Stocks rise despite US-China tensions heating up

US stocks kicked off mixed on Wednesday as earnings season is roaring on and investors are yet again concerned about US-China relations. The Nasdaq Composite managed to open in the green.

Washington ordered China to "cease all operations and events" at its Houston, Texas, consulate, which Beijing called an "unprecedented escalation".

Former Wells Fargo's finance chief John Sh Dania Maxwell/Bloomberg/Getty Images

After serving as Wells Fargo's finance chief under four different CEOs, John Shrewsberry is planning to retire from the troubled big bank after 22 years at the company.

Wells Fargo (WFC) announced Tuesday that it has hired Mike Santomassimo, a former JPMorgan Chase (JPM) and BNY Mellon (BK) exec, to become the San Francisco bank's new CFO in the fall.

The shuffle marks the latest step by Wells Fargo boss Charlie Scharf to remake the company's C-suite after years of scandal. Scharf overlapped with Santomassimo at both BNY Mellon and JPMorgan.

Since joining Wells Fargo last fall, Scharf has hired a slew of former executives from JPMorgan, including: public affairs chief Bill Daley, COO Scott Powell, wealth and investment management boss Barry Sommers, consumer lending CEO Mike Weinbach and sales oversight and management lead Michael Cleary.

The CFO switch comes days after Wells Fargo reported awful results, marked by its first quarterly loss since the 2008 financial crisis.

Shrewsberry, who had been CFO since May 2014, said he personally recommended Santomassimo as his replacement.

A lot is riding on the pandemic recovery going well. But the New York Federal Reserve's weekly economic index showed that the rebound might be in trouble.

The index -- which is composed of data points including the labor market, consumer behavior and goods production -- ticked lower for the first time since hitting its pandemic low-point in late April.

One data point doesn't make a trend, but it's notable nonetheless.

Before Covid-19 hit, the index stood at a modestly positive number -- at the end of February, it was 1.5%. But since the outbreak and subsequent lockdown, the weekly indicator has been in negative territory. On Tuesday, it stood at -6.9%, down from 6.1% last week. If this level of the index persists for the whole quarter, it would imply a similar year-over-year drop in gross domestic product in that quarter.

Pfizer and BioNTech jointly announced that they will supply the US government with 100 million doses of Covid-19 vaccine once approved and developed.

The companies said they reached an agreement with the US Department of Health and Human Services and the Department of Defense: The government will pay $2 billion when they receive the first 100 million doses, and it can buy up to 500 million more doses afterward.

The drug companies warned that they still need to study their vaccine candidate. But if those studies are successful, they believe they can request "some form" of regulatory approval, including Emergency Use Authorization as early as October 2020. On that timeline, they believe they can manufacturer 100 million doses by the end of 2020 -- and 1.3 billion doses by the end of 2021.

Americans will receive the vaccine for free, the companies said.

Pfizer's (PFE) stock rose 5% in premarket trading. BioNTech (BNTX) was up 6%.

The United States government has abruptly ordered China to "cease all operations and events" at its consulate in Houston, Texas, according to the Chinese Foreign Ministry, in what it called an "unprecedented escalation" in recent actions taken by Washington.

The tit-for-tat escalation in US-China tensions is giving investors PTSD about the trade war.

Here's where things stand this morning:

US stocks closed mixed on Tuesday, as investors await more company earnings in addition to news about the economic recovery and efforts to find a Covid-19 vaccine.

Margaret Keane has been in the credit card business for 40 years and she's seeing something she never expected: There's mass unemployment, yet Americans are paying their bills on time.

In normal times, that'd be good sign of financial responsibility. But in the pandemic era, it may just be the calm before the storm.

Keane, the CEO of Synchrony Financial, the nation's biggest store credit card company, told CNN Business Americans will have trouble staying current on their credit card bills once generous forbearance programs and the $600 boost to unemployment benefits fade away.

A stanchion blocks closed kiosks in the United Airlines terminal at San Francisco International Airport on July 8 in San Francisco, California. Justin Sullivan/Getty Images

United Airlines (UAL) lost $1.6 billion last quarter — a three-month outcome that was slightly better than analysts' dire expectations.

Still, the company's revenue was down nearly 90% compared with what it was bringing in a year ago. It's just the latest evidence that the air travel industry is facing a devastating financial outlook with no end in sight as Covid-19 cases spike in some areas of the United States.

United emphasized in a press release that it's been able to slow the rate at which it is burning through cash, even as many of its planes remain in storage and ticket sales have slumped.

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Snapchat's spike in users from coronavirus lockdowns has begun to taper off, despite a pause in reopening across many states forcing people to continue staying home.

"At the onset of widespread shelter in place orders, as people sought to stay connected and entertained from home, we observed an increase in daily active users that informed our initial estimate," Derek Andersen, chief financial officer of Snapchat's parent company Snap (SNAP), said during its second quarter earnings call Tuesday.

"This initial lift dissipated faster than we anticipated as shelter in place conditions persisted."

Snap's daily active users were 238 million for the three months to June, an increase of 17% from the same period last year but just shy of the company's estimate of 239 million during its last earnings call in April. It was also slower year-on-year growth than the 20% recorded in the previous quarter.

The company's stock fell 6% in premarket trading. 

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Bottles of Odwalla protein shakes sit on a grocery store shelf. Shutterstock

Coca-Cola (KO) is on an operation to take out some "zombies."

The beverage giant, fresh off announcing the shutdown of longtime juice smoothie brand Odwalla, is considering dumping other "zombie brands" — or those that aren't growing — to help cut costs, Coke's CEO James Quincey said on the company's second-quarter earnings call Tuesday.

During the past few months, Coca-Cola — like other major consumer goods companies — streamlined its product offerings and zeroed in on its larger and best-selling brands to help ease the strain on supply chains. Coca-Cola is now doubling down on those efforts.

In Coca-Cola's second quarter, which ended on June 26, the company saw sales drop 28% to $7.2 billion.

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