Mixed Messages from White House on Federal Reserve Chair
As the trading day begins, investors are still trying to make sense of conflicting reports regarding President Trump’s intentions to fire Federal Reserve Chair Jerome Powell. Trump initially denied plans to dismiss Powell, but a senior White House official informed CNBC that the president had asked House Republicans for their opinion on the matter and indicated he would likely move forward with the firing. However, Trump later stated that he is unlikely to fire Powell unless there is evidence of fraud. This uncertainty caused a dip in stocks when the news first broke, but they recovered following Trump’s denial.
Crypto Legislation Advances in House
In a late night session on Wednesday, House lawmakers advanced three bills related to crypto regulation. After facing opposition from some House Republicans, the legislation was ultimately approved, but not without a struggle. This raises doubts about the ability of House Republicans to align on these bills and successfully pass them in their final form. This vote was also the longest open vote in modern House history, surpassing a previous record set earlier this month.
PepsiCo Earnings Exceed Expectations
PepsiCo reported second-quarter earnings and revenue that surpassed Wall Street estimates, causing a 3% boost in premarket trading on Thursday. Although the snack-and-soda giant reported softer demand, with worldwide food volumes down and drink volumes flat from last year, CEO Ramon Laguarta remains optimistic about the domestic business improving. The company reaffirmed its full-year forecast, anticipating a slight increase in revenue and earnings per share.
United Airlines Revises Earnings Forecast
United Airlines has adjusted its full-year earnings forecast, landing in the middle of the two scenarios provided in April. The airline missed revenue estimates but beat on EPS for the second quarter, citing weaker-than-expected demand and fares for domestic-coach class travel. However, premium and international demand continue to outperform. United also addressed operational difficulties at its major hub, Newark Liberty International Airport, which is facing a shortage of air traffic controllers. This has resulted in a significant financial impact for the airline, with an estimated $218 million loss in pretax margin for the second quarter and an additional $140 million for the current quarter.
New York Officials Challenge Tesla’s Corporate Bylaw Change
Officials in New York State are calling on Tesla to reverse a change made to its corporate bylaw that requires investors to own 3% of the company’s stock in order to file a derivative lawsuit for breach of fiduciary duties. This comes after the New York State Common Retirement Fund, which owns 0. 1% of Tesla’s shares, accused the automaker of engaging in a “bait-and-switch” tactic to convince shareholders to approve a relocation from Delaware to Texas. The fund submitted a formal proxy proposal and letter to Tesla on July 11, raising concerns over the change and its potential impact on shareholders.
In conclusion, as the trading day begins, investors are facing mixed messages and uncertainty from the White House regarding the