| Thursday's Headlines 1. US markets erase losses to close flat for the day 2. WHO: Too early to call coronavirus an emergency 3. Virgin Galactic's stock is at warp speed 4. A history of super bugs and the stock market 5. The market is much bigger than the US economy Markets Closed
 Markets Today U.S. markets erased early losses to close relatively flat for the day with the reversal happening right around the time global health officials said it was too early to call the coronavirus an emergency. That boosted airline and travel stocks, which have been hit hard since news of the outbreak on Tuesday. The news from the World Health Organization came too late for Asian markets where investors pressed and held the 'sell' button, driving the Shanghai Composite Index down 2.75%, its biggest one-day loss since May 6, when it plummeted 5.6%. In Japan, the Nikkei 225 dropped 1%, as did Korea's Kospi index.
Corporate earnings were in focus today as Southwest Airlines and Procter & Gamble were among the big names reporting results. So far, more than 12% of S&P 500 companies have reported quarterly earnings, with about 70% beating analyst expectations. Funny how they manage to do that every quarter...
Headlines:
 Spacey Gains Virgin Galactic, the space-exploration company controlled by Sir Richard Branson, has seen its shares hit warp speed since the beginning of the year, especially this week. Shares are up 66% since the beginning of the year, with nearly half of those gains coming in the past 5 days.
Virgin Galactic went public in 2019, and lost $138 million in the nine months that ended on September 30, 2019. That's not unexpected given that the costs to develop space travel are astronomical and the company is not making money right now. It brought in a little over $3 million in revenue in the same period from "transporting scientific payloads, and engineering services". It says that 600 people have made reservations representing $80 million in total collected deposits, and over $120 million of potential revenue as of September 30, 2019. No mention of when that first commercial flight is boarding, but the company did say it could happen this year. Given its recent stock surge, Virgin Galactic has a market value of $3.7 billion.
image courtesy Virgin Galactic  Super Bugs and Stock Performance  Schwab Research put together a comprehensive analysis and a chart which marks past world epidemics on a graph of global stock market performance as measured by the MSCI World Index. I mentioned on Tuesday that the SARS virus, which struck in 2002-03, also happened at a time when equity markets were plunging as major companies like Enron and Worldcom were going bankrupt. U.S. markets were in bear territory at the height of the SARS crisis, but by the time it was contained, U.S. and global markets rallied as much as 16% six months later. On average, global stock markets have not been impacted in the near or long term by global epidemics to date. Could the next one be different? Absolutely, but history is not on its side.
How Big is the U.S. Stock Market??!! File this one in your drawer of Caleb's Bubble Fears, but I can't just ignore these kinds of statistics. The market value of the U.S. stock market, as measured by the Wilshire 5000, a capitalization-weighted index of about 4,000 stocks, has been bigger than the gross domestic product of the United States for several years. But last year's surge in stock prices took the Wilshire to a valuation of $33.9 trillion, or 157.4% of the last reported GDP. That's an all-time high for that statistic, and yet another data point that shows us that we are in high-altitude territory for U.S. equities. That doesn't mean we will crash, but as investors, we should check our equipment to make sure we can operate at these heights.
chart courtesy @NorthmanTrader 
 SPONSORED BY INVESCO
(chart courtesy YCHARTS)  Student loan servicer SLM Corp, commonly known as Sallie Mae, rose by nearly 30%, for more details, see above. Utility PG&E rose after it reached an agreement with its creditors, however Gavin Newsom, the governor of California, who needs to sign off on the deal, has expressed objections. Computer-chip maker Intel rose today after reporting strong earnings and revenue.  Clothing and shoe company VF Corp fell after it reported lower than expected sales numbers. Investment bank and financial services firm Raymond James fell today after it reported increased sales but lower-than-expected profits. Word of the Day Stock Market Capitalization-to-GDP Ratio The stock market capitalization-to-GDP ratio is a ratio used to determine whether an overall market is undervalued or overvalued compared to a historical average. The ratio can be used to focus on specific markets, such as the U.S. market, or it can be applied to the global market, depending on what values are used in the calculation. It is calculated simply by the stock market cap divided by gross domestic product.  Today in History January 23, 1957 Today in 1957, the Wham-O toy company released the Frisbee flying disc. Originally marketed as the "Pluto Platter" in order to capitalize on the contemporary UFO craze, it was renamed the "Frisbee," a play on the name of the Connecticut-based Frisbie Pie Company, whose pie tins had been used as makeshift throwing discs by college students for years. In 1967 high school students from Maplewood, New Jersey invented "Ultimate Frisbee", a disc-based mix of football, soccer, and basketball. By 1977, over 100 million Frisbees had been sold.
Source: https://www.history.com/this-day-in-history/toy-company-wham-o-produces-first-frisbees
How can we improve the Market Sum? Tell us at marketsum@investopedia.com
Enjoy the Market Sum? Share it with a friend. Or share the link below to invite friends to sign up.
CONNECT WITH INVESTOPEDIA
Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here.
114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC. All Rights Reserved | Privacy Policy |
Thursday, January 23, 2020
Spaced Out
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment