Thursday's Market Recap - Stock Up But Not Impressed With Good Earnings Or Improving Economic Data.
What is The Premarket Telling Us?
Following yesterday's massive selloff US stock futures appear set for a rebound this morning. Dow futures are up 131 points, Nasdaq futures up 119 points, and S&P futures up 22 points. Investors will be laser-focused on the earnings calendar today, many large technology companies, such as Apple, Amazon, Facebook, Google, and Twitter, report earning at the close of trading today.
On The Bond Desk:
The US 10 Year Bond Yield at 0.78%, unchanged since yesterday's close.
Currency Desk:
Euro dollar: 1.17
UK Pound: 1.29
Crude Oil:
WTI crude oil futures at $36.17/barrel, down 3.26%.
On the Earnings Calendar:
Apple, Amazon, Facebook, Google, and Twitter report earnings results after the close of trading today.
In M&A News:
After a period of contentious back and forth LVMH has agreed on a deal to buy Tiffany for $131.50/share. LVMH had sought to have the deal annulled because of the Pandemic.
What About The Asian And European Markets?
Major Asian markets were mixed in their sessions. Japan (Nikkei 225) fell 0.37%, Shanghai up 0.11%, Hong Kong (Hang Seng) down 0.49%.
Major European markets ended mixed today. German (DAX) up 0.32%, France CAC 40 down 0.03%, London FTSE 100 down 0.02%.
Market And Sector Dynamics
Stocks opened for trading mildly higher, the Dow up 10 points, Nasdaq up 70 points, and the S&P up 9 points.
WTI crude oil is on the decline early, currently at $35.96/barrel, down 5.96%, and the US 10 Year Bond 0.779%.
A strong read on third-quarter GDP, reported this morning came in at 33.1% vs the 30.9 estimated. Even with this strong number, the market is not acting at all impressed, perhaps because economic growth is still below pre-pandemic levels. Also reminding us of our economic frailty, this morning's Jobless Claims report show another 751K American file for first-time unemployment benefits. This was slightly better than the 751K that was expected.
Markets have not been impressed by good news, lately. Third-quarter earnings have been stellar, with 83% of companies beating estimates, but the companies have not been rewarded by the markets, choosing to focus instead on rising coronavirus infections, which puts the full economic reopening rhetoric in doubt. Many companies have also refused to give forward guidance, because of the unpredictability of the virus.
Shortly after the open, the Dow sank more than 200 points. Stocks recovered a short while later, the Dow up 150 points, just before 11:00 AM. Stocks remained subdued in the early afternoon session, but gaped higher later, with the Dow up near 400 points, the high of the day, around 2:30 PM, before moderating into the close.
Ten of the eleven S&P sectors closed the session with gains, led by Energy, Communication Services, Basic Materials, Technology, Industrials, Real Estate, Consumer Discretionary, Financials, and Utilities. Healthcare was the only sector lower today.
Factors Influencing Today's Market
Third-quarter GDP rose 33.1% vs - 31.4% recorded in the second quarter.
This week's Jobless Claims show another 751K American applied for first-time unemployment benefits.
LVMH and Tiffany have finally agreed to a new deal at $131.50/share.
US 10 Year Bond Yield closed at 0.831%, up 7.37%.
WTI crude oil closed today at $36.17/barrel, down 3.26%.
Asian and European markets were mostly flat in their sessions.
Market Close Volume Traded And Advance Decline Ratio
When the markets closed the major indexes were moderately higher. The Dow gained 139.16 points, Nasdaq gained 180.73 points, and the S&P gained 39.08 points. Total NYSE volume traded, a moderate 4.90 billion shares. Advancing shares outpaced Declining shares by 2:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance. Wall Street Journal - Market Diary.
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