The major indexes pushed through for further gains, as quarterly earnings boosted investor confidence despite poor jobs data.
A Day of Gains on the Road to Record Highs for the Market
The ebb and flow of the stock market may not always concern long-term investors. But during challenging economic situations where there is a great deal of unpredictability, such as the present situation created by the coronavirus pandemic, you need to study the daily moves of the market, the stocks that matter and the various economic events and reports that could influence the performance of stocks and the movement of the market.
Quarterly Earnings Lift Stocks Despite Gloomy Jobs Report
The jobs report may have been gloomy, but the earnings from various companies have been so encouraging that it is helping push stocks higher. Wednesday, August 5 was when the Dow Jones gained around 353 points as a result of Disney ($DIS) shares soaring. There were also positive reports stating that there could be a new Covid-19 relief package. That also gave the bulls more juice for their optimism. The jobs report from ADP was disappointing though.
The S&P 500 rose by 22 points while the Nasdaq Composite gained 36 points. Reports by late Tuesday revealed that congressional Democratic leaders and the Trump administration had reached an agreement to get working on an aid bill by the week’s end. Even any differences in views would not stand in the way of a new aid deal.
Earnings Better than Expected for Disney, Despite Loss
Quarterly results were better than expected for Walt Disney Co. despite reporting a loss of $3.5 billion. This was one of the main factors bringing about bullishness in the markets. Disney’s streaming platforms reported 100 million subscribers. This was to be expected, considering the pandemic has forced people to remain indoors. It still is remarkable because Disney faces stiff competition from other providers, particularly Netflix ($NFLX). Disney also announced that it would soon release the live-action version of its “Mulan” for $29.99 on Disney+. This is considered a novel approach to video streaming.
Shifting Between Two Sides Set to Continue
Delos Capital Advisors’ chief investment strategist Andrew Smith believes that the “choppy” action in the market we saw in the past few sessions is an indication that the market is looking to gravitate to the names associated with cyclical economic recovery. He believes that the shift between stocks benefiting from the pandemic, such as Amazon ($AMZN), and those at the opposite end of the spectrum is set to continue. It is actually a struggle between the major economic indicators and the ones that lag.
A Big Merger in the Healthcare Sector
The other big headline was from the healthcare sector. The merger between Teladoc Health ($TDOC) and Livongo Health ($LVGO) made the news on Wednesday. The $18.5 billion deal would create a company dealing with virtual care and a range of healthcare services.It would be interesting to see how the market continues on its recovery path in the days and weeks to come. The course of the pandemic would be something to closely observe. Meanwhile, direct access trading platforms and zero commission trading by experienced online broker-dealers would make it easier to get started in stock trading.