Here are five things you must know for Tuesday, Sept. 1:
1. — Stock Futures Waver as Wall Street Starts September
Stock futures were mixed Tuesday after Wall Street closed out August with its fifth consecutive monthly gain.
Contracts linked to the Dow Jones Industrial Average fell 7 points, S&P 500 futures gained 10 points and Nasdaq futures were up 120 points.
U.S. stocks closed mostly lower Monday with the Dow falling 227 points, or 0.8%, to 28,428, and the S&P 500 declining 0.2%. The Nasdaq rose 0.7% and closed at a record high on the back of gains in Apple (AAPL) – Get Report and Tesla (TSLA) – Get Report.
Despite the losses Monday, the Dow finished August with a gain of 7.6%, and the S&P 500 rose 7%, its best gain since 1986. The Nasdaq jumped 9.6% last month, the tech-heavy index’s best monthly performance since 2000.
Stocks have staged a remarkable recovery since the coronavirus pandemic was declared in March, led largely by tech shares and optimism over a reopening of the U.S. economy.
But with election season looming and coronavirus infections in the U.S. still ticking higher, the question is whether the stock market gains can be sustained as September begins.
“Well, 2020 has laughed at many of these things, but be aware September is indeed the worst month of the year on average,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But what caught our attention was both September and October have a negative return during election years, with October the worst month of the year. Could investors get election jitters again in 2020?”
2. — Zoom Video Soars After Earnings Trounce Estimates
For the quarter ended in July, Zoom reported total sales of $663.5 million, up 355% year over year and well ahead of analysts’ estimates of $500 million. Adjusted earnings in the quarter were 92 cents a share, trouncing forecasts of 45 cents.
“Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform,” said Zoom CEO Eric Yuan in a statement.
For the current quarter, Zoom, the poster child for stay-at-home stocks, expects total revenue of between $685 and $690 million and adjusted earnings of 73 cents or 74 cents a share. For the full fiscal year, Zoom raised its sales guidance to between $2.37 billion and $2.39 billion, representing a year-over-year increase of 281% to 284%, alongside per-share earnings of between $2.40 and $2.47.
At the close of the second quarter, Zoom had 370,200 customers with more than 10 employees, up approximately 458% from the same quarter last fiscal year, and 988 customers contributing more than $100,000, up 112% year over year.
3. — Apple Plans to Build 75 Million 5G iPhones for Later This Year
Apple has asked suppliers to build at least 75 million 5G iPhones for later this year, roughly the same as last year, Bloomberg reported, citing people familiar with the situation.
The technology giant anticipates shipments of the next-generation iPhones may reach as high as 80 million units in 2020.
Apple plans to launch four new models in October featuring the 5G technology, with a different design and a wider choice of screen sizes, the people told Bloomberg.
The company also is preparing a new iPad Air, two new Apple Watch versions and over-the-ear headphones outside the Beats brand.
Apple’s iPhones still generate almost half of Apple’s sales, and that often tops 60% in the holiday season, Bloomberg noted.
Apple was rising 2.66% to $132.47 in premarket trading Tuesday. The stock closed at $129.04 on Monday, the first day Apple traded following is 4-for-1 stock split.
4. — Tuesday’s Calendar Highlights
The economic calendar in the U.S. Tuesday includes the IHS Markit Manufacturing PMI (final) for August at 9:45 a.m. ET, the ISM Manufacturing Index for August at 10 a.m. and Construction Spending for July at 10 a.m.
5. — Kodak Surges as D.E. Shaw Purchases 5.2% Stake
In a filing with the Securities and Exchange Commission, Kodak said D.E. Shaw has bought 3.94 million shares of its stock.
The company, which now makes print and advanced materials and chemicals, received a letter of interest in July from the U.S. government, putting Kodak in line to receive a $765 million loan to boost production of a variety of pharmaceuticals.
But the loan was frozen amid allegations of wrongdoing and a reported investigation by the SEC.