Here are five things you must know for Wednesday, Aug. 4:
1. — Stock Futures Fluctuate After S&P 500’s Record Close
Stock futures fluctuated Wednesday as Wall Street monitored earnings reports and the spread of the delta variant of COVID-19 across the globe and awaited U.S. jobs data later in the week.
Contracts linked to the Dow Jones Industrial Average fell 39 points, S&P 500 futures were down 3 points and Nasdaq futures rose 6 points.
The yield on the benchmark 10-year Treasury rose Wednesday to 1.182%.
Earnings season has been strong with about 87% of S&P 500 companies reporting earnings and revenue beats, according to FactSet. Just under 70% of the S&P 500 now has reported earnings.
Ride-hailing service Lyft (LYFT) – Get Report reported a narrower second-quarter loss as revenue more than doubled, while Caesars Entertainment (CZR) – Get Report posted a quarterly profit vs. a year-earlier loss.
Stocks finished higher Tuesday as earnings reports outweighed jitters about the spread of COVID-19’s delta variant and China’s clampdown on its gaming and technology sectors. The S&P 500 finished up 0.82% to close at a record 4,423.
The spread of the COVID-19 delta strain has renewed fears that governments could reinstitute lockdowns and stall the economic recovery. A surge of the virus in China was the broadest since the world’s second-largest economy controlled its initial outbreak last year, Bloomberg noted.
Meanwhile, the U.S. Food and Drug Administration aims to give final
approval to the Pfizer (PFE) – Get Report and BioNTech (BNTX) – Get Report vaccine by the start of next month, according to The New York Times.
2. — Wednesday’s Calendar: General Motors Earnings, ADP Employment Report
Earnings reports are expected Wednesday from General Motors (GM) – Get Report, CVS Health (CVS) – Get Report, Uber Technologies (UBER) – Get Report, Booking Holdings (BKNG) – Get Report, Roku (ROKU) – Get Report, Kraft Heinz (KHC) – Get Report, Electronic Arts (EA) – Get Report and Etsy ETSY.
The economic calendar in the U.S. Wednesday includes the ADP National Employment Report for July at 8:15 a.m. ET, the PMI Composite Final for July at 9:45 a.m., the ISM Services Index for July at 10 a.m. and Oil Inventories for the week ended July 30 for 10:30 a.m.
The ADP report will serve as a precursor to the release Friday of the official U.S. jobs report for July. Economists surveyed by FactSet expect the U.S. to have added 850,00 jobs last month, about flat with June.
“During last week’s Federal Open Market Committee meeting press conference, (Federal Reserve) Chair (Jerome) Powell emphasized that the labor market ‘has a ways to go’ before achieving the Fed’s maximum employment goal,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.
“Following the 850,000 payroll gain in June’s employment report, another strong number this week will add pressure on the Fed to advance the timeline for winding down bond purchases,” he added.
3. — Zymergen No Longer Expects Product Revenue in 2021; Stock Plummets
Zymergen (ZY) – Get Report shares were plunging more than 70% in premarket trading after the bio-manufacturing company said it no longer expects product revenue in 2021, and for it to be immaterial next year.
In a statement, Zymergen said it recently “became aware of issues with its commercial product pipeline.” The company said “several key target customers encountered technical issues in implementing Hyaline into their manufacturing processes,” delaying the company’s commercial ramp.
Zymergen said it has made “significant progress towards addressing these challenges and believes there are no intrinsic technical issues with Hyaline.”
The company also announced that CEO Josh Hoffman was stepping down, effective immediately. Former Illumina CEO Jay Flatley was appointed acting chief executive.
The stock fell 72.41% to $9.61 early Wednesday. Zymergen went public in April at $31 a share.
4. — Nvidia Dips as Report Says U.K. Could Block Arm Purchase
Nvidia (NVDA) – Get Report shares dipped early Wednesday following a report that said the U.K. was considering blocking the chipmaker’s acquisition of Arm Ltd. due to potential risks to national security.
An assessment of the $40 billion acquisition contains worrying implications for national security and the U.K. is currently inclined to reject the takeover, Bloomberg reported, citing a person familiar with government discussions. Arm is owned by currently owned by Japanese conglomerate SoftBank.
Nvidia declined 0.29% to $197.57 in premarket trading Wednesday. The stock rose 0.33% on Tuesday despite the Bloomberg report.
Rival Advanced Micro Devices (AMD) – Get Report, meanwhile, rose more than 3.6% on Tuesday to $112.56 and closed at a record high for the fifth straight session.
Nvidia and AMD are holdings in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.
5. — Cramer Says It’s Time to Look at ‘Pseduo-Lockdown’ Stocks
TheStreet’s Jim Cramer told his “Mad Money” viewers Tuesday night that with the spread of the delta variant it was time to dust off the Spring 2020 playbook and start investing in pseudo-lockdown stocks or the types of companies that flourish in a “worse before it gets better” economy.
In retail, that means investing in WATCH, Cramer’s acronym for Walmart (WMT) – Get Report, Amazon.com (AMZN) – Get Report, Target (TGT) – Get Report, Costco (COST) – Get Report and Home Depot (HD) – Get Report.
All of these retailers, Cramer noted, have navigated the pandemic with flying colors and are the ones consumers trust most.
Investors should also be looking at United Parcel Service (UPS) – Get Report and FedEx (FDX) – Get Report, with the latter being Cramer’s favorite of the pair.
Cramer’s Mad Money Recap: Walmart, Amazon, Apple
Walmart, Costco and UPS are holdings in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.