Here are five things you should know for Thursday, July 23:
1. – Stock futures rise as Wall Street weighs gains, tensions between the United States and China
Stock futures rose on Thursday as investors on Wall Street weighed in on the mixed earnings reports and the possibility of further government stimulus against rising tensions between the United States and China.
Contracts linked to the Dow Jones Industrial Average rose 102 points, S&P 500 futures gained 11 points and Nasdaq futures increased 86 points.
Beijing called Washington’s order to close its consulate in Houston a “unprecedented escalation” by the United States, and reports say Beijing was considering closing the US consulate in Wuhan or Chengdu in retaliation.
The US State Department said the closure of the Houston consulate was “to protect American intellectual property and the private information of Americans.”
“The escalation in tensions between the United States and China is a reminder of the main risk investors face during the upcoming US election campaign,” said Stephen Innes, chief global market strategist at AxiCorp. “The United States and China have become increasingly combative in their views this year. It is better for the markets to get used to it because there is more of that to come ”.
Meanwhile, Senate Republicans have settled their differences with the White House in a fifth coronavirus relief package, The Wall Street Journal reported, and negotiations with Democrats will begin just days before a weekly supplement of $ 600 a expires. unemployment benefits on July 31.
Shares closed higher on Wednesday and the S&P 500 rose for the fourth straight session despite escalating tensions between the world’s two largest economies.
2. – Tesla publishes fourth straight quarterly profit
Tesla (TSLA) – Get report On Thursday it rose 4.93% in premarket trading to $ 1,670.80 after the electric car maker topped earnings and revenue estimates for the second quarter and said it could top 500,000 deliveries this year despite production disruptions of the coronavirus pandemic.
Tesla earned 50 cents a share on sales of $ 6.04 billion; Adjusted earnings for the quarter were $ 2.18 per share. Analysts had expected a loss of 82 cents per share on sales of $ 5.15 billion.
Second-quarter earnings put Tesla in the race for inclusion in the S&P 500 index, which requires four consecutive quarters of GAAP earnings plus a handful of other basic ratings for a company to be considered, all of which Tesla has met.
Tesla previously reported 90,650 vehicle deliveries in the second quarter, beating estimates by a wide margin. The automaker held firm on its previous delivery projections for the full year, saying it has “installed capacity to exceed 500,000 vehicle deliveries this year, despite recent production disruptions.”
Tesla also confirmed that it was building a new Gigafactory in Texas, just outside of Austin.
3. – Microsoft beats estimates on demand for cloud software
Microsoft (MSFT) – Get report It traded lower in pre-market trade, even after posting better-than-expected fiscal fourth-quarter earnings on demand for its cloud-based software.
The Redmond, Washington company reported earnings of $ 1.46 a share in a 13% increase in revenue to $ 38 billion. Analysts had expected Microsoft to report earnings of $ 1.37 per share on revenue of $ 36.5 billion.
“We are the only company with a stack of modern, integrated technology, powered by cloud and AI and backed by security and compliance, to help all organizations transform and reimagine how they meet customer needs,” CEO Satya Nadella said.
The company’s cloud segment experienced a 17% increase in fourth-quarter revenue to $ 13.4 billion, while its personal computing segment saw a 14% revenue increase to $ 12.9 billion.
“Our business cloud exceeded $ 50 billion in annual revenue for the first time this year. And this quarter our business reserves were better than expected, growing 12% year-over-year,” said Amy Hood, executive vice president and chief financial officer. We drive growth across the company, remain committed to investing in long-term strategic opportunities. “
Hood told analysts in a conference call that revenue in Microsoft’s Intelligent Cloud division in the first fiscal quarter would be $ 12.55 billion to $ 12.8 billion, compared to Wall Street estimates of $ 12.6 billion.
The stock fell 1.92% to $ 207.68 in pre-trade.
4. – AT&T, Intel and Twitter report earnings
AT&T earnings reports expected Thursday (T) – Get reportIntel (INTC) – Get report, American airlines (AAL) – Get report, Southwest Airlines (LUV) – Get report, Dow Inc. (Dow) – Get reportTwitter (TWTR) – Get reportUnion Pacific (ONE P) – Get reportHershey (HSY) – Get reportVeriSign (VRSN) – Get report and Kimberly-Clark (KMB) – Get report.
Thursday’s economic calendar includes weekly unemployment claims at 8:30 am ET. Economists expect another 1.3 million Americans to file for unemployment benefits for the first time last week. More than 51 million have applied for benefits in the past 17 weeks.
5. – Chipotle’s profit falls 90%
Chipotle Mexican Grill (CMG) – Get report posted a 90% drop in second-quarter net income as indoor food was banned from restaurants during the coronavirus pandemic, but adjusted earnings exceeded analyst expectations.
The burrito company earned 40 cents a share on an adjusted basis.
Revenue fell 4.8% in the quarter to $ 1.4 billion and same-store sales fell 9.8%, albeit narrower than forecast.
Digital sales soared 216% in the quarter and accounted for three-fifths of Chipotle’s total sales.
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