US index futures are lower on Thursday as Fitch’s credit rating downgrade is still reverberating through markets, with investors cautious amid global economic and political uncertainties. The market watches economic indicators in Europe, corporate results and the interest rate decision in England.

By 7:00 AM, Dow Jones futures (DOWI:DJI) were down 55 points, or 0.16%. S&P 500 futures were down 0.22%, while Nasdaq-100 futures were down 0.34%. The 10-year Treasury yield is at 4.151%.

On Thursday’s US economic agenda, investors will follow the jobless claims, at 8:30 am, with a consensus of 227,000 new claims, and the composite and services PMIs, at 9:45 am, with the expectation that both will show activity recovery. At 8:30 am, the productivity data for the non-agricultural sector for June will be released, with a consensus of expansion of 2%, and the unit cost of labor for the second quarter. At 10:00 am, it will be the turn of June’s industrial orders, which analysts forecast growth of 2.20%, in addition to the July services PMI measured by the Institute for Supply Management.

In Europe, Germany recorded a trade surplus of 18.7 billion euros, beating expectations of 15 billion euros, indicating business growth despite uncertainties about the bloc’s economy as a whole.

Turning to economic indicators, Germany’s PMI for the composite and services sectors in July were in line with market forecasts, clocking in at 48.5 and 52.30, respectively. Importantly, readings below 50 indicate a contraction in activity.

In the euro zone, the composite and services PMIs for July reached 48.60 and 50.90 respectively, also in line with expectations at 48.90 and 51.10. On the other hand, the producer price index in the region exceeded forecasts, registering a drop of 0.40% in June in the monthly comparison, when a retreat of 0.20% was expected.

In the United Kingdom, the composite and services PMIs were 50.70 and 51.50, respectively, in line with estimates, even amid a scenario of accelerated inflation in the country.

In the context of the Bank of England’s (BoE) interest rate decision, the interest rate was increased by 25 basis points to 5.25%, the 14th consecutive increase, in order to contain inflation. The Monetary Policy Committee voted 6-3 in favor of the hike, with some preferring a 50 basis point hike and one keeping rates unchanged. Consumer price inflation dipped to 7.9% in June, but the central bank is monitoring the tight job market. Salaries continue to grow uncomfortably for the institution, with an increase of 7.7% in May.

In Asia, markets ended without a single trend, reflecting stronger PMI data from Japan and China, in addition to yesterday’s Wall Street losses. In Japan, the Composite and Services PMIs registered 52.10 and 53.90, respectively. In China, the second largest economy in the world, the composite and services PMIs released by Caixin reached 51.90 and 54.10, respectively, surpassing market forecasts.

In commodities markets, West Texas Intermediate crude for September is down -0.21% at $79.32 a barrel. Brent crude for October is down -0.29% near $82.96 a barrel. Iron ore futures traded in Dalian, China fell 2.99% to $112.81 a tonne.

Stocks on Wall Street fell sharply and bond yields rose on Wednesday after positive job data and the announcement of increased debt issuance by the US Treasury. Dow Jones dropped 348.16 points or 0.98% to 35,282.52 points. S&P 500 dropped 63.34 points or 1.38% to 4,513.39 points. Nasdaq Composite dropped 310.47 points or 2.17% to 13,973.45 points.

Investor uncertainty was compounded by the downgrade of the US credit rating by Fitch Ratings, which raised concerns about the possibility of a recession and the sustainability of stock market growth. In addition, the ADP report indicating an increase in job creation in July in the US has affected risk appetite, as this number may influence the Federal Reserve to consider a further hike in interest rates. Given this scenario, the Payroll data forecast for Friday becomes crucial for the market, as it will help to understand the next steps of monetary policy.

Ahead of Thursday’s corporate results, investors await reports from ABInBev (NYSE:BUD), Warner Bros Discovery (NASDAQ:WBD), Cheniere (AMEX:LNG), Wayfair (NYSE:W), ConocoPhillips (NYSE:COP), Expedia (NASDAQ:EXPE), Moderna (NASDAQ:MRNA), Hasbro (NASDAQ:HAS) and Cigna (NYSE:CI) prior to market opening. After the close, reports are expected from Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Coinbase (NASDAQ:COIN), Block (NYSE:SQ), Airbnb (NASDAQ:ABNB), DraftKings (NASDAQ:DKNG) , Cloudflare (NYSE:NET), Fortinet (NASDAQ:FTNT), Petrobras (NYSE:PBR), among others.

Wall Street Corporate Highlights for Today

Meta Platforms (NASDAQ:META) – Meta has released AudioCraft, an open source artificial intelligence tool that allows users to create music and audio from text prompts. The tool comes with three models and has been trained using company-licensed music. However, concerns about copyright infringement have been raised by artists and industry experts alike, as the software learns by recognizing and replicating patterns in web data. Alphabet (NASDAQ:GOOGL) also introduced a similar tool, MusicLM, earlier this year.

Apple (NASDAQ:AAPL) – Apple’s High Yield Savings Account in partnership with Goldman Sachs (NYSE:GS) surpasses $10 billion in customer deposits. Launched in April, the account offers a 4.15% annual percentage yield on savings accounts. Apple continues to expand its presence in the financial sector with the launch of the “buy now, pay later” service in the US in March.

Wells Fargo (NYSE:WFC) – Wells Fargo will commit $60 million to support the nonprofit Concordance, helping workers with criminal records return to the workforce. JPMorgan Chase (NYSE:JPM) also has a similar initiative called Second Chance, hiring the 10% of new employees in the US with a criminal record. Companies are looking to provide opportunities and address labor shortages, as it is estimated that nearly a quarter of the US population is excluded from the talent pool due to criminal records. According to the Prison Policy Initiative, more than 1 million people are held in state penitentiaries, with high rates of criminal recidivism.

JPMorgan Chase (NYSE:JPM) – Jamie Dimon, CEO of JPMorgan, warned that regulators could make it harder for small businesses to access mortgages and loans with capital increases proposed by the Fed and FDIC. He expressed concern about the lack of foresight and calibration in regulators’ rules, saying this may already have taken a toll on US economic growth. Dimon also criticized the stress tests and called for an end to the debt ceiling. As for the downgrade of the US credit rating by Fitch Ratings, he said the markets make the decisions, not the ratings agencies.

Bank of America (NYSE:BAC) – BofA Global Research has revised its forecast for the US economy, predicting a “soft landing” and stronger economic growth in 2023. They no longer expect a recession in 2024 and see GDP growing 2.0% on average this year. The Fed is expected to cut interest rates more gradually, with cuts of 75 basis points in 2024 and 100 basis points in 2025. Other banks have also raised their economic outlook based on recent growth data and a resilient job market.

UBS (NYSE:UBS) – UBS plans to retain most of Credit Suisse’s relationship managers in Asia following the acquisition, with a view to maintaining its leadership position in the wealth management industry in the region. The merger will give UBS more relationship managers than its main rivals combined. However, there are cultural and strategic challenges to integrating the two Swiss banks. While Credit Suisse has taken a bolder approach to lending and supporting businesses, UBS is more conservative. Bank integration can be complex, but it is crucial to UBS’s success in the Asian wealth management market.

Berkshire Hathaway (NYSE:BRK.A) – Warren Buffett downplayed Fitch’s downgrade in the US and said that Berkshire Hathaway bought $10 billion of US Treasuries last Monday, without changing its future plans. He emphasized confidence in the dollar as the world’s reserve currency.

Tesla (NASDAQ:TSLA) – BYD’s loss in India could be Tesla’s gain. While BYD (USOTC:BYDDY) faces hurdles due to Indian scrutiny, Tesla is accelerating discussions to invest in the country. With the electric vehicle market on the rise, India could be a strategic base for Tesla to expand globally.

Toyota (NYSE:TM) – Toyota has unveiled a hybrid version of the Land Cruiser, targeting key markets such as North America. The automaker will produce the new model at factories in Japan and launch it elsewhere. The Land Cruiser is an iconic and profitable vehicle for Toyota.

American Airlines (NASDAQ:AAL) – American Airlines announced that it is negotiating with Airbus (USOTC:EADSY) and Boeing (NYSE:BA) for a new order for narrowbody jets, responding to the growing demand for aircraft during the travel boom. Order size can be as high as 200 jets, including commitments for future purchases.

Vodafone (NASDAQ:VOD) – German broadband and mobile provider 1&1 (XE:1U1) has entered into an agreement with Vodafone to provide 5G coverage to its customers, replacing current network partner Telefonica Deutschland  (USOTC:TELDY) by October 2024. Vodafone will provide mobile coverage in areas not covered by the 1&1 network, including 5G, 2G and 4G. The 18-year commercial agreement will start delivering 5G coverage to 1&1 customers from the second half of 2024. Costs will be indexed to the cost of Vodafone’s mobile network.

Lions Gate Entertainment (NYSE:LGF.B), Hasbro (NASDAQ:HAS) – Lions Gate is close to acquiring Hasbro’s EOne film and TV studio for approximately $400 million. The deal will delay Lions Gate’s planned spinoff of its Starz TV business until the end of the year. With the purchase, Lions Gate will obtain a library of approximately 6,500 titles and rights to a Monopoly film. EOne generated $829 million in revenue last year. Hasbro is selling non-core divisions of EOne to focus on its core strategy.

Coursera (NYSE:COUR) – Online learning platform Coursera recently launched Coach, an AI-powered chatbot that connects to ChatGPT to answer questions about the Coursera curriculum. CEO Jeff Maggioncalda spoke about how generative AI is changing teaching, the need for continuous learning and the demand for digital skills. He also addressed the issue of the four-day week, saying that while desirable, it is not practical for the fast pace of current change.

Airbnb (NASDAQ:ABNB) – Nearly 15 years ago, Airbnb ignited a global boom in short-term home rentals, but cities are still struggling to regulate the industry. Attempts include limiting the number of nights, requiring records, and fining violations. The effectiveness of these measures is questioned, and many homeowners find ways around the rules. Cities are looking to Airbnb for more sophisticated solutions and cooperation to address short-term rental market challenges.

Grab (NASDAQ:GRAB) – Singaporean food delivery companies Grab and Foodpanda are expanding into the on-site dining space, allowing users to pre-purchase dinner vouchers at discounts of up to 50%. Businesses see great potential in this sector and are looking to increase monetization of existing users.

Costco Wholesale (NASDAQ:COST) – Costco Wholesale same-store sales rebounded in July, up 2.5% year-over-year after two consecutive months of declines. Net sales also improved, rising 4.5% to $17.6 billion. The company’s shares are flat in premarket trading on Thursday.

Earnings

Occidental Petroleum (NYSE:OXY) – Occidental Petroleum shares are down -2.5% in premarket Thursday after the company raised its annual production forecast by 1% but came in short of expectations of profit in the second quarter due to the drop in oil and gas prices. The company made an accounting write-off to exit some operations. Quarterly production was up 6% and helped lift the annual production outlook. Occidental will not proceed with future exploration in Wyoming’s Powder River Basin, assuming an after-tax loss charge of $164 million. Adjusted earnings per share of 68 cents were 4 cents short of analyst estimates.

Sunrun (NASDAQ:RUN) – Shares in Sunrun rose 7.51% in premarket Thursday after a surprise profit, but the solar sector faces challenges in its earnings season, with several companies issuing disappointing outlooks. Sunrun has not issued any projections, but its steady growth and surprising profit brought some relief to its investors. In the second quarter, the company posted a windfall of $55.5 million, equivalent to 25 cents a share. Analysts anticipated an adjusted loss of 24 cents a share, according to FactSet. Total revenue grew 1% to $590 million, but missed analysts’ estimates of $628 million.

Albemarle (NYSE:ALB) – Albemarle beat second-quarter earnings estimates, but volatility in lithium prices and future competition has investors worried. The company faces challenges in projecting earnings due to the unpredictable nature of lithium prices. The company posted adjusted earnings per share of $7.33 on $2.4 billion in sales. Wall Street had expected earnings per share of $4.48 on sales of $2.4 billion. Albemarle now expects to earn between $25 and $29.50 a share in 2023.

PayPal (NASDAQ:PYPL) – Shares of PayPal were down 8.5% in premarket Thursday after reporting earnings that were in line with analyst forecasts. The payments company reported adjusted earnings of $1.16 per share, the same amount expected by analysts polled by Refinitiv. However, revenue beat expectations, with PayPal posting $7.29 billion, versus analyst estimates of $7.27 billion.

Qualcomm (NASDAQ:QCOM) – Shares of Qualcomm fell 8.9% in premarket Thursday after posting lower-than-expected revenue in the fiscal third quarter. Qualcomm reported adjusted revenue of $8.44 billion, while analysts surveyed by Refinitiv were forecasting $8.5 billion. Furthermore, the outlook for the fourth quarter was also below expectations.

Unity Software (NYSE:U) – Shares of Unity rose 6.2% after reporting second-quarter earnings that beat analysts’ revenue estimates. The company posted revenue of $533 million, while analysts polled by Refinitiv were expecting a figure of $518 million.

Robinhood Markets (NASDAQ:HOOD) – Shares of trading platform Robinhood were down 6.6% in premarket Thursday after the release of quarterly results. The company surprised analysts by reporting second-quarter adjusted earnings of 3 cents a share, beating Refinitiv’s expectations, which had forecast a loss of 1 cent a share. However, there was a slight drop in the number of monthly active users, at 10.8 million, while analysts were expecting a higher number, at 11.2 million, according to information from StreetAccount.

Clorox (NYSE:CLX) – Clorox shares gained 5.7% premarket after beating earnings expectations. The company reported adjusted earnings of $1.67 per share on revenue of $2.02 billion, surprising analysts polled by Refinitiv who had expected earnings of $1.18 per share on revenue of $2. 1.88 billion.

Qorvo (NASDAQ:QRVO) – Shares of Qorvo are flat premarket after a positive earnings report. Qorvo reported fiscal first-quarter earnings of $0.34 per share, excluding items, on total revenue of $651 million. Analysts polled by FactSet had expected a gain of 15 cents a share and revenue of $640.3 million.

Etsy (NASDAQ:ETSY) – E-commerce company Etsy posted a 6.5% drop in pre-market trading after releasing third-quarter revenue forecasts, coming in below analyst expectations at the lower end of the range. . According to data from Refinitiv, Etsy is forecasting revenue ranging between $610 million and $645 million, while analysts were expecting an average value of $632 million.

Shopify (NYSE:SHOP) – Shares of Shopify are down -2.5% in premarket Thursday, despite the company predicting strong revenue growth and delivering better-than-expected Q2 results due to to new hires and price increases in its online commerce services. The company expects “low twenties” and “mid twenties” revenue growth for the next quarter, beating analysts’ expectations. The company undergoes a reformulation to face the competition and focus on costs. In the second quarter, total revenue grew 31% to $1.69 billion.

Lemonade (NYSE:LMND) – Shares in Lemonade were down 5.2% in premarket Thursday despite earnings and outlook slightly above Wall Street expectations. The company reported a second-quarter loss of $67.2 million on total revenue of $104.6 million. The projections for the third quarter are for revenue between US$ 102 million and US$ 104 million, and for the year, between US$ 402 million and US$ 408 million. The shares, which debuted higher in the 2020 IPO, are still 24% below their original IPO price.

Mercado Libre (NASDAQ:MELI) – MercadoLibre was flat in premarket Thursday after the Latin American e-commerce giant posted a 113% rise in its second-quarter net profit to $261, 9 million dollars, driven by higher sales volume and increased users. The company added 8.1 million new users, bringing its total to 108.6 million active users. Net income grew 57.3% at constant currency to $3.4 billion. Gross merchandise volume increased 47.2% to $10.5 billion. The company has also seen significant growth in its fintech unit and plans to explore credit opportunities in Mexico and invest in ad tech.

Simon Property (NYSE:SPG) – Simon Property lowered its full-year profit forecast due to falling rental demand from retailers facing conservative consumer spending and higher rents. $6.39 and $6.49 per share, compared to its previous forecast of $6.45 and $6.60 per share. High borrowing and input costs hurt retailers and restaurants, while shopping mall traffic declined. Returning student loan payments can also reduce discretionary spending. Per-share trading funds in the second quarter were down year-over-year. Shopping malls facing supermarkets performed better.

Zillow (NASDAQ:Z) – Shares of online real estate company Zillow were up 0.3% premarket although the issue was disappointing for the third quarter. The company forecast revenue of between $458 million and $486 million, while analysts polled by FactSet were expecting higher revenue at around $488.1 million.

MGM Resorts (NYSE:MGM) – Shares in casino operator MGM Resorts were down 6.8% premarket despite the company posting a hit in earnings and earnings in the second quarter. MGM reported adjusted earnings of 59 cents a share on revenue of $3.94 billion. Analysts polled by Refinitiv had expected earnings of 54 cents a share and revenue of $3.82 billion.

Spirit AeroSystems (NYSE:SPR) – Shares in Spirit AeroSystems closed down 27.3% on Wednesday after reporting $105 million in production losses for Boeing and Airbus, and a dismal cash flow forecast. The company faces financial challenges due to rising labor costs, supply chain disruptions and rising debt, as it struggles to meet excess orders from aviation giants. The company is considering renegotiating contracts with plane makers to offset rising costs. Spirit is pursuing refinancing options to pay down debt due in 2025.

Tripadvisor (NASDAQ:TRIP) – Tripadvisor shares were up 2.2% premarket. The company reported revenue of US$494 million in the second quarter, beating the expectations of analysts polled by Refinitiv, who had forecast revenue of US$473 million.

EVgo (NASDAQ:EVGO) – EVgo saw its stock jump 13.7% premarket after reporting better-than-expected second-quarter results and presenting a more optimistic sales outlook for the year. The company reported a net loss of $21.5 million, or 8 cents per share, and revenue of $50.6 million, an increase of 457%. EVgo now expects annual sales of between $120 million and $150 million.

Allstate (NYSE:ALL) – Insurance company Allstate suffered heavy losses due to bad weather caused by climate change. The industry is reassessing risk in the face of these frequent events. Allstate reported a net loss of $1.4 billion. Insurers are adjusting premiums to improve profitability, but the volatility of weather events still presents challenges. Analysts have varying expectations for the sector’s recovery.

Merck (NYSE:MRK) – German company Merck KGaA has warned of a sharper drop in earnings due to reduced demand for materials used in the production of pharmaceuticals and semiconductors, as well as factors such as inflation and a negative currency impact. Adjusted EBITDA is expected to decline between 3% and 9%.

Teva Pharmaceutical (NYSE:TEVA) – Teva Pharmaceutical beat expectations with higher second-quarter profit, driven by sales of the Huntington’s disease treatment Austedo. Chief Executive Richard Francis is upbeat about the company’s branded drugs, including the recently launched Uzedy for schizophrenia. The company anticipates an increase in Austedo sales and also plans to launch Uzedy next year. The 2023 revenue forecast was revised upwards, and the company’s net debt decreased.

Cognizant Technology (NASDAQ:CTSH) – Cognizant projected higher-than-expectations third-quarter revenue, driven by growing demand from companies to digitize their operations. Expected quarterly revenue is $4.89 billion to $4.94 billion. CFO Jan Siegmund will retire in early 2024. The company also raised its full-year adjusted earnings per share projections. For the second quarter, revenue was $4.89 billion and adjusted earnings per share were $1.10.

DoorDash (NYSE:DASH) – Food delivery company DoorDash was up 3.6% premarket after the release of quarterly results. Second-quarter revenue hit $2.13 billion, beating analysts’ expectations of $2.06 billion, according to Refinitiv. However, the company posted a larger-than-expected loss at 44 cents a share, while analysts were projecting a loss of 41 cents a share.

Yum Brands (NYSE:YUM) – Yum Brands beat expectations for quarterly sales and earnings, driven by demand for more affordable meals at KFC. KFC’s comparable sales grew by 13%, attracting low-income consumers with promotional offers. However, performance at Taco Bell and Pizza Hut was mediocre. Revenue increased 3% to $1.69 billion. The company also benefited from reduced costs on key commodities and increased total same-store sales.

Kraft Heinz (NASDAQ:KHC) – Kraft Heinz posted quarterly sales below estimates due to reduced customer purchases of packaged meals and condiments, hit by inflation and higher prices. The company maintained its profit and organic growth forecasts for 2023. Prices increased 11% in the quarter, resulting in a 7% decline in volumes. The company also observed stronger competition and signaled higher promotions in the market. The company posted adjusted earnings of 79 cents a share for the quarter, above analysts’ estimate of 76 cents a share.

Anheuser-Busch InBev NV (NYSE:BUD) – Shares in Anheuser-Busch InBev NV rose 3.0% in premarket Thursday after profit growth beat analyst expectations, with more than 20% up on Brazil, China and Colombia in the second quarter. The company faced a 28% drop in the US due to a Bud Light marketing fiasco. AB InBev maintained its 2023 earnings outlook.

Ambev (NYSE:ABEV) – Brazilian brewery Ambev reported a 15.2% drop in second-quarter net profit of US$540.34 million, below market forecasts. Revenue increased by 20%, but sales volume fell by 2.2%. The Brazilian market led the commercial momentum, but beer volumes in Brazil were down 2.5%. The company is focused on growth and profitability improvements despite volatility in its markets.

Ferrari (NYSE:RACE) – Ferrari has raised its full-year revenue and profit forecasts, driven by exceptional second-quarter results and robust orders. Ferrari posted profit of 334 million euros, or 1.83 euros per share, up 33% on profit of 251 million euros, or 1.36 euros per share, during the same period a year ago. Growth was supported by profitable customizations and strong demand for the Daytona SP3, 812 Competizione and SF90 models. The company also announced that it plans to introduce its first electric car in 2025. Car shipments are down slightly, but hybrid deliveries are up significantly.

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