Rising Wall Street remains hostage to fluctuations in US Treasury yields which, in recent sessions, have discounted fears of an economic slowdown due to the Delta variant, also breaking through the 1.2% threshold.
Rates rebound, even exceeding the 1.27% threshold. 30-year Treasury rates are also recovering, rising to 1.936%.
Wall Street has just returned from the rebound it reported in yesterday’s session after the loud thud of Monday’s session. The Dow Jones is solid with a rise of 0.67% to 34,743 points; the S&P 500 rises by 0.51% to 4,345 points, while the Nasdaq is + 0,20% to 14,525 points.
“What happened on Tuesday (yesterday) was the classic rebound from an oversold situation, which followed the collapse of Monday – commented Thomas Essaye in the Sevens Report Research report – Beyond the short-term variations, we believe that , in order for value and cyclical stocks to regain leadership, it is necessary for (Treasury) yields to bottom out and for economic growth to beat estimates (two factors we believe will occur) ”.
However, some fear a correction on Wall Street:
“I think we have seen the first warnings of a correction that we will probably see … in late August, September, October,” commented Matt Maley, equity strategist at Miller Tabak.
The news coming from the corporate front sees Netflix, Coca-Cola and Johnson & Johnson as protagonists.
Netflix’s earnings per share for the second quarter came in at $ 2.97, lower than the expected $ 3.16, according to analysts polled by Refinitiv. Turnover was $ 7.34 billion, slightly above the estimated $ 7.32 billion.
In the second quarter Netflix witnessed an increase in subscribers, on a net basis, equal to 1.54 million, compared to the 1.19 million expected, therefore better forecasts, even if some analysts had forecast a higher number.
The outlook on subscriptions for the third quarter is disappointing, for which the American company expects an increase in subscribers of 3.5 million, below the +5.86 million new users estimated by analysts. The stock sold after the release of the financial statements, and then recovered in the premarket. But now it loses more than 3%.
The trend of the Coca-Cola stock is solid, after the group announced that it has concluded the second quarter of the year reporting a turnover higher than the levels of 2019, and therefore higher than the levels before the Covid-19 pandemic.
The soft drink giant grossed an earnings per share of 68 cents, well above the expected 56 cents, compared with revenues of $ 10.13 billion, compared to $ 9.32 billion estimated by the consensus. In the same period last year, or in the second quarter of 2020, the giant had suffered a drop in profits of a third, and the strongest decline in turnover in about 30 years.
Of course, fears related to the spread of the Delta variant are not lacking, given the leap in new cases of Covid-19 infection even in those countries characterized by a high rate of vaccinations, such as the United States. Net revenue growth was + 42%, against organic (Non-GAAP) revenue up 37%. Net income jumped 52% year-on-year, while operating profit (NON-GAAP) grew 46%, with a neutral currency impact.
Also starring Johnson & Johnson: Adjusted earnings per share came in at $ 2.48, better than the expected $ 2.27 per share.
Revenue was $ 23.31 billion, up from $ 22.21 billion expected.
The pharmaceutical division, in particular, which is the one that includes the production and sale of the anti-Covid 19 vaccines in a single dose, generated in the second quarter a revenue of $ 12.59 billion, up 17.2% year-on-year. .
The giant revised its full-year earnings and revenue outlook upward, now expecting earnings to be worth $ 9.50 to $ 9.60, compared to the previously expected range of $ 9.30 to $ 9.45 for action. Revenue is expected to be worth between $ 92.5 billion and $ 93.3 billion, compared to the previous range of $ 89.3 billion to $ 90.3 billion. The title, however, is flat.
The corporate earnings season continues: according to FactSet numbers, around 85% of the companies trading on the S&P 500 that have reported second quarter financial results so far have beaten consensus expectations.