US OPEN: Wall Street opens higher despite jump in Covid-19 cases

US indices launched final session of the week slightly higher, however trading is likely to be cautious as investors remain concerned about the spread of the coronavirus and mixed earnings results. Yesterday US reported a record number of 77,000 new infections taking its total to over 3.5 million.  Number of fatalities also rose to their highest for a single day since early June. Meanwhile Wall Street Journal reported yesterday, that Trump administration is willing to implement travel restrictions on China’s Communist Party members and their families in response to the new security law in Hong Kong. Also further actions against Huawei and video service TikTok are expected.

On the data front Building permits in the United States rose 2.1 % from a month earlier, below analysts' estimates of 1.29 million.  Housing starts in the US jumped ed 17.3 % to an annualized rate of 1,186 thousand in June of 2020, above market expectations of 1,169 thousand and following an upwardly revised 1,011 thousand in May. It is the highest reading in three months. The University of Michigan Consumer Sentiment Index is expected to rise to 79 in July, from 78.1 in the previous period.

S&P500 (US500) is trading in a local sideways move. Breaking above the resistance level at 3240.8 pts could be seen as a bullish sign.  On the other hand, breaking below  the support at 3172.9 pts could pave the way for a bigger decline. Source: xStation5

 

Netflix (NFLX.US) stock plunged 10% in extended trading after streaming service  provider posted weaker than expected second-quarter financial results. Netflix reported quarterly earnings of $1.59 well below analysts' expectations of $1.81 per share. Revenue came in slightly above market expectations.  Company also added10.1 million new paid subscribers. However, company's executives admitted that the gains in the first half of the year were likely pulled forward from later in the year, which means fewer new subscribers in the rest of 2020. “In Q1 and Q2, we saw significant pull-forward of our underlying adoption leading to huge growth in the first half of this year (26 million paid net adds vs. prior year of 12 million),” executives said in the letter. “As a result, we expect less growth for the second half of 2020 compared to the prior year.”Netflix also announced that Chief Content Officer Ted Sarandos will become co-CEO with current CEO Reed Hastings.

 

PPG Industries (PPG.US) stock rose 4% after the closing bell. The company reported better than expected second-quarter figures. PPG earned 99 cents per share on revenues of $3.02 billion, above market expectations of 70 cents per share on revenues of $2.81 billion. PPG noted strong gains  from its global architectural coatings businesses, driven by a do-it-yourself demand during the pandemic.

 

Norwegian Cruise Lines (NCLH.US) and Carnival (CCL.US)— Shares of cruise lines dropped 1% in extended trading after the CDC announced it will ban U.S. cruises through September, cited “ongoing” coronavirus outbreaks on ships for its continued ban.

The world's largest asset manager Blackrock (BLK.US) reported a 22% gain in per share earnings for the quarter, slightly above analysts’ expectations. Company also posted $100 billion of net inflows and $1.1 billion of stock buybacks.

Regions Financial (RF.US) reported a quarterly loss of 25 cents per share, while analysts’ expected a 5 cents per share profit. Revenue came in  above forecasts. The loss was prompted by a larger-than-expected increase in the bank's  reserve for credit losses.