Commenting on the strong earnings from Apple and Facebook, and today’s trading, Gorilla Trades strategist Ken Berman said:
Q2 2020 hedge fund letters, conferences and more
The major indices are mixed at midday following a very active morning session on Wall Street. Amazon (AMZN, +4.8%), Facebook (FB, +7.8%), Apple (AAPL, +6.7%), and Google parent Alphabet (GOOG, -4.4%) all reported strong earnings yesterday in after-hours trading, and the shares of Apple and Facebook catapulted to new record highs but Alphabet fell sharply due to the firm’s first revenue drop in its history. Caterpillar (CAT, -3.5%) also published promising numbers, and since the firm’s performance is usually an accurate indicator of global growth, the worries about a full-blown global recession might be overblown.
In economic news, the Chicago PMI smashed expectations, coming in at 51.9, and hitting a 14-month high confirming the strong rebound in the sector. Personal spending also beat the consensus estimate, with a reading of 5.6%, helping consumer-related issues in early trading. The Eurozone GDP print also came out in pre-market trading, and the measure slightly missed expectations, with a decline of 12.1%, putting pressure on the euro following weeks of strong performance from the common currency.
Market Wrap
Dow: 26,242, - 72 or 0.3%
S&P 500: 3,248, + 2 or 0.1%
Nasdaq: 10,670, + 82 or 0.8%
Russell 2000: 1,468, - 27 or 1.8%
Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a more than 4-to-1 ratio on the NYSE at midday. Only 5 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 120 stocks hit new 52-week highs. The major indices have been trading below their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday selling pressure. The key sectors continued to diverge in early trading, but the majority of stocks have been losing ground, and the key cyclical sector remain under pressure, with the most lockdown-sensitive issues adding to bearish overall picture. Stay tuned!
