Well, so much for going back to black for the year. After spending most of the day and putting the index back in positive territory by 2020, the S&P 500 Index (SNPINDEX: ^ SPX) it lost 30 points, or almost 1%, on July 13.
Giant snack and drink PepsiCo (NYSE: PEP) reported earnings that cheered investors and casino stocks Wynn Resorts (NASDAQ: WYNN), Last Vegas Sands Corp (NYSE: LVS)and MGM Resorts International (NYSE: MGM), news that Macao will open to more visitors. But that wasn’t enough to offset the losses of the largest of the index’s mega-cap tech giants. Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Amazon.com (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL)and Facebook (NASDAQ: FB), with a combined market capitalization of $ 6.6 trillion, all ended the day in negative territory. Amazon and Microsoft were the biggest losers, falling 3%.
Image source: Getty Images.
Are investors anxious about the earnings season starting this week? It sure looked like this at the end of today’s trading session.
Casinos get good news in Asia
Wynn, Las Vegas Sands, and MGM got multiple good news about Macau, home to some of its biggest and most important casinos. First, China’s Guangdong Province, a major gateway to Macao, is intended to ease a 14-day quarantine requirement for visitors coming from Macao this week who essentially cut travel from a major region to casinos in Macao.
In addition to Guangdong’s action to remove the biggest obstacle to Chinese travel to and from Macao, travelers leaving Macao by ferry or plane will now be able to present a negative COVID-19 test from the past seven days, aiming to Reduce the spread while also opening trips between other major hubs that connect visitors to Macau.
After spending much of the trading session over 6%, and earning nearly 15% at Wynn, all three are on track to close with more modest gains. The general shift in the market from buy to sell is a reminder that casinos face a long way to go. Their prospects are improving as more of their resorts are open to more visitors, but most continue to lose large amounts of money and may continue to do so for the rest of the year.
PepsiCo showed its resistance to the recession
The food and beverage giant reported second-quarter results that included a 3% decline in revenue and a drop in earnings of 18%, as its core beverage business suffered under the weight of restaurant closings and the trend. long-term reduction of soda purchases by consumers. But earnings of $ 1.18 per share were solid, particularly considering it happened amid the sharpest economic downturn in United States history.
Food sales helped support their strong results, as sales of the Frito-Lay and Quaker Foods brands increased 23% in North America, as consumers spent more on food in supermarkets during the months they saw millions of Americans under orders to stay home. The company ended the quarter with $ 9 billion in cash, and its continued profitability ensures its ability to continue paying dividends. The company has grown for 47 consecutive years.
After spending much of the day rising more than 2%, PepsiCo shares traded the market lower near the close, ending with a modest 0.3% gain.
Tech giants cut rate as earnings season kicks off
It’s a bit ironic that the same actions that have helped propel the S&P 500 this year have influenced today’s turn from profit to loss. The six largest companies in the index largely set the tone. Today, that was a decidedly negative turn in the past few hours:
^ SPX data by YCharts
Of the half-dozen larger stocks, only Alphabet had a better day than the broader S&P 500, and it even continued to drop 0.34% after two analysts raised their price targets for the maker of iStuff.
These megacap actions were not the only members of the Nasdaq compound (NASDAQINDEX: ^ COMP) Drop Today The Tech Index lost 227 points, or about 2%, on a day when tech stocks investors sold a lot near the close of trading.
As a group, these megatech stocks have done a lot of heavy lifting in 2020, outperforming the S&P 500 and helping the smaller, tech-focused Nasdaq Composite make double-digit gains this year:
AAPL data by YCharts
It remains to be seen whether technology companies can continue to generate positive returns for the rest of the year and whether coronavirus remains a significant economic and health risk.
Looking to the future
This week, the earnings season begins in earnest, with the largest banks including CitiGroup (NYSE: C), JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC)and Bank of America (NYSE: BAC) all reported earnings along with Delta airlines (NYSE: DAL) and home builder NVR (NYSE: NVR).
If you’re looking for a solid update on the state of the economic environment in the US, Banks, airlines, and homebuilders are a great place to start. Stay tuned for more tomorrow.
