Some rough economic data was released on Thursday, but the market was really holding its breath in anticipation of FOUR FAANGs releasing quarterly numbers after the bell.
Excitement over these reports may explain why the NASDAQ managed to reverse a morning slide and finish the session in the green, while its counterparts pared their own earlier losses.
Let’s just get right to it since it’s what we’ve been talking about all week.
Facebook (FB), Apple (AAPL), Amazon (AMZN) and Alphabet (GOOG) reported after the close on Thursday. Despite feeling an impact from the coronavirus, they ALL beat earnings and revenue expectations.
Some specifics included AAPL reporting its best third-quarter ever and initiating a 4-for-1 stock split; FB growing users despite its challenges; AMZN fighting through $4 billion worth of coronavirus spending; and GOOG reporting its first quarterly revenue loss in history.
As of this writing, all the stocks have gained afterhours. FB is up more than 6%, AMZN and AAPL increased more than 4% each, and GOOG has advanced more than 1%.
It will be interesting to see how the market responds to all of this tomorrow.
As for Thursday’s session, the market was certainly crossing its fingers while waiting for these reports, but there were other factors impacting the indices’ performances.
Second-quarter GDP plunged by 32.9%, which was actually a little better than expectations. However, it also marked the sharpest drop in economic activity… ever.
Meanwhile, jobless claims of 1.434 million last week marked the second straight week with a decline, though it was in-line with expectations.
So the reports were pretty rough… but they were expected to be. In fact, they were expected to be even worse. The market, though, was hoping we’d be further along at this point, but the coronavirus spikes and reopening delays limited the recovery so far.
Stocks started the day with stiff losses, but improved as the day continued and the tech reports grew closer.
The NASDAQ, which has waffled between being first and last among the indices lately, came all the way back from the morning sluggishness. It gained 0.43% (or nearly 45 points) to 10,587.81.
The Dow dropped 0.85% (or about 225 points) to 26,313.65, while the S&P slipped 0.38% to 3246.22. These indices were well off their lows of the session.
The NASDAQ and the S&P go into Friday’s session with gains for the week, but the Dow is down by about 0.6%. However, they’re all up for the month heading into the final day.
Let’s see if these tech reports can help us end July on a high note tomorrow…
Today’s Portfolio Highlights:
Surprise Trader: The building products – wood space is in the Top 8% of the Zacks Industry Rank right now, and Dave found a name from this area that looks set for a positive surprise. JELDWEN (JELD) makes all types of doors and windows for new construction, as well as repair and remodeling services for residential and non-residential businesses. This Zacks Rank #2 (Bull) beat by 8.3% last time and has a positive Earnings ESP of 10.09% for the quarter coming before the bell on Tuesday, August 4. The editor added JELD on Thursday with a 12.5% allocation, while also selling NXP Semi (NXPI). Read the full write-up for more on today’s moves.
Blockchain Innovators: With a few hours to go before its report, Dave decided to sell Facebook (FB) and secure a return of approximately 36%. That’s a nice result, but the stock has been in the portfolio for over a year and the editor would like to see more upward momentum. He filled this open spot with Gain Capital (GCAP), a Zacks Rank #2 (Buy) investment bank that is involved with retail cryptocurrency trading accounts. The best part is that this stock pays a dividend, so the portfolio will be making money while waiting for the business to take off. Read the full write-up for more.
Insider Trader: The portfolio has plans for several new buys over the coming weeks, but first it needs to make some room. Therefore, Tracey sold a bunch of names on Thursday. However, the biggest gain came from Cincinnati Financial (CINF), which the editor only halved for a profit of about 34.4% in just under three months.
Meanwhile, she sold ALL of the following positions:
• Nike (NKE, +13.8%)
• KeyCorp (KEY, +10.9%)
• Alegiant Travel (ALGT, +0.7%)
• TrustCo Bank Corp NY (TRST)
• CME Group (CME)
See the complete commentary for specifics on today’s action.
All the Best,
Jim Giaquinto
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