U.S. stock market futures jumped as investors continue to hope for a quick recovery from the coronavirus-fed recession while the government considers more stimulus, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
A Wall Street rally from April has lost steam this month as investors weigh hopes of a revival in business activity amid easing lockdowns against conflicting reports on a potential coronavirus vaccine.
The U.S. stock market moved sharply lower in the final hour of Tuesday’s session after a report raised doubts about Moderna Inc.’s (Nasdaq: MRNA) recent coronavirus vaccine early-stage trial results.
“With headlines suggesting that more fiscal and monetary stimulus around the globe is underway and with the virus curve being much flatter than a couple of months ago, we would treat yesterday’s setback as a corrective move,” JFD Group Senior Market Analyst Charalambos Pissouros said.
U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell said Tuesday that the government and the central bank were considering additional measures to ensure the worst stricken areas of the economy received adequate support.
Home improvement chain Lowe’s Companies Inc. (NYSE: LOW) jumped 5.8% in premarket trade after becoming the latest retailer to report upbeat quarterly same-store sales.
As of 9:20 a.m. EDT, Dow Jones and S&P 500 were up 1.2%. Nasdaq Composite futures were 1.1% higher.
Stocks to Watch Today
Johnson & Johnson (NYSE: JNJ) — The packaged goods and pharmaceutical company elected to stop selling baby powder in the U.S. and Canada as it faces numerous lawsuits from consumers claiming its talc products cause cancer. Shares of Johnson & Johnson were up 0.6%.
Target Corp. (NYSE: TGT) — The retailer reported stronger-than-expected first-quarter earnings and revenue. The company beat analysts’ projections in earnings by $0.21 per share. It also said its costs related to the COVID-19 pandemic jumped by $500 million. Shares of Target were up 0.7%.
Apple Inc. (Nasdaq: AAPL) — Shares of the technology giant rose 1.2% after news that it reached a $70 million deal to buy Tom Hank’s World War II-era movie “Greyhound” from Sony Pictures. Apple plans to release the movie to its Apple TV+ subscribers.
CBO Projects 38% Drop in GDP for Q2
The Congressional Budget Office released its outlook for the U.S. economy — and it wasn’t good.
In its projections, the CBO sees gross domestic product dropping 38% on an annualized basis in the second quarter. The CBO also said the coronavirus pandemic would increase the federal deficit by $2.1 trillion in fiscal 2020 and $600 billion in fiscal 2021.
The CBO’s forecasts are in line with Wall Street analysts, but slightly better than the Atlanta Federal Reserve, which sees GDP falling nearly 42% in Q2.
Dow Inc. Closes Operations in Michigan After Dam Breaks
Dow Inc. (NYSE: DOW) has shut down its operations in Midland, Michigan after two dams broke upstream from the chemical company’s headquarters.
According to Bloomberg, Michigan Gov. Gretchen Whitmer said the town of Midland could be under up to nine feet of water. She already ordered the town of Midland evacuated.
Shares of Dow were up 0.8% in premarket trading.
Investors Could See Hard Times Ahead for Bond Market
Yields on 10-year Treasurys have hovered around two-thirds of a percentage point for much of the past month.
According to a report in The Wall Street Journal, that stability and low rate suggest bond investors are holding a bleak outlook for the economy and are fairly confident of that.
The yield on the 10-year Treasury was at 0.692 Wednesday morning, a 0.019% decline from Tuesday’s close.
What We’re Reading
Depression 2.0? Hardly — Don’t Miss New All-Time Highs This Summer (Money & Markets)
People Are Flying Again … Sort Of (CNN Business)
Dangers of a W-Shaped Recovery Can’t Be Ignored After Fed Chief’s Testimony (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Expedia Group Inc. (Nasdaq: EXPE)
L Brands Inc. (NYSE: LB)
Lowe’s Companies Inc. (NYSE: LOW)
Synopsys Inc. (Nasdaq: SNPS)
Target Corp. (NYSE: TGT)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.