U.S. stock market futures moved higher as investors prepare for an address on Wednesday by Federal Reserve Chairman Jerome Powell, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
Investors are betting heavily on the Federal Reserve adopting negative interest rates for the first time to combat the coronavirus pandemic’s impact on the economy.
However, it isn’t likely that Powell will go in that direction, despite President Donald Trump suggesting such a move would be good several times the past couple of years.
Powell did warn of “significant downside risks” for the economy, which sent investors scrambling before the market opened. It pushed futures lower.
The yield on a 10-year Treasury note fell to 0.659% on Tuesday, suggesting bond investors remain risk averse.
Unprecedented stimulus actions from the central bank and hopes of an economic recovery have been vital in helping the main U.S. stock indexes rise about 30% from their March lows.
The S&P 500 ended 2% lower on Tuesday as leading U.S. infectious disease expert Anthony Fauci warned any premature moves to reopen the economy could trigger more outbreaks and set back recovery.
On the economic front, the Department of Labor’s data is expected to show the U.S. producer price index dropped 0.5% in April after slipping 0.2% a month earlier.
As of 9:20 a.m. EDT, Dow Jones futures were 0.02% lower. S&P 500 futures were only up 0.03% while Nasdaq Composite futures jumped 0.3%. All index futures pared back earlier premarket gains.
Stocks to Watch Today
Cyberark Software Ltd. (Nasdaq: CYBR) — The information security company beat Wall Street’s projections for revenue and earnings, but withdrew its full-year guidance and announced a $70 million purchase of Idaptive. Shares of Cyberark were down 2.8%.
JCPenney Company Inc. (NYSE: JCP) — Reports are that the retailer is close to securing $450 million to help it navigate bankruptcy. It is likely the company will file for bankruptcy by Friday of this week. Shares of JCPenney were up 40.7%.
Las Vegas Sands Corp. (NYSE: LVS) — The casino and resort company saw its shares jump 1.5% in premarket trading after news came out that it’s abandoning a plan to build a $10 billion casino in Japan. CEO Sheldon Adelson said he was still bullish on the company’s future.
Several Companies Benefitting From Tax Breaks Amid COVID-19
More than 50 publicly traded companies have disclosed tax savings and deferrals totaling around $2.8 billion, according to The Wall Street Journal.
Securities filings show companies like Chipotle Mexican Grill Inc. (NYSE: CMG), Walt Disney Co. (NYSE: DIS), American Airlines Group Inc. (Nasdaq: AAL), Valero Energy Corp. (NYSE: VLO) and Marathon Petroleum Corp. (NYSE: MPC) have all reported tax benefits of more than $100 million each.
The tax breaks were enacted in March as part of a $2.2 trillion coronavirus stimulus package.
Big Advertisers Set to Cancel TV Contracts
Several big companies are attempting to cut spending by canceling contracts for future television advertising.
According to The Wall Street Journal, General Motors Co. (NYSE: GM), PepsiCo Inc. (Nasdaq: PEP) and General Mills Inc. (NYSE: GIS) are looking to cancel up to 50% of their third-quarter advertising buys.
They are able to do that as part of “upfront” deals where companies pay for advertising in advance of the new TV season, which starts in September.
Weekly Mortgage Applications Jumped 11% Last Week
As states ease coronavirus restrictions, home buyers are returning to the market faster than expected.
According to the Mortgage Bankers Association index, applications to purchase new homes jumped 11% last week, while overall mortgage applications moved up 0.3%.
A separate survey found the percentage of mortgage loans in forbearance increased to 7.91%.
What We’re Reading
Uber’s Rumored Takeover of GrubHub Means Investors Should Wait (Money & Markets)
Walmart Giving Hourly Workers COVID-19 Bonus (USA Today)
Why Coronavirus Stimulus Social Security Loan Is ‘a Political Nonstarter’ (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Cisco Systems Inc. (Nasdaq: CSCO)
Harvest Capital Credit Corp. (Nasdaq: HCAP)
Jack in the Box Inc. (Nasdaq: JACK)
Sony Corp. (NYSE: SNE)
Tower Semiconductor Ltd. (Nasdaq: TSEM)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.
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