Market Indexes:
The market was cruising along for the week, but then reversed on Friday, due to poor earnings reports, and threats of a renewed tariff war coming out of DC. 3 out of 4 indexes were down for the week, with only the Russell small caps in the black.
“U.S. stocks fell on Friday as investors reeled from earnings reports by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) that showed the depth of the coronavirus impact on big business. Amazon stock fell about 5 percent after the company reported on Thursday that despite surging sales in the first quarter, costs to deliver products amid the pandemic had taken a big bite out of profits. Jeff Bezos, the company’s founder, said the expense of protecting workers, including protective equipment and Covid-19 tests, could swing it into a loss of as much as $1.5 billion in the current quarter.
Apple stock also fell, after the company refused on Thursday to give any estimates for the current quarter. But the tech giant signaled confidence by announcing another big stock buyback, and said that its first-quarter revenue rose nearly 1 percent to $58.3 billion, despite lockdowns in China, where it assembles nearly all of its products.” NY Times
Volatility: The VIX rose 3.5% this week, ending at $37.19, vs. $35.93 last week.
High Dividend Stocks: These high yield stocks go ex-dividend next week: CNXM, ET, MDC, CEQP, SUN, HMLP, MMP, GLP, IVZ.
Market Breadth: 5 out of 30 DOW stocks rose this week, vs. 9 last week. 55% of the S&P 500 rose, vs. 33% last week.
FOREX: The US dollar fell vs. most major currencies this week.
Economic News:
“The U.S. home ownership rate barely changed in the first quarter, the Census Bureau reported Tuesday. The home ownership rate hit 65.3% in the first quarter, which the Census Bureau said “was not statistically different” from the fourth quarter of 2019 when it was 65.1%. The share of Americans between 35 and 44 years old who were homeowners rose to 61.5% from 60.4% in the fourth quarter, a sign that millennials were continuing to buy homes before the coronavirus pandemic hit the U.S.” (MarketWatch)
-The consumer confidence index dropped to a reading of 86.9 this month from a downwardly revised 118.8 in March.
“The Federal Reserve expanded its Main Street lending program to be sure it captured larger firms that were still not big enough to tap public capital markets, the central bank said.The group of added firms, with between 10,000 and 15,000 employees and $2.5 billion and $5 billion in revenue, are diverse and not weighted to any particular industry, the Fed said. Changes to insist on only “commercially reasonable” efforts to keep employees was meant to avoid restrictions that might discourage participation, or weaken firms that were struggling, the Fed said.” (Reuters)
Week Ahead Highlights: The Non-Farm Payrolls report and the Unemployment Rate will be issued on Friday am. It will most likely be a bleak report, showing job losses in most categories. There were massive unemployment claims in April, with totals the highest since the Depression.
Next Week’s US Economic Reports:
Sectors: Energy and Basic Materials led this week, with Utilities lagging.
Futures: WTI Crude reversed and rose 16.23% this week, on lower production output and production cuts by oil majors. It ended the week at $19.69.
“Exxon Mobil (NYSE:XOM) on Friday reported its first loss in decades as oil prices plunged to historic lows following a drop-off in demand due to the coronavirus. The oil giant lost $610 million in the first quarter due to $2.9 billion in writedowns tied to falling oil prices. “COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” CEO Darren Woods said in a statement. (CNBC)
