Stock market news live updates: Stock futures open slightly higher ahead of bank earnings – Yahoo Money

Stock News

Posted on July 13, 2020

Stock futures opened slightly higher Monday evening as investors looked ahead of a slew of earnings results from big banks Tuesday and later this week.

Both the S&P 500 and Nasdaq erased earlier gains to close lower during Monday’s regular session. But each had advanced strongly earlier in the day, driven in part by hopes of a Covid-19 vaccine from Pfizer and BioNTech. The Dow closed higher, with a 4% rise in shares of Pfizer buoying the index.

More roll-backs of reopening plans put a damper on the risk rally for the broader market. California Governor Gavin Newsom on Monday ordered that all counties across the state re-close indoor operations at businesses including restaurants, bars, movie theaters and museums. And earlier, the state’s two largest public school districts announced all instruction would be remote-only in the fall.

Coronavirus cases marched higher elsewhere in the South and West as well. New cases in Florida rose by more than 12,000 as of Monday, a day after the state reported a record 15,300 new Covid-19 cases for the highest one-day total of any US state so far during the pandemic.

Still, at least some market strategists remained upbeat on the direction of the stock market for the rest of the year, with stocks largely pushing up despite the unpredictability of the pandemic with government stimulus in focus. Before fading into market close, the S&P 500 had briefly erased its year-to-date losses, and the Nasdaq hit yet another record intraday high.

“We are maintaining our ‘glass half-full orientation,’ believing that equities will trend higher into year-end. Stocks are buoyed by non-problematic inflation and low interest rates – which provide valuation support and the basis for some multiple expansion – massive monetary and fiscal stimulus programs and progress toward Covid-19 treatment and prevention solutions,” Terry Sandven, US Bank Wealth Management chief equity strategist, wrote in a note Monday.

“In the near term, equities are navigating through a ‘zone of uncertainty,’ because earnings visibility remains elusive and fresh spikes of Covid-19 are occurring in the majority of US states, delaying and even rolling back economic reopening,” Sandven said, adding he expects “heightened volatility” to persist.

Next week, lawmakers are reportedly set to begin hammering out the details of another stimulus package, once senators return to Washington, D.C. next week following a recess. White House economic adviser Larry Kudlow told Fox Business on Monday he could “conclusively” confirm that another stimulus relief package set to occur, due to ongoing uncertainty and strain for individuals and businesses in the face of the pandemic.

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6:30 p.m. ET: Bank earnings, CPI – What to know in markets Tuesday

Second-quarter earnings results for a slew of financial companies will be in focus Tuesday morning, with JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) set to report before market open.

The financials sector (XLF) has lagged in the S&P 500 for the year to date, slumping about 23.5% versus the broader market’s 2.3% decline through Monday’s close. Banks are expected to see their results impacted by the current low-rate environment, with the benchmark interest rate near 0%. And banks are also likely to have sustained further hits to their bottom-line results as credit costs increased, due to measures taken to grapple with the economic impact from the coronavirus pandemic. Many analysts believe loan-loss provisions will have climbed further after the first quarter.

Here’s what Wall Street expects some of the firms to report:

JPMorgan Chase & Co. (JPM) is expected to report adjusted earnings of $1.11 per share on revenue of $30.57 billion
Wells Fargo (WFC) is expected to report an adjusted loss of 1 cent per share on revenue of $18.5 billion
Citigroup (C) is expected to report adjusted earnings of 38 cents per share on revenue of $19.16 billion

Later in the morning, market participants will also receive the Commerce Department’s June Consumer Price Index (CPI) which is expected to show still-muted inflationary pressures amid the pandemic. Consensus economists expected headline CPI will have risen 0.5% following May’s 0.1% decline, with core CPI excluding volatile food and energy categories up an even more sanguine 0.1%.

“We have no argument with the FOMC’s [Federal Open Market Committee’s] view that the Covid crisis is a disinflationary event, but the run of three straight outright month-to-month declines in the core CPI likely came to an end in June,” Ian Shepherdson, Pantheon Macroeconomics chief economist, said in a note. “A meaningful rebound is not in prospect, though; we expect [Tuesday’s] report to show that the core index was unchanged last month.”

“Prices likely were flat or even up in the three key components responsible for the declines in March, April and May,” he said, adding that apparel, airline fare and lodging prices have already slowed considerably.

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