Analog Devices and Maxim, PepsiCo, Coronavirus - 5 Things You Must Know Monday

Wall Street preps for an uncertain earnings season amid the coronavirus pandemic; PepsiCo reports earnings; Analog Devices is buying Maxim Integrated.
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Here are five things you must know for Monday, July 13:

1. -- Stock Futures Rise Ahead of Earnings Season 

Stock futures were rising Monday as Wall Street prepared for an earnings season which has investors and analysts flying blind as many companies in the S&P 500 pulled guidance due to uncertainties from the coronavirus pandemic. 

Contracts linked to the Dow Jones Industrial Average rose 201 points, futures for the S&P 500 were up 21 points and Nasdaq futures gained 95 points. 

The S&P 500 rose 1.8% last week, its second straight weekly gain.

Second-quarter earnings won't be as bad as Wall Street expects, according to David Trainer, CEO of New Constructs, an investment research firm in Nashville.

"Wall Street is expecting double-digit declines in Q2 earnings amid the coronavirus-driven recession, but we believe companies are in much better shape than many analysts think," Trainer said. "That’s why the stock market rebounded so strongly from the March bottom. 

"We think there is even more upside ahead as more investors realize earnings aren’t as bad as estimates suggest," he added.

According to FactSet, earnings for companies in the S&P 500 index are expected to fall 44.6% from a year earlier.

2. -- PepsiCo Reports Earnings Monday

PepsiCo  (PEP) - Get Report reported fiscal second-quarter core earnings Monday of $1.32 a share, beating analysts' forecasts by 7 cents.

Revenue at the beverage and snack giant was $15.95 billion vs. expectations of $15.37 billion.

The stock was up 2.04% in premarket trading Monday to $137.20.

Later in the week reports will be issued by JPMorgan Chase  (JPM) - Get Report, Citigroup  (C) - Get Report, Wells Fargo  (WFC) - Get Report, Bank of America  (BAC) - Get Report, Delta Air Lines  (DAL) - Get Report, Goldman Sachs  (GS) - Get Report, Abbott Labs  (ABT) - Get Report, Johnson & Johnson  (JNJ) - Get Report, Netflix  (NFLX) - Get Report and Morgan Stanley  (MS) - Get Report.

Abbott Labs, Goldman Sachs, Johnson & Johnson, JPMorgan Chase and PepsiCo are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.

The economic calendar Monday is light but data are expected this week on consumer prices, retail sales, housing starts and consumer sentiment.

3. -- Analog Devices to Buy Maxim Integrated Products

Analog Devices  (ADI) - Get Report confirmed Monday it was buying rival semiconductor maker Maxim Integrated Products  (MXIM) - Get Report for about $21 billion in stock.

The merger will create a company with an enterprise value of about $68 billion.

Maxim stockholders will receive 0.630 a share of Analog Devices common stock under the deal. Analog Devices stockholders will own about 69% of the combined company, while Maxim stockholders will own roughly 31%.

The Wall Street Journal reported earlier that the merger could be announced Monday.

Maxim’s current market value is about $17 billion, while Analog Devices' market cap is roughly $46 billion.

A combination of Analog Devices and Maxim would still lag behind Texas Instruments  (TXN) - Get Report, the leader in analog semiconductors, with a $119 billion market value. 

Maxim shares jumped 17.65% to $75.40 in premarket trading. Analog Devices rose 1.47% to $126.33.

4. -- Coronavirus - The Latest

The number of confirmed global cases of the coronavirus has risen to 12,910,357, according to Johns Hopkins University, and deaths increased to 569,128.

The U.S. has 3,304,942 cases of the coronavirus, the most in the world, according to Johns Hopkins. Deaths in the U.S. have risen to 135,205, also the most in the world.

"It's really serious," Dr. Thomas Inglesby, director of Johns Hopkins Center for Health Security, told Fox News' Chris Wallace on Sunday. "I think the country is not in a good place with respect to Covid right now."

Florida broke the daily record Sunday for all U.S. states with 15,300 new cases.

Amid the spike in new coronavirus cases in the state, Walt Disney World reopened Saturday in Orlando after a closure of four months in an effort to stop the spread of the virus.

New York City, once the epicenter of the U.S. coronavirus outbreak, reported its first day with zero confirmed or probable virus deaths on Sunday since the pandemic began, Bloomberg reported, citing initial data from the city's health department.

5. -- Jack Ma Cuts Stake in Alibaba, Sells $8.2 Billion of Stock

Alibaba  (BABA) - Get Report co-founder Jack Ma cut his stake in the Chinese e-commerce company to 4.8% from 6.2% over the past year, selling shares for about $8.2 billion, the company's annual filing showed, Reuters reported.

Ma retired as executive chairman of Alibaba in September to focus on philanthropy.