Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Top 5 Things to Know in the Market on Tuesday, July 14th

Economy Jul 14, 2020 06:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
C
-1.30%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
JPM
-1.40%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WFC
-2.25%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
LCO
-0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ESZ2
-0.31%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
-0.04%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Geoffrey Smith 

Investing.com -- Earnings season kicks into gear with reports from three of the U.S.'s biggest banks. Stocks are set for a modest bounce after falling sharply in reaction to news on Monday that California is rolling back its economic reopening and delaying the resumption of in-person schooling. Chinese trade data return to year-on-year growth for the first time since the pandemic erupted, but European data are less convincing. And OPEC presents its monthly report on the oil market while technical staff work out whether the current deal on output restraint is being properly observed. Here's what you need to know in financial markets on Tuesday, July 14th.

1. Reopening rollback

California Governor Gavin Newsom ordered the closure of all indoor businesses. The state’s two largest school districts, in Los Angeles and San Diego, will also conduct classes remotely after the summer break, defying pressure from the federal government to reopen.

The measures, which apply to bars, indoor restaurants, movie theaters and nail salons among other things, are the most dramatic reversal yet of the economic reopening across the U.S. They come after a 20% increase in cases and a 10% rise in deaths across the state over the last week.

The national seven-day rolling average for new cases, which evens out some short-term volatility in the reporting, has risen from less than 20,000 in mid-June to a new record of over 59,000 as of Monday.

Reopening has brought similar concerns across the world, with both Japan and Germany warning on Monday that nightclubbing in particular could prompt renewed surges in infections.

 2. Bank reports to set the tone for Q2 earnings season

Earnings season kicks into gear, with JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) all due to report on what is set to be a dismal quarter.  

Of most interest will be the rate at which banks are building provisions against corporate and personal loans turning bad as they are struck by a wave of bankruptcies and job losses. The provisions number will, indirectly, be a comment on the effectiveness of government policy in preserving jobs.

FactSet estimates that S&P 500 companies overall will post a 10% decline in revenue and a 45% drop in earnings in the quarter. The banks look likely to fare even worse:  JPMorgan’s earnings per share expected to have fallen by more than half to $1.19, while Citigroup’s are expected to fall 84% to 36c.

3. U.S. Stocks set to bounce a little; Delta, Softbank in spotlight

U.S. stocks are set for a modest bounce at opening after sharp losses on Monday in response to the Californian news, although the quarterly reports from the banks may change all that.

By 5:55 AM ET (9:55 GMT), the Dow futures contract was up 96 points or 0.4%, while the S&P 500 Futures contract and the Nasdaq 100 futures contract were both up 0.3%. Overnight, UBS struck a note of caution regarding tech stock valuations, cutting its recommendation on both Netflix (NASDAQ:NFLX) and Spotify (NYSE:SPOT).

In addition to the three big banks, there’ll also be earnings from Delta Air Lines (NYSE:DAL). Also in the spotlight may be SoftBank ADRs (OTC:SFTBY), which hit a one-year high on Monday on reports that it is lining up a possible sale of a stake in chipmaker ARM.

4 Chinese exports, imports return to growth; German, U.K. data underwhelm

China’s external trade data showed positive numbers in year-on-year terms for the first time since the pandemic erupted at the start of the year.  Chinese exports rose 0.5% on the year in June, while imports rose 2.7%, due largely to the country’s taking advantage of low prices to restock their crude oil reserves.

China has emerged furthest from the pandemic-induced collapse partly because it was the first country to be hit by it. In Europe, which only started to suffer two months after China, the recovery is still looking fragile: U.K. May GDP data rebounded by only 1.8% rather than the 5.5% expected, although industrial output and manufacturing were down by slightly less than feared.

In Germany, meanwhile, the ZEW index of economic sentiment fell from June due to a much sharper-than-expected worsening in the assessment of current conditions.

5. Oil steadies on evidence of Chinese buying; OPEC report due

The Organization of Petroleum Exporting Countries will release its monthly assessment of the global oil market, on the same day that a two-day technical meeting to assess compliance with the so-called OPEC+ deal on output restraint starts.

Oil prices steadied overnight having weakened on Monday in response to the Californian news, which casts fresh doubt over the trajectory for fuel demand.

Signs of record buying by Chinese importers in June then acted as a counter-weight. Crude imports to China soared to a record 12.99 million barrels a day in June, up over 3.3 million b/d from May.  

U.S. crude futures were down 0.8% at $39.77 a barrel, while the international benchmark Brent was down 0.6% at $42.47 a barrel

Top 5 Things to Know in the Market on Tuesday, July 14th
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (10)
Selene Annika
seleneannika1980 Jul 14, 2020 10:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
For huge daily profits. WA: +1 (712) 796 0331
Mallet Shop
Mallet Shop Jul 14, 2020 9:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
here is all you need to know about "smart investors". At the bottom of the market during the Great Financial Crisis, Warren Buffett stepped in to rescue Goldman Sachs when the Goldman sold an expensive convertible preferred to Berkshire Hathaway BRK.A, -0.01% , BRK.B, -0.08% with share purchase warrants attached to the deal. When the market recovered, Buffett made out like a bandit. What has Berkshire done now? It is raising cash. It sold its airline stocks, and Bloomberg reported that it is borrowing $1.8 billion in a Yen bond offering. In the current economic environment, there are many companies who need to borrow to shore up their liquidity, cash-rich Berkshire Hathaway does not fit into that category. Does this make you want to rush out to buy stocks? The bottom hasn't hit, it's looming in the distance and those with cash will win.
Mallet Shop
Mallet Shop Jul 14, 2020 9:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Here is all you need to know about "smart investors". At the bottom of the market during the Great Financial Crisis, Warren Buffett stepped in to rescue Goldman Sachs when the Goldman sold an expensive convertible preferred to Berkshire Hathaway BRK.A, -0.01% , BRK.B, -0.08% with share purchase warrants attached to the deal. When the market recovered, Buffett made out like a bandit. What has Berkshire done now? It is raising cash. It sold its airline stocks, and Bloomberg reported that it is borrowing $1.8 billion in a Yen bond offering. In the current economic environment, there are many companies who need to borrow to shore up their liquidity, cash-rich Berkshire Hathaway does not fit into that category. Does this make you want to rush out to buy stocks? The bottom most likely hasn't hit -- it's looming in the horizon and those with cash will win.
GRasool Esfandiari
GRasool Esfandiari Jul 14, 2020 9:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nasdaq, Dow👇
Jeffrey Cooper
Jeffrey Cooper Jul 14, 2020 9:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biden 2020
Kevin DeCosta
Kevin DeCosta Jul 14, 2020 8:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Does anyone really care what California is doing about COVID? I mean investor sentiment in the rest of the country doesn't seem to be suffering too bad... Perhaps you meant to elaborate that not all stocks are dropping because of California's rollback measures and in-person schooling delays. Can we get some less biased reporting here?
Ronald Warren
Ronald Warren Jul 14, 2020 8:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
California has the largest economy in our country. Over 3 trillion in GDP annually. What happens there, can significantly affect the market.
Gibson Ho
Gibson Ho Jul 14, 2020 8:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
CA is also the 5th largest economy in the world. So yea it matters
Kevin DeCosta
Kevin DeCosta Jul 14, 2020 8:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I stand corrected. I guess I'm just tired of the rhetoric. Isn't this crisis priced already? Newsflash, we have been dealing with it for months. Why are investors so fickle to some news about COVID and so non-chalant about other COVID news? Still learning here.
Ronald Warren
Ronald Warren Jul 14, 2020 7:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I watch these futures ticking their way up. There's just no way anyone is buying this market today. Everyone blames the FED, but I'm afraid most have forgotten that the majority of trading is done by artificial intelligence. Give your computer a target # and it'll get you there. Who cares if you pay the ask here and there? It's definitely not legitimate.
test test
test test Jul 14, 2020 7:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
bring back the Redskins
Duane Goodson
Duane Goodson Jul 14, 2020 7:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Democrats are destroyingAmerica.
Ed Kearney
Ed Kearney Jul 14, 2020 7:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Republican President, Republican Senate, it's all the Democrats fault, hilarious
James Marshall
James Marshall Jul 14, 2020 6:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The liberal is the worst enemy to America and the world
Jay West
Jay West Jul 14, 2020 6:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Share something that pertains to the financial/stock markets. Not your silly perpetuation of general beliefs. Although someone may agree or disagree with you, your comment is not helpful or instructive.
Ron Cole
Ron Cole Jul 14, 2020 6:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Current policies and actions very definite affect financial markets!
Ron Cole
Ron Cole Jul 14, 2020 6:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Current liberal policies & actions...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email