U.S. stock market index futures eased back following a five-day rally by the S&P 500 and Nasdaq as investors continued to weigh the risks of thousands of new COVID-19 cases nationwide, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
Miami became the latest coronavirus hotspot to roll back its reopening while Texas registered an all-time high in the number of people hospitalized with the coronavirus.
Travel stocks — among the hardest high during initial lockdowns — fell in premarket trading. United Airlines Holdings Inc. (Nasdaq: UAL) and American Airlines Group Inc. (Nasdaq: AAL) were down 2.3% and 2.1% respectively.
The continued spread of the virus could set back business activity which is attempting to regain momentum after an initial round of lockdowns pushed the U.S. economy into a recession in February.
A surprise expansion of the service sector and record job additions in June have bolstered views that an economic recovery is underway, helping the Nasdaq close at a record high on Monday while pushing the S&P 500 up about 42% from its March lows.
As of 9:20 a.m. EDT, Dow Jones futures were down 0.86%. S&P 500 futures were off by 0.61% while Nasdaq futures fell 0.21%.
Stocks to Watch Today
Ayro Inc. (Nasdaq: AYRO) — The electric vehicle manufacturer recently completed its factory expansion, allowing it to handle up to 600 electric vehicles per month, compared to just 200 before the expansion. Shares of Ayro were up 6.1% after posting a 63% gain in the previous session.
Vivint Solar Inc. (NYSE: VSLR) — The American solar energy company jumped 23.7% in premarket trading on news it is being acquired by rival Sunrun Inc. (Nasdaq: RUN) for around $1.46 billion in an all-stock deal (see below for more).
Novavax Inc. (Nasdaq: NVAX) — The vaccine development company said it has been selected to deliver up to 100 million doses of its coronavirus vaccine as part of the government’s Operation Warp Speed initiative. Shares of Novavax were trading up 33.2%.
Solar Company Sunrun to Acquire Rival Vivint Solar for $1.46 Billion
Residential solar energy installer Sunrun Inc. (Nasdaq: RUN) said it was buying rival Vivint Solar Inc. (NYSE: VSLR) for nearly $1.46 billion in an all-stock deal.
According to CNBC, Vivint shareholders will receive 0.55 shares of Sunrun for each share of Vivint held, representing a premium of 10.4% to Vivint’s Monday close. The deal is valued at $3.2 billion including debt.
Sunrun shareholders will hold about 64% of the combined company while Vivint stockholders will own the rest.
Both companies were up more than 20% in premarket trading.
Social Media Companies Suspend Review of Hong Kong Data Request
Big social media companies like Facebook Inc. (Nasdaq: FB), Twitter Inc. (NYSE: TWTR) and Alphabet Inc.’s (Nasdaq: GOOG) Google have halted requests for user data from Hong Kong law enforcement agencies.
The suspension comes after China imposed a national security law on the special administrative district.
Companies said the pause would continue until “further assessment of the impact of the National Security Law, including formal human-rights due diligence,” according to The Wall Street Journal.
In response, social media app TikTok said it was pulling its app from Google and Apple Inc.’s (Nasdaq: AAPL) app stores.
Fed’s Bostic Seeks Economic Activity Leveling Off
The president of the Federal Reserve Bank of Atlanta says economic activity in parts of the U.S. are showing signs of a plateau.
According to Bloomberg, Raphael Bostic said “this recovery is going to be a bit bumpier than it might otherwise,” due to an uptick in coronavirus cases.
He added that more economic support for small businesses may be needed in order for those businesses to survive the pandemic. Bostic did not say whether there would be more monetary stimulus coming from the Fed.
What We’re Reading
Forget P/E Ratios. This Indicator’s Record High Spells Market Trouble (Money & Markets)
Goldman Sachs Thinks the US Recovery Is Running Into Trouble (CNN Business)
Uncertain Politics Push Gold Higher — and There’s no Sign It’ll Stop Soon (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Aspen Group Inc. (Nasdaq: ASPU)
Levi Strauss & Co. (NYSE: LEVI)
Paychex Inc. (Nasdaq: PAYX)
Pure Cycle Corp. (Nasdaq: PCYO)
Smart Global Holdings Inc. (Nasdaq: SGH)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.