Stock futures rise as Wall Street tries to bounce back from back-to-back losing sessions

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Moderna rises after beating earnings expectations

Moderna shares rose nearly 4% in premarket trading after the covid-19 vaccine maker reported quarterly results that beat Wall Street expectations for earnings and revenue. Additionally, the company announced $3 billion in share buybacks and maintained its full-year outlook.

—Carmen Reinicke

Potential earnings revisions are a risk for the second half, says RBC’s Calvasina

Earnings this earnings season have generally exceeded Wall Street expectations, showing that companies are doing better than analysts had hoped, Lori Calvasina, RBC’s head of U.S. equity strategy, wrote on Wednesday.

“The good news for the US stock market is that evidence of resilience continues to be seen in corporate earnings,” Calvasina said. “The bad news for the US stock market is that the possibility of further downward earnings revisions remains a risk as we approach the second half of the year.”

So far, earnings and revenue estimates for the second half of 2022 and the full year of 2023 have fallen.

Still, the strength in corporate earnings this quarter may suggest that any economic downturn ahead will be short and superficial, according to Calvasina. This is good for equities now, but could set them up for more volatility.

“This has supported equity prices over the past few weeks, but looking ahead it also tells us that the recovery in equities is fragile given the possibility of further downward earnings revisions heading into 2023. “, she said.

—Carmen Reinicke

CVS wins at the pace of earnings

Shares of CVS Health rose more than 3% in premarket trading after the company announced better-than-expected quarterly results before the opening bell. The company also raised its earnings outlook for the year, saying healthcare services are helping to boost sales.

—Carmen Reinicke

Pelosi leaves Taiwan

House Speaker Nancy Pelosi left Taiwan on Wednesday after a visit that heightened tensions with China and rattled financial markets a bit.

Pelosi met with Taiwan President Tsai Ing-wen on Wednesday. China, which considers the disputed island to be part of its territory, stepped up military exercises in the Taiwan Strait during its visit. The S&P 500 is down about 1% this week as traders worry about the ramifications of Pelosi’s trip for relations with China. But the market was set for a small relief rally on Wednesday after he left.

—John Melloy

AMD shares fall on weak revenue forecast

AMD shares traded 5% lower premarket after the chipmaker released third-quarter revenue guidance that fell short of analysts’ expectations.

AMD said it expects $6.7 billion in revenue for the third quarter, below Refinitiv’s forecast of $6.82 billion.

Disappointing guidance overshadowed better-than-expected second-quarter earnings and revenue.

Fred Imbert

European markets mixed as cautious sentiment persists; Avast up 42%

European stocks were mixed on Wednesday, continuing this week’s cautious regional trend.

The pan-European Stoxx 600 slid 0.2% in early trading, with autos falling 1.5% while tech stocks gained 1.2%.

It’s a busy day for earnings in Europe, with Commerzbank, SocGen, BMW, Banco BPM, Siemens Healthineers, Veolia and Wolters Kluwer among companies reporting before the bell.

Shares of Czech cybersecurity firm Avast soared 42% after Britain’s competition regulator provisionally cleared its $8.6 billion sale to US peer NortonLifeLock.

Focus on data, not what Fed speakers say, says Art Hogan

Despite the “parade of Fed speakers,” that’s not what investors should be focusing on, according to Art Hogan, chief market strategist at B. Riley Financial.

“I think investors need to pay more attention to what the data is telling us than what every Fed speaker, voter or not, has to say about what our expectations should be,” Hogan told CNBC’s “Squawk Box.” Asia.”

Still, he said Fed officials have been able to shift expectations about the direction of Fed policy.

St. Louis Federal Reserve Chairman James Bullard said on Tuesday that the central bank will need to keep raising rates and the federal funds rate will likely need to rise to 3.75%-4% by the end of the day. of 2022. San Francisco Fed President Mary Daly said “our job is far from done” in the fight against inflation, while Chicago Fed President Charles Evans said that another big rate hike was possible, although he hopes it can be avoided.

After last week’s meeting, some expected the Fed to continue climbing to 3.25% to 3.5% before pivoting in 2023, Hogan said.

“I think the parade of Fed speakers this week did a pretty good job of pulling that off, lowering those expectations,” he said.

—Abigail Ng

These stocks are poised to come back if inflation peaks, says Jefferies

A slowdown may be on the horizon and further downward earnings revisions are expected. If inflation also peaks, as some analysts expect, that mix of factors will favor a stock class, Jefferies says.

Jefferies has produced a screen of these stocks for investors to buy, based on a list of metrics that include high profitability, reasonable valuations and good cash flow. Pro subscribers can read the story here.

—Weizhen Tan

PayPal increases its profits and announces a share buyback

PayPal shares soared more than 11% after hours. The payments company beat analysts’ earnings and revenue estimates for the second quarter and issued an upbeat outlook for the full year. PayPal also announced a $15 billion share buyback program.

Share buybacks offer companies a way to increase their earnings per share and improve the value of their shares, especially as the market as a whole sees steep price declines this year. The company launched a $10 billion program four years ago.

Elliott Management said it has a $2 billion stake in the payments giant. PayPal has announced that it has entered into a value creation information sharing agreement with the activist investor.

—Tanaya Macheel

Despite Fedspeak on fighting inflation, ‘easing cycle’ is emerging, says Leuthold’s Jim Paulsen

The Leuthold Group’s chief investment strategist, Jim Paulsen, said that despite the Federal Reserve’s “continued lip service to fighting inflation” by tightening monetary policy, several factors suggest the market could enter a an “emerging easing cycle”.

Bond yields have reached a significant rate cut, the dollar is finally rolling and junk spreads have retreated, he said in a note to investors Tuesday evening.

“The media, politicians and investors are mostly focused on the war on inflation and how aggressively the Fed will have to keep rates rising,” Paulsen said. “Yet, with real economic growth already down to a crawl and evidence that inflation is easing, the case for further Fed tightening at its September meeting is rapidly collapsing.”

“Investors should attach appropriate importance to the guiding nature of economic policies,” he added. “Tightening today means weaker real and nominal growth tomorrow.”

—Tanaya Macheel

MatchGroup shares fall after hours

Shares of dating app operator Match Group fell 23% after the company reported second-quarter revenue of $795 million, against FactSet estimates of $803.9 million. dollars. Match also issued a weak guidance for operating profit and adjusted revenue for the current quarter.

—Tanaya Macheel

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