What to watch today: Dow to fall as coronavirus relief talks remain at a stalemate
Dow futures indicated a decline of nearly 80 points at today's opening bell as lawmakers depart Washington without a broad relief package agreement. S&P 500 futures were slightly lower while Nasdaq futures were mostly flat, after a mixed Thursday session in which the S&P again fell short of registering a new record closing high. (CNBC)
* Treasury yields come off highs after jobless data beats estimates (CNBC)
The Nasdaq Composite advanced 0.3% Thursday for its second positive session in a row, while the 30-stock Dow and benchmark S&P declined 0.3% and 0.2%, respectively. The major averages remain on track for a positive week, which would be the second consecutive for the Dow and the third straight for the S&P and Nasdaq.
It's a busy morning for economic data. Retail sales for July are out at 8:30 a.m. ET, with consensus forecasts calling for a 2.3% increase following a 7.5% jump in June. Second-quarter productivity is released at the same time. It is seen posting a 4.4% annual rate increase following a 0.9% decline during the first quarter.
At 9:15 a.m. ET, July industrial production figures will be released. Economists expect a 2.8% increase following a 5.4% rise in June. Then at 10 a.m. ET, the University of Michigan releases its preliminary August Consumer Sentiment Index. It's expected to fall to 71 from the final July reading of 72.5. At the same time, the government is out with June business inventories, seen falling 1.2% after declining 2.3% in May.
There are no earnings reports of note today.
IN THE NEWS TODAY
Apple (AAPL) kicked out Fortnite from the App Store after violating the company's rules for the software marketplace. Developer Epic Games, in turn, sued the iPhone maker, accusing it of anti-competitive behavior. At issue is Epic Games' decision to implement direct payments for Fortnite, one of world's most popular video games, circumventing Apple's policy of taking 30% of revenue made within apps. Epic Games executives have long been critical of the App Store policy, which has drawn renewed scrutiny amid the wave of Big Tech antitrust probes. Epic Games also sued Alphabet's Google (GOOGL) after Fortnite was removed from Google's Play Store for Android phones for a similar policy violation. (CNBC)
* U.S. Justice Department going 'full tilt' on tech antitrust probe: official (Reuters)
Democratic leaders and Trump administration officials remain far apart on a coronavirus relief package, and the Senate adjourned for the month after Thursday's session, returning only if negotiators come to an agreement. Lawmakers in the House had already departed Washington for August under similar conditions. It's not clear when negotiators will meet again. House Speaker Nancy Pelosi, D-Calif., has repeatedly called on Republicans to raise their offer to a $2 trillion relief deal, up from roughly $1 trillion, but they have remained firm. Democrats entered negotiations with a legislative price tag north of $3 trillion. (CNBC)
President Donald Trump indicated he may sign a broad coronavirus relief bill that includes some increased funding for the U.S. Postal Service, seemingly softening comments he made earlier Thursday on Fox Business. During that interview, Trump criticized Democrats' proposed funding increase for USPS ahead of a November election in which people are expected to utilize mail-in voting in record numbers. Trump said without the funding, the Postal Service is "not equipped" to handle "universal mail-in voting." At a White House briefing later, Trump repeated unsubstantiated claims that mail-in voting would lead to widespread voter fraud. But he said he would not veto pandemic relief that included Postal Service funding. (NPR)
* President Trump requests mail-in ballot for upcoming Florida primary, despite rhetoric (Palm Beach Post)
The Trump administration helped broker a deal between Israel and the United Arab Emirates, with the two nations agreeing to normalize diplomatic relations. As with many Arab countries, the UAE has had an economic boycott against Israel since its founding and does not formally recognize it. Under the deal, Israel agreed to suspend annexation efforts for parts of the West Bank claimed by Palestinians. (CNBC)
* Israel-UAE deal condemned by Palestinians, cheered by Egypt and Bahrain (The Washington Post)
The undergraduate admissions process at Yale University "illegally discriminates" against White and Asian students, the Department of Justice said Thursday. Yale denied the DOJ's accusation, which was made after a two-year investigation into the Ivy League school. The DOJ said it found "hundreds of admissions decisions" annually in which race is a determinative factor, therefore violating Title VI of the Civil Rights Act of 1964. (CNBC)
Janet Yellen, the former Federal Reserve chair, was among a team of economists who briefed presumptive Democratic nominee Joe Biden on the fallout from the coronavirus. Yellen ran U.S. monetary policy while Biden was vice president. Yellen, who left the Fed in 2018, has avoided shows of political partisanship, and it's not known if her decision to meet with Biden represented an endorsement. Although former Fed chairs often avoid politics, Paul Volcker endorsed Barack Obama in 2008. (CNBC)
* Biden campaign raises $48 million in 48 hours after naming Kamala Harris as VP choice (Reuters)
Michigan is planning to establish separate lanes for autonomous vehicles on a roughly 40-mile stretch of highway between Ann Arbor and Detroit. A study is being conducted to determine whether new lanes should be built or if existing road infrastructure can be repurposed for the project, which will get much of its financing from companies that are funded by Alphabet. Ford Motor Co. (F) is on the board for the project. Its goal is to have autonomous buses and shuttles running between the University of Michigan, the Detroit airport and the city's downtown. (Associated Press)
* Judge rejects Uber, Lyft bids to delay California driver injunction (Reuters)
STOCKS TO WATCH
Applied Materials (AMAT) reported adjusted quarterly earnings of $1.06 per share, 11 cents above estimates, while the maker of semiconductor manufacturing equipment also saw revenue beat Wall Street forecasts. Applied Materials also gave an upbeat current-quarter forecast amid rebounding demand.
Baidu (BIDU) beat estimates on the top and bottom lines for its latest quarter, but the Chinese search engine giant's shares are under pressure on news that its video streaming service iQIYI (IQ) is the subject of an SEC investigation. The SEC is seeking financial records dating to the beginning of 2018 as well as documents relating to various acquisitions and investments.
CureVac (CVAC) will begin trading on the Nasdaq today after selling 13.33 million shares at $16 per share in its initial public offering, valuing the company at about $2.8 billion. The German biotech company is among those using messenger RNA technology to develop a Covid-19 vaccine.
AutoZone (AZO) announced plans to hire more than 20,000 U.S. employees. The auto parts seller is taking the action in response to rebounding demand from both retail and commercial customers.
Tesla (TSLA) was upgraded by Morgan Stanley analyst Adam Jonas to "equal weight" from "underweight", who revised his opinion on the automaker's stock based on the improving prospects for Tesla building an electric vehicle battery supply business.
Ventas (VTR) was upgraded to "outperform" from "sector perform" at RBC Capital, which points to improving trends for senior housing. Ventas is a real estate investment trust that owns and operates senior housing and health care properties.
If the NFL wants to play games on Saturday this fall due to college football cancellations, the U.S. government may need to sign off. That's because U.S. law stipulates that the NFL cannot broadcast games on Friday nights or Saturdays in the fall when high school and college football is usually happening. (CNBC)
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