Baseball Is Back. Will Day Trading End?

Baseball matters to stocks for a host of reasons and not just because analysts love to ask which inning the cyclical recovery is in. Even without fans in the seats, baseball is a $10 billion business that drives eyeballs to TVs and tablets—eyeballs that are of particular interest to advertisers.

The return is also good for stocks like the
Liberty Media Braves
and
Disney,
which owns ESPN.
DraftKings
should also benefit from having a major sport back.

A less obvious impact: Baseball’s return will give Dave Portnoy something else to do. Portnoy, the founder of Barstool Sports, has taken to opining on stocks during the pandemic, and he’s become a guru of sorts for aspiring day traders.

Baseball isn’t just something else to occupy Robinhood traders, though. It’s another diversion for everyone—one that we could all use right now.

—Al Root

***

U.S. Places $2 Billion Order for Vaccine

The U.S. agreed to buy 100 million doses of a possible Covid-19 vaccine being developed jointly by
Pfizer
and
BioNTech
if it proves safe and effective, the companies announced Wednesday. The deal includes an option to buy an additional 500 million doses.

• The initial order will cost the U.S. government $1.95 billion, or $19.50 a dose, and would be delivered once the vaccine has received regulatory approval. Because the vaccines have been paid for by the government, Americans would receive them free.
• $19.50 is a higher price than analysts had expected the government to pay. Mizuho analyst Vamil Divan said in a note to clients that he thought Pfizer would charge closer to $15.
• The order is part of what the U.S. government has dubbed “Operation Warp Speed,” a program that before Wednesday’s announcement had delivered $2.1 billion to drugmakers working on potential vaccines, not including Pfizer and BioNTech.
• “Hopefully the approval process will go very quickly. We think we have a winner there,” President Donald Trump said about Pfizer’s potential vaccine during Wednesday’s coronavirus news conference.

What’s Next: Pfizer and BioNTech are moving aggressively to get their vaccine through the regulatory process. Final Phase 3 trials will start this month, and if those trials show the vaccine is safe and effective, the companies will request an emergency-use authorization from the Food and Drug Administration in October.

—Ben Walsh

***

Tesla’s Second-Quarter Results All But Secure Its Spot in the S&P 500

Despite having to temporarily halt operations due to the pandemic, electric car company
Tesla
beat analyst estimates for the second-quarter, helped in part by regulatory credits for being a zero-emission vehicle maker.

• The company reported adjusted earnings of $2.18 a share and 50 cents a share under generally accepted accounting principles.
• Its automotive business did best. Overall gross profit margins were up about six percentage points year over year, with automotive gross profit margins of about 25%, or 17% excluding credits for being a zero-emission car maker.
• There is no specific timeline set for Tesla to join the
  S&P 500,
  and it is up to a committee to decide. But profits in its latest quarter as well as on a rolling, 12-month basis mean it has now met a key criterion for inclusion.

• CEO Elon Musk also announced that Austin, Texas, will be the site of its new Cybertruck Gigafactory. “If anyone is interested in working at Giga Texas …please let us know,” Musk said on the earnings conference call.
• Tesla’s stock soared in after-hours trading after the report. Shares are up more than 280% year to date.

What’s Next: Bearish investors may focus on how regulatory credits helped boost Tesla’s performance, but others will see the strong second-quarter results as evidence of electric cars’ bright future, with Tesla poised to hold on to its lead.

—Anita Hamilton

***

Senate Republicans Discuss Extension of Unemployment Benefits

The Trump administration and Senate Republicans are considering a short-term extension of unemployment aid as the $600 weekly federal supplement to state benefits ends July 31.

• Lawmakers agree on extending the supplement but clash on details. Democrats want to keep the current $600 weekly bonus through January 2021, while Republicans say the current amount discourages people from returning to work.
• Considering a one week buffer states need to process jobless claims, the deadline for an extension to avoid an interruption in benefit payments is as early as this weekend.
• White House Chief of Staff Mark Meadows told reporters Wednesday night that a stopgap unemployment measure was not in the cards. “We’re really looking at trying to make sure that we have a comprehensive bill that deals with the issues,” he said.
• Top Senate Republicans and White House negotiators reached a deal on a $1 trillion stimulus package Wednesday night, which will be used as the starting point for negotiations with Democrats.

What’s Next: Beyond the possible stopgap unemployment aid bill, negotiations over the larger fifth coronavirus relief legislation, including issues like the second stimulus payment and payroll tax cut, is likely to spill into August, which is typically a recess period for Congress.

—Kantaro Komiya

***

Baseball Is Back as the Season Starts

Major League Baseball is set to kick off its abbreviated 2020 season today.

• Teams will play 60 regular season games, split between teams in their division and the corresponding region in the opposite league.
• Unlike hockey or basketball, MLB opted not to host its season in one location. Teams will travel to the regular ballparks.
• Infectious disease expert Dr. Anthony Fauci will throw the first pitch at the defending champion Washington Nationals’ opening day game against the New York Yankees tonight.

What’s Next: After months of debate as to how to bring back sports in a pandemic, MLB will be the first of the four major sports to trial run Covid-19 prevention efforts. Basketball, hockey and football are expected to follow, in that order, in the coming weeks. But with cases spiking in states like Florida, Arizona, and Texas, it’s by no means a sure thing.

—Connor Smith

***

Unilever Cleans Up During the Pandemic With Strong Second Quarter

A booming number of Americans cleaning their houses during the pandemic and eating at home helped
Unilever
beat second quarter sales forecasts. It has also proposed a quarterly dividend.

• The owner of Hellmann’s Mayonnaise, Lynx and Dove soap posted a 0.3% decline in underlying sales growth which was better than the 4.3% fall from a consensus of analysts.
• It said consumers eating and cleaning more at home, and focusing more on hand hygiene, led to underlying sales growth in North America of 9.5% in the second quarter.
• But the slump in the customers going to work and socializing due to lockdown caused a decline in its personal care business. The exception was increased demand for its hand and home hygiene products which each grew double digits.

What’s Next: The company is planning to shed most of its tea business which includes Lipton and PG Tips. The shares rose in early trading on reassurance that consumers flock to trusted brands in tough times. But even this could not offset exposure to shuttered restaurants and bars which caused a 40% drop in sales at its food service business.

—Rupert Steiner

***

On Monday, readers wrote in to ask about cheap and easy do-it-yourself home improvement projects that will add the most value to a house.

Thanks to the coronavirus pandemic, Americans have a lot more time on their hands—and they’re spending that time at home.

Earlier in the health crisis, economists predicted that spending on renovation projects would actually dip across much of the country. But recent data show that there’s been a definite surge in interest in certain home improvement projects.

Meanwhile, the housing market has recovered well from the start of the pandemic, with home sales rising considerably thanks to pent-up demand among buyers fueled even further by record-low mortgage rates.

As a result, many homeowners may be considering the benefits of fixing up their home to make it more appealing to potential buyers—and a nicer place to live in the era of social distancing. And they may be thinking about going the do-it-yourself route, given the extra free time many people have this summer.

But not all DIY home improvement projects will offer homeowners a solid return on their investment. Here’s what homeowners need to consider before breaking out the tool kit.

Read more here.

—Jacob Passy

***

—Newsletter edited by Stacy Ozol, Mary Romano, Anita Hamilton, Matt Bemer, Benjamin Levisohn