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Breakfast Bites - Thu Jul 20, 2023

Rise and shine everyone.

We had earnings from Tesla and Netflix yesterday. Tesla delivered a double beat while Netflix missed on revenues. Both companies however, sold off on the results.

US Equity Futures are mixed with the SPX and NDX trading lower this morning on the decline in Tesla and Netflix. This could just be a harbinger of what’s to come from earnings season and we’re likely to see some caution.

Gold, Oil and Bitcoin trading higher while the US Dollar Index remains flat at $100. Yields are higher across the curve with the UC crossing -1.03%.

Note: Anyone following Japan - Inflation numbers are set to be released tonight at 7:30pm ET.

Asia and Australia

  • Asian equities mostly lower Thursday. Hang Seng turned into negative territory in the afternoon, erasing early gains and mainland stocks also lower. Nikkei underperformed while ASX closed flat.

  • PBOC set yuan fixing at 7.1466, 680 pips stronger than Bloomberg estimate and largest bias since November.

  • China’s Loan prime rates were left unchanged with 1y at 3.55% and 5y at 4.20%, both matching expectations

  • Hot Australian labor market increases pressure on RBA to hike again in August.

  • Australian economy added 32.6K jobs in June, less than May's 76.5K increase but more than double consensus for a 15.0K gain.

Europe, Middle East, Africa

  • European equity markets higher.

  • BoE Deputy Governor Ramsden said late Wednesday inflation has begun to fall significantly but remains too high, keeping the door open to further hikes.

  • Latest Eurostat shows Eurozone economy avoided a winter recession with revised figures showing it stagnated at the start of this year instead of shrinking as previously thought.

  • German PPI 0.1% y/y vs consensus 0.0% and prior +1.0%

  • Turkey’s Central Bank slows the pace of rate hikes raising rates today by 2.5% from 15% to 17.5%. The consensus was for 20%.

The Americas

  • June housing starts down 8% m/m to 1.434M, missing consensus for 1.483M. Initial May print for 21.7% growth to 1.631M revised down to 15.7% growth to 1.631M to 1.559M.

  • Netflix revenue disappoints, overshadowing big subscriber beat following crackdown on password sharing

  • Tesla gross margin shrinks more than forecast as price cuts impact profitability; Elon Musk says Tesla to invest more than $1B to become player in supercomputing by end-2024

  • IBM Q2 revenue just below forecasts, reaffirms FY guidance after raising outlook for software growth

  • Around a fifth of 27M student debt holders due to start repayments in September to pay more than $500/month

  • The biggest earnings beat this morning came out of the homebuilder, DR Horton delivering a 40% beat on EPS and 16% beat on Revenue. Homebuilding gross margin improved to at 23.3% vs. 21.2% last quarter. This is something we were watching.



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