Plus, Senate Republicans are planning to introduce a scaled back stimulus bill as the standoff with Democrats over a new virus relief plan continues, Quest Diagnostics sped up its coronavirus testing turnaround time, and three big retailers reported earnings.
Stocks were mixed to start Tuesday with the Dow falling 104 points, or 0.4%. The S&P 500 traded 0.1% after having earlier surpassing an intraday record of 3,393.52, and the Nasdaq rose 0.1%, hitting a record.
Senate Republicans are planning to introduce a scaled-back stimulus bill amid the standoff with Democrats over a new virus relief plan that has dragged on for weeks. The legislation would include just $300 a week in enhanced unemployment benefits through December 27, money for small business aid, additional funding for the U.S. Postal Service, and protection for employers against lawsuits stemming from COVID-19infections. The bill represents a slimmed-down version of the $1 trillion legislation GOP senators introduced at the end of July that was rejected by Democrats who passed their own $3.5 trillion bill in the House back in May. House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer have offered to trim their proposal by $1 trillion, but have repeatedly rejected any smaller stimulus deal or doing a virus relief package piecemeal. Treasury Secretary Steven Mnuchin said that he hopes Pelosi will be interested in restarting negotiations on a new coronavirus stimulus package when the House returns to Washington to discuss the crisis at the Postal Service. “Since Speaker Pelosi is coming back to look at Postal, hopefully she will be more interested in sitting down,” Mnuchin said.
Speaking of the Postal Service, Postmaster General Louis DeJoy is scheduled to testify before the Senate Homeland Security and Governmental Affairs Committee on Friday ahead of the House oversight hearing next Monday as lawmakers speak out against his overhaul of the U.S. Postal Service. “I am pleased to have secured an oversight hearing on Friday with Postmaster General DeJoy in order to address urgent questions on the Postal Service delays that are causing massive disruptions across the country,” said Democratic Senator Gary Peters. “As Ranking Member on the only Senate Committee with oversight of the Postal Service, I will continue pressing for answers on Mr. DeJoy’s recent directives and their impacts on all Americans, who rely on the Postal Service for prescriptions, running their small businesses, voting and other crucial purposes.” In the House, voting on legislation to halt post office cutbacks and give the agency $25 billion in additional funding is set to take place on Saturday.
U.S. coronavirus cases appear to be ticking lower as the seven-day average of newly reported infections falls below 50,000 for the first time in nearly a month. Quest Diagnostics, one of the nation’s biggest diagnostic testing providers, said late yesterday that it has cut its turnaround time for coronavirus tests to one to two days for all patients, down from more than seven days a month ago. Quest now has capacity to conduct 150,000 diagnostic tests per day, and said that it expects “to scale up our capacity to 185,000 tests a day by Labor Day with further gains possible after that.” The company added, “Turnaround time can fluctuate with demand and vary by region. COVID-19 is unpredictable, and changing dynamics affecting demand, supplies, and other factors could cause turnaround times to slip.” Quest’s quick turnaround time, if it holds, could help the U.S. identify more people who don’t have coronavirus symptoms who may be unknowingly spreading the virus.
A few big retailers reported earnings. Walmart posted its biggest earnings surprise in 31 years today, reporting same store sales rose 9.3% and e-commerce sales surged 97% as shoppers splurged after receiving stimulus checks. Walmart posted earnings per share of $1.56 on revenue of $137.74 billion, compared to estimates for earnings per share of $1.25 on revenue of $135.48 billion. Still, the big box retailer is bracing for a second half where pandemic-hit shoppers may be forced to cut back without continued government stimulus. Home Depot said its sales soared 23% as consumers tackled home improvement projects amid the coronavirus pandemic, with the retailer reporting earnings per share of $4.02 on revenue of $38.05 billion, compared to Wall Street expectations for earnings per share of $3.71 on revenue of $34.53 billion. But it wasn’t all good news, Kohl’s shares are down more than 16% after it said revenue fell 23% during its second quarter, even as digital sales soared 58% year-over-year. Kohl’s also offered a grim outlook for the all-important holiday shopping season, with CEO Michelle Gass saying the company is planning “conservatively” for the remainder of 2020.
Oracle has joined the fray for TikTok’s U.S., Canadian, Australian, and New Zealand operations, potentially setting up a showdown with Microsoft. Oracle is reportedly working with a group of U.S. venture capital firms that already have a stake in TikTok, including General Atlantic and Sequoia Capital. According to the Financial times, Oracle is “seriously considering” buying the social media app from ByteDance, TikTok’s China-based parent. TikTok has recently come under fire in the U.S. as President Donald Trump has threatened to shut down the app in the U.S. on claims that it is a national security threat.
Stocks We’re Watching
Myovant Sciences (NYSE: MYOV): Myovant Sciences shares got a boost this week after the company announced yesterday that its New Drug Application for once-daily, oral relugolix combination tablet had been accepted for review with the FDA. “Relugolix is now under FDA review for two distinct potential new treatment options in uterine fibroids and advanced prostate cancer, indications with high unmet need where we have the opportunity to elevate the standard of care for women and for men,” said Lynn Seely, M.D., CEO of Myovant Sciences. “An estimated five million women in the U.S. suffer from symptomatic uterine fibroids, which may include heavy menstrual bleeding, pain, and anemia. Non-invasive treatment options are limited, and we believe women deserve an alternative to surgery that delivers a predictable and clinically-meaningful reduction in menstrual blood loss while maintaining bone health as demonstrated by relugolix combination therapy in the LIBERTY program.”