Morning Brief

What to watch today: Stocks set for higher open ahead of Fed statement, Powell news conference

BY THE NUMBERS

Stock futures were pointing to a higher Wall Street opening on Wednesday ahead of the Federal Reserve's post-meeting monetary policy statement and Fed Chairman Jerome Powell's afternoon news conference. On Tuesday, the Dow dropped 300 points, or 1.1%, snapping a six-session winning streak. Investors took profits in stocks that benefit from states relaxing coronavirus restrictions and are beginning to reopen their economies. (CNBC)

The Nasdaq, which traded above 10,000 for the first time ever, closed up rose 0.3% to 9,953 for another record close. In Tuesday's tech rally, Amazon, Apple, Facebook and Microsoft closed at all-time highs. Big Tech has fared better than most sectors during the coronavirus pandemic as newly remote workers have come to rely on online services. (CNBC)

The Fed will be revealing its first forecasts for the economy and interest rates since late last year. Central bankers skipped making projections in March just as the pandemic forced the abrupt shutdown of the economy. The Fed is not expected to take any action on rates or policy on Wednesday. (CNBC)

Rising interest rates did nothing to deter an onslaught of mortgage demand from homebuyers. Applications for loans to purchase a home rose 5% last week from the previous week and were 13% higher than a year ago. For the week, the average contract interest rate for 30-year fixed mortgages rose to 3.38% from 3.37%. (CNBC)

US consumer price index fell 0.1% in May, vs flat reading expected (Reuters)

IN THE NEWS TODAY

Starbucks (SBUX) expects to swing to a loss in its fiscal third quarter as the company predicts it lost as much as $3.2 billion in revenue due to the coronavirus pandemic. The chain is forecasting adjusted losses per share of 55 cents to 70 cents during for quarter ended June 28. But it expects that its fiscal fourth-quarter earnings will improve. (CNBC)

Coronavirus cases are spiking in parts of California and 20 other states. Many of the recent infections have been linked to loosened restrictions as states begin to reopen. Health officials believe other cases have been passed along by people not following social-distancing recommendations. Texas reported a second straight day of record-breaking Covid-19 hospitalizations. (CNBC)

* Dr. Anthony Fauci says coronavirus turned 'out to be my worst nightmare' and it 'isn't over' (CNBC)
* WHO walks back comments on asymptomatic coronavirus spread, says much is still unknown (CNBC)

MGM Resorts (MGM) will reopen more Las Vegas casinos, following strong performances for the Bellagio, MGM Grand, and New York New York following their reopenings. The Excalibur will open Thursday, followed by ARIA, Mandalay Bay and Four Seasons Las Vegas on July 1. (USA Today)

Best Buy (BBY) plans to bring back 9,000 furloughed part-time and full-time workers, and will allow customers inside its stores for the first time since the pandemic began. The electronics retailer will limit the number of customers inside stores at any one time to 25% of normal capacity. (Yahoo Finance)

Amazon (AMZN) is introducing a new digital credit line for U.S.-based merchants with partner bank Goldman Sachs, CNBC has learned exclusively. Last year, Goldman helped Apple launch its first iPhone-integrated credit card, and followed that with a partnership with Jetblue, CNBC reported in April. The bank also has deals with Intuit and AARP. (CNBC)

AMC Entertainment plans to reopen theaters globally in July, with limited capacity and certain seats blocked off to maintain safety. AMC, which closed theaters in March due to the pandemic, also announced a partnership with Clorox to sanitize its locations. Shares of AMC were up more than 7% in Wednesday's premarket. Last week, AMC raised "substantial doubts" about continuing operations if it were forced to keep theaters closed for a longer period. (CNBC)

AT&T's HBO Max is temporarily removing "Gone With the Wind" from the platform over racist depictions in the 1939 epic. The new streaming service said the Oscar-winning movie will return later with more historical context. The moves come as protests continued across the nation following the death of George Floyd at the hands of a white Minneapolis police officer. (NBC News)

'Cops' canceled by Paramount Network after Floyd killing, protests over police brutality (USA Today)

Floyd's brother will testify before a House committee Wednesday as lawmakers rush to respond to nationwide protests demanding an end to police violence against African Americans. Philonise Floyd is expected to talk about his brother's death last month while in Minneapolis police custody. (USA Today)

* Biden says in Op-Ed: We must urgently root out systemic racism (USA Today)
Pope sends strong message to American Catholics after Floyd death (AP)

Floyd was fondly remembered Tuesday at his funeral in Houston, where he grew up, as "Big Floyd," a father and brother, athlete and neighborhood mentor, and now a catalyst for change. Tuesday's funeral capped six days of mourning for Floyd in three cities. (AP)

STOCKS TO WATCH

Chewy (CHWY) posted a loss of 12 cents per share, smaller than the 16 cents a share loss that Wall Street had anticipated. The pet products retailer also reported better-than-expected revenue and gave an upbeat revenue forecast. Active customers now stand at 15 million, up 33% from a year ago.

Red Robin Gourmet Burgers (RRGB) lost $6.66 per share for the first quarter, compared to a consensus estimate of a $1.10 per share loss. Revenue also came in below estimates, with comparable-restaurant sales falling 20.8%. Red Robin's business was hit by pandemic-related closures, but the company said trends have been improving in recent weeks as restaurants reopen.

GameStop (GME) lost $1.61 per share for its latest quarter, greater than the loss of $1.27 per share that analysts had forecast. The videogame retailer's revenue was slightly below forecasts, and comparable-store sales excluding closed locations fell 17%. One bright spot for GameStop: a 519% increase in e-commerce sales.

Five Below (FIVE) reported a quarterly loss of 91 cents per share, compared to the consensus estimate of a 33 cents a share loss. The discount retailer's revenue came in below forecasts amid coronavirus-related closures, although the company said about 90% of its stores have now reopened.

Genmab (GMAB), a Copenhagen-based biotech company, announced a broad collaboration with U.S.-based AbbVie (ABBV) to jointly develop and market three of Genmab's early-stage antibody treatments for cancer, as well as future treatments. Genmab will receive an upfront payment of $750 million and potential future payments of up to $3.15 billion.

WATERCOOLER

CrossFit founder Greg Glassman has stepped down as chief executive, days after he apologized for his tweet on the Floyd killing. The tweet, which equated the police killing of Floyd to the Covid-19 pandemic, drew criticism and led to footwear brand Reebok ending its tie-up with the fitness regimen. (Reuters)