Thursday Morning Reads

Shaking off a stellar quarter

Despite fiscal Q4 results that were largely positive, shares of Microsoft (NASDAQ:MSFT) fell as much as 3% in AH trading on Wednesday. The software giant easily beat analyst estimates, reporting a net profit of $11.2B and revenue that rose 13% to $38B. Traders may have been looking for more. The company's cloud computing operation saw sales growth under 50% for the first time, while transactional license purchasing continued to slow and subsidiary LinkedIn was negatively impacted by the weak job market.

Earnings, earnings, earnings

Traders are barely digesting the high-profile results from Tesla (TSLA) and Microsoft (MSFT) before the next round of earnings make headlines. Dow and S&P 500 futures are ahead by 0.4%, while the Nasdaq advanced 0.9%, ahead of figures from Twitter (NYSE:TWTR), AT&T (NYSE:T) and Intel (NASDAQ:INTC), as well as American (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV). Weekly jobless claims are also on the radar. Another 1.3M American workers are expected to have filed for first-time benefits during the week ended July 18, bringing that total to 52.58M since coronavirus lockdowns began in mid-March.

Next coronavirus aid package

Senate Republicans have "reached a fundamental agreement" with White House negotiators Steven Mnuchin and Mark Meadows on how to move forward with the next coronavirus relief bill. What's in the proposal? Another round of direct stimulus payments, $16B for coronavirus testing, $105B for K-12 education, colleges and universities, though there was no agreement on a payroll tax cut. The plan, set to be unveiled today, will serve as a starting point for negotiations with Democrats, who have passed a $3.4T bill in the House. Lawmakers are also racing to reach a deal on the $600 weekly supplement to unemployment benefits that's due to expire on July 31.

Looser regulation

With the coronavirus pandemic weighing heavily on Europe's economy, the EU is now arguing that softer rules on the finance industry are needed to help the recovery. The bloc is planning to loosen a key plank of MiFID II that forces investors to pay banks and brokerages for research separately from their trading fees. The proposal also trims investor protection rules like record keeping and disclosure requirements primarily focused on professional investors. Over in the U.S., the SEC has proposed raising the Form 13F reporting threshold and voted to regulate proxy advisers more closely, while a new U.S. derivatives rule is set to complete Dodd-Frank.

Buffett makes moves

Warren Buffett scooped up 34M shares of Bank of America (NYSE:BAC) over the last few days - at an average price of about $24 - taking his stake in the banking giant to over 11% (from about 7.4%). Big discount? The Oracle spent the $816M after BAC shares plunged nearly 32% since the beginning of the year. Buffett has been criticized in recent weeks over failing to deploy Berkshire Hathaway's (BRK.A, BRK.B) enormous cash hoard, which climbed to $137B in Q1. BAC +1.6% premarket.

Foray into auto insurance

There was big news from India overnight as Amazon Pay (NASDAQ:AMZN) partnered with private firm Acko General Insurance to offer car and motorcycle insurance. It's the e-commerce giant's first market for the service, where it will compete with local rivals including Paytm and Policybazaar. Amazon is moving fast to become a full-fledged financial services platform, with Amazon Pay supporting a range of payments services, including the popular UPI, and debit and credit cards. Meanwhile, India's Flipkart (FPKT) announced it would acquire parent Walmart's (NYSE:WMT) local cash-and-carry business, attempting to strengthen its wholesale offering to compete better with Amazon.

Twitter security in question

The hackers who took over prominent accounts on Twitter (TWTR) last week were able to access direct messages. "We believe that for up to 36 of the 130 targeted accounts, the attackers accessed the DM inbox, including 1 elected official in the Netherlands," the company said in its latest update. While many of the high-profile hacked accounts tweeted a scam asking for bitcoin, an analysis of transactions showed that the scheme only collected $121,000. Direct messages, however, could be used or publicized by hackers at a later point in the future.
Go deeper: The cyber attack will likely be discussed this morning as Twitter reports earnings.

What else is happening...

Unilever (UL, UN) soars 7% with sales better than expected.

U.S. may label Switzerland a currency manipulator.

UBS downgrade sends Macy's (NYSE:M) and Kohl's (NYSE:KSS) even lower.

Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) ink vaccine deal with U.S. government.

Apple (NASDAQ:AAPL) defends its 30% App Store fee from antitrust scrutiny.