Stock Market Today Mid-Morning Updates
On Tuesday, the Dow Jones Industrial Average is up by over 90 points as the euro slides towards dollar parity. Fears of a recession have been increasing in the eurozone recently. This is mainly due to energy supply disruptions, with Russia threatening to reduce gas flows to the entire continent. Russia temporarily suspended gas deliveries through the Nord Stream 1 pipeline on Monday for annual summer maintenance works. The scheduled 10-day suspension of gas flows has stoked fears of a permanent cut to supplies.
Shares of Peloton (NYSE: PTON) are in focus today after announcing that it will cease in-house production of its exercise equipment. It will be moving its bike and treadmill production to its partners to simplify its operations and reduce costs. American Express (NYSE: AXP) is down today after Morgan Stanley (NYSE: MS) downgraded the financial services giant to ‘Equal-weight’ from ‘Overweight’. GAP (NYSE: GPS) is also down today after CEO Sonia Syngal will be stepping down, after two years on the job.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 1.21% today while Microsoft (NASDAQ: MSFT) is down by 2.03%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading mixed on Tuesday. Among the Dow financial leaders, Visa (NYSE: V) is up by 0.49% while JPMorgan Chase (NYSE: JPM) is also up by 0.86%
Shares of EV leader Tesla (NASDAQ: TSLA) are down by 2.25% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) are also down by 2.54%. Lucid Group (NASDAQ: LCID) is trading lower by 1.25% today. Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading lower as well today.
Dow Jones Today: U.S. Treasury Yield Dips As Market Braces For Key Inflation Data
Following the stock market opening on Tuesday, the S&P 500, Dow, and Nasdaq are trading higher at 0.06%, 0.30%, and 0.02%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is up by 0.10% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also up by 0.07%.
The benchmark 10-year U.S. Treasury yield dipped below the 3% mark today, as we begin another round of big corporate earnings this week. Major banks will be reporting their earnings later this week. Investors are expecting surging inflation and persistent supply chain issues to squeeze earnings. Crude oil prices are also down today, with Brent crude, the international benchmark, dropping 4% to about $102 per barrel. Bitcoin and other major cryptocurrencies also continue to decline today, with Bitcoin dropping under the $20,000 mark yet again.
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PepsiCo Reports Better-Than-Expected Profit And Raised Revenue Guidance
Today, beverage company PepsiCo (NYSE: PEP) kicked off the corporate earnings season. Diving in, the company reported a better-than-expected revenue and earnings. Revenue for the quarter was $20.23 billion against the estimate of $19.51 billion. It also posted an earnings per share of $1.86 for the quarter. Despite the earnings beat, the company faced higher freight and commodity costs during the quarter. In light of that, it is accelerating its cost management initiatives and also using a mix and assortment solution. This would include smaller sizes for its variety of packing.
“We are pleased with our results for the second quarter as our business momentum continued despite ongoing macroeconomic and geopolitical volatility and higher levels of inflation across our markets,” said Chairman and CEO Ramon Laguarta. He also states that the company’s results are indicative of the strength and resilience of all its categories. Furthermore, he cites the strength of its agile supply chain and also go-to-market systems, and strong marketplace execution for this strong quarter.
For its guidance, Pepsi says that it expects an 8% increase in earnings per share for the year. It also expects total cash returns to shareholders to be approximately $7.7 billion. This would comprise dividends of $6.2 billion and share repurchases of $1.15 billion. Given all of this, PEP stock could be worth paying attention to today.
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Twitter Stock In Focus Again As Firm’s Lawyers Declare Elon Musk’s Deal Cancellation Invalid
Front and center in the stock market news cycle today again is Twitter (NYSE: TWTR) and Elon Musk. For the most part, this seems to be the result of the Tesla CEO’s eye-opening decision to end his $44 billion takeover of Twitter. Getting straight into it, the social media firm’s team of lawyers are fighting back against Musk. This is apparent following the release of an official letter and SEC filing from the legal team of Wachtell, Lipton, Rosen & Katz. To begin with, they start by noting that the Tesla CEO’s “purported termination” is “invalid and wrongful.” The letter also continues, “Contrary to the assertions in your letter, Twitter has breached none of its obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect.”
On top of that, Twitter’s lawyers also posit that Musk is the one in the wrong here. They argue that this is due to Musk and his team “knowingly, intentionally, willfully, and materially breached the Agreement.” Such a prominent declaration would put Elon Musk in the spotlight now as Twitter aggressively fights for the closing of this deal. The company’s legal team writes, “the Agreement is not terminated, the Bank Debt Commitment Letter and the Equity Commitment Letter remain in effect, and Twitter demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement.” This includes Musk’s obligation to use his respective reasonable best efforts to consummate and make effective the transactions contemplated by the agreement between both companies.
Accordingly, Twitter has stated that it intends to close the deal. However this massive legal battle turns out, one thing remains certain. That would be that TWTR stock will likely continue to make headlines in the stock market now.
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