Stock market index futures dropped on Thursday after a surprise fall in China’s retail sales signaled a difficult economic recovery as investors gauge the pace of a domestic economic rebound, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
U.S. retail sales and weekly jobless claims are expected to show the economy limping out of a coronavirus-driven decline as several states eased lockdowns in May.
However, a recent surge in virus cases has forced states like California to shut down again, increasing fears of more economic damage and slowing the pace of a Wall Street rally.
Stock markets in Asia and Europe fell earlier in the day after China reported its retail sales dropped 1.8% in June. Stocks in China sank by 4.5%.
Morgan Stanley (NYSE: MS) reported its quarterly earnings — blowing past Wall Street expectations on strong trading revenue — wrapping up what has been a mixed bag of quarterly earnings updates from the top six U.S. lenders.
Johnson & Johnson (NYSE: JNJ) traded flat before the opening bell after reporting a 35.3% drop in quarterly profit as demand for its medical devices was hammered by hospitals postponing non-urgent surgeries.
As of 9:15 a.m. EDT, Dow Jones futures were off by 0.61%. S&P 500 futures fell by 0.58% and Nasdaq futures dropped 1.06%.
Stocks to Watch Today
Bank of America Corp. (NYSE: BAC) — The multinational investment bank beat analysts’ expectations for profit in the second quarter, but set aside $5.1 billion to offset potential loan losses. The bank posted earnings of $0.37 per share. Bank of America was down nearly 3%.
Twitter Inc. (NYSE: TWTR) — Shares of the social media platform fell 4.8% in premarket trading after several prominent individual accounts were hacked in an effort to spread a cryptocurrency scam (see more below.)
Tesla Inc. (Nasdaq: TSLA) — Data showed registrations for vehicles made by the electric auto manufacturer fell by 48% in California during the second quarter. California is a bellwether market for Tesla. Shares of the company were down 4.2%.
June Retail Sales Expected to Be Strong Before New Virus Outbreak
Economists polled by Dow Jones expect retail sales to gain 5.2% in June as the economy reopened, but those sales may have fallen off toward the end of the month as the COVID-19 outbreak worsened, according to CNBC.
May sales increased by 17.4% — 17.2% when you exclude automobiles — as states first started reopening their economies.
Retail sales figures are key because they show how consumers are faring. In this instance, it’s also important because millions of Americans remain out of work.
Latest Social Media Hack Spotlights Disinformation as Election Looms
The hijacking of several prominent Twitter accounts, including Amazon.com Inc. (Nasdaq: AMZN) CEO Jeff Bezos and Democratic presidential nominee Joe Biden, has raised questions about the battle over disinformation on social media.
Twitter Inc. (NYSE: TWTR) accounts of several political and business leaders were hacked to send out tweets in a coordinated effort to promote a cryptocurrency scam, according to Bloomberg.
Verified accounts (those with a blue checkmark) had difficulty posting Wednesday evening as the company locked them down in an attempt to stop the scam. Those responsible for the hack have not been determined.
China’s Economy Becomes First to Turn Positive
The Chinese economy is the first major economy to return to growth since the coronavirus pandemic took hold earlier this year.
According to The Wall Street Journal, Beijing said its economy grew 3.2% from a year earlier in the second quarter, “as authorities benefited from an aggressive campaign to eradicate the virus.”
From the first quarter, China’s growth in gross domestic product represented an 11.5% rebound from the first three months, according to data released by Beijing’s National Bureau of Statistics. For the first six months of the year, the Chinese economy has contracted just 1.6% when compared to the first half of 2019.
What We’re Reading
The Bull & The Bear: Making Sense of Dividend Stocks During COVID-19 (Money & Markets)
Heritage Brands, an Outlet Mall Staple, Is Closing All its Stores (CNN Business)
Fed Chair Powell Is Powering This 5.3% Dividend Higher (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Bank of America Corp. (NYSE: BAC)
Johnson & Johnson (NYSE: JNJ)
Morgan Stanley (NYSE: MS)
Netflix Inc. (Nasdaq: NFLX)
PPG Industries Inc. (NYSE: PPG)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.