Stocks open mixed with earnings, stimulus talks in focus

Stocks traded choppily Monday morning ahead of a busy week of corporate earnings results, a Federal Open Market Committee monetary policy meeting and plethora of economic data reports.

The S&P 500 and Nasdaq Composite each opened slightly to the upside, with the materials and information tech sectors leading advances in the S&P 500. Shares of Amazon (AMZN) and Apple (AAPL) each rose more than 1%, with both companies set to report second-quarter results later this week.

Meanwhile, gold prices jumped to a record Monday morning, closing in on the $2,000 per ounce mark as investors piled into the safe haven asset. Low interest rates and a weakening US dollar helped support the precious metal’s recent surge and could send prices even higher, according to some analysts.

“While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar,” UBS strategists wrote in a note Friday. They forecast gold will reach $2,000 per ounce by the end of September. “We think these three factors, in combination with limited supply growth as miners continue to restrain capex spending, will drive gold prices higher.”

The ongoing Covid-19 outbreak has also continued to drive a flight to safety. Over the weekend, new coronavirus cases rose but showed signs of slowing in some US states, including in those that had recently been hard-hit by a resurgence in infections.

Former FDA Commissioner Scott Gottlieb told CBS on Sunday that there are “unmistakable signs that the epidemic seems to be slowing” in states including Arizona and Texas, albeit while being “more of a mixed bag in Florida and California.” Florida on Saturday overtook New York to become the state with the second-most overall infections after California. On Sunday, Florida’s new cases were 9,344, or a drop from the previous day, to bring total cases to 423,855.

With coronavirus cases still on the rise and impacting businesses, individuals and the labor market at large, investors will be eyeing developments in discussions for further fiscal stimulus from Washington. Senate Republicans are expected to release details of their plan in the coming days, after discussions carried on through last week between White House officials and congressional lawmakers.

Republicans last week indicated additional spending would likely be capped at $1 trillion, following the more than $2 trillion included as part of the earlier Coronavirus Aid, Relief, and Economic Security (CARES) Act. Unless Congress convenes on a new stimulus deal, at the end of this week, measures included in the original CARES Act are set to expire. These include the $600 per week in enhanced federal unemployment benefits to eligible individuals, which Republican lawmakers have balked at but Democratic lawmakers have pushed to extend as joblessness remains rampant across the country.

White House economic advisor Larry Kudlow told CNN’s Jake Tapper on “State of the Union” on Sunday that the new bill will likely offer another round of $1,200 direct checks to Americans under certain income thresholds, along with reemployment bonuses, retention bonuses and tax credits for small businesses. The plan, however, would not renew the full unemployment insurance enhancement that expires at the end of this month, Kudlow said.

“With roughly 31.8 million people having applied for unemployment claims as of July 4, the expiration of FPUC [Federal Pandemic Unemployment Compensation] benefits this week would cause a roughly 60% or greater decline in income for those who have yet to find employment if Congress does not extend these benefits,” Brett Ryan, senior economist for Deutsche Bank, said in a note. “The opening bid from Senate Republicans this week will be the starting point of the negotiations, which are increasingly likely to stretch into next week. It is therefore possible that we see at least a temporary lapse in FPUC benefits.”

10:11 a.m. ET: Stocks turn higher, Apple and Amazon advance

The three major indices pushed into positive territory about a half-hour after market open Monday.

Gains in materials company Dow Inc. and Apple led advances in the 30-stock Dow. The Nasdaq Composite outperformed against the S&P 500 and Dow, rising more than 1% as a tech rally reignited ahead of a slew of earnings reports later this week.

9:31 a.m. ET: Stocks open mixed, giving up overnight gains

Here were the main moves in markets, as of 9:31 a.m. ET:

  • Dow (^DJI): -28.57 points (-0.11%) to 26,441.32

  • Nasdaq (^IXIC): +57.16 points (+0.55%) to 10,420.46

  • Crude (CL=F): -$0.33 (-0.8%) to $40.96 a barrel

  • Gold (GC=F): +$33.00 (+1.74%) to $1,930.50 per ounce

  • 10-year Treasury (^TNX): -1.9 bps to yield 0.576%

8:30 a.m. ET: Durable goods orders top expectations in June, extending May’s jump

Durable goods orders rose 7.3% in June over May to extend the prior month’s 15.1% advance, the Commerce Department reported Monday, in a signal of the ongoing revitalization of supply chains and broader business activity as social distancing measures abate. Consensus economists were looking for a 6.9% gain in orders during June, according to Bloomberg data. Durable goods orders include those for products intended to last three years or more,

The second-straight monthly increase was led by motor vehicle and parts orders, with these surging 85.7% in June. However, aircraft orders were negative for a third time in four months, with Boeing (BA) having booked more cancellations than new orders during the period.

Excluding more volatile transportation orders, durable goods bookings rose 3.3%, or slightly below the 3.6% gain expected.

Non-defense capital goods shipments, excluding aircraft, rose 3.3% in June from May, accelerating after the prior month’s 1.6% increase and topping expectations by more than one full percentage point. This metric serves as a closely watched proxy of future business investment.

7:50 a.m. ET: Albertsons digital sales surge 276% during pandemic

Albertsons (ACI), in its first quarterly report since its public debut in late June, posted a 276% jump in digital sales, with the company’s results boosted as consumers loaded their pantries while stay in place orders blanketed the country.

“Since the beginning of fiscal 2020, the Company has experienced significant increases in product demand and overall basket size in stores and in our eCommerce business as customers responded to the circumstances around COVID-19,” Albertsons said in a statement. “Due to these circumstances, the company remains unable to predict the continuing impact of COVID-19 on its business for the balance of the year with reasonable certainty.”

Overall revenue rose 21% over last year to $22.75 billion, or just short of the $22.79 billion expected. Adjusted earnings of $1.35 per share, however, were better than the $1.31 consensus analysts anticipated.

7:32 a.m. ET: Hasbro shares slide in early trading after Q2 sales sink 29% amid store closures, product shortages

Hasbro (HAS) reported a 29% drop in sales for the three months ended June 28, with demand “hampered by temporary store closures, product shortages in fast growing categories and lower retail inventory,” the company said in a statement. Hasbro’s $860.3 million in net revenue was well below consensus estimates for $994.8 million, and adjusted EBITDA of $95.3 million nearly halved over last year.

Both franchise and partner brands suffered during the quarter. Franchise brands, Hasbro’s largest business segment that includes owned properties including Transformers, My Little Pony and Play-Doh, saw revenue sink 35% to $376.8 million. Partner brands, which includes Disney toy products, saw sales fall by the same percentage to $138.2 million. Hasbro Gaming, which includes board games, was the sole category to grow sales, with these up 11% to $137 million.

7:23 a.m. ET Monday: Stock futures point to a higher open

Here were the main moves in markets, as of 7:23 a.m. ET:

  • S&P 500 (^GSPC): +12.75 points (+0.4%) to 3,216.75

  • Dow (^DJI): +68 points (+0.26%) to 26,390.00

  • Nasdaq (^IXIC): +94.25 points (+0.9%) to 10,553.25

  • Crude (CL=F): +$0.12 (+0.29%) to $41.41 a barrel

  • Gold (GC=F): +$40.70 (+2.14%) to $1,938.20 per ounce

  • 10-year Treasury (^TNX): -1.2 bps to yield 0.577%

6:09 p.m. ET Sunday: Stock futures open roughly flat

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:09 p.m. ET:

  • S&P 500 futures (ES=F): 3,202.75, down 1.25 points or 0.04%

  • Dow futures (YM=F): 26,295.00, down 27 points, or 0.1%

  • Nasdaq futures (NQ=F): 10,477.25, up 18.25 points, or 0.17%

Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid TPX IMAGES OF THE DAY

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