Earnings season is set to kick off this week, starting with big banks, and investors will be watching to see if they can deliver on high expectations. Here’s what we’re watching ahead of Monday’s open.
- Futures tied to the S&P 500 were flat after the broad-market index reached a record high on Friday. Futures linked to the Nasdaq-100 ticked up 0.5%, suggesting further gains in technology stocks after the Nasdaq Composite ended last week at a record. Dow Jones Industrial Average futures slipped 0.3%. Read our full market wrap.
What’s Coming Up
- Earnings are due from Simulations Plus after the closing bell.
Market Movers to Watch
- Investors got to watch Richard Branson floating around in zero gravity with the curve of the earth as a backdrop over the weekend, and appear to like what they saw. Virgin Galactic shares are up 2% premarket after the billionaire entrepreneur bested rivals Jeff Bezos and Elon Musk in the race of the corporate leaders to the sky—or did he? Mr. Bezos’s planned flight with his own Blue Origin is expected to take him above the Karman Line, a barrier that many consider the boundary of space, whereas Mr. Branson only crossed the lower barrier defined by the FAA. And Blue Origin last week dismissed the Virgin vehicle as a “high altitude airplane.”
- But then, Mr. Musk also has more earthly matters to attend to. The Tesla chief is expected to take the stand in a trial as early as Monday to defend the propriety of the roughly $2.1 billion tie-up of Tesla and SolarCity. Investors don’t seem fazed: The electric-car maker’s shares added 1% premarket.
- Chinese ride-hailing giant Didi Global ‘s shares slipped 2.7% premarket, extending their post-IPO doldrums that began after the company was targeted by Chinese regulators. It said on Monday that some of its apps in China, such as those used by drivers, will be taken down, which may adversely impact its revenue.
- Shares of blank-check company Lionheart Acquisition were up 0.6% in premarket trading. MSP Recovery is set to go public after the company, which specializes in Medicare Secondary Payer recovery rights, announced an agreement Monday to be acquired by the SPAC in a deal that would value the combined firm at about $32.6 billion.
- Shares of ToughBuilt Industries aren’t looking so tough this morning. The company with a market cap of just around $86 million is down 29% premarket, cutting into Friday’s 46% jump. Today’s move comes after the company announced an offering of $40 million of shares.
- Vaccinations continue apace and many major economies are taking steps toward normalcy, but investors are still signalling anxiety as the highly contagious Delta variety of Covid-19 continues to spread. Pandemic-sensitive stocks like cruise operators, airlines and oil companies were all ticking lower premarket. United Airlines slipped 1.4%, Delta Air Lines shed 0.8%, Carnival fell 1.4%, Occidental Petroleum dropped 1.5% and ConocoPhillips fell 1%.
Market Facts
- During the first week of the third quarter, $18.3 billion flowed into bond funds tracked by EPFR, a 22-week high.
- Shares of big banks are trading at about 50% of the forward price-to-earnings multiple of the S&P 500, compared with a historical median of 75%, according to analysts at Autonomous Research.
- On this day in 1773, Jonathan’s Coffee House, where brokers had met for decades to smoke, drink and trade stocks and bonds, was renamed the London Stock Exchange.
Chart of the Day
- JPMorgan , Goldman Sachs and other big banks are expected to report large second-quarter gains this week, though trading businesses that thrived during the pandemic are slowing down and loan demand has been tepid.
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