Breakfast Bites - Better Friday close?
Markets are flat but biased higher; Earnings still mixed, but with positive notes; Japanese elections could derail BoJ hikes.
Rise and shine everyone
Happy Friday.
The stars seemed aligned yesterday as we got earnings, and macro data that led the market higher.
Markets are also getting a boost from this morning’s “goldilocks” economic data. Retail sales came in stronger, jobless claims dropped, and import prices fell, helping ease tariff-related worries. The Philly Fed business outlook jumped to 15.9, one of the strongest readings in the past three years, reinforcing the soft landing narrative.
Markets opened higher yesterday, supported by a strong earnings beat from TSMC, which gained 3.3 percent on the day. The company raised its full-year growth forecast to 30 percent year-over-year and issued a better-than-expected Q3 guide. Management was upbeat on AI, noting that demand continues to grow rapidly.
The Staples sector was also in focus following Pepsi’s 6.97% jump after reporting “okay” numbers. While still trailing larger peers, the move suggested that even modest earnings beats could drive outsized gains. With EPS growth for Staples sitting at -4% going into the season, Goldman flagged it as the most net bought sector on their books last week, driven by both long positioning and short covering.
Economic data added to the positive tone. Retail sales were stronger, and import prices moved lower, helping ease concerns around potential tariff impacts. Jobless claims also declined. The Philly Fed business outlook rose to 15.9, marking one of the strongest prints in three years and reinforcing confidence in a soft landing.
Netflix reported after the close, delivering strong Q2 2025 results, with revenue, operating income, and EPS all exceeding expectations. Management raised full-year guidance, driven by solid subscriber and ad-tier growth, while reiterating confidence in content and marketing investments for the second half. The stock is trading marginally lower in the pre-market.
US Equities are flat now in the pre-market. As Mayhem likes to remind us, there’s a call wall at 6300 for the SPX, and that’s an important level to watch.