US OPEN: Wall Street starts the week on a mixed note

 

US indices open flat today as concerns regarding rising numbers fo new COVID-19 cases and earnings results clashed with hopes for more US fiscal stimulus.

 At least 14 states have reported record hospitalizations so far this month. Meantime Florida reported 12,000 new infections yesterday. Furthermore, the U.S. Centers for Disease Control and Prevention has warned that cases and deaths could rise this autumn and winter. The White House is reportedly trying to block billions of dollars from crucial parts of the U.S. virus response, such as contact tracing, testing and investing in the Centers for Disease Control and Prevention. On the positive side, biotech firm BioNTech (BNTX.US) and US drugmaker Pfizer (PFE.US) announced positive data from their ongoing Phase 1/2 trial that showed the vaccine was safe and induced an immune response in patients.

 

Earlier this year, President Donald Trump signed a stimulus package worth roughly $2 trillion which expanded unemployment benefits for those laid off during the pandemic. These expanded benefits included $600-a-week extra unemployment benefit, which will expire in the end of the month. The Senate Majority Leader Mitch McConnell is expected to present draft stimulus legislation when Congress returns from recess and Democrats and Republicans should start negotiations this week. Earnings reports will also be on the spotlight with this week, as major companies including Microsoft Corp (MSFT.US), Amazon.com Inc (AMZN.US), Tesla Inc (TSLA.US), Intel Corp (INTC.US) and Honeywell International Inc (HON.US) will provide their quarterly results.

 

IBM (IBM.US) is scheduled to report its Q1 results today after the closing bell. The iconic tech company is trying to expand its cloud computing business under the leadership of Arvind Krishna, recently appointed company's CEO. However, now investors will try to analyze how the company dealt with the negative effects of the coronavirus pandemic. One of the key metric that should be noted is the Global Technology Services (GTS) unit, which is one the biggest source of company's revenue. According to  analysts forecasts, both IBM's adjusted earnings per  share and total revenue and GTS revenue are expected to decline.

Shares of Nikola Corporation (NKLA.US) finished  Friday session sharply lower as the SEC released news of Nikola offering 23,890,000 common shares. The company's shares were already down almost 20% on the month before information regarding the offering appeared.
"This prospectus relates to the issuance by us of up to an aggregate of up to 23,890,000 shares of our common stock, $0.0001 par value per share ("Common Stock"), which consists of (i) up to 890,000 shares of Common Stock that are issuable upon the exercise of 890,000 warrants (the "Private Warrants") originally issued in a private placement in connection with the initial public offering of VectoIQ and (ii) up to 23,000,000 shares of Common Stock that are issuable upon the exercise of 23,000,000 warrants (the "Public Warrants" and, together with the Private Warrants, the "Warrants") originally issued in the initial public offering of VectoIQ. We will receive the proceeds from any exercise of any Warrants for cash." Company's shares fell over 18 % in pre-market.

Halliburton (HAL.US) – The oilfield services company reported quarterly earnings of 5 cents per share , while analysts’ expected 11 cents per share loss. Revenue came in below estimates, however, amid a significant drop in global activity.

Chevron (CVX.US) will acquire Noble Energy (NBL.US) in a $5 billion stock-swap deal, valuing Noble at 7.6 percent above its Friday close.

 

Walt Disney (DIS.US) is reducing its ad spending on Facebook (FB.US), according to The Wall Street Journal. Disney  joined hundreds of other companies that have stopped using Facebooks ad services. Disney was Facebook's major U.S. advertiser within the past six months.

 

KKR (KKR.US) is in talks about a potential $4 billion acquisition of French medical clinic and hospital operator Elsan, which is currently owned by private-equity firm CVS Capital Partners, according to a Bloomberg report.

Norwegian group Adevinta has won the auction to buy U.S. e-commerce firm eBay Inc (EBAY.US)'s classified-ads unit for nearly $9 billion, a source familiar with the matter told Reuters on Monday.