Month: July 2024

Advanced Micro Devices, Inc. (NASDAQ:AMD) posted a second-quarter earnings win with a slight beat on analyst expectations. AMD stock rose over 3% in after-hours trading Tuesday.

The chipmaker reported adjusted earnings per share (EPS) of $0.69, just above the $0.68 consensus. The company’s revenue also exceeded forecasts, coming in at $5.84 billion against the predicted $5.72 billion.

This performance represents a strong showing in a competitive semiconductor market, with the company attributing its success to robust demand in its Data Center and Client segments.

AMD’s Chair and CEO, Dr. Lisa Su, highlighted the company’s revenue and earnings growth, crediting record Data Center segment revenue and the acceleration of their AI business.

“The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business,” Dr. Su stated.

The company’s financial outlook for the third quarter of 2024 is also promising, with revenue guidance set at $6.7 billion, plus or minus $300 million. This forecast surpasses the analyst consensus of $6.61 billion, signaling confidence in continued demand for AMD’s products, particularly its Instinct, EPYC, and Ryzen processors. 

AMD’s CFO, Jean Hu, echoed the sentiment of strong execution in the second quarter, emphasizing the company’s revenue growth and gross margin expansion.

“We delivered solid earnings growth, while increasing our strategic AI investments to build the foundation for future growth,” Hu commented.

Investing.com — The S&P 500 closed lower Tuesday, led lower by tech amid cautious trading as the Federal Reserve kicked off its two-day meeting and investors awaited further earnings from big tech.

At 16:00 ET (20:00 GMT), the S&P 500 fell 0.5%, and NASDAQ Composite slumped 1.3%, the Dow Jones Industrial Average rose 205 points, or 0.5%,

Fed kicks off two-day meeting 

The Fed kicked off its two meeting that is expected to culminate in an unchanged decision on interest rates Wednesday.

But following a string of data showing inflation, investors will be looking for Fed Chair Jerome Powell to lay the groundwork for a September rate cut. 

“Any indication of additional confidence in terms of inflation moving to its target or an upward adjustment in its assessment of the progress of inflation will presumably increase the odds of a September adjustment in policy,” Stifel said in a note on Tuesday.

Markets have fully priced in a 25 basis point cut in September, with a small chance of a reduction of 50 basis points, and have 66 basis points of easing priced in by the end of the year.

Labor demand, consumer confidence surprise to upside 

The start of the Fed meeting arrived on the heels of data showing that job openings, a measure of labor demand, fell to 8.18M in June from 8.23M in May, though that was still above economists estimates of 8.18M. 

Signs of ongoing labor demand underpinned consumer confidence in July, which rose to a reading of 100.3 from 97.8 the prior month.   

Tech stumbles ahead of Microsoft earnings 

Tech led the market lower, with NVIDIA Corporation (NASDAQ:NVDA), down 7%, driving downside momentum as rotation out of the tech resumed. 

There are more key earnings to digest this week, starting with Microsoft (NASDAQ:MSFT) reporting its June quarter earnings after the bell on Tuesday.

The earnings report from Microsoft will be closely watch to “gauge the adoption of the AI Revolution as Microsoft and Nvidia (NASDAQ:NVDA) are the two best barometers in technology on the pace of AI adoption globally,” Wedbush said earlier this week. 

Beyond Microsoft, tech heavyweights Meta Platforms (NASDAQ:META) and Apple (NASDAQ:AAPL) are set to report earnings on Wednesday and Thursday, respectively.

PayPal, JetBlue in earnings delight; Merck falls after cutting guidance

JetBlue (NASDAQ:JBLU) stock soared 12% after the low-cost carrier posted a surprise second-quarter profit and announced plans to deepen its cost cuts. 

PayPal (NASDAQ:PYPL) stock rose more than 8% after the payments giant raised its forecast for full-year adjusted profit for the second time, betting on resilient consumer spending in the back-to-school and upcoming holiday shopping seasons.

Merck (NYSE:MRK) stock slumped more than 9% after the drug maker cut its full-year earnings forecast mainly due to one-time charges from its acquisition of eye-focused drug developer EyeBio.

Pfizer (NYSE:PFE) stock was up nearly 1% after the drugs giant raised its annual profit forecast after reporting better-than-expected sales of its COVID vaccine and antiviral treatment.

Gold jumps as Israel strikes Beirut 

Gold Futures rose 1% as investors pored into the safe-haven metal after Israel said it had launched a target strike in Beirut, stoking fears of an Israel-Lebanon war. 

(Peter Nurse, Ambar Warrick contributed to this article.)

Investing.com– China’s manufacturing sector shrank as expected in July, purchasing managers index data showed on Wednesday, contracting for a third consecutive month as domestic demand remained weak amid middling support from Beijing. 

Manufacturing PMI fell to 49.4 in July, data from the National Bureau of Statistics showed. The reading contracted further from the 49.5 seen in the prior month. 

A reading below 50 indicates contraction, with Chinese manufacturing activity now shrinking for a third straight month. 

The reading was driven chiefly by sluggish domestic demand, as Chinese consumer spending weakened further amid waning confidence in an economic recovery. 

Increased trade tariffs on China from the European Union- which went live in July- also weighed on manufacturing output, as export demand weakened. The tariffs were aimed chiefly at China’s electric vehicle industry, which has been a bright spot in the manufacturing sector.

Beijing has so far provided scant cues on planned stimulus measures to further support growth, with surprise interest rate cuts by the People’s Bank doing little to improve confidence earlier in July. 

Weakness in Chinese consumption extended beyond the manufacturing sector. Non-manufacturing PMI grew 50.2 in July, in line with expectations but slowing from the 50.5 seen in the prior month. 

This saw China’s composite PMI slow to 50.2 in July from 50.5 in the prior month. 

The Chinese economy grew less than expected in the second quarter, drawing promises of more stimulus from Beijing, especially to boost consumption. But the government still gave no clear signals on what measures it will enact, which sparked little confidence in the economy. 

Investing.com– Most Asian stocks rose on Wednesday with Chinese markets rebounding from five-month lows as middling economic data fueled bets on more stimulus measures, while Japanese markets turned positive following mixed signals from the Bank of Japan.

Asian technology and chipmaking stocks rallied, tracking strong earnings from Advanced Micro Devices Inc (NASDAQ:AMD). 

Regional markets also brushed off a weak overnight close on Wall Street, with U.S. stock indexes closing lower in anticipation of a Federal Reserve interest rate decision later in the day. 

But U.S. stock index futures rose in Asian trade, with a rally in chipmaking stocks largely offsetting a decline in heavyweight tech stocks, after Microsoft Corporation (NASDAQ:MSFT) missed some estimates with its June quarter earnings. 

Japanese stocks turn positive on mixed BOJ signals

Japan’s Nikkei 225 index rose 0.4%, while the TOPIX rose 0.3% after the Bank of Japan hiked interest rates by 15 basis points- the upper end of analysts estimates.

But the central bank said it will only halve its current pace of Japanese government bond buying- to 3 trillion yen ($19.5 billion) by early-2026. The BOJ will reduce its pace of monthly bond purchases by 400 billion yen every quarter.

BOJ were also seen cutting their forecasts for economic growth and inflation in fiscal 2024.

The extended timeline for cutting bond purchases, coupled with a softer outlook for near-term growth and inflation sparked bets that Japanese monetary policy will remain mostly accommodative in the near-term. Such a scenario presents a positive outlook for Japanese stocks.

Chinese stocks rebound, soft PMIs fuel stimulus bets 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes jumped over 1% each and were the best performers in Asia on Wednesday. Both indexes rebounded from their weakest levels since February, and were nursing steep losses through July. 

Purchasing managers index data for July showed sustained weakness in business activity, with the manufacturing PMI shrinking for a third straight month. 

But the reading ramped up bets that Beijing will be forced into unlocking more stimulus measures, especially after the government presented a supportive stance during the Politburo meeting on Tuesday. 

While the meeting yielded few actual details on the planned stimulus measures, investors took some encouragement from Beijing explicitly stating it will work to improve consumer confidence. 

Asian tech, chipmakers surge despite Microsoft earnings 

Tech-heavy Asian bourses logged strong gains on Wednesday, with Hong Kong’s Hang Seng rallying 1.6%, while South Korea’s KOSPI rose 0.5%. 

Tech stocks- particularly chipmakers, rose tracking strong earnings from AMD, which beat expectations and forecast strong revenue growth on demand from artificial intelligence.

But this trend was somewhat offset by middling earnings from Microsoft. While the firm’s profit beat expectations, the company’s cloud business- which is a barometer for AI demand- clocked slower-than-expected revenue growth. 

Among broader Asian markets, Australia’s ASX 200 index surged 1.3% and came close to a record high after data showed underlying consumer price index inflation grew slightly less than expected in the second quarter. 

The reading ramped up bets that cooling inflation will keep the Reserve Bank of Australia from raising interest rates any further. 

Futures for India’s Nifty 50 index pointed to a positive open, with the index remaining in sight of record highs above the closely watched 25,000 level.