Stock Market in Review This Week – 11/06/2020

What goes down, must come back up, right?

This week the S&P 500 closed at 3,509.44, a gain of 7.32%, the NASDAQ finished at 11,895.23, a gain of 9.01%, and the Dow ended at 28,323.40, a gain of 6.87%.

Summary

All three major indexes were up big this past week, after being down big the previous week. After millions of Americans voted on Tuesday, we still do not know who our next president will be. And I’m sure you’re sick of hearing it, but COVID-19 cases were on the rise.

Worth Mentioning

• The Bureau of Labor Statistics released October’s payroll information on Friday. The unemployment report fell to 6.9% as the economy added 638,000 nonfarm payrolls, beating expectations
• The Federal Reserve met Wednesday and Thursday with Jerome Powell giving a briefing Thursday afternoon. The Fed said the economy is recovering but faces considerable risks ahead and maintained keeping interest rates low
• England imposed stay at home orders as their cases are surging
• Dunkin’ Brands has agreed to be acquired by Inspire Brands, the owner of Arby’s, Buffalo Wild Wings, and Sonic Drive-In
• AT&T is considering selling off minority stakes in some of its businesses
• Uber and Lyft benefited from the election Tuesday as voters in California voted the companies are exempt from classifying drivers as employees instead of contractors
• Two other industries that benefited from the election were the gambling and marijuana industries, as several states voted for legislation for both
• Jobless claims totaled 751,000 last week
• The record-setting IPO from Ant Group has been suspended

Notable Earnings

• General Motors reported earnings that beat expectations for EPS and revenue. They said sales in the US and China are recovering faster than expected
• Qualcomm’s stock shot up Wednesday afternoon after handily beating EPS and revenue estimates. They believe they are well placed to benefit from the rise of 5G
• PayPal’s stock dipped Monday after hours, even after beating EPS and revenue estimates. The stock recovered throughout the rest of the week
• Clorox has continued to benefit from the cleaning boom caused by the pandemic. They reported strong quarterly sales growth, raised its full-year revenue forecast, and saw sales grow in eight of its ten business units
• Uber reported better than expected EPS but missed on revenue forecasts. The company saw revenue decline but says the ride-hailing business is recovering. Bookings from deliveries outpaced bookings for rides and mobility. The stock was up 8% Friday after the news
• Peloton beat on EPS and revenue estimates, seeing first-quarter sales surge over 200%. The company has benefited from stay at home orders but warned it may see supply chain issues in the future due to increased demand
• Zillow’s stock surged 14% Friday from earnings and was up more than 25% for the week. They reported better than expected EPS and revenue as well as offering fourth-quarter forecasts above analyst’s estimates. The company has benefited from low mortgage rates and shifting consumer trends caused by work from home and the pandemic
• CVS’s stock was up almost 6% Friday and more than 15% for the week. They reported better than expected EPS and revenue, and raised full-year guidance

Looking Ahead to Next Week

• In observation of Veterans Day, the bond market is closed Wednesday but the stock market is open
• Consumer Price Index (CPI) for October is released Thursday
• Notable companies reporting earnings next week include McDonald’s, Beyond Meat, Lyft, Walt Disney, Applied Materials, DraftKings, and Workhorse

Weekly Change In Each Sector:

Treasury Yield Rates

The 10-Year ended the week at 0.83%, compared to last week’s end of 0.88%

The 2-Year ended the week at 0.16%, compared to last week’s end of 0.14%