Stocks seen opening marginally lower; Focus on earnings and ECB decision

Wall Street

ECB set to announce its policy decision

U.S. stock future are pointing to a weak open for stock on Thursday as the European Central Bank (ECB) prepares to deliver its first interest rate hike since 2011.

The ECB is widely expected to hike rates by 25 bps, but there are reports that it may announce a bigger hike of 50 bps to counter surging inflation.

ECB announces its monetary policy decision at 8:15 a.m. ET followed by President Christine Lagarde’s press conference at 8:45 a.m. ET.

At 5:30 a.m. ET, Dow futures fell 74 points, or 0.23% to 31,779. S&P 500 futures lost 7 points, or 0.18% to 3,955.5 while the tech-heavy Nasdaq 100 futures were down 16 points, or 0.13% to 12,449.25.

Tesla’s record run of profits ends amid China factory shutdowns

Tesla (TSLA) reported its first sequential drop in quarterly profits on Wednesday evening, as Covid-related shutdowns and raw materials shortages at its Shanghai factory affected deliveries.

The EV maker posted second-quarter earnings of $2.3 billion, or $1.95 a share, compared with a record $3.3 billion in the first quarter. On an adjusted basis, the company earned $2.27 a share.

Sales came in at $16.9 billion, down from $18.8 billion during the first quarter.

Analysts expected the company to have earned $1.91 per share on revenue of $17.39 billion.

Tesla also disclosed that it has converted about 75% of its bitcoin holdings into fiat currency.

Tesla stock was marked $25.50, or 3.43% higher to $768 a share in the premarket trading session on Thursday.

Snap, AT&T, PPG earnings on tap

The earnings jamboree continues today with several companies scheduled to report their results.

Today’s lineup includes AT&T (T), PPG Industries (PPG), Domino’s Pizza (DPZ), Blackstone (BX), Philip Morris (PM), Seagate (STX), and Snapchat’s parent company Snap (SNAP).

Analysts expect AT&T to post earnings of 61 cents per share on revenue of $29.56 billion before the opening bell.

Snap is expected to report a loss of 1 cent per share on revenue of $1.14 billion after the market close.

Crude futures sharply lower as Nord Stream restarts

In energy markets, crude futures dipped early Thursday after Russia resumed pumping gas to Europe via the Nord Stream 1 gas pipeline.

Russian President Vladimir Putin said that gas shipments via the pipeline will restart at far below maximum capacity. Putin also warned that flows may be halted altogether unless a dispute over sanctioned parts is resolved.

The pipeline, which accounts for more than a third of Russian gas exports to the European Union, has been shut down since July 11 for annual maintenance work.

As of 5:30 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures were down $3.85, or 3.85% to 496.03 a barrel. Global Brent crude futures were at $103.09, down $3.83, or 3.58% a barrel.