Stock Market in Review This Week – 10/23/2020

GM revealed their new electric Hummer this week. It came in at a whopping $112,000. Just in time for holiday shopping… when it comes out next fall.

This week the S&P 500 closed at 3,465.39 a loss of 0.53%, the NASDAQ finished at 11,548.28, a loss of 1.06%, and the Dow ended at 28,335.57, a loss of 0.95%.

For reference, the S&P 500 opened at 3,226.14 on September 24th. A month later, October 23rd, it closed at 3,465.39. That’s a one-month gain of 7.4%.

Summary

It was another choppy week for the market, one that ended negatively this time. Plenty of large companies reported quarterly earnings this week. And many more report next week, including most of big tech. Talks of a stimulus deal had the market up on Thursday but once again no deal was reached and we’ll have to see if next week brings more progress.

Worth Mentioning

• China reported its economy is up 4.9% from a year ago, below expectations
• Google is facing a lawsuit from the federal government alleging that it unlawfully obtained a monopoly for its search service and advertising. The news did not have much of an impact on the parent company’s, Alphabet’s, stock
• Mortgage applications and purchase demand for a home fell from a month ago, but are still higher than a year ago
• US housing starts in September were slightly lower than expected while sales of existing homes rose a higher than expected 9.4%
• New filings for jobless claims totaled 787,000 last week
• The FDA approved Gilead’s antiviral drug, remdesivir, as a treatment for COVID-19. It is the first and only fully approved treatment. The stock was up on the news after-hours Thursday before giving back most of those gains Friday during trading
• The yield for longer-term Treasury bonds had a strong week, as the 10, 20, and 30-year bond yields all rose by .1%

Notable Earnings

• IBM reported a third straight quarter of revenue decline and the stock took a tumble Monday after hours
• Proctor and Gamble reported fiscal first-quarter revenue rose by 9% due to increased demand for cleaning and laundry products from COVID-19. They beat on EPS and revenue estimates and raised full-year guidance. The stock rose before the market opened on Tuesday but gave back most of those gains the rest of this week
• Lockheed Martin saw its EPS and revenue for the quarter beat estimates. They also raised its full-year outlook
• Snap reported better than expected EPS and revenue, as well as higher global daily users, than expected. The stock was up almost 50% this week
• Netflix beat on revenue but missed on EPS and subscriber additions. Shares were down big after Tuesdays close
• Verizon beat estimates for its EPS and phone subscribers, helped by demand for its phone and internet services as schools and businesses are still remote
• Coca-Cola reported EPS and revenue higher than analysts’ estimates for the quarter but saw a 9% decline in revenue and a 6% fall in organic sales
• AT&T added more new phone subscribers than expected and beat on revenue this quarter. The stock was up Thursday after the news
• Tesla reported a fifth-straight quarter of profits, beating EPS and revenue, and delivered 139,300 new vehicles, a record for Tesla, this quarter. The stock was up Wednesday after hours on the news, but overall it was down for the week
• Align Technology was up 38% for the week, after smashing last year’s numbers and analysts estimates on their earnings call
• Intel was down big to close the week after reporting earnings Friday morning. The earnings beat analysts’ estimates but showed weaknesses in its data center business

Looking Ahead to Next Week

• GDP for Q3 is released Thursday morning. After contracting over 30% in Q2, economists expect a big bounce back
• Some of the biggest names in tech, Apple, Amazon, Alphabet, and Facebook all report earnings on Thursday
• Other notable companies reporting earnings include Microsoft, Caterpillar, Advanced Micro Devices, Boeing, eBay, Mastercard, Starbucks, and Honeywell
• The presidential election is less than two weeks away

Weekly Change In Each Sector:

Treasury Yield Rates

The 10-Year ended the week at 0.85%, compared to last week’s end of 0.76%

The 2-Year ended the week at 0.18%, compared to last week’s end of 0.14%