BY THE NUMBERS
U.S. stock futures indicated a higher open at the bell following robust quarterly earnings from some of the biggest tech companies that topped Wall Street forecasts. Dow futures implied a roughly 80-point opening gain, while S&P 500 and Nasdaq futures were also green. The three major U.S. stock indexes are set to post a fourth straight month of gains, and the S&P 500 will have its best July since 2010 if it can post a gain of roughly 0.25% today.
The S&P 500 and Dow are coming off a down Thursday as investors processed a historic drop in second-quarter U.S. GDP and a rise in continuing claims for jobless benefits. The Dow gave up 225.9 points, or .8%, while the broad S&P sank .4%. But the tech-heavy Nasdaq added .4% ahead of earnings from Apple (AAPL), Amazon (AMZN), Facebook (FB) and Alphabet (GOOGL).
* Second-quarter GDP plunged by worst-ever 32.9% amid virus-induced shutdown (CNBC)
Apple sales rose 11% in its most-recent quarter, better than Street estimates, despite disruptions caused by the coronavirus that included temporary closures of brick-and-mortar stores. Per-share earnings of $2.58 also beat expectations. Shares of the iPhone maker were up more than 6% in the premarket. (CNBC)
* Apple just announced a stock split — here's what that means for investors (CNBC)
Amazon's stock rose more than 5% in the premarket after the e-commerce and cloud giant reported quarterly sales of $88.91 billion, eclipsing projections of $81.56 billion, as the pandemic shifted more shoppers online. Earnings per share of $10.30 blew past forecasts of $1.46. (CNBC)
* Facebook reports 11% revenue growth even amid pandemic slowdown (CNBC)
* Alphabet reports first revenue decline in company history (CNBC)
The month will end with a busy day for economic data, beginning with June personal income and spending numbers. Economists are predicting a 0.7% drop in income following a 4.2% decline in May, while consumer spending is seen jumping 5% on top of an 8.2% rise in May. The Chicago Purchasing Managers index is out at 9:45 a.m. ET, with consensus forecasts calling for a rise to 43.5 for July from 36.6 in June.
Today's earnings calendar is relatively light, headlined by four Dow components: Caterpillar (CAT), Merck (MRK), Exxon Mobil (XOM) and Chevron (CVX).
* Shares of Caterpillar jump after the Dow component reports better-than-expected results (CNBC)
* Merck raises 2020 outlook, saying the worst of the coronavirus impact is behind it (CNBC)
IN THE NEWS TODAY
The U.S. government has agreed to pay $2.1 billion to drugmakers Sanofi (SNY) and GlaxoSmithKline (GSK) to support the development of their potential coronavirus vaccine, the companies announced this morning. The U.S. could acquire 100 million doses as part of the deal if the vaccine proves safe and effective, with an option to get an additional 500 million more. Sanofi and GSK are jointly developing the vaccine. (CNBC)
The Food and Drug Administration would approve a vaccine to prevent Covid-19 as long as it's safe and at least 50% effective, according to Commissioner Dr. Stephen Hahn. In an interview Thursday with a medical journal, Hahn said it would be "unrealistic" to both expect a vaccine tomorrow and for a potential vaccine to be 100% effective. "But we said 50%, and the reason was because we felt that that was a reasonable floor given the pandemic," he said, adding the hope is "the actual effectiveness will be higher." (CNBC)
* Dr. Anthony Fauci to tell House panel 'unclear' how long pandemic lasts (AP )
* Vietnam reports 1st ever virus death after renewed outbreak (AP)
Hong Kong postponed the upcoming election for its legislative council, with Chief Executive Carrie Lam citing coronavirus concerns as cases rise in the city. The election had been set for Sept. 6. The decision to delay the election came one day after 12 pro-democracy nominees were barred from running in the contests, including a high-profile activist and two incumbent lawmakers. (CNBC)
* Trump encounters broad pushback to his suggestion to delay the Nov. 3 election (The Washington Post)
The $600-per-week federal supplement to unemployment insurance that has been a critical lifeline to millions of jobless Americans during the pandemic officially ends today. Republicans and Democrats appear to still be far apart on the next piece of coronavirus relief legislation, according to a new Politico report. Democratic leaders in the House and Senate on Thursday night rejected an offer from the White House to temporarily extend the $600 benefit by four months while a broader relief package was negotiated, the report said. (Politico)
* 1 Marine dead, 2 injured, 8 missing after vehicle accident off the coast of southern California (AP News)
The euro zone economy contracted by 12.1% in the second quarter of 2020, compared to the first three months, as the coronavirus swept across the region and strict lockdowns were imposed. The preliminary GDP reading is the worst on record, which dates back to 1995. Inflation in the 19-country bloc also ticked up in July, spurred by a 1.7% increase in costs for industrial goods. (Reuters)
One of the Tesla's (TSLA) rivals in China, Xpeng Motors, is in talks to raise $300 million in funding ahead of an IPO in the U.S., sources told CNBC's Arjun Kharpal. Guangzhou-based Xpeng Motors — which has an office in Mountain View, California — has not yet decided which exchange to list on, the sources said. Just a day earlier, Chinese electric car maker Li Auto (LI) raised more than $1 billion in its IPO on the Nasdaq. Washington lawmakers have in recent months ratcheted up scrutiny of Chinese firms seeking to list in the U.S. China is also an important market for Tesla's growth. (CNBC)
STOCKS TO WATCH
Ford Motor (F) lost 35 cents per share for the second quarter, considerably less than the $1.17 per share loss forecast by analysts. The automaker's revenue beat estimates, and it said it expected to have sufficient cash on hand for the remainder of 2020 even if demand falls or the coronavirus forces more plant shutdowns.
Gilead Sciences (GILD) fell 34 cents shy of consensus with quarterly earnings of $1.11 per share. The drug maker's revenue missed Wall Street forecasts and sales of key hepatitis C and HIV drugs fell during lockdowns. Gilead did raise its full-year sales forecast, due to expected contributions from sales of the Covid-19 treatment remdesivir.
Shake Shack (SHAK) lost 45 cents per share for its latest quarter, 8 cents more than analysts were expecting, and the restaurant chain's revenue was slightly below estimates as well. The loss came as some restaurants shut down during pandemic lockdowns, although digital sales nearly doubled during the quarter.
Under Armour (UAA) lost 31 cents per share, better than the loss of 41 cents per share analysts expected. Sales fell by 41% in the quarter to $707.6 million, but analysts had projected a more steep drop in revenues to $543.8 million.
Colgate-Palmolive (CL) beat estimates by 4 cents with quarterly earnings of 74 cents per share, with revenue beating estimates as well. The consumer products company's organic sales were up by 5.5%, with increased demand for soap and cleaning products contributing to that rise.
WATERCOOLER
The NBA season has now resumed — but a lot is different. No fans. All the games are played in the Florida bubble. Coaches don't need to wear suits. The referees are even using modified whistles designed to limit potential transmission of the coronavirus. The whistles have a cloth covering to try to stop spit from flying into the air. (LA Times)