Here are five things you must know for Friday, Aug. 20:
1. — Stock Futures Drop on COVID and Growth Concerns
Stock futures tumbled Friday as investors grappled with the spread of the highly contagious COVID-19 delta variant, the impact of the virus on growth and China’s continued crackdown on its tech sector.
Contracts linked to the Dow Jones Industrial Average fell 124 points, S&P 500 futures were down 15 points and Nasdaq futures slumped 31 points.
The yield on the benchmark 10-year Treasury slid Friday to 1.233%.
Stocks finished a choppy Thursday session mixed on concerns the Federal Reserve could begin tapering stimulus this year, even as surging coronavirus infections caused by the delta variant raised worries about the pace of the U.S. recovery.
“With the number of COVID-19 infections on the rise, especially in the U.S., the threat from the delta variant is becoming more apparent spurring cautious risk sentiment,” said Venkateswaran Lavanya of Mizuho Bank.
Apple (AAPL) – Get Apple Inc. (AAPL) Report will delay the return to corporate offices until January at the earliest
because of surging COVID-19 cases and new variants, Bloomberg reported, citing a memo sent to employees. The tech giant previously had pushed out its office return to October from early September.
In China, shares of the country’s biggest tech stocks fell as Beijing approved new privacy laws on handling user data. U.S.-listed shares of Alibaba (BABA) – Get Alibaba Group Holding Ltd. Sponsored ADR Report edged higher in premarket trading after slumping nearly 7% on Thursday.
2. — Tesla Is Building Humanoid Robots
Tesla (TSLA) – Get Tesla Inc Report CEO Elon Musk said the electric-vehicle company plans to adapt the artificial intelligence technology it has been developing for autonomous driving to make humanoid robots.
Musk detailed his company’s plans to expand the use of artificial intelligence at an event Thursday in Palo Alto, Calif.
Artificial intelligence is seen as key to Tesla’s efforts to deploy fully autonomous self-driving vehicles.
After a detailed 90-minute presentation of the computing technologies Tesla has developed for self-driving capability, Musk displayed a prototype of a robot he said could use the same technology to operate on its own.
The Tesla Bot will “be friendly,” Musk said, adding that it would serve to perform “only dangerous, repetitive, boring tasks.” At a mechanical level “you can run away from it,” and probably overpower it, Musk said. “Hopefully that doesn’t happen. But you never know,” he added.
Tesla stock rose 0.42% to $676.30 in premarket trading Friday.
3. — Applied Materials Falls After Earnings Beat
Shares of Applied Materials (AMAT) – Get Applied Materials, Inc. Report fell more than 1% in premarket trading Friday after the semiconductor equipment maker reported stronger-than-expected earnings and sales in its fiscal third quarter and issued an upbeat forecast.
Applied Materials said it expects adjusted earnings in the current quarter, the company’s fiscal fourth, of between $1.87 and $2.01 a share on revenue of about $6.33 billion, higher than analysts’ estimates.
“Applied Materials delivered record performance as long-term trends fueled by the digital transformation of the economy drive strong, secular demand for semiconductors,” said Gary Dickerson, CEO of Applied Materials, in a statement.
“Applied has the broadest and most enabling portfolio of technologies to accelerate our customers’ roadmaps, putting us in a great position to outperform our markets again in 2021 and the years ahead,” Dickerson said.
In an interview with Bloomberg, Dickerson said a surge in demand for
semiconductors has led to unprecedented shortages of vital
electronic components. That expansion is set to continue as the economy shifts to a greater reliance on automation and computing, Dickerson said, adding that Applied Materials was confident that long-term growth would continue.
The stock declined 1.31% to $127.51 in premarket trading Friday.It has risen nearly 50% so far in 2021.
4. — Johnson & Johnson Names Joaquin Duato to Replace Alex Gorsky as CEO
Johnson & Johnson (JNJ) – Get Johnson & Johnson (JNJ) Report named Joaquin Duato as chief executive, replacing Alex Gorsky, effective Jan. 3.
Gorsky, who has served as CEO and chairman since 2012, will become executive chairman.
Duato is a 32-year veteran of Johnson & Johnson and serves now as vice chairman of the executive committee. He also will join J&J’s board.
Since joining J&J’s executive team in July 2018, Duato has been providing strategic direction to J&J’s pharmaceutical and consumer-health businesses, while overseeing the company’s technology team and its supply chain, according to The Wall Street Journal.
Gorsky said in a statement that “family health reasons” were part of the reason for handing over the reigns of the healthcare giant.
J&J shares fell 0.88% early Friday to $177.
5. — Friday’s Calendar: Deere and Foot Locker Earnings
Deere (DE) – Get Deere & Company Report posted stronger-than-expected fiscal third-quarter earnings and boosted its full-year profit forecasts as strong crop prices and renewed farming equipment demand boosted the company’s top and bottom lines.
Foot Locker (FL) – Get Foot Locker, Inc. Report soared early Friday after adjusted earnings of $2.21 a share in the second quarter smashed analysts’ estimates.
The economic calendar in the U.S. Friday is light. Federal Reserve Bank of Dallas President Robert Kaplan has a speaking engagement at 11 a.m. ET.
Kaplan said earlier this month he wanted the Fed to announce tapering plans in September and begin the gradual wind-down in purchases the following month.