Johnson & Johnson helps the Dow jump for ninth consecutive day

The Dow Jones Industrial Average jumped for a ninth consecutive day overnight. It was the Dow’s best daily winning streak since 2017.

But the broader market suffered after post-earnings declines in trader favourites Netflix and Tesla.

Shares of Netflix dropped more than 8 per cent after the streaming giant posted revenue that fell short of analysts’ estimates. Expectations were high into the report with the stock up nearly 50 per cent on the year.

Tesla, meanwhile, tumbled 9.7 per cent. Late Wednesday, CEO Elon Musk and other executives said on the company’s earnings call that vehicle production would slow during the third quarter due to shutdowns for factory improvements.

On the other end, shares of Dow constituent Johnson & Johnson rose 6 per cent after the drugmaker hiked its full-year guidance along with posting quarterly results that topped Wall Street’s estimates.

Another Dow name, insurer Travelers, beat analyst estimates for revenue in the quarter, boosting the shares.

Of the S&P 500 companies that have reported earnings thus far, 74 per cent have exceeded expectations, FactSet data shows. The strength in corporate earnings have created optimism for a soft landing for the economy.

Overall, The 30-stock Dow, which has less dependence on tech stocks, added 163.97 points, or 0.47 per cent, to close at 35,225.18. The S&P 500 slipped 0.68 per cent to 4,534.87. The Nasdaq Composite fell 2.05 per cent to finish the session at 14,063.31. The Dow’s climb is the widest outperformance by the blue-chip indicator over the tech-heavy Nasdaq 100 index since February of last year.

There is some big commodity news today. Firstly, the number of oil futures contracts traded hit a low point since January. Gold prices dropped from a two-month high due to increasing expectations of a Federal Reserve rate hike. If gold falls below $1960, it could trigger more selling towards $1940.

China is importing record amounts of oil, taking advantage of cheap Russian crude to build stockpiles and increase exports of refined products. Despite a weak economy, China's oil imports in the first half of 2023 reached a record high of 11.4 million barrels per day, up 11.7 per cent compared to the previous year and 15.3 per cent compared to pre-Covid levels.

The Energy Transitions Commission (ETC) warns of potential metal shortages in the next decade due to increased demand from the energy transition. Shortages of key minerals like lithium, nickel, graphite, cobalt, neodymium, and copper could raise prices and delay achieving net-zero emissions by 2050. The ETC recommends increasing annual capital investment from $45 billion to $70 billion to address supply gaps.

Overall, the US sectors finished mostly higher. Utilities was the best performer, whilst Consumer Discretionary was the worst.

Futures

The SPI futures are pointing to a 0.1 per cent gain.

Currency

One Australian dollar at 7:20 AM was buying 67.80 US cents.

Commodities

Gold lost 0.49 per cent. Silver fell 1.67 per cent. Copper added 0.54 per cent. Oil gained 0.37 per cent.

Figures around the globe

European markets closed higher. London’s FTSE gained 0.76 per cent, Frankfurt added 0.59 per cent, and Paris closed 0.79 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 1.23 per cent, Hong Kong’s Hang Seng lost 0.13 per cent while China’s Shanghai Composite closed 0.92 per cent lower.

The Australian sharemarket closed 0.02 per cent higher at 7325.

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

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