BNN Bloomberg's mid-morning market update: July 31, 2020
U.S. stocks were mixed as losses in giant energy producers offset smashing earnings from some of the world’s biggest technology companies. Treasury 10-year yields headed toward a record low.
The S&P 500 pared some of its gains, while still heading toward its fourth straight monthly rally. The Nasdaq 100 outperformed as results from Apple Inc., Amazon.com Inc., Facebook Inc. and Alphabet Inc. showed the industry is thriving in a pandemic that has increased dependence on their products and services. Meanwhile, the Dow Jones Industrial Average fluctuated as Exxon Mobil Corp. and Chevron Corp. posted their worst losses in a generation after the outbreak and a global crude glut combined to batter almost every part of their businesses.
Some other corporate highlights:
Caterpillar Inc.’s cost-cutting efforts helped the heavy-equipment maker make up for slowing sales.
Pinterest Inc. said revenue in July jumped as advertisers and users returned to the social-sharing service.
Under Armour Inc. reported revenue that beat the highest analyst estimate.
Charter Communications Inc. posted a surprising gain in TV and internet customers despite the ongoing effects of the COVID-19 pandemic.
As the S&P 500 notches another month of gains, tech shares continue to lead the advance in 2020. Their results are a validation for bulls who have bet the industry would emerge from the pandemic stronger than the rest of the market. Since the bottom in March, the Nasdaq 100 has added about US$4 trillion in market value. It’s poised to beat the benchmark gauge for a 10th straight month -- the longest winning streak in 20 years, thanks to solid balance sheets and products that cater to social distancing.
On the economic front, U.S. incomes fell more than expected in June as the effects of the government’s one-time stimulus checks dissipated amid a surge in unemployment-insurance payments. That increase, stemming mainly from the federal government’s supplemental US$600 in weekly jobless benefits, highlights the importance of the payments that expire Friday -- with Congress failing to reach an agreement on additional aid.
Meanwhile, trading in the Russell 2000 has been pretty choppy over the past week, and the gauge of small-cap stocks may be headed toward a double top -- with resistance seeming to hold around the 1,500 level.
Its GTI VERA Convergence Divergence Indicator, which detects trend exhaustion, also suggests that a technical sell signal could be on the horizon. The index has struggled to stay above 1,500 on two previous occasions this year, including in early March, whereafter it bottomed two weeks later.
These are some of the main moves in markets:
The S&P 500 rose 0.2 per cent as of 9:55 a.m. New York time.
The Stoxx Europe 600 Index climbed 0.5 per cent.
The MSCI Asia Pacific Index sank 1.2 per cent.
The Bloomberg Dollar Spot Index was little changed.
The euro was little changed at US$1.1845.
The Japanese yen weakened 0.4 per cent to 105.12 per U.S. dollar.
The yield on 10-year Treasuries fell one basis point to 0.53 per cent.
Germany’s 10-year yield decreased two basis points to -0.56 per cent.
Britain’s 10-year yield dipped two basis points to 0.071 per cent.
The Bloomberg Commodity Index gained 0.9 per cent.
West Texas Intermediate crude gained 0.9 per cent to US$40.28 a barrel.
Gold strengthened 0.9 per cent to US$1,974.68 an ounce.
--With assistance from Adam Haigh, Cormac Mullen, Yakob Peterseil, Robert Brand, Lynn Thomasson and Nancy Moran.