OP Wire 7/24 (OP – Lite)

Alphabet and Tesla Underwhelm

Alphabet and Tesla kicked off the market-leading mega-cap earnings season, leaving investors underwhelmed. Not expecting much of a rebound today. Tesla’s stock plummeted 7% in after-hours trading following a disappointing earnings report. The electric vehicle manufacturer posted its lowest profit margin in over five years for the second quarter, largely due to price cuts aimed at boosting demand and increased AI project spending. The company reported a net income of $1.48 billion, down from $2.70 billion a year earlier. Adjusted earnings per share were 52 cents, missing the consensus estimate of 62 cents. The decline in automotive sales to $18.53 billion from $20.42 billion and weaker-than-expected margins pressured the bottom line.Alphabet’s stock dropped over 2% after hours, despite beating second-quarter revenue and profit estimates. The tech giant saw a rise in digital advertising sales and strong demand for its cloud computing services, with advertising sales increasing by 11% to $64.6 billion. Net income rose 28.6% to $23.6 billion, surpassing the average estimate of $22.9 billion. Total revenue grew 14% to $84.74 billion, and YouTube ad sales rose 13% to $8.67 billion. However, Alphabet’s capital expenditure jumped 91% to $12 billion as the company rapidly developed AI offerings, unsettling investors.Meta Platforms Microsoft Amazon and Apple are set to report next week, while Nvidia will report later in August. Expecting more drop or at least chop until then. Patience will be the play.

Futures Lower as Disappointing Tech Earnings Weigh

U.S. stock futures fell on Wednesday, impacted by underwhelming second-quarter results from Alphabet and Tesla. By 04:00 ET, Dow futures were down 190 points (0.5%), S&P 500 futures dropped 38 points (0.7%), and Nasdaq 100 futures fell by 195 points (1%).
The disappointing tech earnings results hit sentiment, with the tech-heavy Nasdaq Composite leading the decline. Additional corporate results are expected Thursday from companies such as AT&T General Dynamics and Boston Scientific

Opinion Poll Lead for Harris

A new Reuters/Ipsos poll shows Vice President Kamala Harris with a slight lead over Republican presidential candidate Donald Trump, following President Joe Biden’s withdrawal from the race. The poll, conducted between July 22-23, shows Harris leading Trump 44% to 42%, within a margin of error of plus or minus three percentage points. This marks an improvement for the Democrats, with Trump previously holding a small advantage in recent national polls.
Trump will hold a campaign rally in Charlotte, North Carolina, later Wednesday, while Harris will continue her campaign trail in Milwaukee, Wisconsin, and Indianapolis.

Banks Lead European Earnings

The European earnings season is in full swing, with the banking sector in focus. Deutsche Bank reported its first quarterly loss in four years, causing its stock to drop 8%. BNP Paribas stock fell 2% despite better-than-expected earnings due to a sharp drop in net interest income at its French retail business.LVMH stock fell over 5% following lower-than-expected second-quarter sales growth. Remy Cointreau stock declined 2% after a steep first-quarter sales drop, while easyJet stock soared over 6% with a 16% profit increase and a forecast for a record-breaking summer.

Crude Boosted by Falling U.S. Stockpiles

Crude prices rose Wednesday, ending a three-day decline, as falling U.S. crude inventories boosted demand hopes. By 04:00 ET, U.S. crude futures climbed 0.6% to $77.41 a barrel, while the Brent contract rose 0.5% to $81.45 a barrel.
Data from the American Petroleum Institute showed a 3.9 million barrel decrease in U.S. oil inventories last week, exceeding expectations for a 0.7 million barrel build. This marks the fourth consecutive week of shrinking inventories, indicating strong demand during the summer travel season.

Watch the latest episode of “What’s Next Wall Street” for more insights, including discussions on Elon Musk and the cryptocurrency market: Watch Here.

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