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Goldman Sachs and Bank of America — What you need to know in markets on Tuesday

Myles Udland
Markets Reporter

In a busy week for earnings, Tuesday will be the financial sector’s biggest day with results coming in from Bank of America (BAC), Goldman Sachs (GS), and broker Charles Schwab (SCHW).

Also on the earnings calendar investors will grapple with results from IBM (IBM), Harley Davidson (HOG), Johnson & Johnson (JNJ), and United (UAL).

On the economic calendar, Tuesday morning will bring us updates on import prices in June and homebuilder sentiment in July.

Goldman Sachs CEO Lloyd Blankfein.

Tuesday’s results will follow a Monday that saw the major U.S. stock indexes trade in a very narrow range, with the Dow trading inside of a 40 point range during the session while none of the averages settled with a change of more than 0.05%.

On the earnings side, Monday’s highlight was Netflix (NFLX), which reported results after the bell that showed subscriber growth topped expectations, sending shares higher by as much as 9% after hours to a new record high.

The company’s revenue also beat expectations, while earnings per share missed by a penny.

In its letter to investors, Netflix said, “The competition for entertainment time is always intense, but the silver lining is that the market is vast and diverse…. It seems our growth just expands the market. The largely exclusive nature of each service’s content means that we are not direct substitutes for each other, but rather complements.”

Blue Apron’s Amazon problem

On Monday, the biggest single-stock story was Blue Apron (APRN).

The meal kit delivery service, which made its market debut on June 28, lost 10% on the day and is now down more than 30% since its public debut.

Blue Apron’s stock chart for its entire run as a public company. Ugly. (Source: Yahoo Finance)

And while the company’s losses have grown from $47 million in 2015, to $54 million in 2016, and $52 million in the first quarter of this year alone, the company has also seen headlines related to Amazon’s (AMZN) food ambitions weigh on its stock price twice now.

Ahead of its market debut, Blue Apron had to move the initial trading range for its shares down to $10-$11 from $15-$17 following news that Amazon would buy Whole Foods (WFM) for about $14 billion.

On Monday, The Street reported that Amazon had filed a trademark earlier this month for “prepared food kits composed of meat, poultry, fish, seafood, fruit and/or vegetables…ready for cooking and assembly as a meal.”

Which sounds exactly like Blue Apron.

Now, this is only a filing for a trademark and Amazon may have no real plans to move into Blue Apron’s space. Because as Blue Apron’s filing revealed, while the idea behind the business is incredibly good, the unit economics of the business right now are a challenge. Blue Apron’s cost to acquire customers is high as is its turnover.

Which makes us think of Amazon’s filing as something that resembles another much-discussed copycat battle taking place in the tech world right now — that between Snapchat (SNAP) and Facebook (FB).

Over the last year, Facebook has repeatedly rolled out features on its Instagram platform that are effectively exactly like those on Snapchat. Kevin Weil, Instagram’s VP of product, said earlier this year when asked about its copying of Snapchat features that, “this is the way the tech industry works… Good ideas start in one place, and they spread across the entire industry.”

In a way, then, Amazon taking a look at what Blue Apron’s doing and filing its food-kit trademark is to be expected.

And as Blue Apron stated in its initial filing with the SEC, “Increased competition presents an ongoing threat to the success of our business.” All businesses, really, deal with the threat of being copied, imitated, undercut on price, or to use the en vogue phrase — disrupted.

That Blue Apron would only make it mere weeks as a public company before being Amazon’d like so many others, however, is perhaps the only surprise.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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