Trade Deficit Narrowed More Than Expected

Pre-market futures are in the green across major indexes this morning, but experiencing a bit of choppiness. The Dow and S&P 500 are both up mere single-digits at this hour, off the early-morning highs, while the tech-heavy Nasdaq stays up +70 points presently. The small-cap Russell 2000, after a +2% up-day yesterday, remains in the green by +0.40%.

Friday’s jobs-report-related selloff was for the most part remedied in Monday trading, and now there will be a lookout for a new catalyst higher. Lucky for us, Q2 earnings reports are overall posting favorable results, including this morning ahead of the open.

Q2 Earnings Results Up for Big Oil, Big Pharma

International oil & gas “supermajor” BP (BP) posted its first positive earnings surprise in the past three quarters, and by a wide margin: earnings of +$0.90 per share is +32.35% higher than the +$0.68 in the Zacks consensus. Shares are up +1% on the news this morning, adding to the stock’s +9.9% gains year to date.

Major oil refiner Marathon Petroleum (MPC) posted solid beats on both top and bottom lines this morning, with earnings of $3.96 per share outpacing the consensus $3.22 by +23%. Revenues in the quarter of $34.1 billion amounted to a +10.3% surprise. Shares are flat on the release, but shares are up +20% year to date.

Remember Pfizer (PFE)? It’s riding a streak of 13-straight quarters of positive earnings surprises, and this morning’s 78 cents per share topped expectations by 20 cents, or +34.48%. Revenues were also up in the quarter, by +6.35% to $14.65 billion in the quarter.

Great Lakes Dredge & Dock (GLDD) shares are up +8.7% this morning — swinging into the green, year to date — on a +75% earnings surprise, reporting +$0.14 per share versus $0.08 in the Zacks consensus. The stock has reversed its recent downturn.

Heavy machinery giant Caterpillar (CAT), on the other hand, posted an earnings miss ahead of today’s open, -3.28% to $4.72 per share, from $4.88 anticipated. Revenues of $16.57 billion beat estimates by +1.32% in the quarter, though still down from the year-ago quarter.

U.S. Trade Deficit Improves to -$60.18 Billion

Coming of an all-time worst Trade Deficit back in March of this year at -$138.3 billion, we’ve seen that cut more in half this morning to -$60.177 billion for June, better than the -$61.0 billion projected and -$75.5 billion for the previous month. These numbers reflect the tariff realities of their moments: March’s huge deficit was clearly to get ahead of whatever tariff policy awaited U.S. trading firms. Now we’re back to levels not seen since September of 2023.

What to Expect from the Stock Market Today

After regular trading is underway this morning, we’ll see the final PMI on S&P and ISM Services for July. The previous S&P print was a healthy +52.9% (the 50 level being the demarcation point between growth and loss) and ISM reached +50.8% — now expected to tick up 30 bps to +51.1% this time around.

It will also be a big afternoon for Q2 reports, as this is the busiest week of Q2 earnings season so far. Tech firms will feature Advanced Micro Devices (AMD), but will also include Arista Networks (ANET) and Skyworks Solutions (SWKS). Beyond tech, Amgen (AMGN), Snap (SNAP), Match Group (MTCH) and Trivago (TRVG) will all post quarterly results after the closing bell.

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This article originally published on Zacks Investment Research (zacks.com).

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