Monday, August 31, 2020 – DIA 284.28 -.84%, QQQ 294.88 +.80%, SPY 349.31 -.36%
No U.S. economic data release on the day. The reconstituted Dow Jones Industrial Average began trading. Apple (AAPL) 129.04 + 3.39% trading post-split for the first time led the DJIA. Stock splits can have outside effects on the underlying stocks. This is due to an accounting mechanism related to pre- and post-split shares and the change in cusip numbers. The new additions, Salesforce (CRM) 272.65 +.57% continued to rise, Amgen (AMGN) 253.32 +.08% was flat and Honeywell (HON) 165.55 -1.68% came under profit-taking.
Tuesday, September 1, 2020 – DIA 286.79 +.88%, QQQ 299.92 +1.71%, SPY 352.60 +.94%
Construction Spending came in much lighter than expected .1% vs. 1.0%, ISM manufacturing employment was better at 46.4 versus 45.8 expectation, but still showing a contraction. ISM new orders were much better than the last print 67.6 versus 61.5. The ISM manufacturing. PMI came in better than expected 56 versus 54.5. adding to the argument that inflation is moving through the system. ISM manufacturing prices came in at 59.5 versus the 54 expectation. Zoom (ZM) 454.02 was up + 40.78%! announcing massive revenue and earnings beat; The stay/ work from home trend appeared to accelerate performance dramatically. DocuSigninc.com (DOCU) 268.80 +20.54, a leader in the remote document space, exploded to the upside as well, continuing the trend of certain companies benefitting from the dispersion of the workplace to homes from offices. Regeneron (REGN) 592.68 – 4.4% was off on a downgrade. Recently the company gave up on an existing arthritis drug as a potential COVID-19 treatment.
Wednesday, September 2, 2020 – DIA 291.26 +1.56%, QQQ 302.76 +.95%, SPY 357.78 +1.47%
MBA Mortgage Applications -2% versus the previous -6.5%, ADP Employment change disappointed coming in at +428K vs. an expected gain of +950K. Factory orders were stronger than expected coming in at 6.4% versus 6%. Crude oil stockpiles showed a drawdown - 9.362 million barrels vs. -1.587 million. Gasoline also had a larger draw than expected -4.32 Million versus -3.036 million. Stocks gapped higher on the open as Dr. Fauci was reported to have said overwhelmingly strong results could end COVID-19 vaccine trials early and proceed to mass production. In the S&P 500 DXC Technology (DXC) 22.37 +11.36% was a clear standout. The stock appears to have formed a base after a long decline. Brown Forman (BF/B) 78.89 +10.06% gapped and traded higher on solid earnings. Oil and Gas names came under pressure, Apache (APA) 14.42 down -3.34%, EOG Resources (EOG) 43.70 -3.34%, Cabot (COG) 18.17 -2.26%, and ConocoPhillips (COP) 36.38 down -2.1%.
Thursday, September 3, 2020 – DIA 283.84 -2.7%, QQQ 287.41 -5.07%, SPY 345.39 -3.44%
Trade balance for July came in worse than expected with a deficit of -63.6 Billion versus -58 Billion expected. Continuing jobless claims dipped to 13.254 Million from an expected 14 million down from the prior 14.492 Million. Initial jobless claims came in at 881K less than the expected 950K. Unit labor costs rose 9% less than the expected 12% annualized. The Markit services PMI came in at 55 vs. the expected 54.8. Above 50 shows expansion. ISM Services New orders came in at 56.8, .02 better. ISM services PMI came in at 56.9 slightly worse than expected. The ISM Services employment index came in far better than expected (but still indicating contraction) 47.9 vs. 31.9. ISM Prices Paid came in at 64.2 vs. 61.7 Indicating stronger inflation pressure. The market gapped lower on the open and traded lower for most of the day, recovering a bit after 3:30 pm EDT. Market leaders Zoom (ZM) Nvidia (NVDA) Tesla (TSLA) and DocuSign (DOCU) all got hit hard. Travel stocks Carnival (CCL) and Norwegian (NCLH) were higher on the day. Another bright spot was retail stocks Kohl’s (KSS) and Nordstrom’s (JWN) showing positive performances.
Friday, September 4, 2020 – DIA 281.77 -.55%, QQQ 283.58 -1.33%, SPY 342.57 -.82
Non-Farm Payrolls for August showed an increase of 1.371 Million-just short of the 1.4 million expected. US labor force participation rate edged up to 61.7% which was better than expected. The headline unemployment rate fell to 8.4%= much better than the 9.8% expected. The market opened mixed then began to sell-off. Pundits pointed to confusion on whether a new stimulus deal could be reached. Also, the news hit that Softbank, a Japanese investment entity, had made staggering call option bets on technology stocks, apparently into the billions of dollars, which likely contributed to the melt-up in recent weeks. Treasury yields widened sparking a rally in the depressed financial stocks; winners included Lincoln Financial (LNC) 38.22+7.15%, Capital One Financial (COF) 73.99 +5.82%. Travel & leisure stocks continued to outperform the general market lifting Carnival (CCL) 18.53 +5.4%, Norwegian Cruise Line (NCLH) 18.42 +4.48% The market experienced large selling throughout the day with only a late-day rally stabilizing things. The S&P 500 (SPY) at one point was trading at 334.87 about 8 points lower than the close. Technology stocks were the clear losers on the day. DocuSign (DOCU) 216.26 – 10.64% continued its correction and volatility.
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