US OPEN: Progress on stimulus negotiations lifts US stocks higher

US indices launched today’s session on the positive note, NASDAQ 100 increased to an all-time high of 11131, on hopes of more US stimulus. Yesterday Treasury Secretary Steven Mnuchin said that congressional Democrats and White House negotiators were working to deliver a deal by the end of the week and that progress had been made on key components of the bill. Federal Reserve is seen pushing for more stimulus measures this year. In the next few months, the FED will be solidifying a policy outline that would commit it to low rates for years as it pursues an agenda of higher inflation and a return to the full employment picture. At the same time, The U.S. and China representatives have agreed to meet in the middle of August to  review the phase one trade agreement. On the data front, ADP report showed that the US hired just 167 thousand workers in July 2020, compared with a revised 4.3 million increase in June and way below market expectations a 1.5 million rise. Meantime US trade deficit narrowed to USD 50.7 billion in June 2020 from a revised one-and-a-half-year high of USD 54.8 billion in the previous month and compared to market expectations of USD 50.1 billion. Both exports and imports rebounded firmly.

Disney (DIS.US) stock rose 4% after the company posted better than expected quarterly results. Disney earned 8 cents per share excluding items on revenue of $11.78 billion while Wall Street expected a loss of 64 cents per share on revenue of $12.37 billion. The company’s operating income dropped by  $3.5 billion as company was forced to close its parks due to the pandemic. Disney said it has 100 million paid subscribers across its digital streaming platforms, which include Disney+, Hulu and ESPN+. Disney also announced that its expected blockbuster “Mulan” will go straight to this streaming platform in September, skipping most movie theaters.

 

Johnson & Johnson (JNJ.US) stock rose after the company reached a deal with the US government to manufacture millions of doses of its candidate vaccine to treat COVID-19 in case it proves successful.

 

Activision Blizzard (ATVI.US)— stock dropped 1% after the company posted its second-quarter financial results. Activision Blizzard reported revenue of $2.08 billion compared to analysts’ estimates of $1.70 billion, according to Refinitiv. The company also reported earnings of 81 cents per share, above analysts’ expectations of 0.66 cents per share.

 

Apple (AAPL.US)– downgraded Apple to “neutral” from “buy”, while raising its price target on the stock to $470 per share from $420. B of A Securities sees many positives for Apple but risks as well, and the risk/reward is balanced at current price levels.

 

Walmart (WMT.US) shares fell 1.5% in extended trading after the company again delayed the launch of Walmart+, a subscription service meant to compete with Amazon Prime, according to Vox.

 

Novavax (NVAX.US) announced its vaccine candidate produced neutralizing antibodies in trial participants, but many safety concerns still surround the potential vaccine.

 

Beyond Meat (BYND.US) stock dropped 6% in extended trading after the company posted is quarterly earnings figures. Company lost 2 cents per share, in line with market expectations. Meanwhile revenue of $113.3 million came in above market expectations of $99.7 million. However, the company's operation costs came in above forecasts due to the pandemic.