What to watch today: Stocks to open higher after JPMorgan Chase, Citigroup report earnings
Stock futures indicated a higher open following Monday's wild trading session that saw rallies in the major indexes evaporate. Dow futures implied an opening gain of about 30 points, while S&P 500 and Nasdaq futures also were in the green. (CNBC)
* Treasury yields retreat as coronavirus surge tempers vaccine optimism (CNBC)
The S&P 500 had been up more than 1% Monday, turning positive for the year, before strength in large tech stocks gave way; the broad equity index closed lower by 0.9%. The tech-heavy Nasdaq closed down 2.1% after it had rallied intraday nearly 2% higher. The Dow Jones Industrial Average closed higher by .04%, but had risen more than 2%. (CNBC)
Shares of JPMorgan Chase (JPM) moved higher by more than 1% in premarket trading after the biggest U.S. bank by assets reported earnings. Its second-quarter revenue of $33 billion topped estimates, while per-share earnings came in at $1.38. JPMorgan reported a 79% growth trading revenues and also said the suspension of its share buyback program would last at least through the end of the third quarter. (CNBC)
Wells Fargo (WFC) reported a net loss of $2.4 billion for the second quarter and said it intends to cut its dividend to $0.10 per share from $0.51, sending its stock lower by about 4% in premarket trading. The San Francisco-based lender set aside $8.4 billion in loan loss reserves in connection to the Covid-19 pandemic.
Shares of Citigroup (C) fell slightly as the bank reported second-quarter revenues of $19.8 billion and per-share earnings of $.50, both of which topped Wall Street estimates.
Delta Airlines (DAL) shares were lower by about 1% after the company reported a $5.7 billion net quarterly loss, mostly as a result of the crushing impact the coronavirus pandemic has had on travel. Delta's revenues of $1.47 billion were 88% lower than a year earlier. (CNBC)
The Labor Department released the latest Consumer Price Index, showing that U.S. consumer prices in June rose by .6%. Economists polled by Dow Jones estimated an increase of .5%.
* U.S. budget deficit hits all-time high of $864 billion in June (AP)
IN THE NEWS TODAY
California Gov. Gavin Newsom ordered a range of businesses to suspend operations in response to the state's rising coronavirus hospitalizations, a decision that contributed to some of Monday's afternoon sell-off in stocks. Bars must suspend all operations while restaurants must stop indoor service, Newsom said. Wineries and tasting rooms, movie theaters and museums also must close. In addition to the statewide order, Newsom closed indoor operations for gyms, hair salons and offices for a list of counties that covers about 80% of California's population. (CNBC)
* L.A. Unified will not reopen campuses for start of school year amid coronavirus spike (LA Times)
* San Diego Unified will start school this fall with online learning (San Diego Union-Tribune)
U.S. health officials and drugmakers anticipate that production of potential coronavirus vaccine doses will begin by the end of summer, a senior Trump administration official told reporters Monday. The official said they are already buying equipment and securing the manufacturing sites — even though it's unclear which, if any, of the potential vaccines will work. The announcement is part of the Trump administration's plan to deliver 300 million doses of a Covid-19 vaccine by early 2021. (CNBC)
* Global vaccine plan may allow rich countries to buy more (AP)
Senate Majority Leader Mitch McConnell said the upper chamber will begin debate on the latest coronavirus relief bill next week. In a radio interview Monday with a station in Kentucky, the Republican senator said negotiations with Democrats over the fifth bill may be more contentious than for earlier pandemic response legislation. However, McConnell said he believes there will be an agreement on the relief bill before the Senate's scheduled recess in August. (Reuters)
* U.S. Supreme Court allows first federal executions in 17 years to proceed (Reuters)
The United Kingdom intends to ban Huawei from its 5G networks, a significant move that should be welcomed by the U.S. while potentially damaging its relationship with China. The reversal from the U.K. comes after it granted Huawei limited access to its next-generation mobile network in January. The Trump administration has taken a hard-line stance against Huawei, contending it presents risks to national security. (CNBC)
* U.S. rejects China's claims in South China Sea, adding to tensions (Reuters)
Ford Motor Co. (F) unveiled the long-awaited resurrection of its Bronco SUV, which had been discontinued in 1996. The new Bronco is viewed a competitor to the Jeep Wrangler, the nation's No.1 off-road seller. Pricing for the Bronco starts at $29,995, including destination charges, which is just $205 above a base Jeep Wrangler. Ford expects its smaller Bronco Sport SUV to start arriving at dealerships by the end of the year; the Bronco will follow in the spring. (CNBC)
STOCKS TO WATCH
Finland-based telecom equipment maker Nokia (NOK) introduced new software that allows mobile operators to upgrade their broadcasting stations to 5G from 4G without requiring a visit to their sites or replacing equipment.
Piper Sandler raised its price target on Tesla (TSLA) to a Street-high $2322 per share, citing faster than expected market share gains and an underappreciated opportunity in software.
Mohawk Industries (MHK) is being sued for alleged securities law violations, and is also under SEC investigation. The maker of carpets and floor-covering products is accused of fabricating sales figures, but the company said it will "vigorously" defend itself against the charges.
The Chinese government said it would put sanctions on defense contractor Lockheed Martin (LMT) for selling an upgrade package to Taiwan for Patriot surface-to-air missiles. China maintains that any U.S. arms sales to Taiwan constitutes interference in Chinese internal affairs.
UBS downgraded the stock of Spotify (SPOT) to "sell" from "buy", saying the streaming service's long-term prospects are now solidly reflected in the stock's price. The firm also thinks the benefits of an expansion in podcasting may be overstated.
Hanesbrands (HBI) was upgraded to "outperform" from "neutral" at Wells Fargo Securities, which notes that basic apparel sales have been among the best performing categories as retail stores have reopened.
U.S. drugmaker Blueprint Medicines (BPMC) is receiving an investment up to $1.7 billion from Switzerland's Roche, partnering on a treatment for certain types of cancers that mutate and accelerate tumor growth.
Johnnie Walker whiskey will be available in paper bottles starting next year. The "100% plastic free" bottles will be made using sustainably-sourced wood, according to producer Diageo, which also manufactures Guinness. Diageo has partnered with venture management firm Pilot Lite on the Johnnie Walker project. The two companies also created a business called Pulpex Limited to work on future paper bottle development. (CNBC)
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