What to watch today: Wall Street set to close first half of 2021 with solid gains
U.S. stock futures were flat Wednesday, one day after the S&P 500 and Nasdaq eked out record high closes, again. The Dow Jones Industrial Average, which gave up a gain of more than 100 points early Tuesday, finished slightly higher and remained about 1.4% away from its early May record close. (CNBC)
Going into the final day of June and the first half of the year, the S&P 500 was leading the major benchmarks with a 14.3% year-to-date gain. The Nasdaq was up 12.7% for the year. The Dow was up 12% in 2021, although it has lagged recently, tracking for a modestly monthly decline. The S&P 500 and Nasdaq advanced in June. All three benchmarks posted solid second quarter gains. (CNBC)
The 10-year Treasury yield ticked lower Wednesday, trading around 1.46%, after better-than-expected ADP jobs data. ADP on Wednesday reported that jobs at U.S. companies grew by 692,000 in June. However, the reading on private-sector positions in May, while still strong, was revised sharply lower to 886,000. (CNBC)
During the Covid pandemic, the ADP report has not been a good indicator of what the government's monthly employment report might show. Economists expect Friday's jobs data to show that around 700,000 new nonfarm positions were created in June. The nation's unemployment rate is expected to dip to 5.7%. Weekly jobless claims are out Thursday. (CNBC)
IN THE NEWS TODAY
Shares of Bed Bath & Beyond bounced around in Wednesday's premarket after the retailer reported mixed fiscal first-quarter results. Sales topped estimates, but profits missed. Costs tied to the company's turnaround efforts, including marketing expenses, hurt margins. The company raised its full-year revenue outlook ahead of the key back-to-school shopping season. Shares of Bed Bath & Beyond, which saw some strength earlier this month in the meme stock trade, were up 68% in 2021, as of Tuesday's close. (CNBC)
Didi Global is set to begin trading Wednesday on the New York Stock Exchange after pricing its initial public offering at $14 per share and raising $4.4 billion. That gives the China-based ride-hailing company an initial valuation of about $73 billion. (Reuters)
Digital ad company Taboola is set to begin trading Wednesday on the Nasdaq following its merger with ION Acquisition Corp. 1, a special purpose acquisition corporation. The SPAC transaction will generate $526 million upon closing. (CNBC)
Clear, No. 19 on CNBC's Disruptors 50 list this year, is set to begin trading Wednesday on the NYSE after pricing its initial public offering $31 per share and raising more than $400 million. Clear, known for its frequent fliers identification service, launched Health Pass during the Covid pandemic. (Press Release)
High home prices are finally starting to take some of the fizz out of the Covid-induced housing boom. Mortgage demand fell 6.9% for the week, according to the Mortgage Bankers Association. Mortgage applications to purchase a home dropped 5% for the week and 17% annually. That's the slowest pace since the start of May 2020, when lockdowns were in full force. Applications to refinance sank 8% for the week and 15% annually. (CNBC)
A bipartisan infrastructure deal reached by President Joe Biden and a group of senators would not only add to economic growth but also lower the national debt, according to a new study from the University of Pennsylvania's Wharton School. Researchers at the Wharton School said the additional $579 billion in new infrastructure spending would increase domestic output by 0.1% and decrease the U.S. debt by 0.9% by 2050. (CNBC)
Warren Buffett said the economic consequences of the pandemic are falling disproportionately on small businesses and the unpredictability of Covid is far from over. "The economic impact has been this extremely uneven thing," the Berkshire Hathaway CEO said during an interview with Becky Quick on CNBC's special "Buffett & Munger: A Wealth of Wisdom," which aired on Tuesday.
* Charlie Munger says he’s in love with Zoom, thinks the videoconferencing trend is here to stay (CNBC)
* Buffett reflects on his first meeting with Munger: 'I'm not going to find another guy like this' (CNBC)
STOCKS TO WATCH
Virgin Galactic (SPCE): The space transportation company's stock dropped 3% in premarket trading, after Bank of America Securities double-downgraded the stock to "underperform" from "buy." BofA notes the recent spike in the stock after the company received approval to carry passengers into space, and said the premium earned by Virgin Galactic's leading position is already reflected in the stock price.
Xpeng (XPEV): Xpeng will raise $1.8 billion in its Hong Kong initial public offering, according to people with direct knowledge of the matter who spoke to Reuters. The Chinese electric vehicle maker's U.S. shares fell 2.3% in premarket trading.
MongoDB (MDB): MongoDB said it would sell 2.5 million class A common shares, seeking to raise $889 million. The database platform provider plans to use the proceeds for general corporate purposes. MongoDB stock lost 4.5% in premarket trading.
Constellation Brands (STZ): The spirits and beer maker reported quarterly profit of $2.33 per share, matching Wall Street forecasts. Revenue came in slightly above estimates.
General Mills (GIS): The food producer beat analysts' estimates by 6 cents a share, with quarterly earnings of 91 cents per share. Revenue was above estimates as well. Organic net sales fell by 6% from a year ago, however, a reflection of the surge in at-home demand as the pandemic was taking hold.
Twitter (TWTR) Twitter appointed its vice president of global solutions Sarah Personette as chief customer officer. She replaces Matt Derella, who is leaving Twitter after nine years at the company.
Las Vegas Sands (LVS): Las Vegas Sands rose 1.7% in the premarket following reports that border restrictions between Hong Kong and Macau will loosen in mid-July. Currently, any traveler from Hong Kong to Macau is required to quarantine for 14 days.
WideOpenWest (WOW): The broadband provider's shares rallied 4.4% in the premarket after it announced a deal to sell five of its service areas in two separate deals for a total of about $1.8 billion.
DR Horton (DHI): The home builder was named a "top pick" by Goldman Sachs. Goldman notes that stocks in the sector are down about 15% from May highs and feels that DR Horton is best positioned to execute against industry headwinds.
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