US markets to open higher after Amazon report surprise profit
As European stocks get knocked back from weak data in China, US markets are looking inwards at what is the height of corporate earnings season. A higher open is expected in the US led by shares of Amazon which could open as much as 18% higher after the ecommerce colossus reported a surprise profit.
Amazon saw a huge move in afterhours trading after surprising with a $92m quarterly profit alongside a massive increase in sales. The huge reaction in shares reflects how long investors have been waiting for Amazon to turn this corner; where huge sales growth is not at the expense of profit growth.
Amazon is the third prominent internet tech company after Google and Netflix to see shares move over 10% after second quarter earnings. The volatility of these earnings reactions are off the chart and are starting to reflect what has been best described in the past as “irrational exuberance.”
Stocks saw their third day of declines on Thursday following poorly received results from Caterpillar and American express which put the Dow Jones Industrial Average negative for the year.
The strong dollar has been mentioned a lot in the earnings statements of the big US corporates but there are also clearly some issues over domestic demand looking at the poor retail sales numbers as well as demand overseas from China with its manufacturing sector seen slumping again in July.
On Friday, the earnings barrage slows down a little with Biogen, American Airlines and State Street amongst those reporting.
Futures suggest the:
S&P 500 will open 8 points higher at 2,110 with the
Dow Jones expected to open 54 points higher at 17,785 and the
Nasdaq 100 43 point higher at 4,645.
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