Major US equity markets traded higher in July despite mixed corporate earnings, soft economic data and China’s plunging stock market. While the Federal Reserve quantified a more positive economic outlook, second quarter US GDP estimates fell below expectations. Second quarter GDP growth expanded 2.3% versus a consensus of 2.9%. However, first quarter US GDP growth estimates were revised from a contraction of 0.2% to growth of 0.6%. In the second quarter, consumer spending drove economic growth, while business investments declined. For July, the Dow, S&P 500 and NASDAQ improved 0.4%, 2.0% and 2.8%, respectively. Year to date, the Dow is down 0.7%, while the S&P 500 and NASDAQ are up 2.2% and 8.3%, respectively.

Laboratory Instruments and Products Stock Index

The Index advanced 4.7% in July to 247.92 and is up 11.5% for the year. More than 60% of the companies traded higher this month, led by QIAGEN, which jumped 12.9%. The company benefited from several announcements, including a molecular diagnostics partnership with Seegene on July 8 and FDA premarket approval for its therascreen EGFR test to treat lungs cancer on July 13. In addition, QIAGEN beat second quarter adjusted EPS on July 29 and maintained its 2015 adjusted EPS outlook of $1.16–$1.18. Bio-Techne, which climbed 11.1% for the month, was the only other company in the Index to increase double digits.

Both Fluidigm and Harvard Bioscience declined by double digits in July despite the absence of any negative financial news. Fluidigm, which fell 17.2% for the month and is down 40.6% year to date, traded at a new 52-week low on July 31. Harvard Bioscience contracted 14.2% for the month. However, it met second quarter adjusted EPS consensus on July 30 and maintained it 2015 EPS outlook of $0.13–$0.15.

A number of other Index firms reported earnings this month. Both Illumina and Affymetrix posted strong quarterly results, led by clinical demand and operational improvements. On July 21, Illumina reported adjusted EPS growth of 40% to $0.80, ahead of analysts’ consensus, and raised its full-year adjusted EPS range by $0.03 to $3.39–$3.45. However, the company missed analysts’ second quarter revenue expectations, leading shares down 8.4% the next day. In spite of the decline, Illumina ended the month up 0.4%.

Affymetrix was also pressured after its earnings report but managed a similar gain of 0.4% for the month. The company beat second quarter earnings estimates on July 29, as adjusted EPS grew 43% due to strong Cytogenetics sales, improved production utilization rates and favorable product mix. The company raised its adjusted 2015 EBITDA outlook range by 100 basis points to 17%–19%.

Thermo Fisher Scientific and Waters each jumped after beating second quarter revenue and adjusted EPS expectations, driven by strong pharmaceutical demand and new products. Thermo, which also benefited from continued cost synergies, raised its 2015 adjusted EPS guidance on July 22 from $7.25–$7.40 to $7.28–$7.41 for growth of 5%–6%. The company completed a €500 million ($555 million) senior notes offering around July 21 to help pay down short-term debt and fund the Alfa Aesar acquisition (see IBO 6/30/15). Shares grew 7.5% for the month.

Increased recurring revenues and robust growth in China drove the stronger-than-expected performance for Waters. As a result, the company raised its full-year adjusted EPS on July 28 from $5.67–$5.87 to $5.75–$5.90. Wells Fargo upgraded the company on July 29 from “Market Perform” to “Outperform.” Shares expanded 4.0% for the month.

Similarly, PerkinElmer exceeded financial expectations for the second quarter on July 30 due to strong pharmaceutical and biotechnology markets, demand in China and new products. But adjusted earnings grew only 2%, as currency hindered EPS growth by roughly 10%. The company raised the lower range of its full-year 2015 adjusted EPS guidance by $0.01 to $2.55–$2.60, as increased volume and margins are expected to be partially offset by R&D investments and currency. Shares were only marginally higher for the month.

FEI jumped 10.5% on July 31 after second quarter adjusted EPS soared past expectations due to completed restructuring measures and controlled spending. However, the company maintained its full-year adjusted EPS forecast of $3.40–$3.70, including third quarter EPS of $0.70–$0.80. Shares improved 3.7% for the month.

Finally, while Metter-Toledo beat second quarter estimates on July 30, it lowered its full-year 2015 top line growth due to weakness in China. However, the company maintained its adjusted EPS outlook of $12.75–$12.90 for growth of 9%–10% due to margin expansion. Shares slipped 1.1% for the month.

In other financial news, Enzo Biochem advanced 3.4% on July 6 following a favorable $7.1 million infringement judgment against Luminex.

Diversified Laboratory Stock Index

For the month and year to date, the Index is up 0.9% to 185.56. Most companies traded lower in July, led by Xylem, which fell 6.9%. While second quarter adjusted EPS were in line with consensus, sales fell short of expectations. The company narrowed its 2015 adjusted EPS range on July 30 from $1.80–$1.90 to $1.82–$1.87.

Similarly, Roper Technologies and Teledyne Technologies, which slipped 3.0% and 1.7% for the month, respectively, missed second quarter revenue expectations due to weakness in certain oil and gas markets. However, both companies beat adjusted EPS estimates. Roper lowered its full-year GAAP EPS estimate from $6.75–$6.95 to $6.61–$6.75 on July 27, while Teledyne maintained its full-year EPS outlook of $5.60–$5.65 on July 30.

Illinois Tool Works beat second quarter adjusted EPS consensus on July 22 and raised its 2015 outlook from $5.00–$5.20 to $5.07–$5.23 due to continued operational improvements and share buybacks. However, shares declined 2.5% for the month as sales missed analysts’ consensus.

Danaher advanced 7.0% for the month to lead the Index, as it reported better-than-expected second quarter revenue and adjusted EPS results on July 23. Earnings benefited from higher sales volume, completed restructuring measures and cost savings. The company raised the bottom end of its 2015 adjusted EPS range by $0.02 to $4.25–$4.33. On July 28, Morgan Stanley upgraded the company from “Equal Weight” to Overweight,” and raised its price target by 8% to $100 per share. The company also priced a €2.7 billion ($3.0 billion) senior notes offering on July 1 to help fund the proposed acquisition of Pall (see IBO 5/15/15).

On July 13, Bank of America downgraded Corning from “Neutral” to “Underperform,” and cut its price target 36% to $16.00 per share.

International

Asia Pacific markets traded mostly lower in July, led by China’s Shanghai Composite and Hong Kong’s Hang Seng Indexes, which slumped 14.3% and 6.1%, respectively. Japan’s Nikkei 225 advanced 1.7%.

For the month, prices for Pacific Region companies in the IBO Stock Table were mixed. Shimadzu recorded the largest gain for the month, climbing 11.1%, while Hitachi High-Technologies fell 16.0%. On July 24, Hitachi reported that fiscal first quarter EPS from continuing operations fell 20% to ¥56.12 ($0.46). The company maintained its fiscal full-year EPS forecast ending March 31, 2016, of ¥250.12 ($2.08).

Following sharp declines in the previous month, all major European equity markets traded higher in July. Switzerland’s SMI Index gained the most ground, advancing 7.4%. Despite 2.7% growth for the London FTSE 100, most UK-based companies in the IBO Stock Table declined. Horizon Discovery declined 7.9%. In a trading update on July 20, it announced that sales for the first half of the year jumped 112% to £8.6 million ($13.2 million), driven by acquisitions, new diagnostic reagent products and increased service revenue.

Spectris, which declined 7.4% for the month, announced on July 30 that adjusted EPS fell 3% to £0.42 ($0.66) for the half year ending June 30 because of cost inflation and growth investments. The company proposed an interim dividend hike of 8% to 17.3 pence ($0.27) per share. Abcam jumped 13.3% this month on stronger-than-expected results. It preannounced on July 23 that fiscal year sales ending June 30 grew 12%, 14% excluding currency. Canaccord Genuity upgraded the company on the same day from “Sell” to “Hold,” and raised its price target by 7% to GBX 500 ($7.80).

Among other European companies in the IBO Stock Table, shares traded higher in July, with the exception of Exiqon, which fell 10.3%. Sartorius, which climbed 16.4% for the month, announced on July 21 that second quarter adjusted EPS jumped 60% to €1.51 ($1.68), led by Bioprocess Solutions sales and strong organic demand in Asia Pacific. The company raised its full-year currency-neutral sales growth outlook from 6%–9% to roughly 12% to account for strong organic demand and recent acquisitions.