) and Nasdaq-100 Index (NDX) futures are both down triple digits, while S&P 500 Index (SPX) futures are also well into the red.

Investors are unpacking better than expected ADP employment report, with the private sector adding 324,000 jobs in July -- outpacing economists' expectations. In addition, Fitch Ratings slashed its long-term foreign currency issuer default rating for the U.S. to AA+ from AAA , saying it "expected fiscal deterioration over the next three years."

Continue reading for more on today's market, including: 

Futures Chart August 22023

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.5 million call contracts and 865,907 put contacts exchanged on Tuesday. The single-session equity put/call ratio rose to 0.58 and the 21-day moving average stayed at 0.65.
  2. CVS Health Corp (NYSE:CVS) stock is up 2% before the open, after the blue-chip pharmaceutical name beat second-quarter earnings and revenue expectations. The company's results were bolstered by a cost cutting measurements, including calls for eliminating 5,000 jobs. Coming into today, CVS was down 20.7% year to date.
  3. Another big name company, Kraft Heinz Co (NASDAQ:KHC), also entered the earnings confessional. The food manufacturing giant reported second-quarter sales that fell short of Wall Street's forecasts, though it affirm its EPS guidance range for 2023. In response, KHC is looking to add to an 11.9% year-to-date deficit.
  4. Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) boasts an impressive 62% year-over-year lead, but is down 3.4% in electronic trading following a gloomy current-quarter outlook. Also weighing on NCLH are multiple bear notes, with Susquehanna downgrading the equity to "neutral," while Stifel slashed its target price to $21 from $22.
  5. Today brought the ADP employment report. 

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Utility Stocks Drag Hong Kong Markets

Asian bourses fell today across the board, with global economy stability in focus after the Fitch downgrade. Utility and medtech stocks weighed, sending Japan’s Nikkei 2.3% lower, while Hong Kong’s Hang Seng gave back 2.5%. China’s Shanghai Composite lost 0.9%, while South Korea’s Kospi fell 1.9% even after the country’s inflation rate for July checked in at its lowest level in 25 months.

Over in Europe, earnings season is still in full swing. London’s FTSE 100 is 1.1% lower at last check, while the French CAC 40 and German DAX are off by 0.8% and 1.1%, respectively. German telecom giant Vodafone secured a national roaming agreement with 1&1 to provide 5B mobile coverage across the country. Elsewhere, German drugmaker Siemens is weighing down the broader European index after its earnings report.

 

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