Tuesday July 14th

14-07-2020

Dow set to open higher as JPMorgan Chase gains on strong earnings

U.S. stock index futures were higher early Tuesday as quarterly results from the major banks started rolling in. Dow Jones Industrial Average futures traded 50 points higher, indicating a 60-point opening gain. S&P 500 and Nasdaq-100 futures traded near the flat line. JPMorgan Chase rose more than 1% in the premarket after the banking giant posted earnings and revenue that beat analyst expectations. The bank’s strong results were driven in part by a 79% surge in trading revenues amid the market’s volatile swings in the second quarter. Wells Fargo slid more than 4% in premarket trading after reporting a $2.4 billion loss for the quarter, its first quarterly loss since the financial crisis. The bank also cut its dividend to 10 cents from 51 cents a share. Citigroup shares rose more than 1% after its second-quarter results topped analyst expectations. A massive surge in trading revenue helped offset a slowdown in the company’s consumer banking business. While corporate profits are expected to fall by 44% in the second quarter, the financial sector is expected to see a more than 52% decline in profits, according to Refinitiv. “What’s so influential about the banks reporting early in the earnings season in times like these is we’re really counting on banks’ management team’s view on what’s going on,” Susan Schmidt, head of U.S. equities at Aviva Investors, told CNBC. “Banks are the foundation of our U.S. economy. They are there to provide loans to small businesses and to manage the retail consumers’ deposits.” On Monday, the Dow Jones Industrial Average gave up a 500-point gain to end the day up 10 points. The S&P 500 ended the day down 0.95%, having earlier rallied 1% to briefly trade positive for the year. Monday marked the first time since early June that the S&P 500 traded positive year to date. The Nasdaq Composite dipped 2.1%, pushed lower by losses in Netflix, Microsoft, Amazon and Facebook. The technology-heavy index rose nearly 2% at its session high on Monday. The Nasdaq-100, which is made up of the 100-largest nonfinancial companies in the Nasdaq Composite, briefly traded above 11,000 for the first time before falling 2.2%. Earlier in the session on Monday stocks were helped by news that Pfizer and German biotech BioNTech SE were granted fast track designation by the Food and Drug Administration for two of the companies’ four vaccine candidates against the coronavirus. Cases continued to hit record levels across the U.S. over the weekend as a number of hot-spot states continue to see Covid-19 deaths gradually rise, according to data compiled by Johns Hopkins University. California Gov. Gavin Newsom is ordering some indoor businesses — including restaurants, bars, movie theaters and museums — to reclose statewide as new cases continue to rise. Stocks in Asia Pacific fell on Tuesday, as China’s trade data for June came in above expectations. Mainland Chinese stocks declined on the day, with the Shanghai composite down 0.83% to around 3,414.62 while the Shenzhen component dropped 1.079% to about 13,996.46. Hong Kong’s Hang Seng index fell 1.24%, as of its final hour of trading. In Japan, the Nikkei 225 slipped 0.87% to close at 22,587.01 while the Topix index declined 0.5% to finish its trading day at 1,565.15. South Korea’s Kospi dipped 0.11% to close at 2,183.61. Oil prices fell around 2% in early trade on Tuesday on worries that new clampdowns on businesses to stem surging coronavirus cases in California and other U.S. states could threaten the nascent recovery in fuel demand. West Texas Intermediate crude futures slid 35 cents, or 0.85%, to $39.76 a barrel, while Brent crude futures fell 24 cents, or 0.56% to $42.48 a barrel. Both benchmark contracts lost just over 1% on Monday. Gold slipped on Tuesday to trade below the key $1,800 level due to a stronger dollar, though concerns over surging coronavirus cases around the world and Sino-U.S. tensions put a floor under bullion prices. Spot gold was down 0.2% to $1,798.52 per ounce by 0042 GMT. U.S. gold futures fell 0.7% to $1,802.20.