Good morning. Happy Friday.
The Asian/Pacific markets leaned to the downside. China, Indonesia and Thailand posted gains; Japan, Hong Kong, South Korea, Australia, Singapore and the Philippines were weak. Europe, Africa and the Middle East currently lean up. Poland, Germany, Russia, Finland, Norway, the Netherlands, Italy and Portugal are up; Turkey, Greece and Spain are down. Futures in the States point to a small positive open for the S&P and a big positive open for the Nasdaq.
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VIDEO:Breadth Indicators Start to Deteriorate
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The dollar is flat. Oil is up; copper is down. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Stocks are set to end the week on a high note after four of the biggest tech stocks – Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (GOOG, GOOGL) – reported quarterly results that beat high expectations. Apple easily exceeded estimates on the top and bottom lines, and announced a four-for-one stock split, sending shares past the $400 threshold in after-hours trading. Amazon’s sales soared, and operating income nearly doubled compared with the big drop analysts had expected. Facebook posted 11% revenue growth and issued stronger-than-expected sales guidance for the current quarter. Results from Google’s parent were a bit murkier, showing the company’s first-ever year-over-year decline in advertising revenue, but sales from its cloud-computing segment came in well above expectations.
Big Tech has been Wall Street’s mainstay this year, and the latest quarterly results look to accelerate that trend. Amazon and Apple are up 65% and 31%, respectively, in 2020, while Facebook and Alphabet each have gained more than 14% over the period. With all four stocks moving higher in after-hours trading, the tech titans likely will add more than $200 billion to their combined market value.
U.S. economy shrank by a third in Q2
The Commerce Department said U.S. gross domestic product collapsed at a 32.9% annualized rate in the second quarter, the steepest decline since the government started keeping records in 1947, as COVID-19 crushed consumer and business spending. Meanwhile, in a sign of a faltering jobs market, the number of workers applying for initial unemployment benefits rose for the second straight week, to 1.43 million, after nearly four months of decreases following a late-March peak. The Q2 economic contraction came as states imposed lockdowns in March and April to contain the coronavirus and then lifted restrictions in May and June, allowing growth to resume. Economists expect the third quarter to show growth, but the summer rise in infections likely will temper gains.
Senate fails to advance jobless benefits extension
Meanwhile, no signs of progress are evident in talks between Republicans and Democrats over a new coronavirus relief bill. The U.S. Senate failed yesterday to advance an effort to extend a $200 per week supplement to unemployment insurance benefits. Senate Republicans and the White House had sought to cut the supplement from $600 through September, after which those collecting unemployment benefits would get 70% of their previous wages when combined with state benefits. While much of the focus has been on the expiration of the additional $600-per-week of unemployment benefits, an eviction moratorium is receiving increasing attention as well.
China factory activity expands for fifth straight month
China’s official manufacturing purchasing managers’ index came in better than expected, rising to 51.1 in July from 50.9 in June for its highest reading since March. July marked the fifth consecutive month that the closely watched measure of China’s factory activity topped the 50 mark that separates expansion from contraction. Combined with China’s official non-manufacturing purchasing managers’ index, which indicated a slight deceleration in the service sector, the data suggests China’s factories have returned to pre-coronavirus levels but consumer demand remains much weaker, which means inventory is piling up.
Chinese-backed hackers reportedly targeted Moderna for vaccine data
China rejects charges that hackers linked to its government targeted Moderna (NASDAQ:MRNA) to steal data related to research on a coronavirus vaccine. Citing an unnamed U.S. security official, Reuters reported yesterday that Chinese hackers targeted the U.S. biotech firm earlier this year. Moderna said it had been in contact with the FBI and was made aware of the suspected “information reconnaissance activities” by a hacking group mentioned in last week’s Justice Department indictment, where two Chinese nationals were accused of spying on the U.S., including three unnamed U.S.-based targets involved in medical research to fight COVID-19. The two other unnamed medical research companies mentioned in the Justice Department indictment are described as biotech companies based in California and Maryland – descriptions that could fit Gilead Sciences (NASDAQ:GILD) and Novavax (NASDAQ:NVAX).
Amazon’s $10 billion Internet satellite plan wins FCC approval
While overshadowed by the company’s earnings, Amazon.com’s (AMZN) tech ambitions got a boost as the FCC approved its $10B plan to put thousands of satellites in the sky to provide high-speed Internet to unserved and underserved areas. The company’s Project Kuiper – using 3,200 low Earth orbit satellites – would compete in that area with the Starlink project at SpaceX (SPACE).
Australia to force Google, Facebook to pay for news
Australia will become the first country in the world to force Facebook (FB) and Google (GOOG, GOOGL) to pay publishers for the news content featured on its sites. It will give the companies three months to negotiate fair pay with media businesses there, a move to ensure competition and consumer protection as well as a sustainable media landscape. Other companies are likely to be targeted for similar moves by Australia’s government later.
U.K. fraud office charges Airbus subsidiary over Saudi deal
The U.K.’s major economic crimes investigator has charged Airbus’ (OTCPK:EADSY) subsidiary GPT Special Project Management and three individuals in connection with a defense contract the country arranged with Saudi Arabia. Airbus says the Serious Fraud Office’s investigation related to contractual arrangements that predated its acquisition of the subsidiary. The charges represent a step forward in one of the SFO’s most politically sensitive probes, which has been viewed as a potential threat to the U.K.’s relationship with the Saudis.
What else is happening…
Walmart (NYSE:WMT) memo points to cutting jobs in ‘streamlining.’
Facebook (FB) finally securing rights to show music videos.
Twitter (NYSE:TWTR) account breach involved phone-based phishing attacks on employees.
Thursday’s Key Earnings
Apple (AAPL) +6.3% PM on strong earnings, stock split.
Amazon (AMZN) +5.5% PM on strong Q2 earnings, Q3 guidance.
Alphabet (NASDAQ:GOOG) flat PM after soft ad revenue.
Facebook (FB) +5.9 PM on strong earnings, user growth.
Ford Motor (NYSE:F) +2.5% PM despite seeing weak FY demand.
Gilead Sciences (GILD) -3.6% PM as pandemic disrupts earnings.
US Steel (NYSE:X) flat PM after Q2 loss, upbeat Q3 guidance.
Electronic Arts (NASDAQ:EA) flat PM after Q2 beat, better-than-expected FY guidance.
LTC Properties (NYSE:LTC) -3.2% AH as Q2 rental revenue takes a hit.
Xilinx (NASDAQ:XLNX) -2.7% PM on in-line Q2, outlook.
Stryker (NYSE:SYK) -2.8% AH despite Q2 beat.
Vertex Pharmaceuticals (NASDAQ:VRTX) +1% AH on robust Q2 Trikafta sales.
OPKO Health (NASDAQ:OPK) -6% PM after healthy Q2 earnings.
Atlassian (NASDAQ:TEAM) -7% PM on FQ4 customer weakness, downside EPS forecast.
Exact Sciences (NASDAQ:EXAS) -3% AH on pandemic disrupting Q2 revenue.
Expedia (NASDAQ:EXPE) -6% PM after massive Q2 bookings dip.
Seattle Genetics (NASDAQ:SGEN) -2% AH despite Q2 beat.
Cabot Oil & Gas (NYSE:COG) flat PM after Q2 beat, unchanged guidance.
XPO Logistics (NYSE:XPO) -4% AH on weak Q2 shipping metrics.
Shake Shack (NYSE:SHAK) -4.8% AH on Q2 miss, pulled Q3 guidance.
Today’s Economic Calendar
8:30 Personal Income and Outlays
8:30 Employment Cost Index
9:45 Chicago PMI
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
3:00 PM Farm Prices
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Good morning. Happy Thursday.
The Asian/Pacific markets were mixed. New Zealand, Taiwan, Australia and Indonesia did well while Japan, China, Hong Kong, India, Singapore, Thailand and the Philippines were weak. Europe, Africa and the Middle East are currently down big. The UK, France, Poland, Germany, Greece, South Africa, Finland, Norway, Spain, the Netherlands, Italy, Portugal, Austria, Sweden and the Czech Republic are down more than 1%. Futures in the States point towards a moderate down open for the cash market.
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VIDEO:What are the Market Leaders Telling Us?
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Shares of Amazon (NASDAQ:AMZN), Alphabet (GOOG, GOOGL), Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) – worth nearly $5T in combined market capitalization – added to gains yesterday even as their chief executives defended themselves in Congress against antitrust allegations. The real test will come today, when the Big Tech companies report Q2 results after the market close. On watch will be figures and trends in e-commerce, streaming, advertising, search, app services, social media and cloud computing. Will investors start rethinking the prices that they’re paying for the stocks or will their market position during the coronavirus pandemic justify their valuations?
Antitrust hearing roundup
Rep. David Cicilline (D., R.I.), chairman of the House Judiciary Committee’s antitrust subcommittee, kicked off the hearing by declaring: “Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.” That set the tone of five hours of grilling the Big Tech CEOs over their business practices. On the competition front, the biggest questions centered around Amazon’s leveraging of seller data to introduce competing products, as well as the revelation of Mark Zuckerberg’s emails about the concept of buying startups in order to “neutralize a competitor.”
Traders get busy
Futures are kicking off a packed session in the red, with contracts tied to the Dow, S&P 500 and Nasdaq down about 1%, as Mark Meadows said the White House and Democrats were “nowhere close” on a stimulus deal. Q2 GDP figures today will likely show an annualized contraction of 34.1% last quarter, while the latest weekly unemployment claims are also expected to show an increase to 1.45M, before enhanced federal benefits expire on Saturday. After the close, four of the market’s biggest stocks will report earnings within a single hour, in a move that could cause significant volatility in after-hours trading and again on Friday. On the coronavirus front, the U.S. death toll topped 150K, marking the highest official figure in the world.
FOMC meeting
Solid gains for indexes were seen Wednesday as the Fed left interest rates near zero and pledged to maintain stimulative measures. “The path forward for the economy is extraordinarily uncertain, and will depend in large part on our success in keeping the virus in check,” Jerome Powell declared. “We’re not even thinking about thinking about raising rates and it will take continued support for both monetary and fiscal policy.” He also said the Fed “has no intention to buy equities” after recently purchasing corporate and municipal bonds.
Both sides of the Atlantic
Today is not only the busiest day for earnings in the U.S. European firms worth more than $2T, as well as 60 companies in the Stoxx 600 Index, reported Q2 results overnight. Highlights: AstraZeneca (NYSE:AZN) shares rose 3% premarket on strong drug sales, while Shell (RDS.A, RDS.B) shares inched down after narrowly escaping a loss despite a $17B writedown and one of the oil industry’s most brutal quarters. Credit Suisse (NYSE:CS) simplified its investment bank structure, AB InBev (NYSE:BUD) booked a $2.5B writedown and Airbus (OTCPK:EADSY) is keeping production rates down until 2022. Over in Asia, Samsung (OTC:SSNLF) announced its Q2 operating profit jumped 23% and forecast demand for mobile devices to recover gradually in next half of the year.
World’s biggest smartphone vendor
Huawei has overtaken Samsung (OTC:SSNLF) to become the No. 1 smartphone player in the world, an ambition it has had for several years, after taking second place from Apple (AAPL) back in 2018. The Chinese vendor shipped 55.8M devices in the second quarter, down 5% Y/Y, according to research firm Canalys, while Samsung shipped 53.7M smartphones, a 30% plunge versus the prior year. However, analysts are questioning whether Huawei’s position is sustainable given the fact that over 70% of Huawei’s sales in the second quarter came from China while its overseas markets took a hit.
Trade deal targets
By the end of the first half of this year, China had bought about 23% of the total purchase target of more than $170B for goods in 2020, according to Bloomberg, which based its calculations on Chinese Customs Administration data. While trade has increased over the past eight weeks, with Chinese companies booking more than $2.5B in U.S. soy purchases, imports really have to speed up in the second half of 2020 to hit trade deal goals. China may still not violate the deal if it misses the target due to the coronavirus (the trade pact grants flexibility in the event of “a natural disaster or other unforeseeable event”).
What else is happening…
‘Nowhere close to a deal’ on virus relief – Meadows.
Amazon (AMZN) scraps live Reinvent conference in blow to Las Vegas.
Kodak (NYSE:KODK) ahead of itself on generic drug-stoked rally – Barron’s.
Dollar drop plays right into these emerging market ETFs’ wheelhouse.
Wednesday’s Key Earnings
Boeing (NYSE:BA) -2.8% posting wider loss, cutting production rates.
General Electric (NYSE:GE) -4.4% hit by decline in jet engine business.
General Motors (NYSE:GM) -1.7% reporting mixed results.
PayPal (NASDAQ:PYPL) +4.1% AH following consensus-beating guidance.
Qualcomm (NASDAQ:QCOM) +13.6% AH on FQ3 beats, Huawei settlement.
Shopify (NYSE:SHOP) +7% sailing past estimates.
Today’s Economic Calendar
8:30 GDP Q2
8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets were split. China and Hong Kong did well; Japan and India were weak. Europe, Africa and the Middle East are mixed and little changed. France and Russia are up; Turkey, the UAE, Spain, Italy and Austria are down. Futures in the States point towards a positive open for the cash market.
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VIDEO:What are the Market Leaders Telling Us?
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The dollar is down slightly. Oil is up; copper is flat. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Big Tech comes under the national spotlight today as four of its leaders – Amazon’s (NASDAQ:AMZN) Jeff Bezos, Google’s (GOOG, GOOGL) Sundar Pichai, Apple’s (NASDAQ:AAPL) Tim Cook and Facebook’s (NASDAQ:FB) Mark Zuckerberg – appear before the House Antitrust Subcommittee investigating the market dominance of online platforms. The hearing will offer a window into the thinking of 15 members of Congress, who will then make potential recommendations like new competition laws or company breakups. As of Monday, the four tech giants and Microsoft (NASDAQ:MSFT) represented the five most valuable U.S. companies. While Silicon Valley has vast control over what the world sees, reads, buys and does online, it has also showered blessings on the consumer and has allowed people around the globe to stay connected even during an unprecedented pandemic.
FOMC meeting
While stocks ended lower on Tuesday amid concerns over stimulus negotiations, U.S. futures inched into the green overnight as traders awaited the Fed’s latest policy decision. The central bank is expected to keep interest rates at near zero to support the pandemic-hit economy, while Jerome Powell will deliver a press conference at 2:30 p.m. He’s expected to sound reassuringly accommodative and perhaps open the door to a higher tolerance for inflation, though some think that could squash real yields and the dollar and are therefore not expecting any meaningful policy announcements. On Tuesday, the Fed announced it would extend all its emergency lending programs through the remainder of 2020.
Reserve currency status
Goldman Sachs put out a note yesterday that warned on the dollar’s reserve currency status as Congress closes in on another round of fiscal stimulus. Contrarians are loving it, and the Goldman analysts say they don’t believe it will necessarily happen, but it highlights a worry that money-printing will trigger inflation in years to come. Putting it in perspective: The dollar is down 10% since mid-March, but it’s 30% higher than at its financial crisis lows, and 15% higher than it was in 2005 when Ben Bernanke and team were in the middle of a years-long rate hike cycle.
Big bank provisions
A day after the ECB requested eurozone banks suspend their dividends until January 2021, big lenders across Europe posted their earnings. Banco Santander (NYSE:SAN) is off more than 3% premarket after posting a net loss of €11.1B for Q2 – the first in its 160-year history – as a deterioration of the economic outlook forced it to cut its goodwill on past acquisitions. Shares of Deutsche Bank (NYSE:DB) and Barclays (NYSE:BCS) meanwhile fell 2% and 3%, respectively, as the two set aside billions of euros to deal with loans and mortgages going bad as a result of the coronavirus pandemic.
Generic drug moment
Eastman Kodak (NYSE:KODK) is up another 60% in premarket trade, after skyrocketing 203% on Tuesday, following the receipt of a $765M government loan under the Defense Production Act, the first of its kind. The company, once a giant in photography, will help speed the domestic production of drugs that can treat a range of medical conditions and reduce U.S. reliance on foreign sources. “We will bring back our jobs and we will make America the world’s premier medical manufacturer and supplier,” President Trump told a press conference.
More vaccine deals
Following the release of its Q2 results, Sanofi (NASDAQ:SNY), as well as partner GlaxoSmithKline (NYSE:GSK), confirmed that they would supply the U.K. with up to 60M doses of their experimental COVID-19 vaccine. The two are also in talks to sell the shot to the U.S., the EU and global organizations, and plan to start a study compressing the early and middle stages of clinical tests in September (their targeting approval in the first half of 2021). The companies are among dozens of others rushing to deliver a vaccine to help curb the coronavirus pandemic as governments around the world jockey to secure doses in advance.
What does a $250K space flight look like?
Virgin Galactic (NYSE:SPCE) revealed the interior design of its SpaceShipTwo space planes in a live-streamed event. Each cabin houses six reclining seats tailored to each passenger’s height and weight, which are designed to blend into the darkness of outer space. LED lighting will switch off at the flight’s peak, putting the focus on the Earth, while passengers will experience a few minutes of weightlessness before they come back home for a runway landing. With SPCE shares up more than 110% YTD, analysts are looking for more color on flight reservations and increased visibility under new CEO Michael Colglazier.
Tesla would supply batteries to rival automakers
Back in April, Volkswagen (OTCPK:VWAGY) Chairman Herbert Diess said the automaker was implementing what he internally called the “Tesla catch-up plan” in order to close the software gap between the company and Tesla (NASDAQ:TSLA). Now, Elon Musk tweeted that he’s willing to help. “Tesla is open to licensing software and supplying powertrains and batteries. We’re just trying to accelerate sustainable energy, not crush competitors!” It’s unclear which types of batteries would be supplied, but Tesla currently runs several joint ventures in Asia and is building its own battery manufacturing facility at its Fremont plant under its “roadrunner” project.
What else is happening…
More virus cases threaten MLB’s shortened season.
Victoria’s Secret parent, L Brands (NYSE:LB), slashes 15% of corporate workforce.
Best Buy (NYSE:BBY) joins retailers in closing for Thanksgiving Day.
AMC (NYSE:AMC) reaches landmark release window deal with Universal (NASDAQ:CMCSA).
CES goes digital next year in blow to Las Vegas.
Tuesday’s Key Earnings
3M (NYSE:MMM) -4.9% with recovery timeline uncertain.
AMD (NASDAQ:AMD) +10.3% AH raising revenue forecast for the year.
McDonald’s (NYSE:MCD) -2.5% as comparable sales plunged 23.9% in Q2.
Pfizer (NYSE:PFE) +3.9% posting a strong outlook.
Raytheon (NYSE:RTX) -0.2% on commercial aerospace worries.
Starbucks (NASDAQ:SBUX) +5.6% AH as large order sizes cut into traffic decline.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 International trade in goods
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 Pending Home Sales
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
2:00 PM FOMC Announcement
2:00 PM Chairman Press Conference
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Good morning. Happy Tuesday.
The Asian/Pacific markets did well. China, Hong Kong, South Korea, India, Malaysia and the Philippines posted gains; Japan and Thailand were weak. Europe, Africa and the Middle East leaned down. France, Turkey, Finland, Hungary, Italy, Portugal and Sweden are down; Greece is doing well. Futures in the States point towards a down open for the cash market.
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VIDEO:My Favorite Stock Market Scan
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The dollar is up slightly. Oil and copper are down. Gold is up; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
Republicans have unveiled major parts of their coronavirus relief plan with just days to go before expanded federal jobless benefits are set to expire. Highlights: The $600 weekly federal unemployment supplement would be cut to $200 a week through September, when the payment will then combine with state benefits to replace 70% of previous wages. It also includes stimulus checks, $105B to help schools reopen in the fall and more PPP loans, among other provisions. The bill is the first step toward negotiating a compromise plan with Democrats, though Nancy Pelosi called it a “pathetic” piecemeal approach. “Having said that, we are going to see if we can find some common ground,” she added. “But we are not there yet.”
Big earnings week
“You need to understand that this week is about one thing and one thing only: It’s about earnings. First time it’s been like that in a while,” CNBC’s Jim Cramer declared, with Q2 results set to pour in. Today investors will hear how McDonald’s (NYSE:MCD), Pfizer (NYSE:PFE), 3M (NYSE:MMM), Raytheon (NYSE:RTX), Starbucks (NASDAQ:SBUX) and AMD (NASDAQ:AMD) fared during the coronavirus pandemic and their expectations for the future. U.S. stock index futures are 0.3% lower ahead of the big earnings announcements, which will include Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Alphabet (GOOG, GOOGL) in the coming days.
Precious metals rally loses some steam
Spot gold fell more than 1% overnight to $1,920/oz, while silver tumbled 4.5% to $23.62/oz, as the FOMC gathers today for a meeting that may provide more direction for traders. While prices waver, most market watchers are still predicting more gains ahead for the precious metals. “The message from the Fed meeting is expected to be dovish, reiterating the need for more fiscal measures, which is likely to be supportive of gold,” said Nicholas Frappell, global general manager at Sydney-based ABC Bullion. “With real interest rates deep in negative territory and the coronavirus resurgence hitting the dollar index hard, that’s good for gold.”
Chances of a Shelton nomination?
Sen. Susan Collins (R., Maine) is joining Sen. Mitt Romney (R., Utah) in opposing the nomination of controversial pick Judy Shelton to the Federal Reserve’s board of governors. “In her past statements, Ms. Shelton has openly called for the Federal Reserve to be less independent of the political branches, and has even questioned the need for a central bank,” Collins said in a statement. The nominee has also been a longtime proponent of a return to the gold standard, which would limit the Fed’s ability to influence inflation and employment. Republicans have a 53-47 vote advantage in the Senate, meaning Shelton can’t afford to lose more than three Republicans if all Democrats oppose her candidacy.
European bank dividends on hold
Billions of euros are at stake for investors as the ECB extended a request that banks hold off on returning capital until January 2021. The central bank first asked lenders in March to not make dividend payments until October in an effort to conserve capital as lockdowns to combat the pandemic brought the economy to a standstill. While the move was painful for shareholders, the ECB indicated it was a trade-off for unprecedented regulatory relief it had granted them to weather the crisis.
Navigating online dating during the pandemic
Match Group (NASDAQ:MTCH) has named Jim Lanzone, previous chief executive of CBS Interactive, as the new CEO of its flagship dating app Tinder. He definitely has his work cut out for him as the coronavirus pandemic redefines the online dating industry. Lanzone will join the company on Aug. 3, succeeding current Tinder CEO Elie Seidman, who is stepping down and returning to work with early-stage, venture-backed companies. Match Group controls much of the Internet dating scene, with other properties like OkCupid, Hinge and Plenty of Fish.
Upcoming Apple product launch dates
It’s going to be a busy fall season for Apple (AAPL), according to well-known leakers iHacktu Pro and Komiya, who published the launch dates for every upcoming company product. The late 2020 updates will begin on August 19 with a new iMac, AirPods Studio, HomePod 2 and HomePod Mini, followed by an event on September 8 that will unveil the iPhone 12 line, iPad, Apple Watch Series 6 and AirTags. Another special event on October 27 will show off the Apple Silicon MacBook and MacBook Pro 13″, iPad Pro and Apple TV 4K. There are also big expectations for a renewed AirPower charging mat, and smaller wireless charger AirPower Mini, as well as Apple Glass – the reported augmented reality smart glasses.
Court showdown over mask mandates
A Georgia judge hears arguments today in a case brought by Governor Brian Kemp to stop the city of Atlanta from enforcing a mask mandate that is punishable by a fine or up to six months in jail. Shares of mask makers like Alpha Pro Tech (NYSEMKT:APT), Allied Healthcare Products (NASDAQ:AHPI) and Lakeland Industries (NASDAQ:LAKE) are on watch as the emergency motion asks the judge to halt Atlanta’s enforcement efforts while a lawsuit works its way through the courts. Kemp, one of the first governors to ease statewide stay-at-home orders and business closures, claims that Atlanta’s measure is more restrictive than a state order which “strongly encourages face coverings” but does not require them.
What else is happening…
WarnerMedia (NYSE:T) probes Ellen DeGeneres Show over toxic work culture.
Google (GOOG, GOOGL) keeping employees at home until July 2021 – WSJ.
Novavax (NASDAQ:NVAX) inks manufacturing deal for COVID-19 vaccine.
Intel (NASDAQ:INTC) ousts its chief engineer after product delays.
Qualcomm (NASDAQ:QCOM) unveils new fast charging standard.
U.S. gunmaker Remington files for bankruptcy again.
Monday’s Key Earnings
Hasbro (NASDAQ:HAS) -7.4% hit by movie theater closures.
NXP Semiconductors (NASDAQ:NXPI) -3.7% AH as weaker auto sales weighed on Q2 beats.
Today’s Economic Calendar
FOMC meeting begins
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
11:30 Results of $24B, 2-Year FRN Auction
1:00 PM Results of $44B, 5-Year Note Auction
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mixed. South Korea, Taiwan and Indonesia closed up; India and the Philippines closed down. Europe, Africa and the Middle East are mixed void of big movers. Poland, Russia and South Africa are up; Finland, Switzerland, Spain and Austria are down. Futures in the States point towards a positive open for the cash market.
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VIDEO:My Favorite Stock Market Scan
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Spot gold traded as high as $1,943.93 per ounce overnight, eclipsing the previous record of $1920.30 set in September 2011 (it has increased 27% since the start of 2020). The yellow metal tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement. The rally is also being driven by U.S.-China tensions, but without cash flow streams to be evaluated like stocks or bonds, the movement in precious metals is notoriously difficult to analyze. Looking to gold funds, the popular SPDR Gold Trust ETF (NYSEARCA:GLD) is up 2% premarket after climbing 5% over the past week.
Back from vacation?
As gold and silver have been making historic moves higher this summer, Bitcoin (BTC-USD) has been notable for not doing anything much at all – mostly residing in a tight trading range around the $9,500 level. Things got interesting over the weekend, with Bitcoin poking its head above $10,000, and it’s now trading changing hands at $10,187. The rally in Ether (ETH-USD) has been even more impressive, now up to a two-year high of $312.
Eventful week
Stocks are on the rise alongside safe-haven assets ahead of an upcoming Fed meeting that will yield clues on what comes next for monetary policy. S&P 500 futures advanced 0.6% overnight after Republicans finalized a bill for about $1T in coronavirus relief funds (see more below), while administration officials once again touted a ‘V-shaped’ economic recovery. The first print of U.S. GDP for Q2 is also due this week, while investors will digest earnings from Big Tech heavyweights. On the coronavirus front, reported cases and fatalities fell in many states hit hard by COVID-19, including Florida, Arizona, California, Texas and New York.
GOP unveils next coronavirus aid bill
Treasury Secretary Steven Mnuchin confirmed there would be $1,200 in direct stimulus payments in August – based on the same formula from the earlier package – but called the $600 in expanded federal unemployment benefits (that expires July 31) “ridiculous” and a disincentive for people to go back to work. The new $1T plan, which will likely ensure no more than 70% of an employee’s previous pay, will serve as a starting point for negotiations with Democrats, who have already passed a $3.4T bill in the House. Mnuchin also revealed that a payroll tax cut sought by President Trump won’t be in the coming bill, but may be in follow-up virus relief legislation.
Dollar falters
“There’s a trade war, there’s a technology war, there is a geopolitical war and there could be a capital war,” according to billionaire investor Ray Dalio. “If you say by law ‘Don’t invest in China,’ or even possibly withholding the payment of bonds that the U.S. owes payment on in China – these things have big implications for the dollar,” he added. “The things I worry about the most are the soundness of our money. You can’t continue to run deficits, sell debt or print money rather than be productive and sustain that over a period of time.” The U.S. Dollar Index broke through support at 94.65 on Friday, and extended losses overnight by falling another 0.4% to 94.03.
Tech antitrust hearing
The high-profile hearing in front of the House Judiciary Committee’s Antitrust subcommittee has been reset for July 29 after a year-long investigation into online competition. It’ll be the first time Amazon’s (NASDAQ:AMZN) Jeff Bezos, Facebook’s (NASDAQ:FB) Mark Zuckerberg, Apple’s (NASDAQ:AAPL) Tim Cook and Google’s (GOOG, GOOGL) Sundar Pichai will testify together and the first congressional appearance for Bezos. It also adds up to a big catalyst day for Facebook, which reports its earnings after the closing bell on Wednesday.
Moderna scores more funding for coronavirus vaccine
The U.S. government modified its existing contract with Moderna (NASDAQ:MRNA) over the weekend, adding a commitment of up to $472M for the company’s Phase 3 study of the mRNA vaccine candidate (mRNA-1273) against COVID-19. As part of discussions related to Operation Warp Speed, the company opted to conduct a “significantly” larger study, which will accommodate 30,000 participants at the 100 µg dose level in the U.S. Combined with the prior contract, total value is $955M and the Phase 3 study will begin today. MRNA +7.6% premarket.
SAP plans IPO for Qualtrics unit
Alongside an EPS beat, German software giant SAP (NYSE:SAP) announced plans to list shares of its Qualtrics survey-software unit in the U.S., less than two years after buying the company for about $8B. “SAP’s acquisition of Qualtrics has been a great success and has outperformed our expectations with 2019 cloud growth in excess of 40%,” CEO Christian Klein declared. An IPO could value Qualtrics at as much as €16B, while SAP will retain a majority stake in the company after the public listing. SAP +3.1% premarket.
Boom year for SPACs
Rush Street Interactive has agreed to merge with special purpose acquisition company dMY Technology Group (NYSE:DMYT), in a deal that values the online sports-and-casino betting company at about $1.8B including debt, WSJ reports. Rush Street is similar to competitor DraftKings (NASDAQ:DKNG), which also recently chose to go public via a blank-check company. Why are SPACs becoming popular? At a time of great uncertainty, they can offer liquidity, especially when some IPOs are getting derailed due to volatility. The traditional IPO process can also take anywhere from several months to a year, though some SPAC deals are reported to only take weeks and could provide better price support. DMYT +10.6% premarket.
What else is happening…
AstraZeneca (NYSE:AZN) signs $6B cancer drug deal with Daiichi (OTCPK:DSKYF).
China seizes U.S. consulate in Chengdu in retaliation over Houston.
Taiwan Semi (NYSE:TSM) climbs another 6% amid Intel (NASDAQ:INTC) production woes.
Canada remains bullish on TC Energy’s (NYSE:TRP) Keystone XL.
Can laggards McDonald’s (NYSE:MCD) and Starbucks (NASDAQ:SBUX) get in gear?
Today’s Economic Calendar
8:30 Durable Goods
10:30 Dallas Fed Manufacturing Survey
11:30 Results of $48B, 2-Year Note Auction
1:00 PM Results of $49B, 5-Year Note Auction
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