This post was originally published on this site
U.S. stock-index futures were headed higher on Tuesday as investors awaited the start of a busy corporate earnings reporting week, which includes quarterly results from Coca-Cola, Lockheed Martin, Synchrony Financial, and United Airlines.
Market sentiment was upbeat after positive results from International Business Machines late-Monday and after the European Union forged a historic fiscal package, intended to dampen the economic impact of the effects of the COVID-19 pandemic.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, +0.60% , YMU20, +0.60% were up 168 points, or 0.6%, at 26,800; those for the S&P 500 index ES00, +0.67% , ESU20, +0.67% were gaining 23.05 points, or 0.7%, at 3,268.25; while Nasdaq-100 futures NQ00, +0.68% NQU20, +0.68% advanced 79.25 points, or 0.7%, to 11,030.25.
On Monday, the Dow DJIA, +0.03% added 8.92 points, or less than 0.1%, to finish at 26,680.87. The S&P 500 SPX, +0.84% rose 27.11 points, or 0.8%, to end at 3,251.84. and ending the session positive for 2020. The Nasdaq Composite COMP, +2.51% surged 263.90 points, or 2.5%, to end at a record 10,767.09, booking its largest daily percent gain since April 29, according to Dow Jones Market Data. Monday’s all-time closing peak for the Nasdaq also represented its 28th of 2020.
What’s driving the market?
Appetite for equities, and in particular technology companies, looked undiminished after the tech-laden Nasdaq Composite delivered its 28th record close of 2020 on Monday, with investors responding to quarterly results and guidance that have so far been better-than-feared despite the impact of the coronavirus pandemic.
Setting the stage for optimism early Tuesday was an EU agreement on a €750 billion ($860 billion) coronavirus rescue fund after four days of intense negotiations among officials from the 27-nation bloc. The recovery package comprises €390 billion in grants and the remainder in loans as a part of a compromise with Denmark, Sweden, Austria and the Netherlands, who had been reluctant to push for a larger package of funds via grants. The leaders also agreed on a multiyear EU budget of over €1 trillion that will run from next year to 2027.
In the U.S., investors were awaiting developments on another fiscal stimulus plan by Congress as a $600 per-week federal unemployment package is set to expire at the end of the month. U.S. Senate Majority Leader Mitch McConnell and Treasury Secretary Steven Mnuchin were slated to discuss details for additional aid to Americans at the White House on Tuesday. Mnuchin has suggested that $1 trillion would represent a minimum amount in recovery funds, with Democrats supporting a package that exceeds $3 trillion.
The reports come as a number of corporations are reporting including Coca-Cola Co. KO, -1.49% which presented results that were better than expected early Tuesday.
The action on Wall Street comes as the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 14.7 million on Tuesday, according to data aggregated by Johns Hopkins University, and the death toll rose to 610,292. The U.S. recorded just under 60,000 new infections on Monday, and 531 deaths, according to a New York Times tracker, which is up 64% on a 14-day basis. In total, the U.S. now has 3.83 million confirmed cases, or about a quarter of the global total, and 140,909 deaths.
On the economic front, the Chicago Fed National Activity Index for June, a composite of 85 indicators, rose to a fresh record 4.11, marking a record high going back to 2000, from a 3.5 in May— representing a level that was raised from the previous May reading. A zero value for the index indicates the national economy is expanding at its historical trend rate of growth.The report highlights that some aspects of the economy are attempting to come off its coronavirus lows.
Meanwhile, market participants may watch the Senate hearing at 2 p.m. ET for controversial Federal Reserve nomination pick Judith Shelton. Shelton, who was an informal Trump adviser during his presidential campaign, has been a longtime advocate for tying the dollar’s value to gold. The committee will also vote on a second Trump Fed nominee, Christopher Waller, the director of research at the St. Louis Fed, who is expected to be confirmed easily.
Capitol Report:GOP’s Kennedy says he’ll vote for Fed nominee Judy Shelton, expects swift action
Which stocks are in focus?
- Shares of Coca-Cola Inc. rose in premarket trading Tuesday, after the beverage and snack giant reported a second-quarter profit to topped expectations but revenue that fell a bit shy, amid challenges resulting from the coronavirus pandemic
- International Business Machines IBM, +1.00% shares gained in after-hours trading Monday, after the tech giant reported another decline in revenue but produced more profit and sales than Wall Street expected amid the COVID-19 pandemic.
- Shares of Lockheed Martin Corp. LMT, -0.80% rallied in premarket trading Tuesday, after the aerospace and defense company reported second-quarter profit and sales that rose above expectations, and lifted its full-year outlook.
- Philip Morris International Inc. shares PM, -2.85% rose 3.3% in Tuesday premarket trading after the Marlboro parent reported second-quarter earnings and revenue that beat expectations.
- Investors are also awaiting results from Synchrony Financial SYF, -3.57% and United Airlines parent United Airlines Holdings Inc. UAL, -4.68%
- Tapestry Inc. TPR, -3.95%, parent of the Coach, Stuart Weitzman and Kate Spade brands, said Chief Executive Jide Zeitlin is resigning from his role and from the board for personal reasons. The company named Chief Financial Officer Joanne Crevoiserat as interim CEO.
- Job-networking site LinkedIn is cutting about 960 jobs, or 6% of its work force, as it moves to align the business with the new COVID-19 world. In a message posted on the Microsoft Corp.-owned MSFT, +4.29% company’s website, Chief Executive Ryan Roslanksy said LinkedIn isn’t immune to the effects of the pandemic.
- Shares of small-cap Moleculin Biotech Inc. MBRX, +3.77% soared in premarket trade Tuesday, after the company said a second round of laboratory testing confirmed antiviral activity for WP1122, its candidate as a treatment for COVID-19.
- EBay Inc. EBAY, +0.58% said it’s selling its classified ad business to Norway’s Adevinta ADE, +27.56% for $9.2 billion in cash and stock.
- Shares of Tailored Brands Inc. TLRD, -1.26% sank toward a record low in premarket trading Tuesday, after the parent of apparel retailers Men’s Wearhouse and Jos. A. Bank said it expects to cut about 20% of its corporate workforce and close up to 500 stores.
- Amazon.com’s stock AMZN, +7.93% rises toward record in premarket trade Tuesday, after surging on Monday.
How are other markets trading?
Germany’s DAX 188658, +1.54% was trading 1.7% higher on Tuesday after the EU forged its landmark recovery package, the gains for the index of Europe’s largest economy helped to erase year-to-date losses.
Stoxx 600 Europe index SXXP, +0.94% gained 1%, while the U.K.’s FTSE UKX, +0.37% gained 0.5% to erase its loss from Monday. In Asia, the Nikkei NIK, +0.73% closed 0.7% higher, while China’s CSI 300 gauge 000300, +0.22% added 0.2% after jumping nearly 3%. South Korea’s Kospi 180721, +1.39% rose 1.4% and Hong Kong’s Hang Seng HSI, +2.30% gained 2.3%.
Gold futures GCQ20, +1.31% climbed $24.40 higher, up 1.3%, to $1,841.70 an ounce on the New York Mercantile Exchange, trading around its highest level since 2011 and approaching its second-highest closing level in its history. August futures for the U.S. crude benchmark CLQ20, +2.69% advanced 2.5%, a $1.01 gain, at $41.93 a barrel, after trading at a four-month high at the intraday peak.
The 10-year Treasury note yield TMUBMUSD10Y, 0.620% was little changed at around 0.62%. Bond prices move in the opposite direction of yields.
In currency markets, the dollar was softening for a second session this week, off 0.1%, against its six major rivals based on trading of the ICE U.S. dollar index. DXY, -0.19%
