Morning Briefing - Moving higher on promising vaccine data


The S&P 500 futures are up 37 points to trade 1.2% above fair value, as encouraging vaccine data strengthens risk sentiment following yesterday's broad-based advance. 
Specifically, Moderna (MRNA 88.31, +13.27, +17.7%) confirmed interim results that showed its COVID-19 vaccine candidate caused rapid and strong immune responses in patients from a Phase 1 study. The news has helped the market brush past U.S. sanctions on China over Hong Kong laws, which sent Chinese equities lower on Wednesday. 
In other positive developments, Apple (AAPL 394.47, +6.24, +1.6%) won an EU antitrust case against Ireland, saving the company nearly $15 billion in taxes owed, and Goldman Sachs (GS 221.70, +7.69, +3.6%) beat top and bottom-line estimates. 
On the data front, investors will receive the Empire State Manufacturing Survey for July (Briefing.com consensus 5.8) and Export and Import Prices for June at 8:30 a.m. ET, followed by Industrial Production (Briefing.com consensus 4.6%) and Capacity Utilization (Briefing.com consensus 68.3%) for June at 9:15 a.m. ET. 
The weekly MBA Mortgage Applications Index, which was released earlier, increased 5.1% following a 2.2% increase in the prior week.
U.S. Treasuries have edged lower amid the positive vaccine update, pushing yields higher. The 2-yr yield is up one basis point to 0.16%, and the 10-yr yield is up three basis points to 0.65%. The U.S. Dollar Index is down 0.4% to 95.87. WTI crude is up 1.3%, or $0.54, to $40.83/bbl.
In U.S. Corporate news:
  • Moderna (MRNA 8.31, +13.27): +17.7% after its COVID-19 vaccine candidate showed rapid and strong immune responses in patients, according to interim Phase 1 study results.
  • Apple (AAPL 394.47, +6.24): +1.6% after the EU Commission ruled in favor of Apple regarding an Irish antitrust case, saving the company nearly $15 billion in taxes owed. In addition, Needham raised its price target on AAPL to $450 from $350.
  • Goldman Sachs (GS 221.70, +7.69): +3.6% after beating top and bottom-line estimates. 
  • UnitedHealth (UNH 310.00, +1.48): +0.5% after providing mixed earnings results and reaffirming its FY20 EPS guidance.
  • U.S. Bancorp (USB 37.45, +1.16): +3.2% after beating top and bottom-line estimates. 
  • STOCK ON THE MOVE .

  • Carnival Corp (CCL), Norwegian Cruise Line Holdings Ltd (NCLH) and Royal Caribbean Cruises Ltd (RCL) are moving higher this morning, while Bank of New York Mellon Corp (BK), Centurylink Inc (CTL) and Public Storage (PSA) are headed lower. Williams Companies Inc (WMB), Vipshop Holdings Ltd - ADR (VIPS) and TC PIPELINES LP Common Stock (TRP) were upgraded by analysts this morning, while Verrica Pharmaceuticals Inc (VRCA), TransDigm Group Incorporated (TDG) and Woodward, Inc.Common Stock (WWD) were downgraded.

    International Markets

    Stocks in Asia are mixed. The Australia ASX All Ordinaries is up 1.9%, the Nikkei 225 is up 1.59%, the Mumbai Sensex is up 0.05% the Hang Seng is down -0.03% and the Shanghai SE Composite Index is down -1.56%. In Europe stocks are up. The CAC 40 is up 2.47%, the FTSE 100 is up 2.01%, the Euro Stoxx 50 is up 1.99% and the DAX is up 1.81%.

    Futures and Currencies

    Energy futures are mixed today. The price for West Texas Intermediate crude oil is up 0.57 at 40.86 per barrel. Brent crude is up 0.46 at 43.36 per barrel. Natural Gas is flat 0 at 1.75. Precious metals are mixed this morning. Gold is down -3.35 at 1806.01 per ounce. Platinum is up 8.12 at 837.43 while silver is up 0.2 at 19.73. The dollar is down compared to the major currencies today. The greenback is down against the euro, down against the Yen and down against the Pound.

    Put/Call Ratio

    Yesterday, 1,568,445 call contracts traded on the Chicago Board Options Exchange (CBOE) compared to 673,955 put contracts. The single-session put/call ratio was 0.43.
    Moderna (NASDAQ:MRNA) jumped 17% after the closing bell on Tuesday after the company released data that showed its potential coronavirus vaccine producing a "robust" immune response in all 45 patients in its early human trial. The Oxford Covid-19 vaccine that is backed by AstraZeneca (NYSE:AZN) - whose shares are up 4% premarket - is generating the kind of antibody and T-cell (killer cell) response that the researchers would hope to see, added Robert Peston, saying the first data is due to be published soon in The Lancet. Related vaccine players are also on the move this morning, including BioNTech (NASDAQ:BNTX) +4.9% and Pfizer (NYSE:PFE) +1.3%.
    Apple wins tax battle with EU
    Apple (NASDAQ:AAPL) does not have to pay €13B in Irish back taxes, according to the EU's General Court, which concluded that the tech giant has not been "granted a selective economic advantage and, by extension, state aid." The decision, which can only be appealed "on points of law" to the EU's highest tribunal, is a setback for the European Commission, which ruled in August 2016 that Apple's practice of channeling sales through units in low-tax member states violated the bloc's state aid rules. This case is particularly important due to the EU's crackdown on taxation in recent years and could impact how the bloc deals with similar matters given the recent trend toward digital services taxes.
    More bank earnings
    As lenders kick off earnings season with their quarterly reports, there appear to be two sides of banking that are faring very differently during the coronavirus pandemic. JPMorgan (NYSE:JPM) recorded a record $33.8B of revenue, with a 54% jump in investment banking fees from a year ago, while Wells Fargo (NYSE:WFC) lost $2.4B in Q2 and Citigroup (NYSE:C) disappointed after highlighting swelling credit loss reserves. On the earnings front for today, more banks are set to report results, including Goldman Sachs (NYSE:GS), U.S. Bancorp (NYSE:USB), BNY Mellon (NYSE:BK) and PNC Financial Services (NYSE:PNC).
    Ending preferential treatment of Hong Kong
    "No special privileges, no special economic treatment and no export of sensitive technologies," President Trump told a news conference after signing the Hong Kong Autonomy Act, which penalizes banks linked to Chinese interference in Hong Kong. "China will make necessary responses to protect its legitimate interests, and impose sanctions on relevant U.S. personnel and entities," the country's foreign ministry said in response, without elaborating. Hong Kong was the source of the largest bilateral U.S. goods trade surplus last year, at $26.1B, and more than 1,300 U.S. companies operate there, including nearly every major American financial firm.
    Increased tensions
    Hong Kong is not the only area where a cold war between China and the West appears to be in the making. The United Kingdom has reversed course on Huawei, moving to ban the Chinese equipment maker's gear from any part of its national 5G network and ordering it all stripped by 2027. The U.S. is also sounding the alarm over Chinese-owned TikTok (BDNCE), with President Trump and Secretary of State Mike Pompeo publicly saying the government is "looking at potentially banning" the short-form video app.
    Relaxing curbs, but seeking lost cuts
    An OPEC+ technical committee that met online Tuesday detailed plans for countries including Iraq, Nigeria and Kazakhstan to make an additional 842K barrels a day of compensatory cuts in August and September, according to delegates. The proposal will be discussed by a ministerial monitoring committee today led by Saudi Arabia and Russia and comes after the nations missed their production targets again in June. Following the meeting, OPEC+ is still expected to announce that overall group cuts of 9.6M barrels a day - about 10% of global supplies - will be relaxed in August as global fuel demand recovers from the COVID-19 pandemic.
    Making money off parking lots
    The coronavirus pandemic is leaving retail real estate owners scrambling for new revenue sources, with Brookfield Property Partners (NASDAQ:BPY) signing a deal with entertainment company Kilburn Live to turn the parking lots at a number of its malls into drive-in theaters and virtual concerts. "People are desperate to leave home," explained chief marketing officer Michelle Snyder, adding that Brookfield has set up food kiosks around the drive-ins for people to order from the mall's food court. "If we can't rent the mall, we are going to rent other space... We actually have tons of ideas for our parking lots.
  • The vaccine front
    Moderna (NASDAQ:MRNA) jumped 17% after the closing bell on Tuesday after the company released data that showed its potential coronavirus vaccine producing a "robust" immune response in all 45 patients in its early human trial. The Oxford Covid-19 vaccine that is backed by AstraZeneca (NYSE:AZN) - whose shares are up 4% premarket - is generating the kind of antibody and T-cell (killer cell) response that the researchers would hope to see, added Robert Peston, saying the first data is due to be published soon in The Lancet. Related vaccine players are also on the move this morning, including BioNTech (NASDAQ:BNTX) +4.9% and Pfizer (NYSE:PFE) +1.3%.
  • What else is happening...
    Voices of Pimco past: Gross, El-Erian warn against growth stocks.
    Google (GOOG, GOOGL) next to make investment in India's Jio Platforms.
    2021 Ford (NYSE:F) Bronco First Edition gets sold out.
    Massachusetts sues Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) over driver classification.
    The New York Times (NYSE:NYT) is hit by another op-ed resignation.
    Texas county OKs $14M-plus in Tesla (NASDAQ:TSLA) tax breaks for factory.
    Boeing (NYSE:BA) reports 60 more MAX cancellations in June.
    Tuesday's Key Earnings
    Citigroup (C) -3.9% bolstering credit-loss reserves.
    Delta Air Lines (NYSE:DAL) -2.7% issuing cautious outlook.
    JPMorgan Chase (JPM) +0.6% on 'eye-popping' trading numbers.
    Wells Fargo (WFC) -4.6% slashing dividend, pushing up reserves.
    Today's Markets
    In Asia, Japan +1.6%. Hong Kong flat. China -1.6%. India +0.1%.
    In Europe, at midday, London +1.7%. Paris +2.3%. Frankfurt +1.9%.
    Futures at 6:20, Dow +1.3%. S&P +1.1%. Nasdaq +0.8%. Crude +1.3% to $40.83. Gold -0.2% to $1809.40. Bitcoin -0.2% to $9239.
    Ten-year Treasury Yield +3 bps to 0.64%
    Today's Economic Calendar

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