Market Recap January 27 – 31
Monday – Dow (453) to 28,535, NDAQ (175) to 9,139 and S&P (51) to 3,243. Concerns regarding the Coronavirus which has now claimed 81 lives and infected more than 2800 hit the market hard today. Almost all sectors were hit hard with the exception of the drug makers. Between last week and today, the 2020 gains made over the last 3 weeks have been wiped out. ABBV and JNJ have sent antiviral drugs to Chinese health authorities in an attempt to find a remedy to stem the tide of infections. GILD is also exploring whether to send its antiviral therapy. Tomorrow, the Fed begins its two day meeting. We will also get durable goods data, consumer sentiment and earnings releases from LMT, HOG, APPL and MMM.
Tuesday – Dow +187 to 28,722, NDAQ +130 to 9,269 and S&P +32 to 3,276. A stronger than expected consumer confidence number helped all three indices bounce back today. Durable goods order were up 2.4% in December although insiders were quick to note that the number was largely due to a 90% increase in Pentagon weapon systems ordering in December. Earnings were also a positive factor as AAPL jumped almost 3% in front of their earning release (they later reported a knockout Q4) and GS was up almost 2% as well. Other notable earnings news…XRX up 5.3% after beating estimates, PHM up 4.9% after reporting good numbers, WHR up 4.4% after demonstrating the ability to pass higher prices on to the consumer, MMM down 5.5% after announcing 1500 layoffs and a grand jury subpoena, PFE missed numbers and was down 4.2%…CMG agrees to pay $1.3mn in fines for more than 13,000 child labor violations. Despite the fine, UBS upgraded the stock to neutral and raised its price target to $900/sh…SBUX down 1% after the company announced closures of all stores and deliveries for the Chines province of Hubei, where the Coronavirus originated…Speaking of the deadly disease, deaths have now risen to 132 with 5974 infections in China and some 70 infections outside of China but no fatalities at this time.
Wednesday – Dow +11 to 28,734, NDAQ +5 to 9,275 and S&P (3) to 3,273. The Coronavirus and earnings continued to battle for the market’s soul today. Despite infections climbing to 7711 in China and 170 fatalities, the market chose to concentrate on the announcement that the Federal Reserve would keep rates at their current levels and bullish earnings releases from DOW +5.3%, AAPL +2.1%, MCD +1.9% and BA +1.7%.
Thursday – Dow +125 to 28,859, NDAQ +23 to 9,298 and S&P +10 to 3,283. The indices shrugged off early losses to rebound and finish positive on the day. Airlines and travel firms bounced off their lows after the World Health Organization said they were not recommending restrictions on international trade and travel…Earnings continued to dominate the news; TSLA posted a quarterly profit, beat numbers and traded up 10% to a new high…MSFT traded up 2.8% as its cloud business drove better than expected results…AMZN crushed their numbers and traded up 12% in after hours trading…Shares with exposure to China continued to suffer; RCL down 1.6% after cancelling a 4 day cruise from Shanghai and SBUX down 1% as they have had to shut down more than half their stores in China.
Friday – Dow (603) to 28,256, NDAQ (147) to 9,150 and S&P (58) to 3,225.
The story of last week was the Coronavirus. The markets bookended a fairly good week of economic reports and earnings but fears over the virus were the focus of the beginning of the week and resurfaced at the end of the week as the rate of deaths and infections continued to climb. For week the Dow (714) or 2.4%, NDAQ (164) or 1.7% and the S&P (69) or 2%.
Michael J. Castro