Stocks that were expected to benefit from a lockdown situation dropped while transportation stocks benefited, indicating economic recovery.
A Reality Check of the Stock Market — Some Unexpected Results
Despite the rise in the number of Covid-19 cases in parts of the United States, the economy seems to be recovering. Stocks that benefited from the lockdown are now experiencing slight dips, while trucking companies are experiencing growth.
Slowing Down of the Market Rally
As of Thursday, July 16, the market rally – witnessed recently following the bearish trends in the wake of Covid-19 – retreated. While the major indexes were close to session highs, the growth names were dragging behind. For Nasdaq futures, it was a modest fall because Netflix ($NFLX) missed its earnings and experienced discouraging subscriber guidance. The S&P 500 and Dow Jones didn’t change much versus fair value.
Video Streaming Companies Disappoint
Netflix is one of those stocks that were expected to really benefit from the pandemic-induced lockdown, with people spending most of their time at home. The reopening economy perhaps sent more Americans outdoors. Still, the content streaming giant’s disappointing earnings weren’t expected. The gains forecasted for the present quarter were also weaker. It experienced strong growth in subscribers though.
Looking at other streaming players, Amazon ($AMZN), Walt Disney ($DIS) and Roku ($ROKU) also fell. Roku, though, is still higher than buy points. It’s important to remember that while Netflix is Amazon’s rival in video streaming, it is also a customer of the cloud computing business of Amazon. As for Walt Disney, Disney+ is one of the few divisions of the company that isn’t shut down.
Tesla Extends Losses
Electric car manufacturer Tesla ($TSLA) had to extend its overnight losses. In late trade, it fell to 1%. The factors for the stock’s losses have not yet been ascertained. Credit Suisse
did double its stock price target for Tesla to 1,400, still under the present price. The bank’s analyst cited momentum rather than fundamentals as the reason for Tesla’s price surge recently.
Tesla shares dipped to 1,794.99 from their intraday peak recorded on Monday, though Tesla’s 10-day moving average hasn’t been affected. The stock closed at 1,500.64, down 2.9%.
Growth of Trucking Stocks Indicate Economic Recovery
However, trucking companies that were among the most adversely affected by the pandemic, had encouraging results, and fueled hopes for a significant economic
