Wall Street is recovering before the market this Monday, while waiting for a new series of quarterly publications, and while Joe Biden has just left the presidential race. The S&P 500 gains 0.7% in pre-session, the Dow Jones 0.2% and the Nasdaq 1.1%! Biden announced on Sunday that he was ending his re-election campaign. In a statement published on social networks, the American president assured that he would remain in office at the White House until the end of his term in January 2025, wishing to concentrate on his presidential duties. It seems that the markets are welcoming the news positively, offering themselves a technical boost after a rather trying week – particularly for major technology stocks.
On the Nymex, the barrel of WTI crude fell by 0.9% to $77.9. The ounce of fine gold consolidated by 0.2% to $2,395. The dollar index lost 0.1% against a basket of currencies.
Vice President Kamala Harris, 59, has announced her candidacy for the presidential election in November. “I will do everything in my power to unite the Democratic Party — and unite our nation — to defeat Donald Trump and his extreme Project 2025 agenda,” she wrote on X, calling on her supporters to financially support her campaign. This unexpected transition from “Biden President” to “Harris for President” is reshuffling the cards of the American presidential election. Kamala Harris now has just over three months until the election to convince the entire party and American voters.
Donald Trump, for his part, said yesterday that he thought it would be “easier” to beat Harris than Biden. The former Republican president, who was sworn in last week as a candidate for the November election, made these comments to CNN. Trump said yesterday on his social network Truth that Biden was “not fit to be a candidate” and “certainly not fit to govern.”
Economic news was fairly sparse on Wall Street on Monday, with only the Chicago Fed’s June national activity index coming in at 0.05 versus a FactSet consensus of 0.22. The index was 0.23 a month earlier.
Tomorrow, Tuesday, traders will be watching existing home sales and the Richmond Fed manufacturing index. Wednesday, they will be watching the preliminary July PMIs (manufacturing, services and composite), as well as new home sales. Thursday, weekly jobless claims, durable goods orders and preliminary second-quarter GDP will be in the news, along with the Kansas City Fed manufacturing index. Finally, Friday, markets will be watching the University of Michigan consumer sentiment index, as well as household income and spending and the Fed’s closely watched core PCE price index.
Elsewhere in the world today, China announced an unexpected cut in its short-term policy rate and benchmark lending rates to boost economic growth. The People’s Bank of China cut the seven-day repo rate to 1.7% from 1.8%. It also plans to improve the mechanism for money market intervention operations. It is the first rate cut since August 2023, Reuters reported. Beijing also announced a cut in its benchmark lending rates. The one-year prime lending rate was cut to 3.35% from 3.45%, while the five-year prime lending rate was reduced to 3.85%. The PBOC also cut rates on its standing lending facility for commercial banks.
In Wall Street corporate news, Verizon, Cadence Design Systems, Truist Financial, IQVIA, Nucor and Brown & Brown are reporting today. SAP and NXP Semiconductors, two European giants that are not without influence on Wall Street, are also reporting tonight.
The serious stuff on Wall Street starts tomorrow night, with earnings announcements from Alphabet, Tesla, Texas Instruments and Visa. Coca-Cola also reports before the market opens tomorrow, along with Danaher, GE Aerospace, Philip Morris International, Comcast, UPS, Lockheed Martin, HCA Healthcare, Sherwin-Williams, Moody’s, Freeport-McMoran, Paccar, Spotify, General Motors, Kimberly-Clark…
On Wednesday, Thermo Fisher Scientific, IBM, ServiceNow, AT&T, NextEra Energy, Boston Scientific, KLA Corporation, Fiserv, Waste Management, Equinor, General Dynamics, CME Group, Otis, GE Vernova, Newmont, Ford Motor and Chipotle Mexican Grill will release their financial statements. AbbVie, Union Pacific, Honeywell, RTX and Northrop Grumman will announce their results on Thursday. Centene, Charter Communications, 3M, Colgate-Palmolive and Bristol-Myers Squibb will finally publish on Friday.
Values
Verizon, the American telecom operator, is losing ground before the stock market on Wall Street. The group has nevertheless revealed rather comfortable quarterly accounts. The only downside is that revenues were slightly below expectations at 32.8 billion dollars, against 33 billion consensus. The group still recovered more wireless subscribers than expected over the period, with its flexible subscription plans associated with streaming services including Netflix or Disney+. Quarterly revenues from wireless services increased by 3.5% to 19.8 billion dollars. Total revenues increased by 0.6%. Consolidated quarterly net income was 4.7 billion dollars, against 4.8 billion a year earlier. Consolidated adjusted EBITDA represented 12.3 billion against 12 billion a year earlier. Adjusted EPS reached 1.15$, as expected, against 1.21$ a year earlier.
Truist Financial, the U.S. regional banking institution, reported second-quarter net income attributable to common shareholders of $826 million, or 62 cents per share. On an adjusted basis, net income came to $1.2 billion, or 91 cents per share. Total revenues fell $6.5 billion to… -$1.63 billion, primarily due to securities losses. Adjusted revenues, however, rose 3%, with net interest income rising to $3.58 billion.
“In the second quarter, we continued to see solid momentum in our core banking businesses, as evidenced by strong year-over-year growth in investment banking and trading revenues and continued expense discipline. Client deposits are stabilizing and asset quality metrics remain in line with our expectations. While loan demand remains subdued, we are encouraged by an improvement in our client engagement and our increased ability to meet their needs,” management added.
IQVIA, the leading U.S. clinical research and healthcare data company, reported second-quarter revenue of $3.814 billion, GAAP net income of $363 million and adjusted EBITDA of $887 million. Adjusted diluted earnings per share were $2.64 for the period. The consensus was for adjusted EPS of $2.56 on $3.79 billion in revenue. Quarterly R&D Solutions orders reached $2.7 billion, representing a book-to-bill ratio of 1.27. The R&D Solutions backlog reached $30.6 billion, up 8%. For the year 2024, the group now envisages a turnover of between 15.425 and 15.525 billion dollars, an adjusted EBITDA of between 3.705 and 3.765 billion dollars, and an adjusted diluted earnings per share of between 11.10 and 11.30 dollars.
Boeing is raising its 20-year aircraft delivery forecast to 43,975 units, up 3% from before. The aircraft manufacturer also said it is seeing a significant improvement in the production of its 737 MAX, and is counting on a normalization of production of these aircraft by the end of the year. In addition, the US Air Force has sealed an agreement with the aeronautics giant for the supply of E-7 Wedgetail aircraft. Finally, Korean Air will order around twenty 777X aircraft.
Nvidia is reportedly working on a version of its new flagship AI chips for the Chinese market that would be compatible with current U.S. export controls, four people familiar with the matter told Reuters. The company unveiled its Blackwell series of chips in March, which are expected to go into mass production later this year. Nvidia is expected to work with Inspur, one of its main distribution partners in China, on the launch and distribution of the new chip, tentatively named the B20, two of the sources told Reuters. Shipments of the B20 chip could begin in the second quarter of 2025, one source added.
Reuters reports that China accounted for about 17% of Nvidia’s revenue in the fiscal year that ended January following U.S. sanctions, down from 26% two years earlier. Nvidia’s most advanced chip for the Chinese market, the H20, initially got off to a slow start when shipments began this year, but sales are now growing rapidly, two sources told Reuters. Nvidia is on track to sell more than a million of its H20 chips in China this year, worth more than $12 billion, Reuters cited an estimate from research group SemiAnalysis. Still, the United States is expected to keep up pressure on export controls related to advanced chips…
