Dow 27,000 | Tough earnings outlook | Millennial credit card woes

THU, JUL 11, 2019

EVENING BRIEF

AS OF THU, JUL 11, 2019 • 04:00 ET

DJIA		27087.84
		+0.85%	+227.64

S&P 500		2999.87
		+0.23%	+6.80

NASDAQ		8196.04
		-0.08%	-6.49

Most Active

DOW
NAME	LAST	CHG	%CHG
PFE	42.98	-1.08	-2.45%
MSFT	138.40	+0.55	+0.40%
MRK	80.99	-3.83	-4.52%

S&P 500
NAME	LAST	CHG	%CHG
AMD	33.06	-0.73	-2.16%
BAC	29.36	+0.34	+1.17%
MU	43.48	+0.58	+1.35%

NASDAQ
NAME	LAST	CHG	%CHG
AMD	33.06	-0.73	-2.16%
MU	43.48	+0.58	+1.35%
MSFT	138.40	+0.55	+0.40%

EDITOR'S NOTE

Investors cheered new hopes for an interest rate cut, helping the Dow on Thursday to break above 27,000 for the first time ever. But the upcoming earnings season may pour some cold water on Wall Street's optimism.

Because of uncertainty around trade wars and global growth, a number of U.S. companies are lowering the bar for their second-quarter earnings. Of the 114 companies that have issued earnings guidance for the period, 77% have issued negative forecasts, according to data from FactSet. Thanks in part to those warnings, earnings are estimated by analysts to have declined by 2.9% year over year in the second quarter. At the start of the period, analysts expected earnings to be basically flat.

Peter Boockvar, chief investment officer of Bleakley Advisory Group, said the market's trajectory is now all about earnings. The two "keys tells" this week, were disappointing quarterly results from MSC Industrial Direct and Fastenal, both of which cited a slowing business environment. Fastenal, the largest fastener distributor in North America, said in its report that the trade war has damaged its business and outlined the difficulty in countering the losses.

With about two months past the most recent tariff round, Bank of America equity and quant strategist Savita Subramanian told clients this week that she "expects to hear more details on the impact from companies this earnings season." Investors will start to get a fuller picture with Citi and other major banks kicking off the earnings parade next week.

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