Microsoft, Elon Musk, United and Snap - 5 Things You Must Know Wednesday

China says the U.S. orders the closure of its consulate in Houston; President Trump warns the coronavirus outbreak probably will get worse before it gets better; Microsoft and Tesla report earnings.
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Here are five things you must know for Wednesday, July 22:

1. -- Stock Futures Mixed on U.S.-China Tensions, Virus Warnings

Stock futures were mixed Wednesday after China said the U.S. ordered the closure of its consulate in Houston and President Donald Trump warned the coronavirus outbreak probably will get worse before it gets better.

Contracts linked to the Dow Jones Industrial Average fell 105 points, S&P 500 futures declined 10 points and Nasdaq futures were rising 14 14 points.

A Chinese Foreign Ministry spokesman said the move was initiated by the U.S. and China would “react with firm countermeasures” if Washington didn’t “revoke this erroneous decision,” Bloomberg reported.

Meanwhile, in a resumption of his daily virus briefings Tuesday, Trump said the coronavirus pandemic "will probably, unfortunately, get worse before it gets better.

“Something I don’t like saying about things, but that’s the way it is. It’s what we have,” the president added during first briefing since he had called them off in late April.

Trump also shifted his stance on masks, encouraging Americans to wear them.

The U.S. Centers for Disease Control said the number of coronavirus cases in some states could be much higher than has been confirmed. The CDC estimated the number of infections is about 10 times higher than the confirmed cases.

Global coronavirus infections crossed 15 million on Wednesday, according to a Reuters tally, and the U.S. reported more than 1,000 deaths from Covid-19 on Tuesday, the first time since June 10 the country has surpassed that mark.

A worry for investors also were talks between Democrat and Republican lawmakers in Washington over the $2 trillion gap in their respective coronavirus rescue packages.

2. -- Microsoft, Tesla and Chipotle Report Earnings

Earnings reports are expected Wednesday from Microsoft  (MSFT) - Get Report, Tesla  (TSLA) - Get Report, Biogen  (BIIB) - Get Report, Chipotle Mexican Grill  (CMG) - Get Report, Las Vegas Sands  (LVS) - Get Report and CSX  (CSX) - Get Report.

The economic calendar Wednesday includes MBA Mortgage Applications for the week ended July 17 at 7 a.m. ET, Existing Home Sales for June at 10 a.m. and Oil Inventories for the week ended July 17 at 10:30 a.m.

3. -- United Airlines Posts $1.63 Billion Loss

United Airlines  (UAL) - Get Report declined slightly in premarket trading Wednesday after the carrier posted a second-quarter loss of $1.63 billion and called the period "the most difficult financial quarter in its 94-year history."

The airline reported a loss of $5.79 a share, compared with year-earlier earnings of $4.02 a share. Revenue plunged to $1.48 billion from $11.4 billion as travel demand remains severely depressed during the coronavirus pandemic.

United said it expects travel demand to remain weak until a vaccine or treatment for Covid-19 is developed and available.

The carrier also said it had about $15.2 billion of available cash as of July 20 and expected that figure to grow to $18 billion by the end of the third quarter.

The stock fell 0.21% to $33 in premarket trading Wednesday.

4. -- Snap Slides as User Growth Misses Estimates

Snap  (SNAP) - Get Report dropped 8.25% to $22.70 in premarket trading Wednesday after the company beat Wall Street's revenue estimates but reported slightly lower active users than expected.

For the second quarter, the first that overlapped completely with the Covid-19 pandemic, Snap reported a loss of 23 cents a share on revenue of $454.2 million. Analysts had expected a loss of 22 cents a share on revenue of $442 million.

Snap reported 238 million daily active users, 17% higher than a year earlier, but a slight miss from estimates of 238.5 million.

“This has been an extremely challenging time,” Snap CEO Evan Spiegel said on a conference call. “While our revenue growth rate continues to be impacted by ongoing market disruptions, the fundamentals of our business are strong.”

The company said revenue so far in the third quarter has risen 32% from last year but expects that to moderate to growth of about 20% during the period.

5. -- Elon Musk Qualifies for $2.1 Billion Payout

Tesla CEO Elon Musk qualified for a payout of $2.1 billion, his second massive compensation award from the electric carmaker.

Tesla's average trailing market value over six months rose above $150 billion on Tuesday, according to Bloomberg, meaning the CEO can exercise an additional 1.69 million stock options, though he must wait at least five years before he can sell them.

The options have a strike price of $350.02, meaning Musk would reap a $2.1 billion gain if he exercised and could immediately sell the shares, Bloomberg noted.