What to watch today: Dow to open higher ahead of Big Tech hearing and Fed policy decision
Dow futures indicated a roughly 70-point gain at the opening bell, ahead of a blockbuster Big Tech congressional hearing, a Fed policy statement and another batch of corporate earnings reports. S&P 500 and Nasdaq futures also were mildly higher. The Dow on Tuesday fell about 205 points, or .77%. The S&P 500 gave up .65% while the tech-heavy Nasdaq Composite sank 1.27%.
The Dow, S&P 500 and Nasdaq have fallen in three of the past four trading days, although all remain on course for solid July gains. The Dow begins the new day at a more than two-week low, coming off its lowest close since July 13.
* Treasury yields edge higher ahead of Fed interest rate decision (CNBC)
The Federal Reserve's Open Market Committee will issue its latest policy statement at 2:00 p.m. ET, followed by Fed Chairman Jerome Powell's virtual news conference 30 minutes later.
General Electric (GE), Boeing (BA), and General Motors (GM) lead a long list of morning earnings reports; streaming service Spotify (SPOT) also reports. After the bell, PayPal (PYPL), Qualcomm (QCOM) and Yum China (YUMC) are scheduled to post quarterly earnings.
* GM swings to a loss as coronavirus shuttered factories and devastated sales (CNBC)
* GE reports quarterly loss as coronavirus pandemic hits hard (Reuters)
* Boeing posts net loss of $2.4 billion and slows aircraft production amid coronavirus-weakened demand (CNBC)
Total mortgage application volume fell 0.8% last week from the previous week, according to the Mortgage Bankers Association's latest report. Mortgage applications to buy a home were down 2% last week compared to the prior week but 21% higher annually. (CNBC)
IN THE NEWS TODAY
The CEOs of Amazon, Apple, Google-parent Alphabet and Facebook are set to testify in front the House Antitrust Subcommittee later today. The blockbuster virtual hearing will be Amazon chief executive Jeff Bezos' first congressional testimony. It comes as part of the House Judiciary Committee's investigation into Big Tech and potential anti-competitive practices. Mark Zuckerberg is expected to defend Facebook's acquisitions of Instagram and WhatsApp, portraying them as key to creating better services for both users and advertisers. (CNBC)
* Jeff Bezos will testify about how Amazon is the quintessential American company (CNBC)
* Google CEO Sundar Pichai plans to tell Congress the company faces plenty of competition (CNBC)
* Tim Cook will testify that Apple is in fierce competition with Google and Huawei (CNBC)
Biotech firm Moderna (MRNA) is planning to price its potential coronavirus vaccine at $50 to $60 per course for high-income countries, according to a Financial Times report. The price for the two-dose vaccine comes in higher than the proposed price from Pfizer (PFE) and German-based BioNTech, according to Reuters, based on the companies' $1.95 billion deal with the U.S. government to produce and deliver 100 million doses. The price for Moderna's vaccine, which entered late-stage human trials earlier this week, is not finalized, Reuters reported. (FT)
Hong Kong is increasing its restrictions to curb the spread of Covid-19 as local officials warn the city is at risk of a large-scale virus outbreak. There's been an "upsurge" in local infections, said Chief Executive Carrie Lam, who warned of overrunning the health-care system. The government is banning gatherings of more than two people, suspending indoor dining at restaurants and requiring face masks in public. (Reuters)
* Europe scrambles to avoid a second coronavirus wave, as infections rise (Washington Post)
The U.S. Senate will not pass a coronavirus relief bill that does not have liability shields for businesses and universities, Majority Leader Mitch McConnell told CNBC. The Kentucky Republican said Tuesday on "Closing Bell" that the GOP was "not negotiating over liability protection," but he added the party was open to compromise with Democrats on other issues. Senate Republicans released their roughly $1 trillion legislative proposal on Monday. (CNBC)
* Most swing state voters support extending $600 weekly unemployment benefit, CNBC/Change Research poll finds (CNBC)
The Trump administration has started negotiations with the office of Oregon's governor over the presence of federal agents in Portland, according to the Associated Press, expressing a willingness to scale back if the state increases its own enforcement in the city, which has seen nearly two months of nightly protests in the wake of George Floyd's death. The talks are still in the early stages and no agreement is in place, the wire service reported. (AP)
* Portland protests bring early-morning clash with feds after more than 1,000 turn out Tuesday (The Oregonian)
* Attorney General Barr, grilled by House Democrats, defends aggressive federal response in Portland (LA Times)
In a historic move, AMC Theaters (AMC) and Comcast-owned Universal Pictures inked an agreement to shorten the theatrical release window for Universal's movies, allowing them to head to digital streaming just 17 days after their debut on the big screen. Theaters previously would have the exclusive rights to films for about 90 days. AMC will share in some of the new revenue from the digital on-demand rentals. Comcast is parent company of CNBC and NBCUniversal. (CNBC)
Starbucks (SBUX) exceeded Wall Street expectations in its earnings report and raised its adjusted earnings outlook for the fiscal fourth quarter, sending its stock up more than 5% in premarket trading. The coffee chain expressed optimism about its recovery from the coronavirus in the U.S. and China, although it saw global same-store sales plunge 40% in the quarter. (CNBC)
* Restaurant transactions plateau as coronavirus cases surge (CNBC)
The American Federation of Teachers, one of the largest teachers' unions in the U.S., will support any of its local chapters that decide to strike if they feel school reopening plans are not safe enough. The federation, which represents 1.7 million school employees, said in its Tuesday resolution that striking should be the last option, but it called for reopening plans to include social distancing measures and mask requirements. It also said buildings should only reopen in places where coronavirus transmission rates are low. (USA Today)
STOCKS TO WATCH
Visa (V) came in 4 cents above estimates with quarterly earnings of $1.07 per share, with revenue above estimates as well. The payments processor did say that payment volume was down 10% during the quarter with profit dropping 23%, as consumer spending was hit by rising unemployment.
Mondelez (MDLZ) reported adjusted quarterly profit of 63 cents per share, 7 cents above estimates, with the snack maker's revenue slightly above Wall Street forecasts. Strong demand for its snacks in North America helped offset other declines, and Mondelez also announced an 11% dividend increase.
FireEye (FEYE) surprised analysts — who had expected a loss – by reporting an adjusted profit of 9 cents per share with revenue above estimates as well. The cybersecurity company benefited from the shift to cloud-based work amid the pandemic.
Avis Budget (CAR) reported a quarterly loss of $5.60 per share, slightly smaller than the loss of $5.68 that analysts were expecting. The car rental's revenue beat estimates, with a recovering used car market and increased leisure rentals helping results.
L Brands (LB) is cutting 15% of its corporate staff, amounting to 850 jobs. The parent of Victoria's Secret and Bath & Body Works also projected a smaller than expected current quarter sales decline.
Spirit Airlines (SAVE) will tell its unions to be prepared for possible October furloughs of 20 to 30% of workers, according to a memo sent to employees and first reported by Reuters.
Advanced Micro Devices (AMD) beat estimates by 2 cents with adjusted quarterly profit of 18 cents per share, with the chip maker's revenue above estimates as well. AMD also raised its full-year forecast, as the surge in the number of employees working from home raises demands for its chips.
EBay (EBAY) reported adjusted quarterly earnings of $1.08 per share, 2 cents above estimates, with the e-commerce company's revenue also beating forecasts. It also raised its full-year outlook, amid more online shopping by people staying indoors during the coronavirus pandemic.
Amgen (AMGN) earned an adjusted $4.25 per share for its latest quarter, compared to a $3.82 consensus estimate, with revenue above forecasts as well. The biotech company was helped by stronger sales of its newer drugs.
Budweiser has unveiled its newest beer — with a twist. It has no alcohol. The 50-calorie Bud Zero is now going out nationwide and was created with the help of former NBA star Dwyane Wade. The new drink gives Anheuser Busch Inbev (BUD) further exposure to the non-alcoholic beer category, which has been growing fast this year. (USA Today)
Source: Read Full Article