Pre-market futures are modestly down at this hour, as market participants brace for another squeeze on interest rates: a fresh 25 basis-point (bps) hike is widely expected this afternoon at 1pm ET, which would bring the Fed funds rate to 5.25-5.50% — its highest level since the first quarter of 2001, more than 22 years ago. This follows a Fed pause at its June meeting; the Fed will not reconvene until September 19th and 20th of this year.
Q2 earnings season continues apace today, with more than 200 companies reporting results today alone. The biggest report happens after today’s close, when Meta Platforms META, with its Zacks Rank #2 (Buy) and Value-Growth-Momentum score of A, is expected to post +16.67% gains in quarterly earnings and +7.25% on quarterly revenues. Also, Chipotle CMG and eBay EBAY, among many others, release Q2 figures after the closing bell today.
Coca Cola KO put up a beat on both top and bottom lines in its Q2 numbers ahead of today’s open, with earnings of 78 cents per share beating by 6 cents, +8.33%, on top-line sales of $11.97 billion — +2% higher than expectations. Shares are up modestly on the news in early trading this morning, but have managed to nearly cut its loss of -2% year to date (compared to the S&P 500’s +19%) in half. The company brought a Zacks Rank #3 (Hold) into the earnings report, with a Value-Growth-Momentum score of F. For more on KO’s earnings, click here.
Boeing BA also outperformed expectations this morning in its Q2 report: a loss of -82 cents per share on the bottom line was better than the -99 cents analysts were expecting, while $19.75 billion in revenues amounted to +18% growth from a year ago and easily stronger than the $18.46 billion in the Zacks consensus. This is only the aerospace major’s fourth positive earnings surprise in the last 16 quarters. Shares are up +3.24% on the news at this hour.
After the regular start to the trading day, New Home Sales for June are out. Expectations are for monthly numbers to drop to 725K from 763K reported a month ago. Homebuilders have gotten busy in recent months putting up new housing while the dearth in existing homes going up for sale continues. Yesterday, the Case-Shiller home price index for May rose for the fourth straight month, with the Midwest taking over from the South as the highest growth region, led by Chicago’s +4.6% year-over-year average price gain.
Really, however, today is all about the Fed. Not so much whether or not that new quarter-point rate hike will come about — it’s already been at least partly priced-in to the markets — but whether the language in the press release and Fed Chair Powell’s press conference afterwards will demonstrate a more dovish posture. That has been priced into the market, as well. Should Powell retain a hawkish tone, market participants may be forced to rethink what it expects from the markets over the next couple months.
The Boeing Company (BA): Free Stock Analysis Report
CocaCola Company (The) (KO): Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report
eBay Inc. (EBAY): Free Stock Analysis Report
Meta Platforms, Inc. (META): Free Stock Analysis Report
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