Stock Futures Edge Lower After Dow Closed At Record Friday

U.S. stock ticked lower early Monday after major stock market indexes notched a record high last week, following a stronger-than-expected jobs report. Over the weekend, Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) reported better-than-expected second-quarter profit growth. Earnings season is still pretty much active this week.  There will be some economic data to look forward to as we start the week. For starters, there will be news reports on consumer and producer price inflation data.

You saw a lot more jobs being created in those areas that are reopening — restaurants, hotels, logistics, transportation,” Raymond James Chief Investment Officer Larry Adam said. “That’s a good sign. I think that puts more spending power behind the consumer going forward and I think that that’s ultimately a good thing for the economy.

Also, U.S. senators voted to work toward the passage of a $1 trillion infrastructure bill on Sunday evening. Recall that the bill is a key part of President Joe Biden’s top agenda. The final vote in the Senate on the bill will likely happen on Tuesday. Certainly, the Republicans and Democrats had their disagreements. But they moved forward with procedural votes on a bipartisan basis. Should the infrastructure bill go through, it would provide a massive injection of federal money to the economy. And that should bode well for the stock market. The Dow and S&P 500 futures are trading in the negative territory, moving 0.31% and 0.19% lower respectively as of 6:50 a.m. ET. Meanwhile, Nasdaq futures are edging up by 0.09%.

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AMC Entertainment Earnings In Focus

One of the hottest meme stocks, AMC Entertainment (NYSE: AMC) is slated to announce its second-quarter after the market closes today. Investors will get to see how economic reopenings have affected the theater chain’s finances today. But before we get into that, it is also worth looking at how the company fared before the pandemic. It should go without saying that the pandemic devastated the company. 

AMC Stock

From its most recent quarter, the company’s cash burn rate was roughly $120 million per month. Sure, the company could find ways to cut costs and raise capital to survive through the pandemic. The thing is, you can’t just rely on cutting costs to keep the company afloat. Sooner or later, AMC will have to boost revenue to improve its cash flow. The good news is that there have been a few blockbuster films on the big screen in the previous quarter. 

Many may be curious as to whether we could potentially see a light at the end of the tunnel for the theatre industry. But it’s not the end of troubles for AMC. The movie theater chain came into the second quarter with $5.4 billion of debt on its balance sheet. No one can say for sure how the financial report would be like this afternoon. But we are likely to hear about operating losses and financial difficulties. Fundamentally, investors may want to exercise caution around this stock. But you never know what is going to happen with Reddit traders also in the game. With that in mind, will you be watching AMC stock to see how it performs after the report?

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Gold’s Flash Crash Subsides After Robust Jobs Data Signals Early Fed Tapering

Gold skidded on Monday morning. This came after U.S. jobs data ignited fears that the Federal Reserve would raise interest rates earlier than expected. The U.S. Labor Department reported that nonfarm payrolls rose by 943,000 in July, handily beating consensus estimates of 870,000. At the same time, the unemployment rate fell to 5.4%. 

The jobs data “beat expectations by a mile last week, which led to both gold and silver selling off into the close. This morning we are seeing the overhang of that as perhaps those traders a bit late to the party are panic-selling the open,” said John Feeney, business development manager at Guardian Vaults. “With low liquidity at this time of the week combined with a large number of stop losses being triggered we have seen a volatile open to start the week.

Dallas Fed President Robert Kaplan said the central bank should start tapering its asset purchases sooner rather than later. Since Friday morning, gold has recorded one of its biggest losses since April 2020, when the market was roiled by the coronavirus pandemic. Some investors took today’s sharp selloff as a buying opportunity. And it seems like the bearish sentiment has swiftly cooled. 

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Oil Prices Extend Decline As Delta Variant In China Threatens Recovery In Oil Consumption

Oil prices continue to slide on Monday, extending last week’s steep losses. This came on the back of a rising U.S. dollar and demand concerns in China. Recall that crude oil rallied strongly in the first half of the year. That came as the rollout of vaccines allowed major economies to reopen. Thus, boosting oil demand and draining the glut built up during the initial waves of the pandemic. 

However, concerns about global oil demand have resurfaced with the acceleration of the Delta variant infection rate. Particularly, the new restrictions in China, the world’s second-largest oil consumer, may set back the global recovery in fuel demand.

Of course, China’s fast action on curbing the spread of the virus would affect oil demand. But the effect is likely to be short-lived should the curb be successful. Perhaps China’s previous history of controlling the virus can serve as a guide. If so, demand for fuels could rebound in a few weeks’ time.

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More Earnings To Watch This Week

Investors have a packed slate of corporate earnings to look forward to this week. One of the biggest names to report this week will be Walt Disney (NYSE: DIS). But that won’t take place until this Thursday. Some of the most highly-anticipated earnings this morning include The Trade Desk (NASDAQ: TTD), BioNTech (NASDAQ: BNTX), and Workhorse Group (NASDAQ: WKHS).

Some of the notable names reporting after the closing bell today include AMC Entertainment, Chegg (NYSE: CHGG), SmileDirectClub (NASDAQ: SDC), and Inovio (NASDAQ: INO). So, whether it is looking at the inflation data, navigating around the commodities market, or simply following the earnings report, there should be enough to keep you busy as we start the week.

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