Morning Bid: US profit growth mushrooms

By Mike Dolan

July 29 (Reuters) -

What matters successful U.S. and planetary markets contiguous

By Mike Dolan, Editor-at-Large, Finance and Markets

In a wide illustration of conscionable however precocious the barroom is for Big Tech to impressment markets, South Korean spot elephantine SK Hynix plunged again arsenic a ‌record six-fold leap successful quarterly profits missed forecasts aboriginal connected Wednesday.

That's a informing up of U.S. megacap net owed retired aboriginal today. Before ‌that, markets volition digest the Federal Reserve's latest argumentation determination and commentary from Chair Kevin Warsh arsenic helium takes the podium this afternoon.

I'll get into that and much below.

But first, cheque retired my ​mid-week column, wherever I sermon hyperscaler currency burn, the caller British PM's canvass bounce and whether the Ukraine and Iran wars could converge.

And perceive to the latest occurrence of the Morning Bid regular podcast. Subscribe to perceive Reuters journalists sermon the biggest quality successful markets and concern 7 days a week.

US PROFIT GROWTH MUSHROOMS

SK Hynix plummeted astir 10% aboriginal connected Wednesday, dragging the chip-heavy KOSPI down arsenic overmuch arsenic 12.6%. The scale pared immoderate of those losses to adjacent down 6%, taking it to ‌levels past seen successful aboriginal April. Samsung is besides ⁠set to study this week.

Despite a resilient bounce-back successful U.S. banal indexes connected Tuesday amid a dense rotation of sectors that besides saw Apple concisely apical $5 trillion successful marketplace worth for the archetypal time, the tremors from South Korea present make ⁠a nervier situation for investors arsenic they hold for Microsoft and Meta's results aft the doorbell today.

Cash pain and leverage are apt to beryllium watched closely, aft Alphabet and Tesla acceptable alarm bells ringing past week with their precocious and rising AI capex.

That said, the wide U.S. net representation is inactive ballooning and estimates for yearly aggregate S&P 500 ​profit ​growth done the 2nd 4th are present a whopping 39% - much than 10 points higher ​than estimates astatine the commencement of this month, according to ‌LSEG data.

Before we get to the net announcements, though, there's the tiny substance of 1 of the astir uncertain Fed decisions successful years. With a one-in-three accidental of an involvement complaint emergence priced into futures - which Deutsche Bank claims is the astir divided the marketplace has been up of a Fed gathering since 2018 - the stakes are precocious and aggregate dissents are likely, adjacent if rates are held.

And immoderate Fed hopes of a clearer representation from vigor markets amid this week's lipid terms retreat were muddied again overnight arsenic the tense truce successful the Iran struggle was broken. That saw planetary crude prices steadfast backmost up to ‌more than $87 per barrel.