Market Brief: July 14, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Tuesday, July 14, 2020
Fed Lift. U.S. stocks finished sharply higher Tuesday, and the Dow industrials notched a third straight gain, powered by a rally in energy and materials shares, a day after technology stocks staged a stunning reversal. Comments made by Federal Reserve members implying further support for the economy and pointing to the possibility of a decline in the unemployment rate also helped lift the market, a day after the Nasdaq staged a powerful reversal. The Dow Jones Industrial Average closed up about 557 points, or 2.1%, at about 26,643, the S&P 500 index closed out the session up 1.3% at about 3198, while the Nasdaq Composite Index concluded the day up 0.9% at about 10,489. Equities added to gains in afternoon action after Fed Gov. Lael Brainard said the U.S. central bank should use large-scale asset purchases for a “sustained” period to help the economy rebound amid a
“thick fog of uncertainty” brought on by Covid-19. Later Tuesday, St. Louis Fed president James Bullard struck an upbeat tone on the outlook, saying that the unemployment rate could drop sharply in the next six months, if “we play our cards right” and many workers subject to temporary layoffs are recalled.
DJIA 26,642.59 556.79
S&P 500 3,197.61 42.39
NASDAQ 10,488.58 97.73
US 10-Year Note 0.63 0.01
Dollar Index 96.29 -0.18
Crude Oil 40.29 0.19
Gold 1,813.20 -0.90
Global Dow 2,922.44 14.99
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JPMorgan’s Earnings Were Surprisingly Strong. It’s a Positive Sign for Other Banks.
Megabank JPMorgan Chase crushed expectations for its second-quarter earnings. The shares traded higher on Tuesday even though it wasn’t all good news: Profits fell by about 50% year over year.

Still, it was good enough for Wall Street, which can be a funny place. The Street, after all, is all about expectations, and JPMorgan’s results could mean gains for other large banks with a similar mix of businesses that are due to report earnings in coming days. JPMorgan earned $1.38 a share from $33.8 billion in revenue. In last year’s second quarter, the bank earned $2.82 a share from $29.5 billion in revenue.

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Citigroup Earnings Top Analyst Estimates
Citigroup reported better-than-expected results for the second quarter, but the news failed to lift the stock.

Profits for Citigroup totaled $1.3 billion, or 50 cents a share—better than the 35 cents a share analysts expected, but 73% below profits of $4.8 billion in the second quarter of 2019. Revenue of $19.8 billion was 5% higher than in the year-earlier quarter. Shares were down about 3.4% Tuesday afternoon.

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Wells Fargo Is ‘Disappointed’ With Its Second-Quarter Results
Wells Fargo on Tuesday reported weaker-than-expected results for its second quarter. The San Francisco-based bank posted a loss of 66 cents a share on revenue of $17.8 billion. Analysts expected a loss of 20 cents a share.

“We are extremely disappointed in both our second quarter results and our intent to reduce our dividend,” Wells Fargo CEO Charlie Scharf said in a statement. “While the negative impact of the pandemic is unprecedented and many of our business drivers were negatively impacted, our franchise should perform better, and we will make changes to improve our performance regardless of the operating environment.”

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Moderna Says It Plans to Start Phase 3 Trial of Covid-19 Vaccine on July 27
The biotech company Moderna plans to start its 30,000-participant Phase 3 trial of its experimental Covid-19 vaccine on July 27, according to an entry posted on, a U.S. government registry of drug trials.

Moderna confirmed in an email to Barron’s that it had set an estimated start date for the trial of July 27. The start date would meet the company’s announced target of beginning its Phase 3 trial in July, although it is later than the July 9 start previously announced by some of the investigators involved. The company’s CEO has said that he aims to have efficacy data by Thanksgiving.

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Delta’s Loss Exceeds Forecasts as CEO Offers Grim Outlook
Delta Air Lines reported second-quarter results Tuesday morning, and they were worse than expected. The coronavirus pandemic wiped out most of the carrier’s revenue, and CEO Ed Bastian said in a press release that the company isn’t expecting a sustainable recovery for another two years.

Delta reported a pretax loss of $7 billion as adjusted revenue collapsed by more than $11 billion, down 91% from a year earlier, to $1.2 billion. The revenue number missed consensus estimates for $1.4 billion. Delta lost $9.01 a share on a GAAP basis, versus a consensus forecast loss of $3.72 a share.

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Inflation Picked Up in June, Driven by Energy and Food. But Prices Will Likely Stay Subdued.
Prices consumers pay for everything from food and fuel to haircuts jumped in June, but investors shouldn’t read the increase as a sign of bubbling inflation.

The Labor Department said Tuesday that the total consumer price index climbed a seasonally adjusted 0.6% last month from May, slightly higher than the 0.5% increase economists surveyed by FactSet predicted. The rise, which broke an unprecedented string of contractions, was mostly due to a surge in gasoline prices. The gas index rose 12.3% in June after recent declines, accounting for more than half of the increase in the overall CPI.

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Boeing Delivered 20 Planes in the Second Quarter. Here’s How Bad It Is.
Boeing delivered 20 planes in the second quarter. While it isn’t unexpected, it isn’t good. The 737 MAX saga and global coronavirus pandemic continue to hammer the commercial aerospace giant.

Boeing updates delivery figures monthly, so there is little drama in quarterly releases. Still, 20 is the lowest quarterly number since 1963. Boeing delivered 149 planes in the second quarter of 2019 and 184 planes in the second quarter of 2018.

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NCino Stock Rockets 150% After IPO
NCino, which provides cloud-based software for financial institutions, saw its stock surge more than 150% in its first day of trading.

Shares of nCino opened at $71 and were trading at $77.20, up 150% on the Nasdaq Stock Market at midday Tuesday. With roughly 89.2 million shares outstanding, nCino now has a market capitalization of $6.9 billion. The Wilmington, North Carolina, fintech sold 8.06 million shares at $31 each late Monday.

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Delta Co-Owned Virgin Atlantic Seals $1.5B Rescue Package, Securing the Airline’s Future
Delta Air Lines and its partner Virgin Group will support a £1.2 billion ($1.5 billion) rescue package for the struggling carrier Virgin Atlantic, the airline said on Tuesday.

Sir Richard Branson’s Virgin Group will reportedly inject £200 million in cash, as well as offering £400 million in payment deferrals to shareholders alongside Delta.

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Comcast’s Peacock Is a Bet Viewers Will Watch Ads for Free Streaming
The already crowded streaming space will gain yet another contestant on Wednesday, as NBCUniversal’s Peacock service launches in the U.S. The Comcast subsidiary is taking a different approach from other high-profile streaming services with a multitiered offering that includes advertising-supported options and discounts for its cable customers. Comcast’s goals are to better monetize online viewing of NBCUniversal content and to offset viewership losses for linear TV.

Comcast stock has lagged behind the market and some peers in 2020, as investor concern about the coronavirus pandemic’s impact on its NBCUniversal media division outweighed continuing cable-segment strength.

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