NASDAQ momentum snaps: Massive week ahead

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US equities finished lower in Friday trading, though off worst levels.

If you think the last couple of weeks have seen a lot of news and action in financial markets, then have we got a BIG week ahead for you. There’s a Federal Reserve rate rise in the US, a high inflation reading from Australia, an economic update Thursday from the Federal Government, the first estimate of American June quarter GDP, inflation and unemployment in the EU and more US earnings in the biggest week of the season.

Australia’s June quarter Consumer Price Index is out Wednesday and will drive the size of the interest rate rise here next Tuesday from the Reserve Bank.

The Dow Jones Industrial Average lost 137.61 points, or 0.43 per cent, to 31,899.29. The S&P 500 declined 0.93 per cent to 3,961.63, while the Nasdaq Composite traded 1.87 per cent lower to 11,834.11.

US equities saw second straight week of outflows though BofA said still no sign of investor pessimism in flow data.

Friday's losses cut into weekly gains for all three major averages, with the Dow closing out the week nearly 2 per cent higher. The S&P 500 advanced about 2.6 per cent, and the Nasdaq capped the week up 3.3 per cent. Across the sectors investors got defensive with the best performing sectors being utilities, real estate & consumer staples.

An earnings miss from Snap, which sent shares tumbling about 39.1 per cent, halted this week’s Nasdaq rally. One analyst said “Snap has managed to snap the uptrend in the Nasdaq by reporting disappointing earnings, which has created a cascading effect on the S&P". The results from the Snapchat parent were followed by a slew of analyst downgrades on the stock. Snap’s quarterly report also weighed on other social media and tech stocks, which investors feared could face slowing online advertising sales.

Shares of Meta Platforms and Pinterest fell about 7.6 per cent and 13.5 per cent, respectively, while Alphabet lost 5.6 per cent.

Twitter rose 0.8 per cent despite reporting disappointing second-quarter results that missed on earnings, revenue and user growth. The social media company blamed challenges in the ad industry, as well as “uncertainty” around Elon Musk’s acquisition of the company, for the miss.

Verizon was the worst-performing member of the Dow after reporting earnings. The wireless network operator dropped 6.7 per cent after cutting its full-year forecast, as higher prices dented phone subscriber growth.

About 21 per cent of S&P 500 companies have reported earnings so far. Of those, nearly 70 per cent have beaten analyst expectations, according to FactSet. Five sectors, including energy, health care, technology, utilities, and consumer staples, are expected to post higher earnings than expected on June 30th.

The pace of the second-quarter earnings season hits its peak this week, with 174 S&P 500 scheduled to release earnings this includes the likes of Apple, Amazon, Meta, Alphabet, McDonalds, Colgate Palmolive, Procter and Gamble, Pfizer, Mastercard, & Anglo American, - to name a few

In currency news - the $US Dollar was firmer vs euro but under pressure on yen cross.

Currencies

One Australian dollar at 7:10 AM has slightly weakened compared to the US dollar on Friday, buying 69.31 US cents (Fri: 69.33 US cents), 57.92 Pence Sterling, 94.26 Yen and 67.91 Euro cents.

Commodities

Iron ore is 4.1 per cent higher at US$100.35 a tonne. Iron ore futures are pointing to a 8.5 per cent gain.
Gold headed for its first weekly gain in six on Friday as a pullback in U.S. Treasury yields and the dollar’s decline bolstered bullion’s safe-haven appeal as economic risks persisted. Gold gained $14 or 0.8 per cent to US$1745 an ounce. Silver was down $0.10 or 0.5 per cent to US$18.62 an ounce. Oil prices fell on Friday on a weakening global demand outlook and the resumption of some Libyan crude oil output. Oil lost $1.65 or 1.7 per cent to US$94.70 a barrel.

The SPI futures are pointing to a 0.2 per cent fall.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added 0.3 per cent, Frankfurt gained 0.1 per cent and London’s FTSE closed 0.1 per cent higher.

Asian markets closed mixed. Tokyo’s Nikkei gained 0.4 per cent, Hong Kong’s Hang Seng added 0.2 per cent and China’s Shanghai Composite closed 0.1 per cent lower.

On Friday, the Australian sharemarket lost 0.04 per cent to 6,792.

Ex-dividends

There is one company set to trade without the right to a dividend.

Praemium (ASX:PPS) is paying 5 cents fully franked.

Dividends payable

There is one company set to pay eligible shareholders today, including:

Thorn Group (ASX:TGA) 

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

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