Fundamental Analysis

Wall Street Slides As Investors Brace For Dour Earnings

Wall Street slipped on Monday as corporate America launches into what is expected to be a painful quarterly earnings season due to the coronavirus pandemic.

JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) will kick off the reporting season on Tuesday, with analysts expecting an uptick in trading revenue to be countered by declines in other businesses and a bleak outlook for the rest of 2020.

The S&P banking subsector .SPXBK shed 3.6%, while the broader financial sector .SPSY dragged on the benchmark S&P 500.

Overall, earnings for S&P 500 firms are expected to tumble 10.2% in the first quarter, compared with a Jan. 1 forecast of a 6.3% rise, before plummeting 22.4% in the second quarter as sweeping lockdowns halt business activity and spark furloughs.

“This week will be somewhat of an inkblot test,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial Corp in New York.

“There are multiple ways to read the state of play as earnings roll out, is the downturn fully priced in or is there cause for more downward pressure?”

The S&P 500 .SPX has recovered about 24% since hitting a three-year low in March, powered by aggressive U.S. monetary and fiscal stimulus and early signs of a potential peaking in U.S. coronavirus cases, but remains about 19% below its mid-February record high.

A staggering 16 million Americans have filed for jobless claims in the three weeks to April 4 and economists expect U.S. unemployment spiking to Depression-era levels in coming weeks as entire sectors shut down to try and contain the pandemic.

The outbreak could reach its U.S. peak this week, a top health official said on Monday, as the White House considers when and how to lift stay-at-home restrictions.

“More than likely, this will be a slow, rolling re-opening of the economy and with the threat of new flare-ups of the virus, policymakers will likely be more cautious than courageous in reversing current guidelines,” said Peter Cecchini, global chief market strategist at Cantor Fitzgerald in New York.

At 11:30 a.m. ET, the Dow Jones Industrial Average .DJI was down 476.34 points, or 2.01%, at 23,243.03, the S&P 500 .SPX was down 49.76 points, or 1.78%, at 2,740.06 and the Nasdaq Composite .IXIC was down 64.08 points, or 0.79%, at 8,089.49.

Carnival Corp (CCL.N), Royal Caribbean Cruises (RCL.N) and Norwegian Cruise Line Holdings (NCLH.N) tumbled between 8.8% and 14% as the U.S. Centers for Disease Control and Prevention extended its “no sail order” for all cruise ships.

Ford Motor Co (F.N) shed 5.8% after the carmaker projected quarterly adjusted loss before interest and taxes to be about $600 million, compared with a profit of $2.4 billion a year earlier.

Caterpillar Inc (CAT.N) tumbled 8.2% after Bank of America Global Research downgraded the heavy equipment maker to “underperform”.

Declining issues outnumbered advancers more than 3-to-1 on the NYSE and 2-to-1 on the Nasdaq.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded nine new highs and five new lows.

Source

Advertisement

Click To Join Our Community Telegram Group

Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.

Recent Posts

Weekly Summary And Review 3rd May 2024

Hi Traders! Arvinth here from the Home Trader Club team. The weekly summary and, review of May…

14 hours ago

Tech Powers Stocks Hours Away From Apple’s Results: Markets Wrap

The world’s biggest technology companies drove a rebound in stocks ahead of Apple Inc.’s earnings, with Wall Street also gearing…

2 days ago

Oil Technical Analysis And Short Term Forecast

Hi Traders! Oil technical analysis and short term forecast post is here. We do our…

2 days ago

NZDJPY Short Term Forecast Follow Up And Update

Hi Traders! NZDJPY short term forecast follow up and update is here. On February 27th…

3 days ago

EURNZD Technical Analysis And Short Term Forecast

Hi Traders! EURNZD technical analysis and short term forecast post is here. We do our…

3 days ago

GBPCAD Short Term Forecast Update And Follow Up

Hi Traders! GBPCAD short term forecast update and follow up is here. On February 7th,…

4 days ago