JPMorgan Chase, Wells Fargo, Delta, Coronavirus - 5 Things You Must Know Tuesday

Stock futures rise as big U.S. banks report earnings; rising coronavirus cases prompt California to throttle back on reopening plans; American Airlines is expected this week to warn pilots of potential furloughs.
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Here are five things you must know for Tuesday, July 14:

1. -- Stock Futures Rise Ahead of Bank Earnings

Stock futures were modestly higher Tuesday after JPMorgan Chase  (JPM) - Get Report topped earnings estimates and as rising coronavirus cases in the U.S. put reopening plans on hold.

Adding to the cautious mood was China saying it would impose sanctions on Lockheed Martin  (LMT) - Get Report in response to U.S. sales of surface-to-air missiles to Taiwan.

The White House on Monday also said it rejected nearly all Chinese maritime claims in the South China Sea.

Contracts linked to the Dow Jones Industrial Average rose 163 points, futures for the S&P 500 gained 14 points and Nasdaq futures were up 65 points.

Stocks ended mostly lower Monday after California rolled back its reopening plans, with Gov. Gavin Newsom announcing he would close indoor dining, bars and movie theaters after the state reported a record number of hospitalizations of people with the coronavirus.

“There’s an increasing sense that the recovery from the virus-related shutdown is going to be more drawn out, more uneven than maybe the market was looking for,” said Willie Delwiche, investment strategist at Baird.

Meanwhile, earnings season kicked into high gear Tuesday with reports from banks led by JPMorgan Chase.

Jon Adams, senior investment strategist, BMO Global Asset Management, said the market is giving companies a free pass with respect to earnings during the second and third quarters.

"The estimated earnings decline for second quarter is about negative 45% and we think investors are looking through earnings right now in addition to many other macro risks, like the virus spike in the U.S. and the upcoming U.S. election," Adams said. "Policy seems to be all that matters in the current environment and we remain constructive on both equities and U.S. investment grade corporate bonds based on extremely supportive policy backdrop globally."

2. -- JPMorgan Chase, Wells Fargo and Citigroup Report Earnings

JPMorgan Chase earned $1.38 a share in the second quarter, higher than analysts' estimates of $1.01, but the bank said it would suspend its share buyback plans through to at least the end of September and set aside more than $10 billion to absorb potential losses on bad loans.

Citigroup  (C) - Get Report posted better-than-expected second-quarter earnings as a surge in trading revenue helped offset a steep rise in credit loss provisions.

Wells Fargo  (WFC) - Get Report posted its first loss since 2008, set aside $9.5 billion to cover loan losses and cut its dividend to 10 cents a share from 51 cents.

Delta Air Lines  (DAL) - Get Report posted an adjusted loss in the second quarter of $4.43 a share, wider than analysts' estimates that called for a loss of $4.22. Revenue was $1.18 billion, below estimates of $1.43 billion.

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The economic calendar Tuesday includes the consumer price index for June at 8:30 a.m. ET. CPI is forecast to have risen rise 0.5% during the month vs. a decline in May of 0.1%.

3. -- Coronavirus - The Latest

The number of confirmed global cases of the coronavirus has risen to 13,113,181, according to Johns Hopkins University, and deaths increased to 573,287.

The U.S. has 3,364,547 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.

California reported 1,716 new patients in hospitals for Covid-19 in the past two weeks, an increase of 28% from the previous two weeks, according to Bloomberg. The state reported a record 6,485 people hospitalized with the coronavirus on Sunday.

The jump in hospitalizations prompted California Gov. Gavin Newsom to order all dine-in restaurants, bars, movie theaters, museums and other indoor businesses across the state to again close.

“We’re going back into modification mode of our original stay at home order,” Newsom said. “This continues to be a deadly disease.”

California’s two largest public school districts, Los Angeles and San Diego, which together enroll about 825,000 students, said they would only offer online instruction in the fall.

Tedros Adhanom Ghebreyesus, head of the World Health Organization, warned that the coronavirus pandemic was  worsening globally and things won't return to "the old normal" for some time.

4. -- American Airlines to Warn Pilots of Furloughs

American Airlines  (AAL) - Get Report is planning to notify pilots of potential furloughs this week, CNBC reported.

“Our expectation is that WARN notices will be sent next week,” said Chip Long, American’s managing director of flight line operations, in a July 10 audio message for pilots, which was heard by CNBC. “Again, our hope is to very soon engage with APA and seriously explore every opportunity to take care of our pilots while taking care of our airline.”

Delta Air Lines and United Airlines also have warned pilots about potential furloughs amid weak travel demand during the coronavirus pandemic.

5. -- Google Won't Use Fitbit Health Data to Ease EU Concerns

Alphabet's  (GOOGL) - Get Report Google offered not to use health data from Fitbit devices to help it target ads in an attempt to address European Union antitrust concerns about its proposed $2.1 billion acquisition, Reuters reported.

“This deal is about devices, not data. We appreciate the opportunity to work with the European Commission on an approach that safeguards consumers’ expectations that Fitbit device data won’t be used for advertising,” Google said in an emailed statement to Reuters.