Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

A $9.4 Trillion Results Day Looms in a Test for Stock Market

Stock Markets Jul 27, 2022 09:40
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
VFC
-1.78%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
INWT
-0.62%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CLNX
-1.27%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WEGRY
-5.86%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
REPYY
-6.63%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
STOXX
-2.34%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

(Bloomberg) -- For analysts, the last Thursday of July is always one of the busiest dates in the calendar. This year, it’s likely to be even more of a stretch.

Firms in the US and Europe worth more than $9.4 trillion will report their latest figures tomorrow at a time when concern over the impact of rampant inflation on corporate profitability is at fever pitch. And coming right on the back of a crucial Federal Reserve meeting and on the same day as a slew of major macro-economic data, there will be a huge amount for market watchers to digest.

“No doubt it’s going to be very busy, but we love a busy markets week,” said Victoria Scholar, head of investment at Interactive Investor in London. She would normally write the firm’s morning markets round-up email by herself, but on Thursday will be mobilizing a team of analysts to help cope with the rush.

In a year that the S&P 500 and other major indexes have slumped into bear market territory, the day will have a lot riding on it. Particularly after a recent rally in equities, which appear to have already priced in a disappointing earnings season to date, sending the Stoxx Europe 600 Index up 4.7% in July.

“The stakes are high for stocks on Thursday with regards to earnings since the rally of the past week means valuations are now higher, slightly dropping the bar for disappointment,” said James Athey, investment director at Abrdn Plc.

The load is heavy on both sides of the Atlantic. In the US, S&P 500 members with a combined market value of $6.8 trillion will report on Thursday, in total spanning 55 companies if constituents of the Nasdaq 100 are also included. Big Tech will be a particular focus with results from Amazon.com Inc (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL) and Intel Corp (NASDAQ:INTC).

For Europe, the count is even bigger, with more than 80 Stoxx 600 firms expected to report in what is set to be one of the busiest earnings days in at least a decade. They have a combined market capitalization of $2.6 trillion and include the likes of Nestle SA (SIX:NESN), Anheuser Busch Inbev NV (EBR:ABI), Shell (LON:RDSa) and Banco Santander SA (NYSE:SAN).

On Wednesday, Adidas (ETR:ADSGN) fell after issuing a profit warning after its sales were hit by lockdowns and consumer boycotts in China. Deutsche Boerse (ETR:DB1Gn) climbed after strong first-half revenue performance. Nasdaq 100 futures advanced after Microsoft Corp (NASDAQ:MSFT) gave an upbeat sales forecast. 

As usual, traders, investors and brokers are drawing up plans to make sure they can stay on top of things. “I’ve bought in an industrial sized box of Yorkshire Tea to keep the brain caffeinated and the cake tin has been stocked with sugar laden treats,” said Danni Hewson, financial analyst at AJ Bell Plc.

The key for equity analysts will be to provide quick reactions for investors, according to Georgios Ierodiaconou, who covers telecommunications for Citigroup Inc (NYSE:C). Those reporting on his watch Thursday are Telefonica (NYSE:TEF), Inwit (BIT:INWT), Cellnex Telecom SA (BME:CLNX), Orange SA (NYSE:ORAN) and BT PLC (LON:BT), which have a total market value of $109 billion.

“There isn’t much time to go into details as you would normally do, or have ongoing discussions with people about specific results,” Ierodiaconou said by phone. “You just work like a robot in a way and go through the process.”

Given the high volume of newsflow, plenty of volatility is likely on the day, with options markets implying more than 5% moves for stocks including ArcelorMittal (NYSE:MT), AB InBev, Weir Group (OTC:WEGRY), Repsol (OTC:REPYY), VeriSign Inc (NASDAQ:VRSN), VF Corp (NYSE:VFC), Amazon.com, Intel (NASDAQ:INTC) and Royal Caribbean Cruises Ltd. (NYSE:RCL), according to Cowen’s London trading desk.

“With almost 15% of the European market reporting that morning in theory it’s the most significant micro day of the season,” said Carl Dooley, Cowen’s head of trading for the Europe, Middle East and Africa region.

Market participants will already have plenty on their plate even before the first earnings release crosses the tape. A 75 basis-point Fed rate hike is fully expected on Wednesday, and with financial markets starting to anticipate a peak in the central bank’s hawkishness, its commentary will be closely scrutinized.

And as if that wasn’t enough, US second-quarter gross domestic product and weekly jobs data, as well as German inflation numbers will add to analysts’ load.

Fed to Inflict More Pain on Economy as It Readies Big Rate Hike

According to Laura Cooper, senior investment strategist for iShares EMEA at BlackRock International, this earnings season warrants more caution than in the past given the flurry of macroeconomic challenges. “We’re in this heightened macro uncertain environment, and we are starting to see demand pressures seep into earnings and that could escalate through the back half of the year,” she said.

AJ Bell’s Hewson will spend Thursday working from her kitchen table, meaning her time will be “all about juggling” between media requests and the demands of two teenagers. Of her supplies of tea and cake, “I can’t guarantee what might be left by the time Apple and Amazon dish up their offering,” she said.

(Updates with latest earnings in eighth paragraph)

©2022 Bloomberg L.P.

 

A $9.4 Trillion Results Day Looms in a Test for Stock Market
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email