What to watch today: Futures rose after more hot inflation, ahead of Powell testimony

U.S. stock futures rose Wednesday — and the 10-year Treasury yield was around 1.38% — after the government's latest inflation report came in hot. In prepared testimony to a House panel, Federal Reserve Chairman Jerome Powell said the central bank is still a ways off from altering monetary policy. He also said he expects inflation to moderate. He speaks at noon ET Wednesday and goes before a Senate committee Thursday morning. (CNBC)

A day after higher-than-expected June consumer prices, the producer price index for last month soared 7.3% year over year and the core rate excluding food and fuel jumped 5.6%. Month over month, both the headline PPI and the core rate rose 1%. The Dow Jones Industrial Average, S&P 500 and Nasdaq on Tuesday retreated from record closes, breaking two-session winning streaks. (CNBC)

* Weekly mortgage refinances spike 20% after interest rates drop to February low (CNBC)

BY THE NUMBERS

Bank of America (BAC) shares dropped less than 2% in the premarket after the company on Wednesday morning posted second-quarter revenue below expectations. Excluding a one-time $2 billion tax gain, adjusted earnings of 80 cents per share edged out estimates. (CNBC)

Citigroup (C) posted second-quarter earnings of $2.85 per share. Revenue was $17.47 billion. Both measures beat estimates. Shares gained 1.5% in the premarket. Quarterly results benefited from a $1.1 billion boost from releasing reserves the bank had previously set aside for loan losses. (CNBC)

* Wells Fargo profit tops expectations with boost from release of money set aside for loan losses (CNBC)

BlackRock (BLK), the world's largest asset manager, reported a 28% jump in second-quarter earnings that handily beat estimates. Investors poured more money into the company's funds, boosting its assets under management 30% year over year to nearly $9.5 trillion. Shares fell around 2% in the premarket. (Reuters)

* BlackRock’s CEO is concerned about inflation. But here’s why he still sees stocks going higher (CNBC Pro)

Delta Air Lines (DAL) reported second-quarter revenue that topped estimates, saying leisure and business travel bookings rose sharply. The Atlanta-based airline posted a profit of $652 million, snapping a five-quarter streak of losses, thanks to federal coronavirus aid that offset some of its costs. Shares rose nearly 2% in premarket trading. (CNBC)

American Airlines (AAL) shares rose more than 3% in Wednesday's premarket, the morning after the carrier forecast better revenue and reported a narrower loss than previously estimated for the second quarter. (CNBC)

The spread of the Covid delta variant across unvaccinated pockets of the U.S. is causing flare-ups in cases and leading to increases in hospitalizations, according to infectious disease specialists. New daily Covid infections are once again on the rise as the highly transmissible delta variant, first detected in India, takes hold as the dominant strain in the U.S. (CNBC)

President Joe Biden is set to meet with Senate Democrats on Capitol Hill on Wednesday to talk about their budget agreement. The accord announced Tuesday night envisions spending $3.5 trillion over the coming decade, paving the way for their drive to pour federal resources into initiatives sought by Biden. (AP)

Activist short seller Spruce Point Capital Management has accused Oatly (OTLY) of shady accounting practices and misleading consumers and investors about its sustainability practices. The firm, which has taken a short position against the maker of oat milk, called for Oatly's board to hire an independent forensic accountant to open an investigation into its claims. (CNBC)

Apple (AAPL) is asking suppliers to build as many as 90 million next-generation iPhones, according to Bloomberg. That would represent an up to 20% increase over 2020 levels. Apple rose 1.8% in the premarket.

STOCKS TO WATCH

Peloton (PTON) shares fell 2.2% in the premarket after Wedbush Securities downgraded the fitness equipment maker's stock to "neutral" from "outperform". Wedbush points out that consumers now have a growing number of workout alternatives, as well as the post-pandemic option of out-of-home workouts.

Lululemon (LULU) shares rose 1.1% in the premarket after Goldman initiated coverage with a "buy" rating and inclusion on the firm's "Conviction Buy" list. Goldman said the post-Covid recovery period has been favorable for apparel and strong brands.

L Brands (LB) raised its fiscal second-quarter earnings guidance, thanks to better-than-expected profit margins and improved sales at its Victoria's Secret and Bath & Body Works units. Separately, L Brands filed to sell 20 million shares held by founder Leslie Wexner and affiliated stockholders. The company will not receive any proceeds from the sale. L Brands fell 2.1% in the premarket.

Broadcom (AVGO) is no longer in talks to buy software company SAS Institute, according to The Wall Street Journal. The end of the discussions reportedly came after SAS co-founders Jim Goodnight and John Sall changed their minds about possibly selling the company.

EBay (EBAY) agreed to sell part of its stake in Norway's Adevinta to satisfy a demand from Austrian competition regulators. Austria wanted eBay to cut its stake to no more than 33%, in order to give its approval for a tie-up between the classified ad businesses of the two companies. EBay will sell a 10.2% Adevinta stake to private equity firm Permira for $2.25 billion.

Japan's Sumitomo Mitsui Financial Group is considering buying a 5% stake in Jefferies Financial (JEF) for about $380 million, according to multiple reports. Sumitomo did acknowledge it was considering a financial alliance with Jefferies and would announce further details once they are worked out. Jefferies shares rallied 3.5% in premarket trading.

Source: Read Full Article