the S&P 500 Index (SNPINDEX: ^ SPX) The week closed 0.37% on July 17, closing a mixed week 1.5%. Today’s gains were driven by the health sector; More than a dozen of the best index results today include companies like Intuitive surgical (NASDAQ: ISRG), Align technology (NASDAQ: ALGN), Boston Scientific (NYSE: BSX)and Stryker Corp (NYSE: SYK), all more than 3% to close the week.
Asset Management Giant Blackrock Inc (NYSE: BLK) Shares gained 4% today after the company’s earnings report, due to strong growth in bond demand during the recession.
Image source: Getty Images.
On the downside, investor concern about the tightening of the labor market is taking breathless travel and leisure reserves, as well as oil reserves. Some of the biggest losers of the day were MGM Resorts International (NYSE: MGM), American Airlines Group (NASDAQ: AAL), Apache Corp (NASDAQ: APA)and Occidental Petroleum (NYSE: OXY), all down around 4% or more.
Today’s worst-performing S&P 500 share was Netflix Inc (NASDAQ: NFLX). The streaming giant reported gains after the market closed yesterday, and despite adding more new subscribers than expected, investors are selling in droves, causing shares to drop nearly 7% today.
Netflix earnings: solid quarter, but weak orientation
Investors in the streaming giant have enjoyed huge long-term gains, as well as a huge spike in stocks recently, as investors piled up in the weeks leading up to earnings. In the first two weeks of July, shares were up 24%, but the hot streak ended today as investors sold after the results of yesterday’s earnings gains.
Netflix reported an excellent second quarter, adding a Q2 record of 10.1 million subscribers. Revenue increased 25% and operating profit doubled. But management rained down the parade with a guide that did not make investors happy. CEO Reed Hastings (now co-CEO after promoting Ted Sarandos to share the great chair) said that because the company “attracted” so many new customers in the second quarter, management now expects to add just 2.5 million new subscribers in the third quarter.
Outcome? Investors who have done so well recently are taking their money up and running today, despite the huge financial improvements Netflix continues to deliver.
Health actions offer a great day
The healthcare sector provided a great day for investors. the SPDR S&P Health Care Equipment ETF (NYSEMKT: XHE) and SPDR S&P Health Care Services ETF (NYSEMKT: XHS) ETFs in the subsector were big winners, 2.6% and 1.2% to close the week.
The biggest winner in the sector was Intuitive Surgical, with shares getting almost 8% on the news that one of its biggest potential competitors, a surgical robot jointly developed by Johnson and Johnson (NYSE: JNJ) with a Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) subsidiary, would not begin human trials before 2022 due to stricter FDA regulations for medical devices.
While investors see Intuitive Surgical as the most obvious winner here, other device makers like Stryker and Boston Scientific, which make a litany of surgically implanted devices, also see their short-term prospects fueled by the delay in bringing a competitive product. to the market . The market rightly viewed this as having minimal impact on health giant J&J in the meantime, with its shares closing almost unchanged during the day.
Stock of stagnant cruise lines in port
The bad news continues for the cruise industry. The CDC announced an extension of the “do not sail” order that has kept the industry in the port for months until September 30. Industry Giants Shares Royal Caribbean Cruises (NYSE: RCL), Carnival Corp (NYSE: CCL)and Norwegian Cruise Line Holdings Ltd (NASDAQ: NCLH) they fell between 1.3% and 2% today.
The news was not unexpected; The industry had already imposed a plan not to sail until mid-September and it was unlikely to start sailing before the end of that month before the order was established. The companies continue to work to implement a plan that can profitably return their boats to the water while keeping customers and crew safe. Meanwhile, they will remain a risky proposition as the group burns large amounts of cash to stay afloat long enough to start paying passengers later this year.
Oil, travel and hospitality reserves fall due to ongoing coronavirus and economic concerns
Some of the worst-performing S&P 500 stocks today were in various industries that will struggle to recover as the coronavirus pandemic continues to delay and halt travel and leisure activity. The latest COVID-19 case data is troubling, as new case counts from the US and the world reach record levels overnight. Yesterday more than 75,000 new cases were reported in the U.S., and almost 250,000 new cases were reported worldwide. The death toll also continues a higher trend, with more than 900 US deaths reported yesterday and hospitals across the country reporting that ICUs are nearing capacity.
The United States has yet to implement a coherent plan to prevent the spread of the virus, with 50 states enacting different policies, and the federal government seems to disagree with its own health care experts about the best steps to get back to the front of the spread disease. Although this battle continues in public opinion, economic concerns are intensifying. Google searches for terms that include the words “unemployment file” are still well above typical levels, and have held steady for the past two months.
This certainly coincides with the trend of large numbers of new unemployment applicants. Last week, another 1.5 million people joined the new unemployed as the initial recovery appears to be slowing down.
By bringing this to oil reserves, the industry received more troubling news. Russia’s and OPEC’s group of oil nations called OPEC + is ready to start turning on the taps soon. The group is expected to start adding around 2 million barrels per day to its production starting in August. This will not only absorb the minimal recovery in demand seen in the past two months, but it will also put further pressure on US producers to strengthen their production and work through the enormous excess of stored oil, which continues to grow.
Make no mistake: The US oil industry is still in danger and more bankruptcies are on the way.
Until next week: full earnings season sets up a difficult journey
With more than 60 different S&P 500 companies reporting earnings next week, things will be busy and surely volatile. Notable names established to report include Coca Cola (NYSE: KO), AT&T (NYSE: T), Microsoft (NASDAQ: MSFT)and Intel (NASDAQ: INTC).
For many companies, the second quarter of 2020 will be potentially the worst of all. And while that will play a role in market volatility, the focus will be on what they hope will happen in the future. Stay tuned here as we take a closer look at some of the biggest and biggest companies during the week.
