Dow Jones futures lower, Johnson & Johnson and Netflix results loom

The Dow Jones is expected to open lower on Thursday as a spate of high profile earnings releases loom.

US markets and Dow Jones futures in focus

Global equity markets rose strongly overnight, after US biotechnology company Moderna, revealed positive interim results from the phase 1 clinical trials of its Covid-19 vaccine.

The Moderna share price finished out the session up 6.90% at US$80.22 per share off the back of this news, with the company noting that it expected to commence phase 3 clinical trials on its Covid-19 vaccine, with 30,000 participants, on 27 July.

From a broader perspective, the Dow Jones Industrial Average finished out yesterday’s session up 227 points, the S&P 500 rose 29 points and the tech-focused Nasdaq Composite gained 61 points.

The best performing Dow Jones constituents on Wednesday were Boeing (+4.43%), Raytheon (+4.08%) and American Express (+2.66%); while the worst performing were Procter & Gamble, Verizon, and UnitedHealth.

Looking at the catalyst behind these bullish market moves, IG’s market analyst, Kyle Rodda today wrote that while cases of the coronavirus continue to grow at an alarming rate, equities rallied overnight nonetheless, ‘as market sentiment found itself juiced by separate announcements from US biotech company Moderna, and the University of Oxford, that progress is being made in their respective efforts to develop a COVID-19 vaccine.’

Interestingly, while US markets rose strongly on Wednesday, Dow Jones futures are currently suggesting the key US benchmark will open some 97 points or 0.36% lower, as of 1:09AM (New York time).

Events to watch out for heading into Thursday’s session

Overall, its poised to be a busy session on Thursday, with Morgan Stanley, Johnson & Johnson, Netflix and Domino's all set to report their latest round of quarterly results.

Much attention will likely be on Morgan Stanley, after rival banks JPMorgan and Goldman Sachs delivered a resilient set of quarterly results this week.

Specifically, as part of their latest quarterly results Goldman Sachs revealed that its Q2 revenues came in 41% higher, at US$13.30 billion. Goldman’s investment banking arm performed particularly well, with quarterly revenues coming in at $2.66 billion – representing growth of 36% on a year-over-year basis. Q2 FY20 net earnings came in at US$2.42 billion.

Speaking to the uncertainty of the current economic environment as a result of the coronavirus however, Goldman also made a US$1.59 billion credit loss provision.

By comparison, JP Morgan revealed second quarter net revenues of US$33.81 billion (+15%), against net income of US$4.687 billion, down 51%, on a year-over-year basis. Management attributed this decline to 'reserve builds across the firm.'

Mind you, like Goldman, JP Morgan also made significant credit provisions as a result of Covid-19, with JP Morgan booking a US$10.5 billion provision charge.

Elsewhere, initial jobless claims, for the week ending 11 July, and continuing jobless claims for the week ending 4 July, are set to be released on Thursday. Retail sales data (June) and business inventories data (May) are also set to be released.

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