Morning Minutes 7/17/2020

Morning Minutes

Mixed Action in Stocks and Commodities as Earnings Season Continues

July 17, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

With investors focused more on individual stocks and sectors as US earnings continue to roll out, indices have been mixed overnight and into this morning. US index futures are up 0.5%-1.0%, clawing back much of yesterday’s 0.3% to 0.7% declines. Dow futures are currently up about 150 points or 0.5%. Overseas, the Dax is up 0.3%, the FTSE and Hang Seng are up 0.5%, but the Nikkei fell 0.3%.

Netflix is down 8.0% in US premarket trading today after the streaming service reported EPS of $1.59 for Q2, a big increase from $0.60 a year ago, but short of the $1.82 street estimate. Management noted that it feels the pandemic pulled forward subscriber additions. After posting subscriber gains of 26 million in the first half of this year, it forecast Q3 subscriber additions of only 2.5 million, less than half the 5.4 million street estimate. Management also raised a flag that production shutdowns could impact its new content release schedule into 2021.

Asset manager Blackrock reported EPS well above expectations ($7.85 vs street $6.99). Management noted that it had over $100B in net capital inflows into fixed income, cash management and active equity strategies.

US housing starts accelerated to 1.186M annualized in June from 1.011M in May, beating the 1.169M street estimate.

Energy and metals markets are mixed as well. WTI crude oil is down 0.5% but still holding the $40.00/bbl level, copper is up 0.1% and gold is up 0.4% as it continues to hang around the $1,800/oz level.

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