— Carmen Reinick
Starbucks shares rise after earnings release
Shares of Starbucks gained nearly 2% in premarket trading after the coffee chain posted quarterly earnings on Tuesday after the bell. The company beat expectations for profit and revenue, boosted by US demand for frozen drinks even amid high inflation. “We actually had a record number of customers and a record average weekly sales,” Rachel Ruggeri, Starbucks’ chief financial officer, told CNBC’s “Squawk Box.” — Carmen Reinick
Moderna rises after beating earnings expectations
Shares of Moderna rose nearly 4% in premarket trading after the Covid-19 vaccine maker posted quarterly results that beat Wall Street expectations for both profit and revenue. In addition, the company announced $3 billion in share repurchases and maintained its full-year outlook. — Carmen Reinick
Potential earnings revisions are a risk for the second half, says RBC’s Calvasina
This earnings season, the results are generally higher than Wall Street expectations, showing that companies are doing better than analysts had hoped, RBC’s head of U.S. equity strategy wrote in a note Wednesday. Lori Calvasina. “The good news for the US equity market is that corporate earnings continue to be resilient,” Calvasina said. “The bad news for the US equity market is that the possibility of further downward earnings revisions remains a risk as we move deeper into the 2nd half of the year.” So far, earnings and revenue estimates for the second half of 2022 and the full year of 2023 have been lowered. However, the strength of corporate earnings this quarter may suggest that any coming economic downturn will be short and shallow, according to Calvasina. That’s good for stocks now, but could set them up for further volatility. “This has supported share prices in recent weeks, but going forward it also tells us that the share rally is fragile given the possibility of further downward revisions to earnings as 2023 approaches,” he said. — Carmen Reinick
CVS earnings beat earnings
Shares of CVS Health rose more than 3% in premarket trading after the company reported better-than-expected quarterly earnings before the open. The company also raised its earnings outlook for the year, saying health services are helping boost sales. — Carmen Reinick
Pelosi leaves Taiwan
House Speaker Nancy Pelosi departed Taiwan on Wednesday after a visit that raised tensions with China and rattled financial markets. Pelosi met with Taiwan President Tsai Ing-wen on Wednesday. China, which considers the disputed island part of its territory, stepped up military exercises in the Taiwan Strait amid her visit. The S&P 500 is down about 1% this week as traders worry about the implications of Pelosi’s trip for relations with China. But the market was set for a relief rally on Wednesday after her departure. —John Malloy
AMD shares fall on weak revenue guidance
Shares of AMD traded 5% lower in premarket trading after the chip company issued third-quarter revenue guidance that fell short of analysts’ expectations. AMD said it expects revenue of $6.7 billion for the third quarter, below Refinitiv’s forecast of $6.82 billion. The disappointing guidance overshadowed better-than-expected earnings and revenue for the second quarter. — Fred Ebert
European markets are mixed as cautious sentiment persists. Avast up 42%
European shares were mixed on Wednesday, continuing the cautious regional trend this week. The pan-European Stoxx 600 slipped 0.2 percent in early trade, with autos down 1.5 percent and technology shares gaining 1.2 percent. It’s a busy day for earnings in Europe, with Commerzbank, SocGen, BMW, Banco BPM, Siemens Healthineers, Veolia and Wolters Kluwer among the companies reporting before the bell. Shares in Czech cybersecurity company Avast soared 42% after the UK competition regulator provisionally approved its $8.6 billion sale to US peer NortonLifeLock.
Focus on the data, not what the Fed speakers are saying, says Art Hogan
Despite the “parade of Fed speakers,” that’s not what investors should focus on, according to Art Hogan, chief market strategist at B. Riley Financial. “I think investors should pay more attention to what the data is telling us than what any individual Fed speaker, whether they’re a voter or not, has to say about what our expectations should be,” Hogan told the CNBC’s “Squawk Box.” Asia.” But he said Fed officials have managed to change expectations about where Fed policy is headed. St. Louis Federal Reserve President James Bullard said on Tuesday that the central bank should keep interest rates on hold and the Fed funds rate will likely need to rise to 3.75%-4% by the end of 2022. San Francisco Fed President Mary Daley said “Our work is far from done” to fight inflation, while Chicago Fed President Charles Evans said another big rate hike is possible, though he hopes it can be avoided. After last week’s meeting, some expected the Fed to continue hiking to 3.25%-3.5% before pivoting in 2023, Hogan said. “I think the parade of Fed speakers this week did a very good job of turning that around, tempering those expectations,” he said. — Abigail Off
These stocks are poised for a comeback if inflation peaks, Jefferies says
A slowdown could be on the horizon and more earnings downgrades are forecast ahead. If inflation also peaks, as some analysts expect, that combination of factors will favor one class of stocks, Jefferies says. Jefferies created a screen of such stocks that investors can buy, based on a list of metrics that include high profitability, reasonable valuations and good cash flow. Professional subscribers can read the story here. — Weizhen Tan
PayPal Raises Earnings, Share Buyback Announcement
Shares of PayPal rose more than 11% after hours. The payments company beat analysts’ estimates on profit and revenue for the second quarter and issued upbeat guidance for the full year. PayPal also announced a $15 billion share buyback program. Stock buybacks provide a way for companies to increase earnings per share and boost the value of their stocks, particularly when the market in general is experiencing sharp price declines this year. The company launched a $10 billion program four years ago. Elliott Management said it has a $2 billion stake in the payments giant. PayPal announced that it has entered into a value creation information sharing agreement with the activist investor. — Tanaya Machel
Despite inflation-fighting Fedspeak, a ‘cycle of easing’ is emerging, says Leuthold’s Jim Paulsen
Leuthold Group chief investment strategist Jim Paulsen said that despite the Federal Reserve’s “constant statements about fighting inflation” by tightening monetary policy, there are several factors that suggest the market may be entering an “emerging cycle relaxation”. Bond yields have seen a significant rate cut, the dollar is finally easing and unwanted spreads have narrowed, he said in a note to investors late Tuesday. “The media, policymakers and investors are mostly focused on the war on inflation and how aggressively the Fed will need to keep interest rates hiking,” Paulsen said. “However, with real economic growth already on the rise and evidence that inflation is easing, the case for further Fed tightening at its September meeting is collapsing fast.” “Investors should give due weight to the leading nature of economic policies,” he added. “Tightening today means lower real and nominal growth tomorrow.” — Tanaya Machel
MatchGroup shares fall after hours
Shares of dating app operator Match Group fell as much as 23% after the company reported second-quarter revenue of $795 million, compared with FactSet estimates of $803.9 million. Match also issued weak guidance on adjusted operating income and revenue for the current quarter. — Tanaya Machel