After Hours Report

The major indices saw some choppy action action today, but finished with modest gains and showed a continued aversion to negative territory. The Nasdaq oscillated around its flat line, underperforming its peers due to relative weakness from some mega cap names and amid some hesitation in front of earnings reports after the close from Tesla (TSLA 291.26, -2.08, -0.7%) and Netflix (NLFX 477.59, +2.79, +0.6%).

By and large, market participants continued to trade off the notion that the economy will avoid a hard landing and that earnings growth will return in the second half of the year. The lack of concerted selling interest, despite calls for a pullback after the big run to start the year, has continued to act as an added support, sparking short covering activity and drawing in money from the sidelines due to a fear of missing out on further gains. 

There was a slate of corporate news today that revolved around earnings results; however, Apple (AAPL 195.10, +1.37, +0.7%) garnered some added attention following a Bloomberg report that the company is internally testing AI tools.

On the earnings front, Goldman Sachs (GS 340.55, +3.28, +1.0%) outperformed despite missing on Q2 EPS estimates, as did J.B. Hunt (JBHT 195.23, +7.06, +3.8%), which logged a sizable gain despite mentioning a freight recession but some improvement in customer destocking.

Northern Trust (NTRS 81.28, +9.58, +13.4%), M&T Bank (MTB 138.10, +3.34, +2.5%), Western Alliance (WAL 46.42, +3.35, +7.8%), and U.S. Bancorp (USB 38.91, +2.36, +6.5%) were notable winners following their earnings reports. Other financial stocks outperformed in solidarity. The SPDR S&P Regional Banking ETF (KRE) rose 3.1% and the SPDR S&P Bank ETF (KBE) rose 2.7%.

Only three S&P 500 sectors closed with losses -- materials (-0.5%), information technology (-0.3%), and industrials (-0.1%) -- while the real estate (+1.1%) and utilities (+1.0%) sectors saw the largest gains. 

Treasuries settled with gains. The 2-yr note yield fell one basis point to 4.75% and the 10-yr note yield fell five basis points to 3.74%, aided by some friendly inflation data out of the UK and some weaker than expected housing starts and building permits data for June. On a related note, today's $12 billion 20-yr bond reopening was met with lukewarm demand.

• Nasdaq Composite: +37.2% YTD
• S&P 500: +18.9% YTD
• Russell 2000: +12.7% YTD
• S&P Midcap 400: +12.2% YTD
• Dow Jones Industrial Average: +5.8% YTD

Reviewing today's economic data:

• The weekly MBA Mortgage Applications Index rose 1.1% after a 0.9% increase last week with refinancing applications up 7.0% and purchase applications down 1.0%.
• Total housing starts declined 8.0% month-over-month to a seasonally adjusted annual rate of 1.434 million (Briefing.com consensus 1.475 million), with single-family starts down in all regions except the West (+4.6%), following a downwardly revised 1.559 million (from 1.631 million) for May. Building permits decreased 3.7% month-over-month to a seasonally adjusted annual rate of 1.440 million (Briefing.com consensus 1.472 million), with permits for single-family units flat to positive in all regions, following an upwardly revised 1.496 million (from 1.491 million) for May.
  • The key takeaway from the report is that higher financing costs are creating headwinds for builders and preventing activity from being stronger in a supply-constrained housing market.
• The weekly EIA crude oil inventories showed a draw of 708,000 barrels following last week's build of 5.95 million barrels.

Looking ahead to Thursday, market participants will receive the following economic data:

• 8:30 ET: Weekly Initial Claims (Briefing.com consensus 240,000; prior 237,000), Continuing Claims (prior 1.729 mln), and July Philadelphia Fed Survey (Briefing.com consensus -9.0; prior -13.7)
• 10:00 ET: June Existing Home Sales (Briefing.com consensus 4.25 mln; prior 4.30 mln) and June Leading Indicators (Briefing.com consensus -0.6%; prior -0.7%)
• 10:30 ET: Weekly natural gas inventories (prior +49 bcf)

Overseas:

• Europe: DAX -0.1%, FTSE +1.8%, CAC +0.1%
• Asia: Nikkei +1.2%, Hang Seng -0.3%, Shanghai +0.0%

Commodities:

• Crude Oil -0.32 @ 75.29
• Nat Gas -0.2 @ 2.60
• Gold +0.80 @ 1981.50
• Silver +0.09 @ 25.37
• Copper -0.02 @ 3.81

After-Hours Spotlight:

• Alcoa (AA) beats by $0.14, reports revs in-line; leaves 2023 alumina and aluminum shipments unchanged... AA up 0.9%
• Discover Financial Services (DFS) misses by $0.13, reports revs in-line; pauses share repurchases... DFS down 14.1%
• Equifax (EFX) beats by $0.03, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs in-line... EFX down 5.7%
• IBM (IBM) beats by $0.17, reports revs in-line; reaffirms FY23 revenue growth and free cash flow view... IBM down 0.6%
• Kinder Morgan (KMI) reports EPS in-line; reaffirms FY23 EPS guidance... KMI up 0.3%
• Las Vegas Sands (LVS) beats by $0.02, beats on revs; reinstates quarterly dividend at $0.20/share... LVS down 2.8%
• Marten Transport (MRTN) misses by $0.01, misses on revs... MRTN up 0.6%
• Netflix (NFLX) beats by $0.44, misses on revs; guides Q3 EPS above consensus, revs below consensus... NFLX down 5.4%
• Steel Dynamics (STLD) beats by $0.03, misses on revs... STLD down 1.1%
• Tesla (TSLA) beats by $0.11, beats on revs, GAAP gross margin of 18.2%, reaffirms FY23 guidance for deliveries of about 1.8 mln... TSLA up 0.2%
• United Airlines (UAL) beats by $0.99, beats on revs; guides FY23 EPS above consensus... UAL up 2.7%
• Zions Bancorp (ZION) beats by $0.03, beats on revs... ZION up 8.1%

Fair Value for Thursday, July 20:

•  S&P 500: 4,597
• Nasdaq 100: 15,951
• DJIA: 35,237

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • AAR Corp (AIR) beats by $0.05, beats on revs
  • Activision Blizzard (ATVI) reports EPS in-line, beats on revs
  • Ally Financial (ALLY) beats by $0.03, reports revs in-line
  • ASML (ASML) beats on top and bottom lines; sees Q3 revs above consensus
  • Baker Hughes (BKR) beats by $0.06, reports revs in-line; sees Q3 and FY23 revs in line with estimates
  • Brunswick (BC) sees Q2 EPS and revs below consensus; sees FY23 EPS below forecast
  • Carvana (CVNA) reports Q2 results; beats on revs; announces agreement with noteholders that will provide the company significant flexibility
  • Citizens Financial Group (CFG) beats by $0.04; provides Q3 outlook
  • Commerce Bancshares (CBSH) beats by $0.08, beats on revs
  • Coty (COTY) sees Q4 revs in-line with forecast
  • Daimler Truck Holding AG (DTRUY) reports Q2 results
  • Elevance Health (ELV) beats by $0.26, beats on revs; guides FY23 EPS above consensus
  • First Horizon (FHN) reports Q2 (Jun) results
  • Fulton Fincl (FULT) beats by $0.05, net interest margin decreased 13 bps from Q1
  • GitLab (GTLB) reiterates Q2 and FY24 guidance; announces appointment of Chris Weber as Chief Revenue Officer
  • Goldman Sachs (GS) misses by $0.08, beats on revs; increases dividend 10%
  • Halliburton (HAL) beats by $0.02, misses on revs
  • Hancock Whitney (HWC) beats by $0.01, misses on revs
  • Harrow Health (HROW) guides Q2 revenue above consensus
  • Haynes Intl (HAYN) provides cybersecurity update and estimated third quarter financial impact
  • Interactive Brokers (IBKR) misses by $0.08, misses on revs
  • J.B. Hunt Transport (JBHT) misses by $0.09, misses on revs
  • M&T Bank (MTB) beats by $0.89
  • NASDAQ (NDAQ) beats by $0.05, beats on revs
  • Northern Trust (NTRS) misses by $0.06, reports revs in-line
  • Omnicom (OMC) beats by $0.01, misses on revs
  • Pinnacle Finl (PNFP) beats by $0.16, beats on revs
  • PTC Therapeutics (PTCT) provides investor updates in presentation; reaffirms 2023 revs guidance
  • Rio Tinto (RIO) reports Q2 production
  • United Comm Banks (UCBI) misses by $0.08, customer deposits up 2.3% on annualized basis
  • U.S. Bancorp (USB) beats by $0.07, reports revs in-line; guides Q3 revs below consensus; guides FY23 revs in-line
  • Vale S.A. (VALE) provides Q2 production and sales data
  • Western Alliance Bancorp (WAL) misses by $0.01, beats on revs
  • Woodside Energy Group (WDS) provides Q2 production udpate
• General News
  • Higher than expected inflation in UK could impact next year's election in the country, according to the Wall Street Journal
  • White House Competition Council announces new actions to lower costs and marks second anniversary of President Biden’s executive order on competition
  • Distressed US office buildings reach $24.8 bln, overtaking malls, according to Bloomberg
  • Amarin (AMRN) implements organizational restructuring to strengthen the company while driving patient access to VASCEPA/VAZKEPA Globally
  • Amarin (AMRN) appoints Patrick Holt as President and CEO, effective immediately
  • American Airlines (AAL): pilot deal said to be in jeopardy, according to Reuters
  • Amylyx Pharmaceuticals (AMLX): British Columbia to publicly reimburse ALBRIOZA for the treatment of ALS
  • Apple (AAPL) is internally testing AI tools, according to Bloomberg
  • Aramark (ARMK) and BLK & Bold have reached a multi-year agreement that will make the company’s lineup of hot and cold coffee products available to Aramark Refreshments clients this year
  • AT&T (T) believes less than 10% of its network has lead cables, according to Bloomberg
  • AT&T (T) halted plans to remove lead cables from Lake Tahoe, according to the Wall Street Journal
  • AT&T (T) Shares Filing Made by Pacific Bell Telephone Company in U.S. District Court
  • Autolus Therapeutics (AUTL) appoints Robert F. Dolski as Chief Financial Officer (CFO), effective August 7, 2023
  • Aurinia Pharma (AUPH): long term phase 3 data published in arthritis & rheumatology shows LUPKYNIS (voclosporin) preserved kidney function up to three years in lupus nephritis patients with no new or unexpected adverse events
  • Avery Dennison (AVY) provides litigation update; potential liability related to this matter could be modestly above the Company's previously disclosed range
  • Banco Bradesco (BBD) informs to its shareholders, customers and the market that it became aware that its unit Bradesco Securities – New York was the victim of a cybersecurity incident, which may have resulted in unauthorized viewing of employees, corporate, and customer data
  • BioCryst Pharma (BCRX) selects Er-Kim Pharmaceuticals as commercial partner for ORLADEYO in Turkey
  • Black Hills Corp (BKH) receives approval for new rates in Colorado
  • Black Stone Minerals (BSM) and Longroad Energy announces multi-year mineral rights agreement
  • Block (SQ) files antitrust lawsuit against Visa (V) and Mastercard (MA), according to Bloomberg
  • Chemours (CC) and Honeywell (HON) engaging with authorities in European Union to stop illegal fluorinated gas refrigerants from entering the European Union at the Greek border
  • Constellation Brands (STZ) announces Cooperation and Information Sharing Agreements with Elliott Investment Management; appoints new independent directors to the Board
  • CytoSorbents (CTSO) names Alexander D’Amico as CFO
  • FibroGen (FGEN) approved a restructuring plan - includes an expected reduction to U.S. workforce of approximately 32%
  • Granite Constr (GVA) awarded an ~ $23 mln contract by the California Department of Transportation (Caltrans) to upgrade Highway 101 in Mendocino, California
  • GreenPower Motor (GP) announces revocation of cease trade order
  • Kenon Holdings (KEN) appoints Deepa Joseph as Interim CFO
  • Haynes Intl (HAYN) provides an update today regarding its operational restoration efforts following the recent cybersecurity incident
  • Howard Hughes (HHC) provides update on previously announced holding company structure: will trade under the ticker "HHH" on August 14
  • Huntington Ingalls (HII) awarded a $41 million contract to provide integrated training systems installation and sustainment for the U.S. Navy
  • Ipsen S.A. (IPSEY) announces European Commission decision on palovarotene for the treatment of FOP
  • LendingTree (TREE) COO John David Moriarty to leave, effective July 31
  • McDonald's (MCD): Strive Asset Management confirms stake in MCD
  • Merck (MRK) announces Phase 3 KEYNOTE-A18 trial met primary endpoint of progression-free survival in patients with newly diagnosed high-risk locally advanced cervical cancer
  • Microsoft (MSFT) accelerating AI transformation through partnership
  • Nano Dimension (NNDM) exposes another misleading news release that Stratasys (SSYS) Board distributes unabashedly, deceiving shareholders and public quoting a respectable Judge in a totally out-of-context and misguided manner
  • Netflix (NFLX) has 1.5 mln ad tier subs, according to The Information (co reports tonight after the close)
  • New Found Gold Corp. (NFGC) Intercepts 4.4 g/t Au Over 43m, Extends Strike Length at Keats West to 315m
  • Nissan (NSANY) will announce new alliance with Renault within days, according to Reuters
  • Qiagen (QGEN) expands its digital PCR offering for the development of cell and gene therapies in the biopharma industry
  • RTX (RTX) awarded $256 mln U.S. Navy contract modification
  • Shopify (SHOP) discussing possibility it could invest in online wholesale marketplace Faire, according to Business Insider
  • Starbox Group's (STBX) Starbox Rebates Sdn. Bhd. enters into a software licensing agreement with MY Rebates PH Solutions Corporation
  • Tellurian (TELL) entered into a binding commitment letter with a fund of Blue Owl Real Estate Capital regarding the sale and leaseback of approximately 800 acres of land
  • Tesla (TSLA) requests German approval to make changes to plant, according to Reuters
  • TPG Inc. (TPG) has signed a definitive agreement to acquire Nextech from Thomas H. Lee Partners for $1.4 bln
  • UPS (UPS) reaches out to Teamsters union to resume negotiations next week
  • Warner Bros. Discovery (WBD): Barbie posting best ticket presales this year since Avatar 2, according to Deadline
  • Yum China (YUMC) announces disclosure under Hong Kong Stock Exchange rules in relation to a possible quarterly dividend
  • Zai Lab (ZLAB): JAMA Oncology Publishes Data from Zai Lab Study Demonstrating Significant Reduction in Disease Progression or Death with ZEJULA (Niraparib) Maintenance Therapy in Broad Population of Advanced Ovarian Cancer Patients

(see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Bluebirdbio (BLUE) upgraded to Buy from Neutral at BofA Securities; tgt raised to $10
  • Forward Air (FWRD) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $130
• Downgrades:
  • Chord Energy (CHRD) downgraded to Market Perform from Outperform at TD Cowen; tgt $151
  • Global-E Online (GLBE) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $45
  • Hancock Whitney (HWC) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $46
  • PotlatchDeltic (PCH) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $55
• Others:
  • Axonics Modulation (AXNX) initiated with an Outperform at Robert W. Baird; tgt $69
  • Boston Scientific (BSX) initiated with an Outperform at Robert W. Baird; tgt $59
  • Compass Minerals (CMP) initiated with a Neutral at BTIG Research
  • Edwards Lifesciences (EW) initiated with an Outperform at Robert W. Baird; tgt $107
  • Inari (NARI) initiated with an Outperform at Robert W. Baird; tgt $79
  • Inspire Medical Systems (INSP) initiated with an Outperform at Robert W. Baird; tgt $371
  • Intuitive Surgical (ISRG) initiated with an Outperform at Robert W. Baird; tgt $377
  • iRhythm (IRTC) initiated with an Outperform at Robert W. Baird; tgt $130
  • LivaNova (LIVN) initiated with a Neutral at Robert W. Baird; tgt $56
  • Medtronic (MDT) initiated with a Neutral at Robert W. Baird; tgt $90
  • Nevro (NVRO) initiated with a Neutral at Robert W. Baird; tgt $26
  • Nyxoah S.A. (NYXH) initiated with a Neutral at Robert W. Baird
  • Orthofix (OFIX) resumed with a Buy at BTIG Research; tgt $27
  • Penumbra (PEN) initiated with an Outperform at Robert W. Baird; tgt $375
  • Ribbon Communications (RBBN) initiated with a Buy at Craig Hallum; tgt $5.50
  • Senseonics (SENS) initiated with an Underperform at Jefferies; tgt $0.50
  • Texas Roadhouse (TXRH) initiated with a Buy at Guggenheim; tgt $130
  • TransMedics Group (TMDX) initiated with an Outperform at Robert W. Baird

• Econ Data (Thursday):
  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 240,000; prior 237,000), Continuing Claims (prior 1.729 mln), and July Philadelphia Fed Survey (Briefing.com consensus -9.0; prior -13.7)
  • 10:00 ET: June Existing Home Sales (Briefing.com consensus 4.25 mln; prior 4.30 mln) and June Leading Indicators (Briefing.com consensus -0.6%; prior -0.7%)
  • 10:30 ET: Weekly natural gas inventories (prior +49 bcf)
• Earnings:
  • Monday (July 17)
    • Pre-Market: None
    • After-Hours: ELS
  • Tuesday (July 18)
    • Pre-Market: BAC BK SCHW LMT MS NVS PNC PLD SYF
    • After-Hours: AIR FULT HWC IBKR JBHT OMC PNFP UCBI WAL
  • Wednesday (July 19)
    • Pre-Market: ALLY ASML BKR CFG CBSH ELV FHN GS HAL MTB NDAQ NTRS USB
    • After-Hours: AA CALX CNS COLB CCI DFS EFX FNB FR IBM KMI LVS LBRT MRTN NBHC NFLX REXR SLG STLD TSLA UAL WTFC ZION
  • Thursday (July 20)
    • Pre-Market: ABT AAL BMI BHLB BX DHI EWBC FITB FCX GPC HOMB JNJ KEY MAN MKTX MMC NEM NOK PM POOL SAP SNA TSM TCBI TRV TFC WBS WNS
    • After-Hours:  ASB BANF OZK COF CSX FFBC GBCI HTH ISRG KNX PPG WRB
  • Friday (July 21)
    • Pre-Market: AXP ALV AN CMA HBAN IPG RF ROP SXT SLB
    • After-Hours: None