Here are the most important news, trends and analysis that investors need to start their trading day:
- Futures turned lower after hot inflation, strong bank earnings
- JPMorgan, Goldman Sachs quarterly results top expectations
- PepsiCo raises forecast after earnings crush estimates
- Boeing cuts 787 Dreamliner production, delivery targets
- FDA to announce new warning on J&J Covid vaccine, report says
1. Futures turned lower after hot inflation, strong bank earnings
U.S. stock futures turned lower Tuesday as earnings season kicked off and hot inflation data came one day after the Dow Jones Industrial Average, S&P 500 and Nasdaq logged record closes. All the major benchmarks have been on hot streaks, with the Dow up in seven of the past eight sessions, the S&P 500 up in 10 out of 12 sessions, and the Nasdaq higher in eight of the past 10 sessions. The S&P 500 leads the three with a 16.7% year-to-date gain. The Dow and Nasdaq are up about 14.3% for 2021.
The 10-year Treasury yield rose Tuesday, trading at around 1.38%, after going as low as 1.25% last Thursday. The yield move came after the government said its June consumer price index jumped 0.9% on both the headline number and the non-food and energy core reading. Those were nearly double expectations. The year-over-year numbers came in better than expected at up 5.4% on headline CPI, the fastest pace in nearly 13 years; the core rate jumped 4.5%, the sharpest move since September 1991.
2. JPMorgan, Goldman Sachs quarterly results top expectations
Shares of JPMorgan fell nearly 0.2% in Tuesday's premarket, after the bank reported second-quarter profit and revenue that exceeded expectations as the firm released money set aside for loan losses. Borrowers have held up better than expected as the economy continued to pull out of the Covid pandemic tailspin.
Shares of Goldman Sachs rose 1% in premarket trading, after the bank's second-quarter earnings report blew past Wall Street estimates, propelled by strong performance in investment banking during this year's robust IPO market.
3. PepsiCo raises forecast after earnings crush estimates
PepsiCo shares rose more than 1% in the premarket, after the beverage and snack company reported that its quarterly revenue rose more than 20% from a year earlier as restaurant demand for its drinks returned, fueling an earnings beat. PepsiCo also raised its outlook for its full-year adjusted earnings per share growth. "A lot of the things we did through the pandemic, continuing to invest in the business, are now paying dividends now that mobility has increased and consumers are getting out more," CFO Hugh Johnston said on CNBC's "Squawk Box" on Tuesday.
4. Boeing cuts 787 Dreamliner production, delivery targets
Boeing shares fell 2% in the premarket after the aircraft maker announced Tuesday morning that it cut its delivery target for its undelivered 787 Dreamliner planes. Boeing said it will temporarily lower production rates after a new defect was detected on some of the wide-body jets. Boeing said it would deliver fewer than half of the Dreamliners that it has already produced but has not yet delivered to customers. CEO Dave Calhoun said at an investor conference last month that the company would deliver the "lion's share" of the roughly 100 Dreamliners in its inventory this year.
5. FDA to announce new warning on J&J Covid vaccine, report says
The Food and Drug Administration is expected to announce a new warning for Johnson & Johnson's Covid-19 vaccine, saying the shot has been linked to a serious, but rare, autoimmune disorder, The Washington Post reported Monday, citing four unnamed sources. About 100 preliminary reports of Guillain-Barre syndrome have been detected after 12.8 million doses of J&J's one-does vaccine were administered, the Centers for Disease Control and Prevention said in a statement to NBC News. Guillain-Barre is a rare neurological disorder in which the body's immune system mistakenly attacks part of the nervous system.