July 27 through July 31, 2020
Euro Trader P. M4
Emerging Markets P. M4
Striking Price P. M5
Commodities P. M6
Inside Scoop P. M7
13D Filings P. M7
Power Play P. M7
Charting the Market P. M8
Winners & Losers P. M9
Research Reports P. M10
Market View P. M11
Statistics P. M12
26,428.32
52-wk:-0.21%YTD:-7.39%Wkly:-0.16%
Dow Jones Industrials
3271.12
S&P 500
52-wk:+11.56%YTD:+1.25%Wkly:+1.73%
10,745.27
Nasdaq Composite
52-wk:+34.25%YTD:+19.76%Wkly:+3.69%
$425.04
Apple
52-wk:+108.33%YTD:+44.74%Wkly:+14.73%
15%
-5
0
5
10
Monday Tuesday Wednesday Thursday Close
Source: Barron’s StatisticsFriday
MARKET PERFORMANCE DASHBOARD
BacktoWork
Techsharesagainrosetoopentheweek,
with the Nasdaq Composite gaining 1.7% to
more than wipe out the previous week’s losses.
Data Overload
Dozens of earnings reports moved individual
stocksonTuesday.TheDow,S&P500,and
Nasdaqfirstrose,thenfellintotheclosingbell.
Speaking Out
Federal Reserve Chairman Jerome Powell
reiterated his call for fiscal stimulus.
Big Tech CEOs testified before Congress.
Stocks wavered, then rose.
Big Earnings
Apple, Facebook, and Amazon shares surged
after second-quarter results Thursday
evening. Alphabet was the sole loser
among Big Tech.
THE TRADER
The Market
Keeps
Climbing a
Covid Wall
Of Worry
I
t’s earnings season—and this
one has a theme: Companies
are crushing overly bearish
estimates. That should be
good news, but investors
aren’t buying it. Something
else is going on. Investors are
trading scared. But they should hold
on to hope—for now.
More than 300 S&P 500 index
companies have reported second-
quarter numbers so far. About 85%
are beating Wall Street earnings esti-
mates by an average of 22%. Both
numbers are huge. Companies always
beat numbers, but not like this.
In the first quarter, about 70% of
S&P 500 companies beat analyst esti-
mates by an average of 3%. Solid, but
unremarkable. In the second quarter
of 2019, about 75% of them beat ana-
lyst estimates by an average of 5%.
The Dow Jones Industrial Average
fell 0.2%, or 42 points, to 26,428.32,
this past week. The S&P 500 rose 1.7%,
or 55 points, to 3,271.12, while the Nas-
daq Composite rose 3.7%, to 10,745.27.
That’s not bad, but since earnings
season began—unofficially with bank
earnings—the Dow is down about 2%
and the S&P 500 is flat. Monster Big
Tech earnings have saved the Nasdaq,
which is up about 1% for the season.
Yet even the popular FAANG plus
Microsoft(ticker: MSFT) stocks
have had some hiccups. There has
been aNetflix(NFLX)—down 6.5%
after reporting earnings—for every
Apple(AAPL)—up 9.7% Friday after
it crushed quarterly expectations. In
fact, three of the FAANG+M stocks
are up after earnings. The other three
fell.
Tech giants, overall, are stuck just
like the rest of the market. This past
week, half of the 280-plus large com-
panies reporting numbers dropped.
The other half rose. The average gain
for the group was basically zero.
Something is spooking investors.
Microsoft results, for starters, star-
tled investors when its cloud sales
slowed significantly compared with a
very strong first quarter. The cloud has
been booming, supporting many high-
flying tech names. Analysts and inves-
tors don’t want to see that hot end mar-
ket slow amid the pandemic, with the
Nasdaq trading at about 28 times esti-
mated 2021 earnings, roughly a 40%
By Al Root
MARKET WEEK
Alex Eule,
Deputy Editor
Josh Nathan-Kazis,
Healthcare Reporter
Beverly Goodman,
Editorial Director,
Investing & Asset
Management
Lauren Rublin,
SeniorManagingEditor
Ben Levisohn,
Deputy Editor
Leslie Norton,
Senior Writer