Stocks Rebound as Amazon Surges and Apple Slides

Stocks are rebounding for a second straight day as July draws to a close. Signs of slowing in China’s economy have had little impact on sentiment, while stronger-than-expected Canadian GDP growth has provided a positive domestic signal. China’s Manufacturing PMI (49.2 vs Street 50.0) and Non-Manufacturing PMI (49.0 vs Street 50.0) both declined from last month, fell into contraction territory, and missed expectations. The Bank of Japan held its benchmark interest rate at 1.00%, as widely expected, while Canada’s GDP increased 0.3% in May, ahead of the 0.2% Street estimate.

For a second straight day, reactions to Magnificent Seven earnings have diverged sharply. Amazon.com is up 10.7% in premarket trading after earnings crushed expectations ($5.75 vs Street $1.82), supported by cloud computing growth. Apple beat earnings expectations ($2.02 vs Street $1.89), but its shares are down 7.6% premarket after guidance disappointed, with management citing component shortages. Elsewhere, First Solar is up 3.5% following significant earnings beat, while Western Union and Coinbase are down 9.9% and 6.5%, respectively, following substantial misses. Chevron beat expectations, and Exxon Mobil reported in line, although both stocks are quiet so far today.

In Canada, Magna International ($1.86 vs Street $1.51), TransAlta ($0.18 vs Street $0.16), Imperial Oil ($4.52 vs Street $4.10), and Enbridge ($0.63 vs Street $0.59) all beat expectations. Cameco ($0.18 vs Street $0.36) and Telus ($0.16 vs Street $0.20) disappointed significantly.

NASDAQ futures are up 0.9%, building on Thursday’s 2.8% rally, while Dow futures are up 0.5% after gaining 1.3% yesterday. Overseas, the Nikkei surged 4.0% and the Hang Seng gained 0.1%. In Europe, the DAX is up 0.3% and the FTSE is up 0.2%.

Commodity markets are mixed today. Crude Oil is up 1.9% and trading above $85.00 per barrel, while Brent Crude is up 1.3% above $90.00 per barrel. Gasoline is down 1.1%, slipping below $3.25 per gallon. Gold is down 1.5% trading near $4,100 per ounce, Copper is steady just below $6.50 per pound, and Silver is down 1.9%.

The U.S. 10-year Treasury note yield has climbed toward 4.70%, while the 30-year yield is consolidating gains near 5.20%. The U.S. Dollar is broadly gaining against metals, cryptocurrencies, and major currencies. The Euro is down 0.4%, the Loonie is down 0.25%, and Bitcoin is down 1.8%.

U.S. Chicago PMI is due at 9:45 a.m. EDT, followed by Michigan Consumer Sentiment at 10:00 a.m. Monday brings Manufacturing PMI reports from around the world, along with U.S. construction spending data.

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