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There’s a price shocker coming at the pumps.
The U.S. economy is showing signs of slowing down after a slight recovery, signaling the need for more monetary support, according to Federal Reserve Governor Lael Brainard. “Rolling flare-ups or a broad second wave of the virus may lead to widespread social distancing—whether mandatory or voluntary—which could weigh on the pace of the recovery and could even presage a second dip in activity,” Brainard said in a speech. “Some high-frequency indicators tracked by Federal Reserve Board staff … suggest that the strong pace of improvement in May and the first half of June may not be sustained.” —Fred Imbert
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RBOB gasoline futures fell 1.6% Tuesday, on concern state efforts to halt the spread of the coronavirus by restricting activities will result in less driving and less demand for fuel. In particular, traders are watching Texas to see if Houston and the state more broadly locks down, after California closed indoor dining and other activities Monday.
“While we saw gasoline sales spike prior to the (July 4) holiday, now we’re seeing the impact of states reversing course and closing their economies, which is resulting in a decline in demand again,” said Andy Lipow, president of Lipow Oil Associates.
On Wednesday, the government will release the latest gasoline demand figures. For the week ended July 3, the U.S. consumed 8.8 million barrels a day, about 1 million less than the same time last year. – Patti Domm
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The Dow traded more than 200 points higher, or 0.9%, as the market tried to recover from Monday’s late-day swoon amid the start of the corporate earnings season. The S&P 500 gained 0.3%. The Nasdaq Composite, however, slid 0.3% as Big Tech continues to struggle. —Fred Imbert
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Wells Fargo — Shares of Wells Fargo fell 5% after the bank posted its first quarterly loss since the Great Recession and slashed its dividend to 10 cents a share.
Netflix — Alongside the rest of Big Tech, Netflix ticked 3% lower, dragged down by a downgrade to neutral from buy from UBS.
Ford — Shares jumped nearly 4% after Ford unveiled its new Bronco SUVs. The revived brand, positioned as a competitor to Fiat Chrysler’s Jeep Wrangler, has a starting price just under $30,000.
Check out more midday movers here. —Maggie Fitzgerald
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Biotech firm Moderna said Tuesday it will begin its phase 3 coronavirus vaccine trial on July 27. The trial will enroll 30,000 people that are at high infection risk. Shares of Moderna jumped nearly 4% following the news. — Yun Li
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Citi initiated Teledoc and Livongo Health as buy on Tuesday, and analyst Daniel Grosslight wrote “we believe that a new era of healthcare technology investing has emerged, with a concatenate increase in innovation and disruption. Legacy technology underinvestment and pain points have boiled over (accelerated by COVID-19), and in our view, the healthcare ecosystem is on the verge of its ‘Netflix moment.'” Both stocks are down almost 2% in early trading. — Michael Bloom
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After a brief bounce in the opening minutes, tech stocks are once again heading south. Shares of Amazon dropped 2.7%, while Netflix lost 2.9%. Facebook and Microsoft both slid more than 1%. — Jesse Pound
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CNBC’s Jim Cramer urged investors to be cautious after yesterday afternoon’s steep reversal, particularly in large tech stocks.
“You don’t just snap out of that in one day. There are too many people who bought at the top who are trying to figure out, ‘Lord get me back to even,'” Cramer said on “Squawk on the Street.” “Let this play out.”
The “Mad Money” host said it’s not clear which theme of stocks will emerge as the predominant trade, underscoring the need for investors to be patient. “Will it be the companies that do better because people think a vaccine is upon us? I can’t buy into that theory but that was the theory yesterday afternoon,” he said. — Kevin Stankiewicz
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Shares of Wells Fargo plunged as much as 8% minutes after the opening bell on Tuesday. The bank posted its first quarterly loss since the Great Recession as the bank set aside $8.4 billion in loan loss reserves tied to the coronavirus pandemic. The bank had a net loss of $2.4 billion in the second quarter, or a loss of 66 cents a share, worse than the 20 cents a share loss expected by analysts surveyed by Refinitiv. Meanwhile, Wells Fargo cut its quarterly dividend to 10 cents a share from 51 cents previously. – Yun Li, Hugh Son
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The drastic intraday reversal in the Nasdaq Composite on Monday raised eyebrows on Wall Street. The tech-heavy benchmark went from rising nearly 2% to hit an all-time high to finishing the day more than 2% lower. Such a reversal (when the Nasdaq swings more than 2% while hitting a record) only happened two other times, going back to 1985, according to Bespoke Investment Group. Those two days were on Jan. 24 and March 7 of 2000, right before the burst of the tech bubble, the firm said. “Although the Nasdaq was up the following day both times, you don’t need us to remind you what happened over the long-term from there,” Bespoke said in a note Tuesday.
Many on Wall Street have sounded the alarms that the Nasdaq’s comeback rally has gone too far, too fast. It was the first major U.S. equity benchmark to reclaim a new high after the coronavirus sell-off, soaring 15% this year. “Given the nonstop rally of late in the Nasdaq and earnings season on the horizon, Monday’s reversal should at least serve as a reality check that the market isn’t a one-way street,” Bespoke said. –Yun Li
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The Nasdaq opened in the red on Tuesday as major tech stocks including Apple and Microsoft fell. The index was down 0.7% after the opening bell, while the Dow and S&P 500 registered smaller losses. — Jesse Pound
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Piper Sandler raised its target on Tesla to a new Street high of $2,322, implying a 55% rally ahead for shares of the electric vehicle maker. The new target firmly establishes Piper as the Street’s biggest bull, prompting CEO Elon Musk himself to respond to the call. Tesla shares jumped more than 4% during premarket trading on Tuesday.
CNBC PRO subscribers can read more here. — Pippa Stevens
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Pro subscribers can read more here. — Michael Bloom
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The U.S. consumer price index rose 0.6% in June. Economists surveyed by Dow Jones expected an increase of 0.5%. The Labor Department said in a release that rising gas prices accounted for more than half of last month’s increase. — Jesse Pound
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UBS cut its rating on Spotify to sell from buy, saying that the stock’s climb in recent months has gone too far. Shares of the streaming audio company were down 3.1% in premarket trading amid light volume. CNBC Pro subscribers can read more about the call here. — Jesse Pound
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Shares of Citigroup gained 1.8% in premarket trading after the bank reported a surge in trading revenues for the second quarter that helped it beat Wall Street expectations. The bank reported earnings of 50 cents per share on $19.77 billion of revenue. Analysts expected earnings of 28 cents per share and $19.12 billion of revenue, according to Refinitiv. — Jesse Pound, Fred Imbert
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Shares of Wells Fargo dropped more than 2% in premarket trading after the bank announced that it was cutting its dividend to 10 cents per share and reported a $2.4 billion loss for the second quarter. This was the first quarterly loss since the financial crisis. Wells Fargo previously paid a quarterly dividend of 51 cents per share. — Jesse Pound, Hugh Son
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Shares of Carnival dipped 1.5% in premarket trading on Tuesday, while Norwegian Cruise Line and Royal Caribbean slid about 1% each after SunTrust downgraded these cruise line operators due to expected delays in their restarting plans. The Wall Street firm slashed its ratings on Carnival to sell and Norwegian and Royal Caribbean to hold, saying cruising in any meaningful way in North America for the major brands will not resume until at least the second quarter of 2021. –Yun Li
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Shares of JPMorgan rose 2.5% in premarket trading on Tuesday after the bank reported better-than-expected second-quarter earnings bolstered by a 79% surge in trading revenue. The bank posted earnings of $4.69 billion, or $1.38 a share, exceeding the $1.04 per share estimate of analysts surveyed by Refinitiv. Revenue of $33 billion exceeded the $30.3 billion estimate. Shares of Goldman Sachs, Morgan Stanley and Bank of America climbed at least 1% each in premarket following JPMorgan’s strong trading results. — Yun Li, Hugh Son
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The market is set to open Tuesday’s session in the green as traders digest corporate earnings from big U.S. banks. Futures on the Dow Jones Industrial Average jumped about 140 points, indicating an opening gain of 150 points. S&P 500 and Nasdaq 100 futures rose 0.3% and 0.1%, respectively. The S&P 500 will attempt to erase 2020 losses on Tuesday after briefly turning green in Monday’s roller-coaster session. The equity benchmark is now down 2.3% on the year after losing 0.9% in the previous session. A big rollover in technology shares took the market down on Monday. — Yun Li
Premier Doug Ford lashed out at the gas companies for the double-digit overnight increase in the price of gas across the GTA, calling it unacceptable and disgusting.
Speaking at an unrelated announcement in Oakville, Ont., on Thursday, Ford took a moment to vent on behalf of “16 million people” across the province.
“You go out last night and you’re sitting there for 20 minutes in the lineup to get gas. It’s unacceptable,” said Ford. “Everywhere I was going it was a $1.59. You wake up this morning and it’s $1.80. It’s absolutely disgusting.”
Prices at the pumps surged 14 cents overnight to 178.9 cents/litre at most GTA stations. Analysts attribute the increase to the annual changeover from winter gas to summer gas.
“That is why prices are going up so significantly all at once is essentially we’re seeing discounts on winter gasoline to get rid of it but now that we’ve made the jump, summer gasoline inventories are much lower and thus a much higher price,” Patrick De Haan, the head of petroleum analysis at Gas Buddy tells CityNews.
That explanation, Ford said, was simply a way for the gas companies to gouge people.
“It’s absolutely disgusting what the oil companies are doing,” said an agitated Ford as he questioned whether the gas companies are waiting for the tanks to drain at gas stations before filling them up with the new summer formulation. “Or are you using the old gas and charging the higher cost.”
“I have my opinion that it’s not physically possible to drain every single gas station to put the fresh stuff in. So either you’re putting the fresh stuff in last month or you’re gouging the people right now.”
Ford went on to say that after consulting with some friends in the United States, he found that gas prices were trending around $3.80 per gallon. “Folks, let’s do the math – it’s a $1.80 (a litre) that’s $7.20 (a US gallon).”
Mike Eppel, 680 News Radio Toronto Senior Business Editor, says it also comes down to a refining capacity issue in this country.
“So there’s lots of oil, that’s not the issue – oil supplies are high. It’s the refining capacity. We haven’t had a refinery built in eastern Canada since whenever – you can’t get a pipeline built. And anytime there is any disruption in the system, up goes the price for gas.”
Ford did not limit his anger on rising gas prices to just the oil companies, closing his rant by taking a shot at the federal government’s carbon tax, which took effect on April 1 and pushed gas prices up three cents a litre.
“This goes back to the federal government sticking their hands in the people’s pockets, they don’t care that we have some of the highest prices in North America on the carbon tax, they jack it up 17.5 per cent,” explained Ford. “And then of course the oil companies thought they’d hop on board, no one’s going to notice, because if I remember … just a few months ago I remember filling up for $1.30 to $1.34. Did the barrel of oil go up 30 per cent? The answer is no. So where is the 30 per cent.”
While the price of gas is expected to fall by four cents/litre on Friday, prices will continue to fluctuate with no real relief in sight until June or July.
Google has fired 28 employees after a number of staffers protested the company’s cloud contract with the Israeli government.
The workers were terminated after staging protests inside Google’s offices in New York and Sunnyvale, California, per CNN.
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In a statement, Google’s parent company Alphabet said that “physically impeding other employees’ work and preventing them from accessing our facilities is a clear violation of our policies, and completely unacceptable behavior.”
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The protests were organized by the No Tech For Apartheid campaign and protesters held signs that read “No More Genocide For Profit” and “We Stand with Palestinian, Arab and Muslim Googlers.”
The company said it would continue to investigate and take action as needed, reports The Guardian.
The protesters say that Project Nimbus, a $1.2 billion contract granted to Google and Amazon.com in 2021, provides cloud services to the Israeli government and aids in the creation of military applications.
A form letter on the campaign’s website demands that Amazon CEO Andy Jassy, Amazon Web Services CEO Adam Selipsky, Google CEO Sundar Pichai and Google Cloud CEO Thomas Kurian “end all ties with Israeli apartheid and cut the Project Nimbus contract.”
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Google says the Nimbus contract “is not directed at highly sensitive, classified, or military workloads relevant to weapons or intelligence services.” It added that Google Cloud “supports numerous governments around the world, including the Israeli government.”
“We have been very clear that the Nimbus contract is for workloads running on our commercial cloud by Israeli government ministries, who agree to comply with our Terms of Service and Acceptable Use Policy.”
The No Tech for Apartheid campaign called the firings a “flagrant act of retaliation” and a “clear indication that Google values its $1.2 billion contract with the genocidal Israeli government and military more than its own workers.”
The campaign added that some of the individuals fired did not directly participate in the protests.
Despite what its critics allege, Israel has attempted to warn and shield civilians as the IDF hunts the Hamas terrorists who hid themselves among Gaza’s civilian population and infrastructure after the group’s October 7 attack. As well, critics who call Israel an apartheid state ignore the freedoms enjoyed by the democratic country’s Arab citizens, who play major roles in business, the judiciary and even the Knesset.
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Gas prices have not been this high since August 2022
There’s a price shocker coming at the pumps.
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Gas in Ontario, including the GTA, will go up 14 cents a litre overnight for customers filling up on Thursday, says Dan McTeague, the president of Canadians for Affordable Energy.
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“So going from $1.65.9 (per litre) going to $1.79.9,” said McTeague adding the increase will affect the entire province except for northwestern Ontario, which gets its prices from the prairies market.
“That’s the highest level since August, 2022, almost two years ago,” he added.
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McTeague said the reason for the price hike is that stations are switching over to summer-blend gasoline.
“Around this time of year prices go up to reflect the new blend of gasoline, which is more expensive to make,” he explained. “Butane is used in the winter, for gasoline, whereas in the summer it’s alkyaltes. Alkyaltes are extremely expensive.”
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“In the winter you want your ignition to start quickly in cold temperatures, you uses volatile butane. You take that out in the summer. That’s a big difference. This is going to be around for awhile and it could get higher,” McTeague said.
McTeague also blamed the rise in gas prices in Canada on the carbon tax increase, the rising price of oil, and the weak Canadian dollar.
“It just makes a bad situation worse,” he said. “It’s just another brick in the wall, another load on the camel’s bank. The cost of denying our resources, blocking pipelines, is one of the most significant reasons why the Canadian dollar is so weak.”
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