Here are the top news, trends, and analysis investors need to start their trading day:
1. Dow will open lower before day 2 of Powell’s testimony
Traders on the floor of the New York Stock Exchange.
Dow futures fell 150 points Thursday, a day after the S&P 500 hit an all-time high but didn’t close on a record. In a muted session, the Dow Jones Industrial Average finished slightly higher and the Nasdaq a little lower. Both benchmarks were less than 1% from their record closing times on Monday. Federal Reserve Chairman Jerome Powell will submit his semi-annual economic report to the Senate Banking Committee on Thursday. He told the House of Representatives Finance Committee on Wednesday that the Fed was still a long way from changing monetary policy. He also said he expected inflation to weaken even if this week’s latest readings on consumer prices and wholesale prices rose.
2. Bond yields lower by weekly unemployment figures
Bond yields fell Wednesday after Powell’s moderate message. The yield on 10-year government bonds fell further on Thursday to around 1.32%. The Department of Labor reported that initial jobless claims for last week were expected to be 360,000 – a new low in the Covid era. The initial claims, which had risen unexpectedly in the week of July 3, have been revised upwards. All of that data came after the government’s June employment report, which showed the U.S. economy created better-than-expected 850,000 non-farm jobs.
3. Morgan Stanley is the newest bank to beat quarterly estimates
Signage for Morgan Stanley is displayed at the company’s New York headquarters.
Victor J. Blue | Bloomberg | Getty Images
UnitedHealth Group Inc. is headquartered in Minnetonka, Minnesota, USA
Mike Bradley | Bloomberg | Getty Images
UnitedHealth reported quarterly earnings on Thursday morning that exceeded expectations. In the second quarter, the largest US health insurer reported a medical claims ratio – the percentage of premiums spent on services – of nearly 83%. Compared to 70% the previous year when patients postponed non-urgent treatment due to the pandemic. UnitedHealth has also raised its earnings target for the full year. Dow shares lost 0.4% in pre-trading.
4. Volatile meme stocks AMC, GameStop are taking big hits
AMC Entertainment’s shares lost another 6% in the premarket on Thursday, indicating a fifth straight session of losses a day after falling 15%. The volatile Meme stock has lost 30% in the last four down sessions. As of Wednesday’s close of trading, AMC shares were down more than half their value after hitting an all-time high of $ 72.62 on June 2.
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GameStop, the original Meme stock, is down more than 21% this month and continued to decline in the premarket as the reality of bubble rallies and failing businesses became apparent to Reddit-obsessed investors. For 2021, however, AMC was still up more than 1,450% and GameStop nearly 800%.
5. GM warns some Bolt EV owners not to park indoors and charge unattended
Vermont State Police released this photo of the 2019 Chevrolet Bolt EV that caught fire in the driveway of State Representative Timothy Briglin, a Democrat, on July 1, 2021.
Vermont State Police
General Motors is instructing 2017-2019 Bolt electric vehicle owners who were part of a recent recall not to park their vehicles indoors or to charge them overnight unattended. The warning comes after two Bolt EVs catch fire. These vehicles had been repaired as part of a recall of nearly 69,000 vehicles that had been marked for fire hazard. The recall was originally announced in November by GM and the National Highway Traffic Safety Administration. One of the Bolt-EV fires occurred when the vehicle was being charged at a Vermont state legislature’s home earlier this month. The other fire occurred in New Jersey.
– Reuters contributed to this report. Follow the whole market like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.