The US stock market had gained yet more ground as investors ignored the red flags and focused on the few positive signs that the US economy might restart soon. In this way, the S&P 500 appreciated by 4.09% and the Dow Jones Industrial Average grew by 3.64%. The tech-heavy NASDAQ Composite advanced by 5.59%.
The White House administration outlined some guidelines for a phased re-opening of states economies, although it’s still down to governors to decide when and how to proceed. So far, none of the states provided a clear date when things will start returning to normal and data shows the number of infections with the COVID-19 is still on the rise. On the other hand, there were some positive news from the healthcare sector that Gilead Sciences, Inc. (NYSE: GS)’s remdesivir is showing rapid recovery for patients infected with COVID-19.
The earnings season kicked off last week, with some major banks reporting their financial results for the first quarter. JPMorgan Chase & Co. (NYSE: JPM) posted EPS of $0.78 and revenue of $28.25 billion, missing the consensus estimates by $1.34 and $1.20 billion respectively. Goldman Sachs (NYSE: GS)’s EPS of $3.11 missed the consensus by $0.18, but its revenue of $8.74 billion was higher than the expected $7.92 billion.
Overall, by April 17, 9% of companies in the S&P 500 reported their results and 66% of them posted better-than-expected bottom lines and 70% topped revenue expectations, according to FactSet.
In addition, another piece of somewhat worrisome news came from China, where the economy contracted by 6.8% in the first quarter. This marks the first quarterly drop in China’s GDP since at least 1992 and it was worse than the expected decline of 6.5%. For the full year, the Chinese economy is expected to grow by 2% as the country recovers from the pandemic and ramps up its capacity.
Oil remained in the spotlight as prices continued to decline. Experts suggest that investors see the recent OPEC+ deal to curb production as coming too little too late and despite the production cuts the supply glut continues as demand remains at historic lows amid a global lockdown. By April 20, the price for WTI futures for May delivery turned negative $37.63 per barrel, which suggests that producers would pay traders to take oil off their hands. This was the first time in history when oil futures contracts turned negative.
In the meantime, Financial Advisors were also looking at some individual companies and developments surrounding them. According to TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, the most searched ticker last week was Q.E.P. Co., Inc. (OTCMKTS: QEPC), whose stock inched down by less than 2% on low volume and continued its decline into the current week.
On the second spot was Boeing Co (NYSE: BA). The airplane maker reported 50 deliveries for the first quarter, much lower than 149 a year ago and below expectations of 60. Nevertheless, the company said it plans to resume production of jetliners in Puget Sound and helicopters in Ridley Township, Pennsylvania this week. The news of production re-start helped offset the drop caused by missed delivery figure and helped the stock gain over 4.50% last week.
Three other stocks that ranked as the most-searched last week, according to TrackStar data were Amazon.com, Inc. (NASDAQ: AMZN), Tesla Inc (NASDAQ: TSLA), and Microsoft Corporation (NASDAQ: MSFT). All three stocks gained ground amid some positive news and high expectations for their upcoming earnings releases.
In this article, we’re going to take a closer look at Amazon.com, Inc. (NASDAQ: AMZN). The eCommerce giant is one of the largest winners from the coronavirus outbreak, recording higher sales as people are forced to stay indoors and all shops excluding supermarkets are shut. Since the beginning of the year, Amazon’s shares surged by more than 26% and it’s currently valued at nearly $1.20 trillion.
Last week alone, Amazon’s shares appreciated by 9.50% despite some concerns over the company’s operations in France, where the company had to suspend its operations at six fulfillment centers following a court order banning the sale of non-essential goods. The court order was issued after a filing from a labor union that expressed concerns over workers’ safety amid the pandemic.
Similar concerns were expressed in other countries where Amazon is operating, including the US. The company’s CEO Jeff Bezos pointed out in his annual letter that Amazon will focus more on testing to ensure the safety of its workers. Earlier, the company said it would build some testing capacity and planned to start testing its workers in the near future.
In the meantime, on April 20, Morgan Stanley said it removed Amazon from its Fresh Money list, suggesting investors should take their profits now as the stock has substantially outperformed the broader market. Even though Morgan Stanley fundamental analyst Brian Nowak remains positive on the stock’s long-term performance, the bank believes that the benefits for the company’s financials arising from the Work from Home tendencies have been already priced in.