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Wall Street futures were mixed early Thursday as traders continued to weigh the flow of U.S. corporate results. Major European markets were lower after the European Central Bank’s first rate hike in more than a decade. TSX futures were moderately weaker along with lower crude oil prices.
As the North American open approached, Nasdaq futures edged higher, while S&P futures climbed above par. Dow futures were modestly lower. On Wednesday, all three managed gains on the day, with the Nasdaq ending up 1.58 percent. The S&P/TSX Composite closed up 0.44%, helped by gains in technology stocks.
“The general lack of fireworks on earnings means that boring is beautiful,” said Stephen Innes, managing partner at SPI Asset Management.
“And while the supply chain and inflation talk are improving, there remains a significant consumer-driven headwind on earnings.”
Shares of Tesla Inc. rose about 3% in premarket trading after the electric car maker reported a smaller-than-expected drop in quarterly profit, beating market forecasts. The company posted adjusted earnings of $2.27 per share for the second quarter ended in June, compared with analysts’ consensus estimates of $1.81.
“Like Netflix, Tesla’s results were worse than the previous quarter,” said Swissquote analyst Ipek Ozkardeskaya.
“The company announced the first consecutive profit decline since late 2020, but revealed it achieved the highest vehicle production in its history despite the shutdown of the megafactory in Shanghai due to COVID restrictions and maintained its annual growth target of production unchanged at 50 percent.”
Elsewhere, United Airlines saw its shares fall about 7 percent in premarket action after the US carrier reported its first quarterly profit since the start of the pandemic, but also missed market forecasts. The company reported adjusted earnings of $1.43 per share last quarter. Analysts had expected adjusted earnings per share of $1.95, according to Refinitiv.
US companies reporting on Thursday included American Airlines and AT&T.
In Canada, The Globe’s Brent Zhang reports that West Fraser Timber Co. Ltd. there are at least $706 million in timber deposits in the United States, which would be a valuable bonus for a potential suitor. Vancouver-based West Fraser has been paying U.S. tariffs on its lumber shipments south of the border for the past five years in the latest round of a long-running trade dispute between Canada and the U.S. over softwood lumber.
Overseas, the pan-European STOXX 600 was down 0.02% by midday. The ECB raised its deposit rate by 50 basis points. It was the central bank’s first hike in 11 years.
Britain’s FTSE 100 fell 0.41 percent. Germany’s DAX lost 0.54%, while France’s CAC 40 rose 0.24%.
In Asia, Japan’s Nikkei ended up 0.44%. Hong Kong’s Hang Seng lost 1.51 percent.
Goods
Crude oil prices fell for a second session after a rise in U.S. gasoline inventories fueled demand concerns.
Brent’s daily range is $102.70 to $106.78. West Texas Intermediate’s range is US$95.57 to US$99.99.
Data this week from the US Energy Information Administration showed US gasoline inventories rose by 3.5 million barrels last week, more than analysts had expected.
“Oil traded off session highs on the back of the weekly EIA report showing consistently higher gasoline inventories and generally read as an indicator of lower consumer demand,” said Stephen Innes of SPI Asset Management.
“And even more so in the context of a seasonal reversal. Gasoline demand is usually quite strong during the mid-summer months in the US.
Meanwhile, Russia has resumed natural gas supplies to Europe via the Nord Stream 1 pipeline after a 10-day maintenance outage. Markets were concerned that Moscow could delay the resumption of supplies as a tactic in the war in Ukraine.
On Thursday, flows returned to 40 percent of the pipeline’s capacity, similar to the level seen before the maintenance shutdown, according to Reuters.
Among other commodities, gold prices fell as markets awaited more interest rate hikes from global central banks as they seek to tackle high inflation.
Spot gold was down 0.2% at $1,692.80 an ounce by Thursday morning, after falling to its lowest level since early August 2021 at $1,689.40 earlier in the session.
U.S. gold futures fell 0.6 percent to $1,689.50 an ounce.
Currencies
The Canadian dollar was weaker as risk sentiment receded and crude oil prices eased.
The loonie’s daily range is from 77.37 US cents to 77.77 US cents.
There were no major economic announcements for Canada on Thursday’s calendar.
In global markets, the euro was initially lower early Thursday, weighed down by political uncertainty in Italy. However, it gained against the US dollar following the ECB’s interest rate decision. The euro was trading at US1.025 shortly after the ECB’s policy announcement.
The Associated Press reports that Italian Prime Minister Mario Draghi resigned on Thursday after key coalition allies boycotted the confidence vote, signaling the possibility of early elections.
The US dollar rose to 138.575 yen, consolidating below a 24-year high of 139.38 seen a week ago, after the Bank of Japan stuck to its ultra-easy monetary policy stance.
The risk-sensitive Australian dollar reversed course, falling 0.2 percent to $0.6875, while the New Zealand dollar did the same, falling 0.5 percent to $0.6201, according to Reuters data.
More company news
Amazon.com Inc said Thursday it would buy One Medical for $3.49 billion in an all-cash deal.
American Airlines Group Inc reported its first adjusted quarterly profit since the start of the COVID-19 pandemic as a boom in travel demand more than offset higher costs. The lifting of coronavirus-related restrictions and limited travel demand sparked the strongest summer for U.S. carriers in three years, putting them on track for a profitable quarter despite a higher fuel bill. American Airlines reported an adjusted profit of $533 million, or $0.76 per share, for the quarter ended June 30, compared with a loss of $1.09 billion, or $1.69 per share, a year earlier earlier.
AT&T Inc on Thursday raised its forecast for annual revenue growth in its wireless services business due to solid subscriber additions as more people travel in the summer and use the company’s roaming services. AT&T has focused on making its 5G and fiber internet services widely available and has doubled down on promotional activities to win subscribers. The company added 813,000 new wireless phone subscribers paying monthly bills in the second quarter, benefiting from the expansion of its 5G network, compared with 691,000 additions in the first quarter.
Microsoft CorpMS Teams’ MS Teams is working for most users, the company said Thursday, after an hours-long outage that knocked out the chat app for tens of thousands of customers around the world. The company cited an outage in a recent software update that “contains a broken connection to an internal storage service.” “We are looking at all residual impacts associated with this event. We are also monitoring for any signs of damage until we are certain that all service functions are fully restored,” the company said on its website.
Economic news
ECB monetary policy meeting
(830 a.m. ET) Initial U.S. jobless claims for last week.
(830 a.m. ET) Philadelphia Fed U.S. Index.
(10 a.m. ET) leading indicator for the US.
With Reuters and the Canadian press
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