Market Recap Week of July 27-31, 2020
News/Flows:
July 27, 2020 - DIA 265.95 +.46% - QQQ 260.12 +1.87% - SPY 323.22 +.74%
Durable Goods orders for June came in better than expected +7.3%. Vaccine news from Moderna (MRNA) was mildly positive for the market and the big cap stocks (viewed by some traders as COVID-19 news resilient) continued to outperform. The US Dollar continued to be weak and as a result metals (GLD) (SLV) and miners (GDX) (SIL) continued to hit new highs. It appears that (SLV) may be due for a pullback/correction. Keep an eye on this. In a sign of stress in luxury goods, LVMH profits slid 84%, as it struggled with cost-cutting.
July 28, 2020 - DIA 263.93 -.76% - QQQ 256.81 -1.27% - SPY 321.17 -.63%
Consumer confidence came in lower than expected at 92.6%, while the homeownership rate came in much better than expected at 67.9%. Big tech came under profit-taking ahead of the congressional hearings. Eastman Kodak (KODK) revealed that it received a $765 million loan under the defense production act. The stock soared as a result. Pandemic hit affordable luxury coffee business Starbucks (SBUX) posted its second quarterly loss for the year, but gave guidance for better results going forward. 3m (MMM) disappointed as well sighting the pandemic
July 29, 2020 - DIA 265.5 +.59% - QQQ 259.77 +1.15% - SPY 325.12 +1.23%
Pending home sales were up 16.6% The CEOs of Google (GOOG), Apple (AAPL), Amazon (AMZN) and Facebook (FB) all appeared by video before Congress and took shots from both sides of the aisle. All four traded slightly lower on the day. The FOMC ended its two-day meeting with a Jerome Powell press conference. Boeing (BA) announced more job cuts. GE reported a $2 billion dollar loss (jet engines) and GM showed a loss of $758 million (factory shutdowns). “Smoke Stack America” continues to struggle.
July 30, 2020 - DIA 263.28 -.84% - QQQ 261.13 +.52% - SPY 323.96 -.36%
GDP came in with a Whopping Annualized decline of 32.9% which actually was better than expected. Initial jobless claims came in at 1.43 million while continuing claims came in at 30.2 million. The Big Cap Techs did better on the day. After significant selling pressure across the board in the morning, stocks closed near the highs of the day. For traders it is not the news that is important, it is the reaction to the news. Stay at home plays, Amazon (AMZN) reported a record profit and Apple (AAPL) reported an 11% increase in sales due to product mix that benefited from a change in work habits and continued App usage. Facebook (FB) reported a decline in its growth rate. FB & AAPL hit new highs in the aftermarket trading session.
July 31, 2020 – DIA 264.35 +41% - QQQ 265.79 +1.78% - SPY 326.52 +.79%
Personal income declined .8%, which was much better than expectations, But Consumer spending was short of expectations at 5.9% Chicago PMI came in at a severe 36.6% (above 50% shows expansion). Microsoft (MSFT) was reported to be exploring the acquisition of the Chinese app Tik- Tok. The energy patch continued to show pressure on revenue and earnings as ExxonMobil (XOM) reported a $1.1 billion loss.
ECONOMIC CALENDAR Aug 3 - Aug 7 2020
| TIME (ET) | REPORT | PERIOD | PREVIOUS |
| MONDAY, AUG. 3 | |||
| 9:45 am | Markit manufacturing PMI | July | 51.3 |
| 10 am | ISM manufacturing index | July | 52.6% |
| 10 am | Construction spending | June | -2.1% |
| Varies | Motor vehicle sales | July | 13.1 million |
| TUESDAY, AUG. 4 | |||
| 10 am | Factory orders | June | -8.0% |
| WEDNESDAY, AUG. 5 | |||
| 8:15 am | ADP employment report | July | 2.37 million |
| 8:30 am | Trade deficit | June | -$54.6 billion |
| 9 am | Treasury quarterly refunding | ||
| 9:45 am | Markit services PMI | July | 49.6 |
| 10 am | ISM nonmanufacturing index | July | 57.1% |
| THURSDAY, AUG. 6 | |||
| 8:30 am | Initial jobless claims (state program, SA) | Aug. 1 | 1.43 million |
| 8:30 am | Initial jobless claims (total, NSA) | Aug. 1 | 2.04 million |
| 8:30 am | Continuing jobless claims (state program, SA) | July 25 | 17.1 million |
| 8:30 am | Continuing jobless claims (total, NSA) | July 18 | 30.2 million |
| 10 am | Household debt (SAAR) | Q2 | 4.5% |
| FRIDAY, AUG. 7 | |||
| 8:30 am | Nonfarm payrolls | July | 4.8 million |
| 8:30 am | Unemployment rate | July | 11.1% |
| 8:30 am | Average hourly earnings | July | -1.2% |
| 10 am | Wholesale inventories | June | -1.2% |
| 3 pm | Consumer credit | June | -$18.3 billion |
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