Yen falls against the dollar
The Japanese yen depreciated 2% at 147.28 per U.S. dollar Wednesday morning.
The yen is now down from its seven-month high of 141.675 from Monday, but is still up nearly 2% in August.
The dollar index inched up 0.3% at 103.26.
Dollar to yen rate over the last five days
Stocks open in the green on Wednesday
U.S. stocks began Wednesday’s trading session in positive territory.
The S&P 500 advanced 1.1%, while the Nasdaq Composite gained 1.7%. The Dow Jones Industrial Average jumped 256 points, or 0.65.
— Hakyung Kim
‘Tread lightly’ on the early bounce, says Strategas
Although the market has recovered from Monday’s lows, it still lies in a “no-man’s land” from last Thursday’s lows, according to Strategas head of technical and macro research Chris Verrone.
The S&P 500 closed at 5,240 on Tuesday, which was higher than the low of 5,119 on Monday but below the 5,410 low seen on August 1.
Verrone wrote in a Wednesday note that he is “not blown away with the first bounce attempt from [the] S&P 500 yesterday,, as breadth cam in a tepid +2.6 to 1 advance/decline.”
“Tread lightly with the first bounce attempt,” said Verrone. Correction lows are likelier to occur in September or October rather than in August, he added.
“A bottoming sequence typically takes some time to come together, and we can’t think of many correction lows in August,” Verrone said.
— Hakyung Kim
Disney, Airbnb, Rivian among stocks making biggest premarket moves
Check out the companies making headlines before the bell.
- Disney — Shares were down about 1% after the media giant reported quarterly results that beat analyst expectations, thanks in part to strong performance at its streaming unit. The company earned $1.39 per share, excluding items, on revenue of $23.16 billion. Analysts expected a profit of $1.19 per share on revenue of $23.07 billion, per LSEG.
- Airbnb — Weaker-than-expected revenue guidance for the third quarter hurt Airbnb shares in the premarket, losing nearly 14%. The company sees revenue in a range of $3.67 billion to $3.73 billion. Analysts expected a forecast of $3.84 billion.
- CVS Health — Shares of the drugstore chain slipped just 0.3% after CVS Health reported second-quarter earnings that surpassed expectations but cut its full-year profit outlook due to the impact of higher medical costs.
For the full list, read here.
— Pia Singh
Economy still on track for a soft landing, says UBS
Despite some weaker-than-expected economic data in recent weeks and market volatility sparking fears of a recession, UBS says the U.S. economy is still on pace for a soft landing.
Corporate profit margins remain strong, and consumer spending is normalizing from high levels, not deteriorating, the firm added. Solita Marcelli, chief investment officer Americas, also noted that earnings for S&P 500 companies are likely to grow by double-digit percentages this year.
To be sure, Marcelli said in a Wednesday note that “While the breadth of earnings beats is in line with historical averages, the magnitude of the beats is a bit below normal.”
— Hakyung Kim
Airbnb falls on weak guidance
A woman talks on the phone at the Airbnb office headquarters in the SOMA district of San Francisco, California.
Gabrielle Lurie | Reuters
Weaker-than-expected revenue guidance for the third quarter hurt Airbnb shares in the premarket, losing 13%. The company sees revenue in a range of $3.67 billion to $3.73 billion. Analysts expected a forecast of $3.84 billion.
ABNB drops
Lyft slides on disappointing quarterly guidance
An empty Lyft pickup area is shown as ride-share drivers hold a rally as part of a statewide day of action to demand that ride-hailing companies Uber and Lyft follow California law and grant drivers “basic employee rights,” in Los Angeles on Aug. 20, 2020.
Mike Blake | Reuters
Lyft shares were down more than 11% after the ride-hailing company issued disappointing third-quarter revenue guidance. Lyft sees revenue ranging between $90 million and $95 million, while analysts expected a forecast of $103.4 million, according to StreetAccount.
LYFT plunges
Disney shares rise on earnings beat
Disney shares were up about 1% after the media giant reported quarterly results that beat analyst expectations.
The company earned an adjusted $1.39 per share on revenue of $23.16 billion. Analysts expected a profit of $1.19 per share on revenue of $23.07 billion, per LSEG. Operating income increased 19% year on year to $4.225 billion thanks in part to streaming.
— Fred Imbert
European markets open higher
European markets opened higher on Wednesday, with the pan-European Euro Stoxx 600 adding 0.37% as of 8:23 a.m. London time.
Most sectors were last trading in the green. Banks rose 1.17%, while healthcare stocks shed 0.47%.
Bourses across the region also picked up, with the U.K.’s FTSE 100 adding 0.57%, Germany’s DAX rising 0.27% and France’s CAC 40 gaining 0.46%.
— Sophie Kiderlin
Bank of Japan deputy governor says central bank won’t raise rates while markets are unstable
The Japanese government’s nominee for the Bank of Japan (BOJ) Deputy Governor Shinichi Uchida attends a hearing session at the lower house of the parliament in Tokyo, Japan, February 24, 2023.
Issei Kato | Reuters
The Bank of Japan won’t raise rates while markets are volatile, deputy governor Uchida Shinichi said in a speech Wednesday.
Japanese markets have whipsawed this week, seeing both their worst sell-off since the 1987 Black Monday crash as well as the best day since October 2008.
Uchida noted that unlike Europe or the United States, “Japan’s economy is not in a situation where the Bank may fall behind the curve if it does not raise the policy interest rate at a certain pace.”
“Therefore, the Bank will not raise its policy interest rate when financial and capital markets are unstable,” he said.
— Christine Wang
Futures rebound as Asian stocks rise
U.S. stock futures reversed to trade higher as Asian stocks rose in morning trading.
Dow futures rose 219 points or 0.56% while S&P 500 futures rose 0.67%. Nasdaq 100 futures jumped 0.97%.
The benchmark Nikkei 225 in Japan rose 2%, while the broad-based Topix jumped 3%. The Japanese yen weakened against the dollar, trading around 146.
— Christine Wang
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading.
- Airbnb — The online booking company plunged 13% after second-quarter earnings missed Wall Street estimates. Airbnb reported earnings of 86 cents per share, while analysts polled by LSEG were looking for 92 cents. The company also said it’s seeing signs of slowing demand from its U.S. customers.
- Reddit — Shares ticked down 2% despite the company’s second-quarter results beating Wall Street estimates on the top and bottom line. The social news company reported better-than-expected daily active user metrics. Reddit also issued its third-quarter revenue outlook, calling for $290 million to $310 million while analysts polled by LSEG called for $279 million.
- Wynn Resorts — The resort and casino operator added 2% despite posting disappointing second-quarter results. Wynn reported adjusted earnings of $1.12 per share on revenue of $1.73 billion, compared to an estimate from analysts polled by LSEG that expected $1.14 per share and $1.75 billion in revenue.
Read the full list here.
— Brian Evans