BY THE NUMBERS
Stock futures signaled a higher open after Monday’s wild trading session that saw rallies in major indexes evaporate. Dow futures implied an initial gain of approximately 30 points, while S&P 500 and Nasdaq futures were also green. (CNBC)
* Treasury withdraws when coronavirus increases vaccine optimism (CNBC)
The S&P 500 was up more than 1% on Monday, turning positive for the year, before strength lost in the big tech stocks; The broad equity index closed lower at 0.9%. The technology-heavy Nasdaq closed 2.1% after recovering nearly 2% more intraday. The Dow Jones Industrial Average closed higher at 0.04%, but was up more than 2%. (CNBC)
JPMorgan Chase (JPM) shares rose more than 1% in pre-trading after the largest US bank by assets reported earnings. Its second-quarter earnings of $ 33 billion exceeded estimates, while earnings per share reached $ 1.38. JPMorgan reported 79% growth in business revenue and also said that the suspension of its share buyback program would last at least until 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 reduce its dividend to $ 0.10 per share from $ 0.51, causing its shares to drop approximately 4% in pre-marketing trade. The San Francisco-based lender reserved $ 8.4 billion in loan loss reserves in connection with the Covid-19 pandemic.
Citigroup (C) shares fell slightly as the bank reported second-quarter revenue of $ 19.8 billion and earnings per share of $ .50, which beat Wall Street estimates.
Delta Airlines (DAL) shares were down approximately 1% after the company reported a quarterly net loss of $ 5.7 billion, primarily as a result of the crushing impact the coronavirus pandemic has had on travel. Delta’s $ 1.47 billion revenue was 88% lower than the prior year. (CNBC)
The Labor Department released the latest Consumer Price Index, which shows that consumer prices in the US in June increased by .6%. Economists surveyed by Dow Jones estimated an increase of 0.5%.
* US budget deficit reaches all-time high of $ 864 billion in June (AP)
TODAY IN THE NEWS
California Governor Gavin Newsom has ordered several companies to suspend operations in response to the growing coronavirus hospitalizations in the state, a decision that contributed to the mass sale of stocks Monday afternoon. Bars must suspend all operations, while restaurants must suspend indoor service, Newsom said. Wineries and tasting rooms, cinemas and museums should also close. In addition to the state order, Newsom closed indoor operations for gyms, hair salons, and offices for a list of counties that covers approximately 80% of California’s population. (CNBC)
* LA Unified will not reopen campuses for the start of the school year in the midst of coronavirus spike (LA Times)
* San Diego Unified will start school this fall with online learning (San Diego Union-Tribune)
US health officials and drug makers anticipate that production of possible doses of the coronavirus vaccine will begin in late summer, a senior Trump administration official told reporters Monday. The official said they are already buying equipment and securing manufacturing sites, although it is 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 in early 2021. (CNBC)
* Global vaccine plan may allow rich countries to buy more (AP)
Senate Majority Leader Mitch McConnell said the upper house will begin debating the latest coronavirus relief bill next week. In a radio interview Monday with a station in Kentucky, the Republican senator said negotiations with Democrats on the fifth bill may be more controversial than for previous pandemic response legislation. However, McConnell said he believes there will be an agreement on the aid bill before the Senate scheduled recess in August. (Reuters)
* The United States Supreme Court allows the first federal executions in 17 years to proceed (Reuters)
The UK intends to ban Huawei from its 5G networks, a significant move that the United States should welcome, while potentially damaging its relationship with China. The UK rollback 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, arguing that it presents risks to national security. (CNBC)
* The United States rejects China’s claims in the South China Sea, increasing tensions (Reuters)
Ford Motor Co. (F) unveiled the long-awaited revival of its Bronco SUV, which had been discontinued in 1996. The new Bronco is seen as a competitor to the Jeep Wrangler, the nation’s No. 1 off-road seller. The price for the Bronco starts at $ 29,995, including destination charges, which is only $ 205 above a base Jeep Wrangler. Ford expects its smallest Bronco Sport SUV to start hitting dealerships later this year; the Bronco will follow in the spring. (CNBC)
STOCKS TO SEE
Finnish-based telecommunications equipment maker Nokia (NOK) has introduced new software that enables mobile operators to upgrade their broadcast stations to 4G 5G without the need to visit their sites or replace the equipment.
Piper Sandler raised its Tesla Price Target (TSLA) to $ 2,322 a share, the highest on the street, citing faster-than-expected market share gains and an underrated opportunity in software.
Mohawk Industries (MHK) is being sued for alleged violations of the securities law, and is also under investigation by the SEC. The maker of carpets and floor covering products is accused of making sales figures, but the company said it will “vigorously” defend itself against the charges.
The Chinese government said it would impose sanctions on defense contractor Lockheed Martin (LMT) for selling an upgrade package to Taiwan for Patriot surface-to-air missiles. China submits that any sale of arms from the US to Taiwan constitutes interference in Chinese internal affairs.
UBS downgraded Spotify’s (SPOT) stock rating to “sell” from “buy”, saying the streaming service’s long-term outlook is now strongly reflected in the stock price. The firm also thinks that the benefits of a podcasting expansion may be overstated.
Hanesbrands (HBI) was upgraded to “outperform” from “neutral” at Wells Fargo Securities, indicating that sales of basic apparel have been among the best performing categories as retail stores have reopened.
US drug maker Blueprint Medicines (BPMC) is receiving an investment of up to $ 1.7 billion from Roche of Switzerland, in association with a treatment for certain types of cancers that mutate and accelerate tumor growth.
WATER COOLER
Johnnie Walker whiskey will be available in paper bottles starting next year. The “100% plastic-free” bottles will be made from wood of sustainable origin, according to producer Diageo, who also makes Guinness. Diageo has partnered with risk management company Pilot Lite on the Johnnie Walker project. The two companies also created a business called Pulpex Limited to work on the future development of paper bottles. (CNBC)
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