[Market Madness] Edition 0091
More of the Same
Overnight
Well folks, yesterday we saw a big move in the NASDAQ. This helped carry the other indices well into the green at the start of trading today. The leaders of the EU managed to complete a stimulus deal, helping to pave their path ahead in the economic fight with COVID 19. Eyes return to the U.S. to see what the members of Congress will be able to manage. Some early indicators are suggesting that a deal will not come before the close of July. As many watch with anticipation for whatever will come from Capitol Hill, there is a great level of fatigue and declining optimism for a deal that the market truly expects.
Elsewhere, the major indices overseas crushed it overnight, riding the hype from the massive boost we saw in the NASDAQ yesterday. Crude, volatility, and gold are up today. By the end of the day, we got much lower results in the markets due to differences in communication between Treasury Secretary Mnuchin and Senate Majority Leader McConnell regarding the timeline of new stimulus. At the close, the Dow Jones and S&P held onto gains, and the NASDAQ lost on the day.
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Fundamentals
Tuesday Close:
Dow Jones: +0.60%
S&P 500: +0.17%
NASDAQ: -0.81%
US 10 YR: 0.612%
Crude OIL: $41.76
Market Madness Portfolio: -0.13%
COVID 19 Global Cases: 14,774,887
Indices Overseas:
FTSE 100: +0.16%
Nikkei 225: +0.73%
Hang Seng: +2.31%
TEDRATE: 0.14
LIBOR (3 month): 0.25775%
Where we stand
I don’t like being too redundant, but the headlines from yesterday have carried on into today and much of what concerned us yesterday still concern us today. The major markets have turned mostly green across the globe on continued stimulus plans and hopes of a vaccine to arrive in the future. Positive trial results across the big pharma spectrum is giving investors a sense of choice with respect to several key agents to deliver the world with a vaccine. Despite that, the health concerns continue to rise. Cases continue to rise at exponential levels not only here in the U.S., but all across the globe.
In light of the health concerns, investors continue to lock eyes on earnings and find the silver lining to continue running the tape green. Here in the states, the major indices outside of the NASDAQ are running up in the green. It looks like the NASDAQ has run out of steam off of yesterday’s massive run.
Other big changes might be on their way in the future. According to a survey from the Global CFO Council seems to suggest that many business leaders are considering moving away from releasing guidance statements. Moving into the future post-COVID 19 suggests that business leaders will have to reframe their thought processes and forecasting metrics to better account for business performance that is more flexible to unexpected changes to the overall market and financial community.
What else is likely to be expanded upon is the inclusion of multiple cases in company analysis. Some research firms already provide a 3-case analysis (bear, normal, bull). I see that this practice will be expanded upon to become both more common and more robust. This expansion of case analysis will likely grow and evolve to match more closely with internal forecasting practices. Situations like COVID 19 have shaken up so many things that much of analysis and business strategies are likely to be taken back to the drawing board and reworked in order to better adjust for both internal and external analysis.
Quick Takes
Some members of Congress see stimulus package not passing by end of July. (via CNBC)
Coca-Cola sales down 28%, but executives see a major turnaround ahead. (via WSJ)
EU leaders reach $2 trillion stimulus deal after long debate. (via CNBC)
Apple to make supply chain and products carbon neutral by 2030. (via CNBC)
More on the government assistance programs that are set to end soon. (via CNBC)
LinkedIn to lay off 6% of workforce. (via WSJ)
What’s going on at the Fed? (via CNBC)
Regulators go after Citadel Securities for a trading breach. (via FT)
Cramer suggests we stop comparing the market to 1999. (via CNBC)
Reader’s Corner
The reader might be interested to know that their favorite canned soda beverage may be low in stock at your local grocer due to an unforeseen impact of COVID 19. Because can redemption machines have been closed due to the virus, bottling companies are not getting the proper amount of aluminum needed to produce all cans of all flavors/varieties of beverages in the soda companies’ lineups. If you are upset because your select drink is in low or no stock, please recycle your cans when your local redemption machines come back online.
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Behind the Madness
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