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Mega-caps help market cut losses ahead of earnings
30-Jul-20 16:15 ET
Dow -225.92 at 26313.65, Nasdaq +44.87 at 10587.89, S&P -12.22 at 3246.22

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 declined as much as 1.7% on Thursday following the release of weak economic data, but a buy-the-dip trade in the mega-cap stocks helped the benchmark index close lower by just 0.4%. The Nasdaq Composite gained 0.4%, while the Dow Jones Industrial Average lost 0.9% and the Russell 2000 lost 0.4%.

Prior to the open, data showed Q2 GDP declined at an annualized rate of 32.9% (Briefing.com consensus -35.0%) and initial and continuing jobless claims increase on a weekly basis. The GDP print reflected the self-imposed lockdown while the unemployment data suggested that the labor market is still struggling to normalize.

The data appeared to take a toll on the cyclical energy (-4.1%), materials (-2.0%), and financials (-1.8%) sectors, but a turnaround in the mega-caps contributed to the gains in the information technology (+0.5%), communication services (+0.3%), and consumer discretionary (+0.1%) sectors.

Shares of Apple (AAPL 384.76, +4.60, +1.2%), Amazon (AMZN 3051.88, +18.35, +0.6%), Alphabet (GOOG 1531.45, +9.43, +0.6%), and Facebook (FB 234.50, +1.21, +0.5%) were down between 1-2% at their lows today as investors braced for their earnings reports after the close, but shareholders gradually embraced a buy-the-dip mindset that sent shares into positive territory.

Procter & Gamble (PG 131.42, +3.11, +2.4%), Qualcomm (QCOM 107.19, +14.16, +15.2%), PayPal (PYPL 192.51, +7.91, +4.3%), and UPS (UPS 141.46, +17.78, +14.4%) set new all-time highs after pleasing investors with their earnings results and/or guidance. Qualcomm also announced a licensing agreement with China's Huawei Technologies.

In other developments, reports indicated that lawmakers are still haggling over the contents of the next coronavirus relief bill, and President Trump suggested that the presidential election should be delayed to prevent mail-in fraud.

U.S. Treasuries finished the day with modest gains amid today's weak data. The 2-yr yield declined two basis points to 0.11%, and the 10-yr yield declined four basis points to 0.54%. The U.S. Dollar Index fell another 0.5% to 92.98. WTI crude futures fell 3.2%, or $1.30, to $39.97/bbl.

Reviewing Thursday's economic data:

Second quarter GDP declined at an annualized rate of 32.9% (Briefing.com consensus -35.0%), which is the worst annualized quarterly decline on record. The GDP Price Deflator declined 1.8% (Briefing.com consensus +0.1%).
The key takeaway from the report is its data-based rendering of just how bad things were in the second quarter amidst a self-imposed lockdown to contain the spread of the coronavirus and just how much ground needs to be made up to get back to pre-pandemic levels.
Initial claims for the week ending July 25 increased by 12,000 to 1.434 million (Briefing.com consensus 1.400 million). Continuing claims for the week ending July 18 surged by 867,000 to 17.018 million.
The key takeaway from this report is that initial claims are moving in the wrong direction (up, not down), signalling that the initial recovery momentum from the depths of the second quarter has slowed.

Looking ahead, investors will receive the Personal Income and Spending report for June, the Chicago PMI for July, the Q2 Employment Cost Index, and the revised University of Michigan Index of Consumer Sentiment for July on Friday.

Nasdaq Composite +18.0% YTD
S&P 500 +0.5% YTD
Dow Jones Industrial Average -7.8% YTD
Russell 2000 -10.4% YTD

Market Snapshot
Dow 26313.65 -225.92 (-0.85%)
Nasdaq 10587.89 +44.87 (0.43%)
SP 500 3246.22 -12.22 (-0.38%)
10-yr Note +3/32 0.548
NYSE Adv 1018 Dec 1923 Vol 826.2 mln
Nasdaq Adv 1446 Dec 1827 Vol 4.0 bln

Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services, Consumer Staples
Weak: Energy, Financials, Materials

Moving the Market

-- Buy-the-dip trade in the mega-caps helps market cut losses

-- Adv. Q2 GDP showed 32.9% annualized contraction (Briefing.com consensus -35.0%); weekly initial claims and continuing claims increased versus prior week

-- Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), and Facebook (FB) closed higher in front of their earnings after the close

WTI crude falls back below $40 per barrel
30-Jul-20 15:25 ET
Dow -199.93 at 26339.64, Nasdaq +58.36 at 10601.38, S&P -10.05 at 3248.39

[BRIEFING.COM] The S&P 500 continues to pare losses and is now down 0.3% amid gains in the mega-cap stocks.

One last look at the sector standings shows eight trading lower and three trading higher. Consumer discretionary (+0.7%), information technology (+0.5%), and communication services (+0.4%) are on track to close higher, while energy (-3.6%), financials (-1.9%), and materials (-1.9%) continue to underperform.

WTI crude futures settled the session lower by $1.30 (-3.2%) to $39.97/bbl.