October 19 through October 23, 2020
Euro Trader P. M4
Emerging Markets P. M4
Striking Price P. M5
Commodities P. M6
Power Play P. M7
13D Filings P. M7
Power Play P. M7
Charting the Market P. M9
Winners & Losers P. M10
Research Reports P. M11
Market View P. M12
Statistics P. M13
28,335.57
52-wk:+5.11%YTD:-0.71%Wkly:-0.95%
Dow Jones Industrials
3465.39
S&P 500
52-wk:+14.65%YTD:+7.26%Wkly:-0.53%
11,548.28
Nasdaq Composite
52-wk:+40.10%YTD:+28.71%Wkly:-1.06%
$118.44
Technology Select Sector SPDR ETF
52-wk:+42.84%YTD:+29.20%Wkly:-2.21%
2%
-3
-2
-4
-1
0
1
Monday Tuesday Wednesday Thursday Close
Source: Barron’s StatisticsFriday
MARKET PERFORMANCE DASHBOARD
Monday Blahs
M&Aactivityandaclusterofthird-quarter
earningsreportsfailedtoliftthemarket.
TheDowJonesIndustrialAveragefell
411points,or1.4%.
A Matter of Trust
On Tuesday, the Justice Department accused
Google parent Alphabet of antitrust
violations.Techstocksrose,breakingafive-
day losing streak for the Nasdaq Composite.
Value Rally
Beaten-up value-oriented energy and
financial sectors led the market higher
on Thursday, while tech and other growth
sectors fell.
Going Nowhere
Thursday night’s final presidential debate
leftlittleimpressiononmajorindexes,which
hovered near the break-even line on Friday.
THE TRADER
The Market
Signals
Optimism
About the
Economy
F
orget the election. For-
get stimulus. The mar-
ket is getting ready for
better economic
growth.
You wouldn’t know
it from this past week’s
returns. The Dow Jones Industrial Av-
erage fell 270.74 points, or 0.9%, to
28,335.57, the S&P 500 index declined
0.5%, to 3465.39, and the Nasdaq Com-
posite dropped 1.1% to 11,548.28, end-
ing a four-week winning streak.
The market was whipsawed by the
back-and-forth negotiations over
stimulus. Talks seemed to have
stalled by the close of trading on Fri-
day, and without more stimulus, the
economy—and the stock market—
have gotten as good as they can get.
Earnings season would seem to
confirm that suspicion. Not the results
themselves, which have been quite
good. Of the 135 companies that have
reported so far, 83.7% have topped
earnings forecasts, well above the long-
term average of about 65%, while the
average earnings number has been
17.7% above expectations, five times the
long-term average of 3.5%. The S&P
500 has responded to such great num-
bers by dropping 1.9% sinceJPMor-
gan Chase’s (ticker: JPM) report
kicked things off on Oct. 13. Together,
the lack of stimulus and the lukewarm
response to earnings would seem to
imply tougher times ahead for stocks.
But maybe not. The reason: The
market appears to have different stan-
dards for perceived Covid winners and
losers.Netflix(NFLX) dropped 8%
this past week because it added just 2.2
million subscribers, below its own fore-
cast for 2.5 million.Kimberly-Clark
(KMB) raised its full-year guidance,
but earnings fell short of analyst fore-
casts and the stock fell 11%.Citrix Sys-
tems(CTXS) tumbled 11% despite an
earnings beat as investors worried
about the transition of its business to
the cloud. There was no good excuse
for failing to meet high expectations.
Companies that had seen their
businesses hurt during the early
stages of the pandemic were rewarded
for showing signs of improvement.
Align Technology(ALGN), maker of
Invisalign, jumped 40% this past
week after its earnings nearly quadru-
pled estimates, while Snapchat parent
By Ben Levisohn
MARKET WEEK
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November 9 , 2020 | 1 : 00 PM ET