Stocks on Pace for Weekly Gain as Delta Reports

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Colette O 'Claire and here is Schwab's early look at the markets for Friday, July 10th. Delta Airlines checks in this morning after a solid quarter for its sector as the so-called K-shaped economy kept travelers paying up for higher service levels. However, the recent surge in oil prices amid fresh fighting in the Strait of Hormuz could raise questions about margin for both Delta and United Airlines, which reports next week. The U.S. kept up its heavy attacks on Iran Thursday, and Iran launched missiles toward U.S.

0:53allies in the region as the ceasefire appeared more tenuous. But oil prices fell on hopes for renewed peace talks. Turning back to Delta, analysts tracked by Schwab see earnings at$1.48 per share and revenue at $17.5 billion. Important metrics include the strength of Delta's premium business and how it manages capacity to protect margin. Also today, SK Hynix, a South Korean memory chip maker, is expected to start trading on U.S. markets after its listing was more than seven times oversubscribed, according to Bloomberg. It could be another sign that memory market and AI excitement persists and follows chip and AI infrastructure names rising this week amid technical short coverings after the sector fell below its 50-day moving average Tuesday.

1:50Next week brings results from the largest U.S. banks, along with reports from chip industry giants ASML and Taiwan Semiconductor Manufacturing. For the Treasury market, next Tuesday's June Consumer Price Index, or CPI, looms large after the New York Federal Reserve reported earlier this week that consumer inflation expectations reached nearly three-year highs. Monthly CPI is seen flat, benefiting from lower oil prices in June, while core CPI, that strips out food and energy, is seen rising 0.2 percent. The key year-over-year core number is seen at a relatively benign 2.9 percent, but that's still well above the Fed's 2 percent goal that Fed Chairman Kevin Warsh has emphasized.

2:42Warsh will also be in the headlines next Tuesday when he testifies to Congress in a semi-annual appearance scheduled that morning. He'll likely be asked about economic growth. The Atlanta Fed's GDP Now estimate for second quarter gross domestic product or GDP growth fell to 1.3 percent this week from above 4 percent a few months ago. Though growth might be slowing, some positive economic breezes blow. For instance, initial jobless claims last week of 215 ,000 remained relatively light and were below expectations of 220 ,000. And analysts expect a 23 % annual gain in S &P 500 earnings for the second quarter, though that's magnified by the dramatic jump in tech.

3:34An updated faxed estimate is due today. Existing home sales for June were 4.09 million, compared with Briefing.com's consensus of 4.2 million and May's 4.17 million. Sales rose 2.2 percent annually, while the median price rose 1.8 percent year-over-year. Today is light on data, and so is Monday. Tuesday features a full court earnings press as the largest Wall Street banks step up to the line. Earnings and revenue are seen up solidly for most, according to analyst projections, though Fed policy and economic uncertainty might make guidance interesting. Major indexes advanced Thursday, led by the tech-heavy Nasdaq, as chips mounted a comeback.

4:23Volume was well below average, suggesting possible lack of conviction in the rally. Advancers easily outpaced decliners. Treasury yields eased, along with crude oil prices, and received an assist from solid demand for Thursday's 30-year bond auction. That capped a series of strong auctions this week, though the 10-year note yield remains above 4.5 percent. Seven of 11 S &P 500 sectors rose Thursday, led by tech, consumer discretionary, and financials. Defensive sectors pulled back. About 63 percent of S &P stocks trade above their 50-day moving averages up from 50 % a month ago and representing healthy breadth, and about two of every three S &P 500 stocks rose Thursday.

5:18Checking technical matters, the NASDAQ Composite and Philadelphia Semiconductor Index both managed to close above their 50-day moving averages after falling below them earlier this week. Among individual movers Thursday, PepsiCo fell about 3.6 percent as earnings per share came in a penny shy of analysts' estimates at$2.20, even as revenue slightly exceeded analysts' thinking. U.S. food and beverage performance moderated, with consumer budgets tightening due in part to rising gas prices, the company said. Chip and AI infrastructure firms advanced, including a 3 % increase for Philadelphia Summichonductor Index, led by Lumentum, SanDisk, and Arm Holdings.

6:06Heavy interest in shares of South Korean chipmaker SK Hynix before today's U.S. listing helped generate support. So did positive words about chip equipment demand from applied materials. The chip sector remains down about 11 % from June's peak, but on pace for light gains this week. The S &P 500 index is also up for the week. Meta Platforms advanced 4 % after a series of announcements related to its AI capabilities and Honor Reuters report that Meta plans to produce a new AI chip beginning in September. Levi Strauss lost 2 % even though earnings beat analyst estimates and the company raised its full-year guidance and dividend.

6:54Guidance for third-quarter revenue growth of 4 % to 5 % fell short of 8 % second-quarter revenue growth. AstraZeneca dropped more than 5 % after a heart disease drug candidate missed its primary endpoint in a Phase III clinical trial. Paramount's guidance fell more than 4 % on a Reuters report that U.S. states could sue the company next week to block its$110 billion acquisition of Warner Brothers Discovery. Cerebra's systems climbed more than 9 % as it announced a European AI expansion. The Dow Jones Industrial Average climbed 139.02 points, or 0.27 % Thursday, to 52 ,487.41. The S &P 500 Index gained 60.93 points, or 0.81%, to 7 ,543.64, and the NASDAQ Composite advanced 336.24 points, or 1.30%, to 26 ,206.89.

8:13This has been the Schwab Market Update Podcast. To stay informed, visit schwab.com slash market update or follow for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or review. It really helps new listeners find the show. Join us for another update Monday.

8:40For important disclosures, see the show notes and schwab.com slash market update podcast.