Hi Everyone,
The stock market advanced for the second session in a row following a choppy and nervous session on Wall Street, as the positive economic reports and the bullish earnings outweighed the continued virus-related worries and the geopolitical escalation. The Dow was up 228, or 0.9%, to 26,870, the Nasdaq gained 62, or 0.6%, to 10,550, while the S&P 500 rose by 29, or 0.9%, to 3,227. Advancing issues outnumbered decliners by a 6-to-1 ratio on the NYSE, where volume remained light.
Traders said that the S&P 500, the Dow, and even the Russell 2000 closed at their highest levels in over a month, which could signal the start of a broader rally in stocks. As one trader explained, “Small-caps rose by almost 4% on average today, eclipsing the performance of the most valuable stocks. We haven’t witnessed that since mid-June, and bulls hope that more and more stocks will join the breakout toward the end of the week.”
Goldman Sachs’ (GS) second-quarter earnings report crushed analyst expectations both on top and bottom lines, with the company’s revenue and profit beating forecasts by 36% and 65%, respectively. The bank benefited from its surging trading and investment bank revenue, and even though interest revenue missed expectations, the company weathered the COVID storm virtually unscathed, so far. U.S. Bancorp (USB) also reported bullish earnings, and despite the lackluster performance of the sector in recent weeks, it fared well during the lockdown period.
Active trading continued across the board today, thanks to the key corporate earnings reports and mixed COVID-related headlines, but the escalating tension with China triggered wild intraday swings. China’s Vice Foreign Minister summoned the U.S. ambassador in response to the President Trump executive order on Hong Kong, which could lead to severe sanctions down the road. Stocks exposed to China pulled back sharply following the announcement, as investors fear that the diplomatic skirmish could soon start hurting the global economy.
Apple (AAPL) got good news today regarding one of the strangest tax evasion cases in recent memory, as the European Union’s (EU) General Court ordered that the company doesn’t have to pay $13 billion in unpaid taxes to Ireland. Apple appealed a 2016 ruling, which rendered the tech giant’s accounting tricks illegal. The “success” of the motion means that the country won’t receive the huge sum. Shares of Apple jumped higher in the wake of the decision before retreating due to the China fears, and Apple is now very close to cracking the $400 price level for the first time.
As always, have a great evening and stay tuned!!!
Joe
