Investing.com -- The tech-led selloff looks set to continue Thursday, while Ford has also disappointed with a second-quarter profit miss. Biden points to a new generation after addressing the nation, while the European earnings season presses on.
1. Biden points to a new generation
President Joe Biden addressed the nation on Wednesday for the first time since dropping his reelection bid, explaining he was stepping aside to allow a new generation to take over after weeks of concerns about his age and health.
Biden is the oldest president in U.S. history, at 81, and becomes the first incumbent president not to seek reelection since 1968 when Lyndon Johnson, under fire for his handling of the Vietnam War, pulled out of his campaign.
“In recent weeks, it’s become clear to me that I need to unite my party,” Biden said. “I've decided the best way forward is to pass the torch to a new generation. That's the best way to unite our nation."
The spotlight now falls on Vice President Kamala Harris, who is set to be formally nominated as the Democratic Party’s candidate as soon as next week, before the party's Aug. 19-22 convention in Chicago.
A Reuters/Ipsos poll completed on Tuesday showed Harris with a lead of two percentage points over Republican candidate Donald Trump, 44% to 42%. A CNN poll by SSRS showed Trump leading Harris, 49% to 46%. Both findings were within the polls' margins of error.
2. Futures steady ahead of growth data
U.S. stock futures traded in a mixed fashion Thursday, with the previous session’s sharp tech-driven selloff continuing ahead of the release of key growth data.
By 04:15 ET (08:15 GMT), the Dow futures contract was 20 points, or 0.1%, higher, while S&P 500 futures dropped 15 points, or 0.3%, and Nasdaq 100 futures fell by 120 points, or 0.6%.
The major Wall Street indices slumped on Wednesday, driven by poorly received earnings from tech giants Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA).
The Dow Jones Industrial Average fell over 500 points, or 1.3%, while the S&P 500 dropped 2.3% and the Nasdaq Composite plummeted 3.6%, the worst session since 2022.
There will be more earnings to digest Thursday, from the likes of American Airlines (NASDAQ:AAL), Honeywell (NASDAQ:HON) and Hasbro (NASDAQ:HAS).
More than 25% of companies in the S&P 500 have reported their second-quarter earnings, according to FactSet data, and although some major tech stocks have disappointed, the overall nature of the earnings session has been generally positive.
Investors will also study the release of preliminary second-quarter GDP data before the market open, and is expected to show annualized growth of 2.0%.
This would be above the 1.4% growth seen in the first quarter, but would remain considerably slower than the 4.2% pace seen in the second half of last year.
3. Ford slumps after profit miss
Ford (NYSE:F) stock slumped premarket after the auto giant reported a significant profit miss for the second quarter as it continues to battle costly quality issues and an EV business that is weighing on its bottom line.
Ford stock fell over 11% after hours following the Detroit automaker posting an adjusted profit of 47 cents per share, significantly missing analysts' expectations of 68 cents, according to LSEG data.
Ford CEO Jim Farley has made fixing the automaker's quality problems a priority since he took charge in October 2020, but warranty expenses went up $800 million in the second quarter compared with the previous quarter.
Legacy automakers have tended to scale down their EV ambitions amid easing demand, a shift to hybrids and stiff competition.
"Overall, the EV journey has been humbling, but it has forced us to get even more fit as a company, including applying it to our (traditional gas-engine) business, and that will pay off in the long run," said Farley. "The remaking of Ford is not without growing pains."
4. European earnings roll in
A number of important European companies have released their quarterly earnings Thursday for investors to digest.
Luxury giant Kering (EPA:PRTP), best known for its Gucci brand, disappointed with its second-quarter results, as overall sales fell by 11% year-on-year on a constant currency basis, a steeper decline than expected.
Anglo-Swedish drugmaker AstraZeneca (NASDAQ:AZN) raised its sales and profit forecast for 2024 and topped analyst expectations for second-quarter revenue, buoyed by demand for its therapies for cancer and rare diseases.
Sanofi (EPA:SASY) (NASDAQ:SNY)'s second-quarter profit rose on strong demand for its blockbuster asthma drug Dupixent and better-than-expected sales of new launches.
Nestle (SIX:NESN) reported half-year sales growth below expectations and lowered its full-year organic sales growth outlook to at least 3% from about 4% previously, as the world's biggest packaged food company said prices had come down faster than expected.
Unilever (LON:ULVR) reported weaker-than-expected underlying quarterly sales after the British consumer goods giant felt the backlash from higher prices, while French oil major TotalEnergies (EPA:TTEF) reported a 6% fall in second-quarter earnings.
5. Crude falls amid demand concerns
Crude prices retreated Thursday, as concerns about waning demand, especially from China, the world's largest crude importer, continued to weigh.
By 04:15 ET, the U.S. crude futures (WTI) dropped 0.5% to $77.19 a barrel, while the Brent contract fell 0.5% to $81.30 a barrel.
Both benchmarks settled higher on Wednesday, snapping consecutive sessions of declines after the Energy Information Administration said U.S. crude inventories fell by 3.7 million barrels last week, more than expected.
However, prices remained close to two-month lows as concerns over waning demand, coupled with forecasts of a potential oil market surplus in 2025 and talk of a ceasefire in the Middle East kept traders largely bearish towards crude.