By Gorilla Trades. Originally published at ValueWalk.
Commenting on the focus on Amazon, Apple, and Facebook earnings scheduled for the after-hours session and today’s trading Gorilla Trades strategist Ken Berman said:
Q2 2020 hedge fund letters, conferences and more
The major indices are all trading lower at midday following a bearish overnight session that was dominated by a sharp drop in European assets. The worse-than-expected German GDP print and the disappointing Italian jobs report weighed on risk assets, together with the growing fears of a second wave of outbreaks in Europe. A batch of negative European earnings surprises added to the selling pressure, but most of this morning’s U.S. reports were bullish, such as UPS’s (UPS, +15.1%) and Procter & Gamble’s (PG, +2.4%), and that could fuel an afternoon rebound on Wall Street.
Amazon, Apple, and Facebook To Report Earnings At The Closing Bell
Several crucial tech earnings are scheduled for the after-hours session, with Amazon (AMZN, -0.4%), Apple (AAPL, -0.3%), and Facebook (FB, -0.9%) in focus, so markets are expected to remain very active after the closing bell. In domestic economic news, the first reading of the second-quarter GDP showed an annualized drop of 32.9%, which, believe it or not, was better than the consensus estimate. The reading is still the worst ever, but analysts expect a strong rebound in the third quarter. The weekly number of new jobless claims was in line with expectations at 1.43 million, but continuing claims increased by around 800,000, climbing back above 17 million, raising further doubts about the speed of the recovery.
Market Wrap
Dow: 26,199, – 341 or 1.3%
S&P 500: 3,224, – 34 or 1.1%
Nasdaq: 10,516, – 54 or 0.5%
Russell 2000: 1,483, - 17 or 1.1%
Market breadth has been in line with the performance of the major indices, with decliners outnumbering advancing issues by a 7-to-1 ratio on the NYSE at midday. 18 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 51 stocks hit new 52-week highs. The major indices have been trading below their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday selling pressure. The steep drop in the price of oil has been weighing heavily on the energy sector this morning, and financials and materials have also been among the weakest issues, reversing yesterday gains, with only the key defensive sectors showing strength amid the risk-off shift. Stay tuned!
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