Disappointing Blue-Chip Earnings Sending Stock Futures Lower

Disappointing earnings from McDonald's and 3M are dragging Dow futures lower

Deputy Editor
Jul 28, 2020 at 9:20 AM
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Futures on the Dow Jones Industrial Index (DJI) are pointing almost 130 points lower this morning, as investors pour over another round of earnings. Blue chips McDonald's (MCD) and 3M (MMM) both posted second-quarter results that largely missed the mark, with the former also announcing a roughly 30% drop in revenue.

Also making headlines is the latest COVID-19 relief bill rolled out by Senate Majority Leader Mitch McConnell. The bill includes another stimulus check of up to $1,200, provides more small businesses with loan funds, and sets federal unemployment to 70% of a worker's wages. Meanwhile, futures on the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) are both headed lower this morning, too. 

Continue reading for more on today's market, including: 

  • A historically bullish technical signal is flashing for Gilead stock ahead of earnings. 
  • Schaeffer's Senior V.P. of Research Todd Salamone thinks tech buyers shouldn't panic yet.
  • Plus, 2 more blue chips posting second-quarter earnings; Intel's chief engineering officer steps down. 

Futures Chart July 28

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 1.4 million call contracts traded on Monday, and 609,037 put contracts. The single-session equity put/call ratio fell to 0.44, and the 21-day moving average fell to 0.48.
  2. Another Dow component that just reported earnings is Raytheon Technologies Corp (NYSE:RTX). The defense contractor reported a second-quarter earnings and revenue beat, but said its performance was impacted by commercial aerospace challenges. RTX is up 2.4% ahead of the bell, looking to chip away at its 31% 2020 deficit. 
  3. Fellow blue-chipper Pfizer Inc. (NYSE:PFE) is enjoying a positive post-earnings response, too. The drugmaker is up 3% in pre-market trading after revealing second-quarter earnings and revenue that beat analysts' expectations. The firm also just launched a late-stage trial of the coronavirus vaccine candidate it's developing with BioNTech (BNTX). Pfizer stock is up almost 15% in July.
  4. Earlier this morning, chipmaker Intel Corporation's (NASDAQ:INTC) chief engineering officer Murthy Renduchintala announced he would be stepping down from the company. This comes just a few days after Intel said it was falling behind on manufacturing its next-generation 7-nanometer chip. INTC is up 0.7% before the open, as it tries to fill last week's steep post-earnings bear gap.
  5. Today's schedule will bring the consumer confidence index and the Case-Shiller home price index. Meanwhile, Visa (V), Advanced Micro Devices (AMD), Harley-Davidson (HOG), and Starbucks (SBUX) will all step in to the earnings confessional.  

OV Buzz Chart July 28

Gold Keeps Asian Markets Afloat; Europe Eyes $1 Trillion Relief Plan 

Stocks in Asia were mostly higher today, after gold extended record gains. South Korea’s Kospi closed 1.7% higher, as technology giant Samsung prepared to unveil a new smartphone next week. Meanwhile, China’s Shanghai Composite and Hong Kong’s Hang Seng rose 1.8% and 0.2%, respectively. Elsewhere, Japan’s Nikkei closed 0.3% lower, after Mitsubishi Motors reported a drop in sales and warned this could be their biggest annual operating loss in 20 years.

Across the pond, stocks are also higher, as a new $1 trillion coronavirus relief plan in the U.S. lifted investor sentiment and outweighed renewed travel restrictions to countries that had seemingly contained the virus. At last check, France’s CAC 40 was up 1.7%, while the German DAX and London’s FTSE 100 were both up 1.3%.


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