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The Dow Jones now could finish the day with a 200-point gain with investors piling into FAANG stocks.
The NASDAQ continues to surge in July - up more than 10% so far. Major indexes don't seem to be hurting from the latest update in COVID-19 cases - and news that corporate profits fell 44% in Q2. More of what's moving the Dow today, below.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now here are what I think will be the most important market events and stocks on Monday morning.
The Top Stock Market Stories for Monday
- The race for a COVID-19 cure is on. Markets ripped higher yet again after Pfizer Inc. (NYSE: PFE) and German biotechnology giant BioNTech received a fast track designation from the FDA for two of the firms' four vaccine developments. The two companies expect to begin the next phase of their vaccine trials in July and include up to 30,000 participants. Both companies believe they can mass-produce vaccines and have at least 100 million doses available by the end of the year (and 1.2 billion by the end of next year).
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- On the coronavirus front, Florida has reported its single-day record of new COVID-19 cases for any state. Florida announced 15,299 new cases on Sunday, according to the state health department. That figure shattered the previous record set by California last week (11,458). On Sunday, the United States reported 66,000 new cases
- Meanwhile, earnings season is about to kick off this week with a number of blue-chip stocks and large banks set to report on Tuesday. Tomorrow, we're looking for earnings reports from JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), and Wells Fargo & Co. (NYSE: WFC). Corporate profits are expected to decline by as much as 44% during the second quarter. That would be the sharpest year-over-year decline since Q4 2008, at the height of the Great Financial Crisis. Many people are wondering how the market can remain high despite the fact that the numbers represent such a divide. The answer is simple. So long as a recovery appears likely on the horizon and we're able to price in the 31% increase in the money supply and inflation, stocks can remain elevated for the future. That said, we can expect some wild swings this quarter due to lackluster guidance.
Stocks to Watch Today: PEP, ADI, MXIM
- Shares of PepsiCo Inc. (NYSE: PEP) added another 1.3% despite news that the company saw a 3% decline in revenue during the second quarter. The company cited a drop in its beverage business due to sluggish demand from restaurants and convenience stores due to the pandemic. However, the firm did say that it experienced stronger demand for its food business, for products including oatmeal, Frito Lay chips, and Cheetos. The company said Monday that it will not provide a full 2020 outlook at the moment due to the continued uncertainty around COVID-19. The company did top both Wall Street earnings and revenue expectations for the quarter. However, it's worth noting that Wall Street had very dismal numbers projected for the company.
- Meanwhile, Analog Devices Inc. (NASDAQ: ADI) stock was up 2% on news that the company offered to buy industry peer Maxim Integrated Products Inc. (NASDAQ: MXIM). The speculation over a $20.91 billion deal sent shares of MXIM up more than 18.5% this morning. The all-stock deal would give MXIM shareholders 0.63 shares of ADI for every MXIM share they currently own.
- Tesla Inc. (NASDAQ: TSLA) has a market capitalization in line with the United States' largest bank, JPMorgan. CEO Elon Musk is now worth more on paper than Warren Buffett. Both numbers come despite the fact that Tesla is not a profitable company. That said, TSLA just received yet another upgrade from Morgan Stanley (NYSE: MS) with a "bull case scenario" price target of $2,070. The analyst's official price target is $740, which would represent downside of 47% since Friday.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.