Current Futures: Dow +35.00, S&P +4.50, NASDAQ +8.75

European markets are heading higher, in-line with the S&P futures, after another raft of companies reported better than expected earnings results

The S&P futures market is currently trading near to the high of the year, testing the 980.00 area. Futures trade gained approximately 4.50 points through the overnight session, as a number of important companies reported better than expected results. The first company in, was Honda, which helped the Japanese Nikkei stay above the break-even line. During the European session, BT Group and Alcatel-Lucent reported better than expected earnings, which provided a strong boost to the German Dax and the U.K. FTSE.

However, despite the market’s positive reaction, not everything is rosy in the corporate environment. During the European session, Volkswagen said that its profits fell a little more than 80% in Q2 from a year earlier, becoming the fourth major carmaker to report losses in just two days. Sony, Siemens and BASF missed their expected mark, as well as analysts’ estimates during the overnight session, but this had little effect over the equity market’s valuation.

Nearly half of the European companies that reported so far have beaten analyst’ estimates, Trade Team noted, while 2/3 of the companies listed in the S&P 500 produced better than expected results throughout the second quarter. However, the reported earnings are between 30-40% lower than one year ago, something that shows the magnitude of the downturn, and the pressure that the real economy is under to produce growth. Better than expected numbers may cut the muster in a depressed global arena, but will do little to the outlook for economic expansion because of the expected bar having been placed so low in Q1.

The following companies are expected to report on Thursday: AstraZeneca, Eastman Kodak, Exxon Mobil, Goodyear Tire & Rubber, Kellogg, Mastercard, MetLife and Motorola.

Overnight, the U.K. FTSE advanced 22.91 points (0.50%) to 4,570.44, while the German Dax gained 29.64 points (0.56%) to 5,299.96.

Crude oil for August delivery was recently trading at $63.80 per barrel, up by $0.90. 

Gold for August delivery was recently trading higher by $2.10 to $932.30. 

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