US open: Stocks mixed Snap, Twitter disappoint

US futures

Dow futures +0.18% at 32100

S&P futures +0.1% at 3960

Nasdaq futures -0.35% at 12570

In Europe

FTSE +0.37% at 7250

Dax +0.8% at 13320

Euro Stoxx +0.4% at 3616

Stocks mixed but set for weekly gains

US stocks are pointing to a mixed start to trading on Friday, with the Nasdaq lower after Snap and Twitter earnings disappoint.

Earnings season is in full swing and so far have been broadly ahead of expectations. Rising costs, the stronger USD and slowing growth are areas that remain in focus.

Whilst Netflix and Tesla beat forecasts this week, boosting optimism, Snap is hurting the mood today after weaker earnings.

The markets have risen higher across the week, boosted by upbeat earnings and tempered expectations of aggressive Fed rate hikes.

The big test for the rally will be next week when faced with the Fed interest rates decision and more earnings from big tech, which have already indicated slower hiring and therefore slower spending.

Looking ahead US PMI data is expected to show that business activity growth slowed,. With the composite PMI is expected to slip to 51.7 in July from 52.3 in June.

In corporate news:

Snap was the first major tech firm to report Q2 earnings, and the picture was pretty grim, with the company falling 25% pre-market. The stock missed the top and bottom line and said that it plans to slow hiring substantially as it battles slowing revenue.

Twitter also disappointed on top and bottom lines citing weaker advertising revenue and uncertainty surrounding the Musk takeover.

Where next for the Nasdaq?

The Nasdaq is extending its rally from 2022 lows, retaking the 50 sna, which, combined with the bullish RSI, is keeping buyers optimistic about further gains. Buyers need to break above 12585, the 100 sma, and the June high. On the flip side, it would take a move below the 50 sma at 12040 to negate the near-term downtrend.

FX markets – USD rises, EUR falls.

USD is rising but is set for losses across the week as investors pare back expectations of a more aggressive rate hike. Higher than expected jobless claims yesterday raised recession concerns.

EURUSD is falling after PMI data showed that business activity slipped into contraction. The composite PMI fell to 49.4 in July, worse than the 51 forecasts and down from 52 in June. The data doesn’t bode well for GDP growth in the quarter.

GBP/USD is falling against a stronger USD and despite retail sales and business activity falling less than feared. Retail sales slipped -0.1% YoY, better than the -0.3% feared and up from -0.5%. The composite PMI data fell to 52.8, down from 53.7.

GBP/USD -0.06% at 1.1950

EUR/USD -0.5% at 1.0180

Oil falls by $5

Oil prices are falling, extending losses from the previous session and puts oil on track for losses of around 2.5% across the week, the third straight week of declines.

The weakening global demand outlook combined with the resumption of Libyan crude oil output is dragging on oil prices.

Macro data points to a global economic slowdown just as central banks are aggressively hiking rates. Slower growth hurts the demand outlook.

WTI crude trades -4.5% at $95.20

Brent trades -4% at $99.00

Looking ahead

N/A