Day Ahead: 3 Things to Watch for July 2

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Investing.com – The S&P 500 and NASDAQ Composite were slightly higher at the start to the third quarter as improving jobs and manufacturing data boosted hopes the economic recovery remains intact despite pandemic shutdowns and increasing infections. The Dow fell 0.3%.

Netflix (NASDAQ:NFLX), Facebook (NASDAQ:FB) and Tesla (NASDAQ:TSLA) were higher, and Pfizer (NYSE:PFE) rose after news that a Covid-19 vaccine had positive preliminary results.

New vehicle sales in the U.S. came in lower after weak fleet orders, but automakers said sales have been improving since April.

Macy’s Inc (NYSE:M) took a major hit, reporting a $3.58 billion quarterly loss and forcing the department store to tap credit lines, make layoffs and suspend dividends and buybacks. Sales for the fiscal first quarter fell by almost half, to $3 billion.

In other consumer news, the largest franchisee of Pizza Hut in the U.S., NPC International Inc., filed for bankruptcy and will start selling Wendy’s restaurants as it works out a deal with creditors.

The manager of one of the biggest U.S. pension funds told CNBC that he wants to be underweight in stocks for the rest of the year because of the massive swing in markets so far in 2020. Christopher Ailman, the chief investment officer for CalSTRS, said that the stock moves in the first half of 2020 were “utterly absurd.”

Federal Reserve policymakers discussed the need to bolster forward guidance when they met last month, and suggested that the jury was still out on the use of yield curve control, according to the Fed’s June meeting minutes released Wednesday.

U.S. markets will be closed Friday in observance of Independence Day.

Here are three things that might move markets tomorrow: 

1. Will Americans take to the road this weekend? 

Oil prices were slightly higher Wednesday after an outsized drawdown in U.S. crude stockpiles, but gains were limited as coronavirus cases keep rising and Americans consider staying home for the long holiday weekend ahead.

That looks like good news if you sell fireworks. Sales are skyrocketing, up as much as 300% with more to come, Julie Heckman, president of the American Pyrotechnics Association, told NBC.  

2. Jobs and Unemployment Data

June jobs data and weekly unemployment claims may show improvement when figures are released at 8:30 AM ET (1230 GMT).

Economists are forecasting that the U.S. economy added 3 million jobs in June after a shock 2.5 million gain a month earlier. But the two months of gains would still pale in comparison to the approximately 22 million jobs that were lost in March and April.

The number of Americans applying for initial unemployment benefits is estimated at 1.355 million compared to 1.4 million for the week ending June 20. Claims have pulled back from a record 6.86 million in late March. 

3. Coronavirus Infections Increase, and States Shut Back Down

Covid-19 cases jumped again to more than 43,000 in the U.S., for a total of more than 2.6 million infections nationwide.

As a result, Apple Inc (NASDAQ:AAPL) is closing 30 stores, again, from California to Oklahoma, of its more than 270 nationwide. The market didn’t much care, with shares little changed at the close on Wednesday.

California Gavin Newsom ordered counties in the southern part of the state, including Los Angeles, to close indoor dining for at least three weeks. The mayor of New York also delayed the reopening of indoor dining, which had been slated for July 6.

 

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