US markets hover near flat ahead of key earnings releases

US markets hovered around flat as traders and investors awaited earnings numbers from Google parent Alphabet & EV/A giant Tesla. Both companies were due to report after the close.

The S&P 500 just tipped into the red finishing down 0.16 per cent. The Nasdaq closed 0.06 per cent lower and the Dow Jones ended the day down 0.14 per cent

In company news, UPS closed down 12 per cent on the day after the logistics giant reported weaker than expected second-quarter results. General Motors shares fell 6.4 per cent after delivering better than consensus earnings, however, the car giant also flagged delays to its plans for electric and autonomous vehicles.

The key results were released after the market close with Tesla reporting weaker-than-expected earnings for the second quarter as automotive sales dropped for a second straight period. Revenue increased 2 per cent, but automotive sales dropped 7 per cent to $19.9 billion from $21.27 billion in the same quarter a year ago. The stock was trading more than 3 per cent lower in after market trading.

Google parent Alphabet reported slightly better than expected profit and revenue numbers for the quarter with earnings per share of US$1.89 on revenue of US$84.7 billion versus consensus expectations of US$1.85 on revenue of US$84.3 billion. The company also said that quarterly Cloud revenue topped US$10 billion and operating profit topped $US1 billion for the first time. The stock was trading near flat in the after market.

FactSet data shows about 20 per cent of S&P 500 companies have posted second-quarter results now, with 80 per cent of those names beating expectations.

In more good news for the small end of town, the small cap-focused Russell 2000 index rose 1.03 per cent as the rotation into the rate sensitive sectors continued. The Russell 2000 index has risen 9 per cent over the past 10 sessions, contrasting with a 3 per cent decline in the Nasdaq 100. The shift to small caps comes as investors grow increasingly confident that the Federal Reserve will soon begin lowering interest rates, a move seen as particularly helpful for smaller and more cyclically oriented companies.

In commodities news, oil fell for a fourth straight session, the longest losing streak since early June, driven by algorithmic selling and low seasonal liquidity. US oil settled below US$77 a barrel.

Turning to US sectors, the worst performing sector was Energy which closed 1.55 per cent lower driven by lower oil prices. The best performing sector was Materials, which closed 0.38 per cent higher.

Futures

The SPI futures are pointing to a 0.1 per cent gain.

Currency

One Australian dollar at 7.35am was buying 66.17 US cents.

Commodities

Gold has gained 0.54 per cent. Silver has added 0.03 per cent. Copper has lost 0.88 per cent. Oil has dropped 1.84 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.38 per cent, Frankfurt gained 0.82 per cent, and Paris closed 0.31 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei lost 0.01 per cent, Hong Kong’s Hang Seng dropped 0.94 per cent, while China’s Shanghai Composite closed 1.65 per cent lower.

The Australian share market closed 0.50 per cent higher at 7971.13.

Ex-dividends
Alternative Invest (ASX:AIQ) is paying 3.913 cents unfranked

Dividends payable

Eildon Capital Group (ASX:EDC)
Premier Investments Ltd (ASX:PMV)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.
Disclaimer

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