Here are the key news, trends, and analysis investors need to start their trading day:
1. Wall Street is trying to keep its recovery rally going
People walk down Wall Street in the rain on July 8, 2021 in New York City.
Spencer Platt | Getty Images
Dow futures rose on Wednesday as Wall Street tried to keep its recovery rally going. However, previous earnings were cut sharply and the Nasdaq futures slipped. The Dow Jones Industrial Average rose 549 points, or 1.6%, on Tuesday after starting the week down 725 points. Both the S&P 500 and the Nasdaq rebounded more than 1.5%. The increase in new daily Covid cases in the US and around the world, driven by delta variants, has unsettled investors. At the close of trading on Tuesday, all three stock benchmarks were still more than 1% away from last week’s record closing times. In addition to the volatility in stocks this week, 10-year government bond yields rebounded from Tuesday’s 5½-month lows of nearly 1.13% to trade 1.25% early Wednesday.
2. Johnson & Johnson, Coca-Cola beats earnings and sales
A healthcare doctor prepares a dose of Johnson & Johnson’s Coronavirus Disease (COVID-19) vaccine for a commuter during the opening of MTA’s public vaccination program at the 179th Street subway station in the Queens borough of New York City in front of USA, May 12, 2021.
Shannon Stapleton | Reuters
Dow share Johnson & Johnson gained about 1% in pre-trading after the U.S. drugmaker posted better-than-expected earnings of $ 2.48 per share in the second quarter on Wednesday. Sales of $ 23.31 billion also exceeded. J&J expects to sell $ 2.5 billion of its one-time Covid vaccine this year, amid growing concerns about its effectiveness against the Delta variant. A new NYU study suggests that people who received the J&J vaccine will get a second vaccination or a booster of the Pfizer or Moderna vaccines.
A worker fills a display of soft drinks from Coca-Cola Co. in a store in Orem, Utah, USA on Tuesday, February 9, 2021.
George Frey | Bloomberg | Getty Images
Dow component Coca-Cola stocks rose about 2% in the premarket after the beverage giant reported better-than-expected earnings of 68 cents per share early Wednesday. Revenue of $ 10.13 billion also exceeded forecasts. Revenue exceeded pre-Covid 2019 levels, prompting the company to raise its full-year outlook.
Verizon, also a Dow stock, gained about 1.5% in pre-market trading after the company beat estimates by 7 cents on Wednesday with adjusted quarterly earnings of $ 1.37 per share. Verizon also reported better-than-expected revenue and subscriber growth and raised its outlook for the full year.
3. Netflix is outpacing paid subscriber growth but is missing out on revenue
This photo image shows the Netflix logo on the App Store displayed on a smartphone screen.
Rafael Henrique | SOPA pictures | LightRakete | Getty Images
Shares in Netflix was flat in the premarket. The stock initially fell in Tuesday’s extended trading hours after the video streaming giant missed estimates with earnings of $ 2.97 per share in the second quarter. Revenue of $ 7.34 billion was largely in line with projections. The worldwide increase in paid net subscribers of 1.54 million exceeded expectations. Netflix also confirmed a foray into gaming. The company recently hired Facebook video game manager Mike Verdu. Netflix will be able to differentiate its game offerings based on its vast intellectual property holdings, COO Greg Peters said during the company’s conference call.
4. United plans to increase flights to meet strong demand
A United Airlines passenger jet lands at Newark Liberty International Airport, New Jersey, USA on December 6, 2019.
Chris Helgren | Reuters
Shares in United Airlines was up about 1% in its premarket on Wednesday, the morning after the airline hit estimates with a loss of $ 3.91 per share in the second quarter. Revenue exceeded expectations, quadrupling to $ 5.47 billion, thanks to a resurgence in air travel following last year’s pandemic-induced slump in demand. Revenue was still 50% below 2019 levels. United expects positive adjusted pre-tax earnings for the third and fourth quarters and plans to ramp up flights. Last week, Delta Air Lines and American Airlines also announced an improvement in bookings and financial results.
5. WHO chief warns of “early stages of another wave”
The Tokyo 2020 logo will be displayed near Odaiba Seaside Park in Tokyo on July 7, 2021, as reports suggest that the Japanese government is planning to impose a state of emergency virus during the Tokyo Olympics.
Kazuhiro Nogi | AFP | Getty Images
The world is in the “Early stages of another wave” of Covid infections and deaths, World Health Organization Director General Tedros Adhanom Ghebreyesus said on Wednesday. Speaking to members of the International Olympic Committee in Tokyo, Tedros also urged the world’s leading economies to share vaccines. With the opening of the Games on Friday, after a one-year delay, Tokyo’s new Covid infections are emerging soared to a six month high Wednesday. The head of the Olympic Games, Toshiro Muto, refused on Tuesday to rule out a cancellation of the Games if the coronavirus cases increased. A spokesman later said the organizers were “100% focused on delivering successful games”.
– Follow the entire market like a pro CNBC Pro. Find out about the pandemic with CNBC’s coronavirus coverage.