Tech Earnings Grand Slam

July 31, 2020 08:09 AM
Apple announces 4:1 stock split
Exxon and Chevron report larger-than-expected losses
Equity Index futures

Equity Index futures

Thursday's Close

E-mini S&P 500 Futures (September): Settled at 3248.75, down 3.75

E-mini Nasdaq-100 Futures (September): Settled at 10,794, up 119.75

Apple, Amazon, Facebook, and Alphabet slugged a grand slam after the bell yesterday. Premarket, the behemoths are +7%, +5%, +6% and unchanged respectively after beating top and bottom-line expectations. Apple didn't provide guidance, but they are escorting the stock above $400 with the announcement of a 4:1 stock split. Amazon, gaining only the third-most among the crew, may have given the best results. After announcing monstrous spending on their Q1 release, the company posted its biggest profit ever and gave a wildly bullish forecast. Facebook’s resilience and innovation amid advertisers boycotting their platform provided a tailwind to a blowout beat. Lastly, although Alphabet topped expectations, it isn’t surging higher like the others due to less enthusiastic headlines and the company posting its first ever decline in revenue.

Exxon and Chevron are both lower this morning after reporting larger than expected losses. Caterpillar is higher after better than expected results.

Q2 GDP data has also been front and center as economies around the world post record contractions amid the worst of the pandemic. Yesterday, the U.S. reported -32.9% QoQ, annualized. Some may look to the European reads and wonder how Germany’s -10.1% QoQ posted yesterday or the Eurozone’s -12.1% posted this morning was so much less worse. That’s because it isn’t, the U.S. results are annualized. From April through June, the U.S. contracted at only a 9.5% whereas the Eurozone’s annualized results are -40.3%.

Next up is the Core PCE price index. This is the Federal Reserve’s preferred inflation indicator and accompanied by personal income and spending data. Final Michigan Consumer data is due at 9:00 a.m. CT.

Washington is still trying to secure additional fiscal stimulus, just as the previous measures are set to be exhausted. One of the hold-ups is employer liability and the Washington Post reported this morning the White House is willing to break from Senate Majority Leader Mitch McConnell in requiring such promises. Yesterday, President Trump said he wants to get a deal done to extend unemployment benefits and the federal eviction moratorium which are set to expire today.

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