ASX 200 Live Updates – Monday, 21st July

ASX Live Coverage Summary – July 21

Welcome to the ASX live blog for Monday, July 21. We’re happy to introduce this new format which will feature multiple updates throughout the day, particularly before market opening. This coverage will conclude at 3:00 PM AEST. For the latest updates, please refresh the page and share your feedback on enhancing this experience through this survey.

Block Shares Set to Surge on S&P 500 Inclusion

[8:50 AM] NYSE-listed Block’s shares have surged 8.5% during pre-market trading following the announcement of its inclusion in the S&P 500 index. This comes as Hess is removed from the index after Chevron’s completion of its US$54 billion acquisition of the oil company. Block’s official inclusion is set for the market opening on Thursday, July 24.

Earnings Updates with Minimal Market Reactions

[8:46 AM] Recent earnings reports from major US companies reflected robust figures, yet market reactions remained relatively subdued. Notable highlights include:

• Netflix (-5.1%)

  • Revenue and Earnings Growth: Netflix reported a revenue increase of 16% to $11.08 billion, with earnings of $7.19 per share—a 46% rise year-on-year, surpassing consensus estimates of $7.07 EPS.
  • Key Drivers: Growth in U.S. and Canada revenue reached 15% in Q2, attributed to pricing strategies, alongside an operating margin improvement to 33% (up from 27% in 2024).
  • Forward Guidance: The company raised its full-year revenue forecast for 2025 to $44.8-$45.2 billion, revising upwards from $43.5-$44.5 billion.

• American Express (-2.3%)

  • Revenue and Earnings Growth: American Express outperformed expectations on both earnings and revenue; however, expenses surged 14% to $12.9 billion, slightly higher than estimates.
  • Key Drivers: CEO Steve Squeri noted record cardholder spending and sustained demand for premium products, alongside strong credit performance.
• 3M (-3.6%)
  • Revenue and Earnings Growth: The company’s Q2 adjusted earnings per share reached $2.16 on revenue of $6.16 billion, exceeding forecasts.
  • Forward Guidance: 3M has increased its full-year adjusted profit outlook to $7.75-$8.00 per share, adjusting from the previous $7.60-$7.90 due to anticipated lower impacts from tariffs on earnings.

Market Response to Earnings Misses

[8:41 AM] The US earnings season has commenced strongly, reflecting resilient consumer expenditure and robust corporate profits. Nonetheless, despite positive results, investor reactions have been muted:

• Major companies like Netflix and United Airlines, despite beating expectations, faced declines in stock prices (Netflix down over 5%).
• Financials reported an impressive 94.4% earnings beat rate, yet their shares showed minimal movement.
• Current market conditions indicate that companies exceeding forecasts are rewarded less, with only slight outperformance at the index level.
• The S&P 500 index hovers near all-time highs, trading at a forward earnings ratio of 22, which suggests high investor expectations.
• Companies that fall short of estimates face more severe penalties than seen since 2022 due to elevated valuations limiting the scope for error.

For further details on these earnings reports, refer to Bloomberg’s coverage here.

Morning Update

[8:30 AM] The ASX 200 futures are currently down 49 points (-0.56%) following a lacklustre overnight performance (Nasdaq +0.05%, S&P 500 -0.01%, Dow -0.32%). If you’re new to our coverage, be sure to quickly catch up via this morning’s wrap-up.

This summary encapsulates the key points from the live coverage, providing insights into significant market activity and corporate performance. For continuous updates, please stay tuned to our live blog.