Tuesday, July 19, 2016

Following the market rally into this week from last which saw equity markets reach all-time highs, futures this morning are angling for a pull-back. While there is plenty of Q2 earnings and Housing data to help inform market direction, as of now the lower futures appear to simply be taking a breather.

Goldman Sachs (GS Quick QuoteGS - Free Report) outperformed analyst estimates before the bell today on both top and bottom lines, and significantly. Earnings of $3.72 topped the $3 consensus, and revenues beat expectations by roughly $350 million to $7.932 billion. This still represents Goldman at its low range of quarterly revenue generation, with many analysts looking for overall U.S. economic strength coming in the 2nd half of this year.

Not even June Housing Starts have been able to turn around futures this morning, after posting 4.8% in gains, compared with 1.7% in May. The annual rate for June rose to 1.189 million units from 1.16 million a month ago. Building Permits also rose in June — 1.5% from a downwardly revised 5% in May. So then, strength in U.S. housing has actually increased month over month, though summertime is a seasonally stronger time for more housing.

After the bell yesterday, Netflix (NFLX Quick QuoteNFLX - Free Report) posted dismal subscriber numbers, showing much higher subscriber churn than the company had guided or analysts had anticipated. This resulted in a big revenue miss for the company’s Q2, lowered guidance, and a cautious stance toward Netflix’s growth in China. The stock has fallen double-digits since yesterday’s close, and looks to open much lower today.

IBM (IBM Quick QuoteIBM - Free Report) , on the other hand, posted its 4th straight positive earnings surprise after Monday’s market close, and topped expectations for quarterly sales numbers, to boot. The company cited strength in its cloud-based solutions as well as its Cognitive Solutions business. To read more on Monday’s after-market earnings, please click here.

Mark Vickery
Senior Editor