People wear face coverings in Grand Central Market on July 19, 2021 in Los Angeles, California, where a new mask mandate went into effect.
Mario Tama/Getty Images
Here’s what you need to know to navigate the markets today.
• The Centers for Disease Control and Prevention is expected to recommend on Tuesday that people who are vaccinated against coronavirus resume wearing masks indoors in areas of the U.S. with high Covid-19 transmission rates, CNBC and the New York Times both reported, citing people familiar with the matter. That would reverse its recommendation since May that people who are vaccinated don’t need to wear masks in most indoor settings. The change follows reports of increasing numbers of breakthrough infections from the Delta variant of the virus in people who were fully immunized. A day after its May announcement, the CDC released results from a large study that found the mRNA vaccines made by Pfizer -BioNTech and Moderna were 94% effective in preventing symptomatic illness in those who got two doses, and 82% effective in those who had received one dose, the Times said. But those results and the CDC’s mask guidance were based on previous strains of the virus before the Delta variant became the nation’s most prevalent variant. Federal public health officials still believe that fully vaccinated people represent a small risk of transmission, but some vaccinated people could be carrying a higher level of the virus than previously understood and could transmit it to others, CNBC said.
• Big pharmaceutical companies are quietly pushing back against an agreement by 130 countries to establish a minimum corporate tax of 15%, which lawyers and company officials say could cost the companies hundreds of millions of dollars each year, The Wall Street Journal reported. U.S.-based Pfizer, which delivered a Covid-19 vaccine with Germany’s BioNTech SE, has joined peers in warning that higher taxes could weaken U.S. companies and make them vulnerable to foreign takeovers. Pharmaceutical companies are especially vulnerable to the proposed tax changes because they have global operations, pay taxes where operations are based, spend large sums on research and development, and sell their products around the world. Over the past decade, the world’s 20 largest pharmaceutical companies reported a global effective tax rate of about 17%, compared with about 21% for the world’s 20 biggest tech companies—both lower than rates reported by very large companies in other sectors, excluding China, according to an analysis for The Wall Street Journal by New York University finance professor Aswath Damodaran. “Pharma is going to get hit hard,” said a senior tax official at Johnson & Johnson who has been closely involved in policy talks.
• Republican Rep. Liz Cheney said the House select committee investigating the deadly invasion of the Capitol on Jan. 6 must uncover everything that happened in former President Donald Trump’s White House that day. Investigators must find out “what happened every minute of that day in the White House — every phone call, every conversation, every meeting leading up to, during and after the attack,” Wyoming’s Cheney said in Tuesday’s opening remarks at the committee’s first public hearing. “If those responsible are not held accountable, and if Congress does not act responsibly, this will remain a cancer on our Constitutional Republic, undermining the peaceful transfer of power at the heart of our democratic system,” she said. Cheney, one of two Republicans on the nine-member panel, told ABC News on Tuesday that the committee might subpoena Trump and House GOP Leader Kevin McCarthy, saying, “The committee will go wherever we need to go to get to the facts.”
Before the mob broke into the Capitol, Trump held a rally outside the White House and pressured Republicans, including Vice President Mike Pence, to challenge key states’ Electoral College results. He urged the crowd to march to the Capitol, saying, “If you don’t fight like hell you’re not going to have a country anymore.” On Tuesday, Sgt. Aquilino Gonell of the U.S. Capitol Police told the committee about being crushed by a group of rioters pushing their way into the building. “I could feel myself losing oxygen and recall thinking to myself, ’This is how I’m going to die, defending this entrance,” he said.
• The worst frost in more than 25 years in Brazil’s coffee-growing region has sent coffee bean prices to six-year highs on global markets, threatening to drive up costs at cafés and breakfast tables around the world, The Wall Street Journal reported. Before the cold snap, a drought in the world’s largest coffee-producing country parched the 2021 crop. Traders have pushed futures for arabica beans up to $2.08 a pound, their highest level in New York since late 2014. Coffee futures are up 30% in July and have almost doubled over the past year, after years of depressed prices that prompted many farmers to abandon their fields. Temperatures in Sul de Minas, the region in Brazil that produces the most coffee, fell as low as 23 degrees Fahrenheit in some towns, and the region as a whole experienced the coldest weather since 1994, said Anete Fernandes, a meteorologist at Brazil’s National Institute of Meteorology. The weather won’t hurt the 2021 harvest already under way, but could cause the loss of 4 million to 5 million bags of coffee from the 2022 crop, nearly 10% of Brazil’s production levels from last year. Prices jumped 10% on Monday when another cold-weather front loomed. Forecasters expect temperatures to fall close to or below freezing again later this week.
• JetBlue Airways CEO Robin Hayes said Tuesday that “The recovery in air travel has come more quickly than we expected.” With increased vaccinations spurring larger numbers of customers to fly, including a boost from a Northeast alliance with American Airlines that has helped capture more corporate customers in New York and Boston, “ JetBlue is well positioned for success,” he said during an earnings conference call.. Despite the outlook, the airline’s shares fell 7.7% as of midday Tuesday. JetBlue posted a profit of $64 million for the second quarter, compared with a net loss of $320 million in 2020, MarketWatch reported. Earnings were 20 cents a share, compared with a loss of $1.18 a share in the same quarter last year. The airline reported an adjusted loss of 65 cents a share, less than the adjusted loss of 74 cents a share that analysts polled by FactSet had expected. “In the second quarter, we saw strong signs that consumer confidence and travel demand is returning,” he said. “We expect continued improvement in our operating performance as we progress towards a full recovery. We are creating a path to restore our earnings power to beyond 2019 levels.”
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