Stock futures are little changed ahead of busy earnings day: Live updates

Beauty and tech company Oddity will price shares of its initial public offering after the bell Tuesday.

The Israeli-based company, which runs the Il Makiage and Spoiled Child brands, will trade on the Nasdaq under the ticker ODD.

Oddity is one of four companies slated to go public this week, as the IPO picks back up.

— Michelle Fox

Stocks closed higher Tuesday, with the Dow Jones Industrial Average earning its seventh-straight session of gains.

The 30-stock Dow added 366.58 points, or 1.06%, to close at 34,951.93. The S&P 500 added 0.71% to finish the session at 4,554.98, while the Nasdaq Composite climbed 0.76% to 14,353.64.

— Brian Evans

Investors can use this week’s earnings reports from small and regional banks to get a better sense of how the Federal Reserve’s rate hikes are slowing economic activity, said Raymond Bridges, the portfolio manager of the Bridges Capital Tactical ETF (BDGS).

“This higher-for-longer starts to affect the real economy with financing. … It’s not just what the market’s doing,” Bridges said.

The portfolio manager pointed out that regional banks have had to raise interest rates more than their larger competitors, which could make them less willing to lend out money.

“We’re looking at what type of lending standards are out there, because it’s very tough to go out there and get loans for small businesses right now. It’s not the same as it was two years ago,” he added.

— Jesse Pound

The SPDR Regional Banking ETF (KRE) remains on track to post its best session in more than a month — and it’s the most expensive since March.

Up 3.8% on Tuesday, the ETF is on pace for its best day since June 6, when the index gained just shy of 5%.

With the leg up, the fund was last trading at $45.54. If that holds through market close, that will be the most expensive since early March, before investors grew skittish amid the bank crisis.

The KRE’s 2023

Shares of convenience store chain Casey’s popped more than 2% Tuesday after being upgraded to outperform from neutral by Credit Suisse.

Analyst Karen Short cited “the resiliency of the c-store industry, especially for larger/scaled operators such as CASY, in a macro which we believe will continue to pressure consumers for the foreseeable future” along with strong gas margins, among other factors, for the upgrade.

Casey’s shares are up 13% year to date.

CASY in 2023

Forty-three stocks in the S&P 500 leapt to new 52-week highs on Tuesday.

Microsoft jumped to all-time highs dating back to its March 1986 initial public offering. At their highest level on Tuesday, shares hit $366.78. Shares of the Big Tech name popped after Microsoft announced a new artificial intelligence subscription service for Microsoft 365, costing an additional $30 a month.

Chipotle Mexican Grill shares rose to a high of $2,173.63 Tuesday. The stock is trading at all time high levels dating back to the burrito chain’s debut in January 2006. Chipotle signed its first-ever franchise partner to expand in the Middle East.

On Semiconductor, Darden and Omnicom are also trading at all-time highs.

–Darla Mercado, Chris Hayes

Blackstone is the best bet among alternative asset managers heading into the thick of earnings season, according to Morgan Stanley analyst Michael Cyprys.

“We see shares trading at a 3x discount to the S&P (17x on ’24 vs S&P at 20x), for a best-in-class franchise with unrivalled product breadth and distribution capabilities that can grow faster than the market expects,” Cyprys wrote in a note to clients on Tuesday.

Morgan Stanley bumped its price target on Blackstone up by $1 to $116 per share, or about 9% above where the stock was trading on Tuesday. The asset manager will report its second quarter results next week.

The analyst also noted that Blackstone could get a boost from passive index funds in the coming months. A recent change to the criteria for the S&P 500 means that Blackstone is seen as a likely candidate to be added to the index soon.

— Jesse Pound

Telecommunications stocks have continued to slump this week as questions surrounding potential environmental cleanup liabilities trailed a Wall Street Journal investigation published July 9 that found legacy carriers “have left behind a sprawling network of cables covered in toxic lead that stretches across the U.S., under the water, in the soil and on poles overhead.”

Morgan Stanley estimated premarket Tuesday that about $35 billion in market value has been wiped out from telecom and cell phone tower stocks since the slide began. Verizon accounted for roughly $18 billion of the total and AT&T for $15 billion more, although Verizon has “much less legacy wireline exposure,” Morgan Stanley’s Simon Flannery wrote.

So far in July, Frontier Communications has plunged 34%, Lumen Technologies by 28%, Consolidated Communications is 21% lower, AT&T by 15%, Verizon by 13% and Telephone & Data Systems another 7%. Among cell tower stocks, American Tower is down 6% in July, Crown Castle 4% and SBA Communications 3%.

“With the stocks trading at historically attractive valuation levels, we think that a lot of risk is already priced in, although uncertainty may continue for some time as potential legal and regulatory processes unfold,” Flannery said, noting that Verizon now yields about 8.3%, the third highest yield in the S&P 500.

— Scott Schnipper, Michael Bloom

The price increase for some Microsoft users who opt for the artificial intelligence-enabled subscription offering is on the higher end of investor expectations and could bump up the stock, according to Barclays.

“We think the price uplift (53% over E5) is at the upper end of investors’ expectations and should drive shares,” analyst Raimo Lenschow said in a note to clients, specifically referencing the price increase for customers with the E5 security license.

Despite the optimism over the announcement of the $30 subscription — which he called a “major next step” in Microsoft’s AI monetization journey — Lenschow’s price target of $336 per share suggests the stock should still fall nearly 3% in the next year. Shares rose in Tuesday’s session to a new high amid investor excitement around the announcement.

— Alex Harring

Jefferies says Apple is the stock to hold in uncertain economic times even as it braces for a “quiet quarter” from the iPhone maker.

“After June in which Apple set out its long term vision of computing, this earnings call will bring us back to the reality of iPhone and services being the two most important drivers of the stock. Both are likely to show enough resilience to drive an inline to slightly better quarter,” wrote Andrew Uerkwitz in a Tuesday note to clients.

The analyst lifted his price target on shares to $225, representing 16% upside. The stock’s risen nearly 49% this year and topped a $3 trillion market capitalization.

While many view the stock as the “most boring” buy-rated name, what the company “lacks in investor pizzazz, it makes up for with consistency,” Uerkwitz said.

“Its moat has been, remains, and will be its ability to integrate software services with its hardware that builds a regular replacement cycle, ability to slowly raise prices, and take share,” he said.

— Samantha Subin

Morgan Stanley CEO James Gorman said Tuesday he expects the Federal Reserve to raise interest rates one more time, and then can stop.

“It’s hard to argue for more rate increases,” Gorman told CNBC’s Leslie Picker during a “Squawk on the Street” interview. “You could get one more after this. I think the odds are definitely against that.”

However, he doesn’t see any rate cuts coming until at least 2024.

Markets overwhelmingly expect the central bank to approve a 0.25 percentage point rate hike at its two-day meeting that concludes July 26.

—Jeff Cox

Warner Bros. Discovery is poised to rally despite the media industry’s turmoil amid strikes from the unions representing screenwriters and actors.

“While we expect investors to continue to debate the long-term outlook for traditional media companies, we see the risk/reward skew for WBD as most attractive vs. its peer group with key execution catalysts … largely within management’s control,” Feldman said in a note to clients Tuesday.

CNBC Pro subscribers can read more here.

— Alex Harring

Bank of America added Marvell Technology to its best investment ideas list called “US 1” on Tuesday.

The Wall Street firm also raised its price target on the stock to $80 from $75, implying nearly 24% upside from Monday’s close. Marvell’s networking products are benefitting from the build out of artificial intelligence data centers, which can accelerate its data center growth, analyst Vivek Arya wrote in a note to clients.

Shares of Marvell Technology have rallied 75%so far this year.

— Michelle Fox

Check out some of the companies making headlines in midday trading.

Regional bank stocks — Regional bank stocks gained on Tuesday on the heels of a fresh batch of bank results, lifting the SPDR S&P Regional Banking ETF (KRE) more than 3%. Western Alliance popped nearly 8% ahead of earnings after the bell. PacWest was up 9%, while FB Financial gained more than 6% and Zions Bancorporation rose about 3%.

UnitedHealth — The health-insurance stock gained 3.7% after being upgraded to outperform from market perform by Bernstein. The firm said UnitedHealth is a “best-in-class” managed-care and value-based-care company with an attractive valuation and “large runway of growth.”

Verizon, AT&T — Verizon and AT&T rose about 5% and 1%, respectively, reversing the recent downtrend in shares following a report that linked the companies to lead-encased cables and concerns from analysts.

Read the full list here.

— Brian Evans

Microsoft shares popped more than 4% after the company shared a slew of artificial intelligence-related announcements.

Meta Platforms said Tuesday its partnering with the software giant to make its open source large language model Llama 2 available for free for both research and commercial use. Microsoft said it will support these models on both Azure and Windows.

In other news, Microsoft also announced pricing for its AI tool known as Copilot.

— Samantha Subin

Goldman Sachs’ David Kostin recommends investors seek value after the Nasdaq-100 rebalanced for the first time since 2011, and the overall market starts to catch up to the handful of mega-cap tech stocks that rallied this year.

The strategist said traders can find opportunities is in the health care and energy sectors. He also recommended some non-bank financials, some semiconductor names, as well as small-cap stocks.

“The market trades at around 19 times forward multiple. Those big stocks that you referenced, those Magnificent Seven, trade at 31, 32 times forward earnings,” the strategist told CNBC’s “Squawk on the Street” in a Tuesday appearance. “The rest of market, excluding those names, around 17 times, so a little bit of a catch up. That’s why value, I’m suggesting.”

— Sarah Min

Charles Schwab’s stock jumped on Tuesday.

Schwab topped analyst estimates on the top and bottom lines, and CFO Peter Crawford said in a press release that the company saw a “substantial deceleration” in cash outflows during June.

The stock is still down more than 20% year to date.

— Jesse Pound

American Express has won the title of Morgan Stanley’s favorite card issuer stock as the industry’s earnings season begins this week.

“Our top pick is AXP, which we expect to continue benefitting from an ongoing T&E boom,” she said in a note to clients Tuesday, using an acronym for travel and expenses. “We look for management to at least indicate that they are very comfortable with their 2023 guide.”

Shares were up 0.6% Tuesday.

CNBC Pro subscribers can read more about why she chose American Express here.

— Alex Harring

The SPDR Regional Banking ETF (KRE) gained more than 3% on Tuesday, putting it on pace to post its best daily performance in more than a month.

Before Tuesday, the fund last saw a better performance on June 7, when it finished up 3.3%. The fund has been closely watched since the banking crisis that began in March.

Mercantile Bank, PacWest, Western Alliance, FB Financial and Zions all led the ETF higher with individual gains of more than 5%.

The KRE’s leg up

Investors should buy UnitedHealth while it still trades at a cheap valuation despite a solid earnings report and the potential to rally, according to Bernstein.

“We believe UNH is a best-in-class MCO and VBC company, and current valuation offers a unique opportunity to buy a piece of a business with a large runway of growth in front of it at very attractive valuation,” analyst Lance Wilkes said in a note to clients Tuesday.

Even after the stock’s post-earnings rally on Friday, it is still down on the year despite the broader market’s ascent.

CNBC Pro subscribers can read the full story here.

— Alex Harring

Western Alliance‘s earnings report on Tuesday evening could spark a relief rally for the bank stock, according to Wells Fargo analyst Timur Braziler.

The regional bank was one of the stocks that saw dramatic declines earlier in the year surrounding the failures of Silicon Valley Bank and First Republic. Western Alliance’s stock has more than doubled off of its lowest close of the year in early May, but is still down about 33% year to date. The stock also trades below its total book value, according to Wells Fargo.

“This sets the bar quite low for 2Q EPS, which we expect to further demonstrate the bank gradually moving back to business as usual. Shares reacted well to a favorable 1Q print, and we look for similar outperformance again on Wed. (7/19) should mgt. achieve their $2B deposit growth guidance,” Braziler wrote.

— Jesse Pound

Consumer spending was weaker than expected in June despite a seemingly brighter inflation picture, the Commerce Department reported Tuesday.

Advance retail sales showed just a 0.2% increase for the month over May, less than the 0.5% increase that economists surveyed by Dow Jones had been expecting. Excluding autos, the increase also was 0.2%, below the 0.3% estimate.

Falling prices saw gasoline station sales drop 1.4%, offsetting a 2% gain from miscellaneous stores and a 1.9% increase on online purchases.

The numbers are not adjusted for inflation; the consumer price index rose 0.2% for the month, indicating that real sales were about flat.

—Jeff Cox

BlackRock is poised to keep growing its industry-leading asset holdings, especially in fixed income, according to Morgan Stanley Michael Cyprys.

“BLK’s breadth of capabilities, unrivaled distribution prowess and top brand uniquely position the firm to capture key growth zones over the next several years in fixed income, cash mgmt, private markets and Aladdin technology. This should result in the firm’s $9 trillion of AUM today expanding to $10 trillion in the next few quarters, and surpassing $15 trillion in 5-years,” Cyprys wrote.

Morgan Stanley has an overweight rating and an $888 price target on BlackRock, which is about 22% above where the stock closed on Monday.

— Jesse Pound

Weapons maker Lockheed Martin notched an earnings beat before the opening bell Tuesday.

The company reported an adjusted $6.63 per share on $16.7 billion in revenue, while analysts had forecasted $6.45 and $15.92 billion, according to Refinitiv. The company noted $158 billion in backlog orders, which underpinned raised forward guidance estimates from executives.

— Brian Evans

Pinterest rose nearly 4% before the bell Tuesday after Evercore ISI said improving advertising trends could be a boon for the visual discovery platform.

Stabilizing ad spending and operational upgrades “are combining to create something of a fundamental inflection point, with material revenue growth acceleration and substantial margin expansion a distinct probability over the next 2-4 quarters,” he said in a note to clients Monday.

CNBC Pro subscribers can click here to read more.

— Alex Harring

Bank of America earnings and revenue exceeded estimates, as the company got a boost from higher interest rates and interest income.

“All businesses performed well, and we saw improved market shares, particularly in our Sales and Trading and Investment Banking businesses,” CEO Brian Moynihan said in a statement. “A strong balance sheet and ample liquidity allowed us to continue investments in our franchise to drive long-term value for stakeholders.”

Bank of America shares rose 0.8% in the premarket

— Fred Imbert

U.S. Treasury yields were lower on Tuesday as investors looked ahead to the latest economic data, which could provide clues about the state of the U.S. economy ahead of the Federal Reserve’s next policy meeting.

At 4:31 a.m. ET, the 10-year Treasury yield was down by over four basis points to 3.7540%. The 2-year Treasury was trading more than four basis points lower at 4.6852%.

— Sophie Kiderlin

European stocks were mixed in early trade, with the Stoxx 600 index flat at 8:28 a.m.

The FTSE 100 was higher by 0.08% as France’s CAC 40 traded flat and Germany’s DAX was lower by 0.13%.

Stoxx 600 index.

Adani Group’s chairman on Tuesday affirmed the company’s disclosures that no breach was found and that the Hindenburg report carried misinformation.

“The report was a combination of targeted misinformation and discredited allegations, the majority of them dating from 2004 to 2015,” the group’s chairman Gautam Adani said in a shareholder address during the annual general meeting.

He added that an Expert Committee looking into the matter did not find any regulatory failure and confirmed that the Group’s disclosures, finding “no instances of any breach.”

Shares of Adani Enterprise inched up 0.56%, while Adani Transmission rose 1.58%. Adani Green added 1.52%.

—Lee Ying Shan

The Reserve Bank of Australia was considering whether to hold rates steady, or raise by 25 basis points in its July meeting, minutes have revealed.

The central bank eventually decided to leave rates unchanged, saying that monetary policy was “clearly restrictive” at the prevailing cash rate of 4.1% and that mortgage interest payments were around a record high in May.

It also acknowledged that inflation has been declining, and would help mitigate the risk of a rise in medium-term inflation expectations.

The bank said the risk that output growth could slow more than expected if rates were raised, noting there was “considerable uncertainty” around household consumption.

Read more here.

— Lim Hui Jie

Real estate and technology stocks led losses on the Hang Seng index which tumbled more than 2%.

Real estate developer Longfor Group was the biggest loser on the index, its shares sliding more than 9%, while Country Garden Holdings saw a 6.67% fall.

On the tech front, shares of JD Health International fell more than 5% and was the largest loser in the sector, followed by Alibaba Group subsidiary Alibaba Health Information Technology, which dropped 4.2%.

Chinese property developer China Evergrande Group posted steep losses in its long overdue results for 2021 and 2022.

The company saw a total net loss of 686.2 billion yuan ($95.68 billion) for 2021, and a 125.8 billion total net loss in 2022.

For 2022, the majority of the losses were due to losses related to the return of lands, impairment losses on financial assets, and other non-operating losses, which amounted to 69.37 billion yuan.

Evergrande’s total liabilities amounted to 2.35 trillion yuan last year, 23% higher compared to 2020, while its total assets stood at 1.8 trillion yuan, 20% lower compared to two years ago.

— Lim Hui Jie

Traders will keep an eye out for a key indicator of consumer health: June’s retail sales data, due at 8:30 a.m. ET Tuesday.

Economists polled by Dow Jones are anticipating an increase of 0.5%, up from May’s gain of 0.3%. The data point arrives at a pivotal time: The latest consumer and producer price index releases showed that inflation grew at a slower pace than what economists forecasted. Those findings suggest that the Federal Reserve’s 10 rounds of interest rate increases are helping to cool inflation.

What economists will watch for in Tuesday’s report is whether retail sales come in too hot, which could be an inflationary development and show that consumers have stepped up their spending.

Read more about the Fed’s battle against inflation and the upcoming retail sales report here.

— Darla Mercado, Jeff Cox

Shares of FB Financial gained about 14% in extended trading after posting second-quarter earnings results.

The company reported earnings of 77 cents per share, topping consensus expectations of 65 cents a share, according to StreetAccount.

FB Financial finished the period with $10.87 billion in deposits, up from $10.54 billion in the year-ago quarter. Deposits declined slightly from the first quarter.

— Samantha Subin

Activision Blizzard shares lost about 0.5% in extended after securities filings revealed that Warren Buffett’s Berkshire Hathaway sold a large chunk of its holding in the video game publisher.

A 13G filing released Monday evening showed a 1.9% stake in the company, with 14,658,121 shares. That’s down from a 6.3% stake at the end of March.

The news comes as Microsoft’s plan to buy Activision nears a close after the Federal Trade Commission last week lost its bid to block the $68.7 billion acquisition.

—Yun Li

Mon, Jul 17 20236:03 PM EDT