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Six of the bog-tech stocks (Google-parent Alphabet, Amazon, Apple, Facebook-parent Meta Platforms, Microsoft, Nvidia, and Tesla) report over the next two weeks. Alphabet and Tesla are up first, with both set to report after the market close today. Microsoft follows on 7/30, Meta on 7/31, Apple and Amazon on 8/1, and Nvidia on 8/28. In aggregate, Alphabet, Amazon, Meta, and Nvidia are expected to report year-over-year earnings growth of +56.4% versus growth of +9.7% for the entire S&P 500 for Q2 2024, according to FactSet.
Excluding those four companies, the expected earnings growth rate for the remaining 496 companies in the S&P 500 is +5.7%. In Q1 2024, Amazon, Alphabet, Meta, and Nvidia in aggregate reported growth of nearly +132% while aggregate growth for the remaining companies declined over -1%.
Investors today will also gain some more insights into the health of US consumers via earnings results from Coca-Cola, General Motors, KimberlyClark, SherwinWilliams, UPS, and Visa. Other earnings highlights today include Boston Scientific, Canadian National Railway, Capital One Financial, Danaher, FreeportMcMoRan, GE Aerospace, General Motors, and Texas Instruments.
Economic data today includes the Richmond Fed Manufacturing Index and Existing Home Sales. As for the shake-up in the Presidential race, right now, Wall Street seems to think that President Joe Biden’s exit from race makes the election more of a toss-up but still think things lean in Trump’s favor.
Globally traders are paying very close attention to the headlines surrounding the upcoming November US elections. Remember, over +40% of total revenues from S&P 500 companies come from overseas. Meaning policy and trade wars could be crazily impactful to stock prices, especially if the market seems stretched and priced to perfection. US companies can't afford to lose much of that foreign revenue. During President Trump's last run in the White House Tech, Financials, and Consumer Discretionary, which refers to companies that sell goods and services people want, but don't necessarily need. It covers a wide variety of industries, each closely tied to consumer spending cycles, including: Automobiles, Apperral, Hotels, Household appliances, Restaurants, Luxury and Leisure items, etc. Keep paying close attention to the money-flow and try to ignore all of the noise.
Pentagon to Bolster Response to China, Russia in Arctic: The US will expand its military readiness and surveillance in the Arctic given heightened Chinese and Russian interest coupled with new risks brought on by accelerating climate change, the Pentagon said in a new report. Measures are needed “to ensure the Arctic does not become a strategic blind spot” as melting ice makes the region more accessible economically and militarily, according to the Defense Department’s 2024 Arctic Strategy released Monday. Priorities include better surveillance of the vast region, as well as research into space-based missile warning systems, deeper coordination across NATO and with Canada through the North American Aerospace Defense Command, and improved satellite and data communications. The Pentagon also said it needs better modeling and forecasting of the rapidly changing environment to prepare for potential combat in increasingly unpredictable conditions so far north. “Melting Arctic ice caps are opening new shipping lanes and attracting increased interest and activity from both the People’s Republic of China and Russia,” Kathleen Hicks, Deputy Secretary of Defense, said during a briefing Monday. China is “the only strategic competitor with the will and increasingly the wherewithal to remake the international order” while Russia “continues to pose an acute threat to security and stability in the region.” Source Bloomberg
EVs Are Cheaper Than Ever: Electric vehicles were a splurge purchase not long ago. Now they are among the biggest bargains on the dealership lot. Many electric models have never been cheaper, as automakers splurge on financing deals and cash incentives to sway consumers who might be hesitant to give up their gas guzzlers. The steeper discounts will serve as a test of Americans’ appetite for going electric after months of slowing demand. Four of the five vehicle models with the biggest drop in list price over the first half of this year were electric, including the Chevrolet Blazer and Volkswagen ID.4 SUVs, according to shopping site CarGurus. On average, buyers paid about $1,500 more for nonluxury EVs than internal combustion engine vehicles, according to a July J.D. Power report. Just over a year ago, the average EV fetched $8,400 more. In some cases, electric models that once came with a hefty premium are actually cheaper than their combustion-engine equivalents. Ford Motor’s F-150 Lightning is selling for about $5,000 less than its gas-engine alternatives, according to J.D. Power data. Still, it won’t come cheap for the car industry: Discounts and deals make EVs that have already drained billions from legacy automakers’ bottom lines even less profitable. Several major automakers are scheduled to report quarterly earnings this week, including Tesla, General Motors, and Ford. Source WSJ
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Mortgage Delinquencies Hit Six-Month High: Borrowers fell behind on paying their mortgages in June, pushing delinquencies up to the highest level in six months. The national delinquency rate rose +14.5% in June from the month before, according to loan-level data from Intercontinental Exchange Inc. on Monday. The delinquency rate was higher in December 2023. In June, the number of borrowers missing a single payment rose by +19.6%, the biggest increase since May 2020, the company said. Serious delinquencies, which refer to payments on outstanding loans due past 90 days, were up +5.1% in May, ICE said, but were still down -8.5% from a year ago. However, the uptick in delinquencies appears to be a result of how the data is collected, rather than a genuine reflection of homeowners in distress. The national delinquency rate jumped in June partly because the month ended on a Sunday, and payments made on the last day of the month weren’t processed in time to be included in the data set. In addition, delinquencies in May were at a near-record low, which made the June increase seem even bigger than it was. Source MarketWatch
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