Juicy Fruit

U.S. markets rally to end the week behind shares of Apple, which is now the largest public company in the world.

Read in Browser   The Market Sum | Insight after the bell By Caleb Silver, Editor in Chief Friday's Headlines 1. US markets rally to end week behind tech stocks 2. Apple has become the biggest public company in the world 3. US personal income and savings start to sag 4. European consumer confidence rises as US falls 5. What to expect next week Markets Closed Dow 26,428.32 +114.67 (+0.44%) S&P 3,271.12 +24.90 (+0.77%) Nasdaq 10,745.27 +157.46 (+1.49%) VIX 24.46 −0.30 (-1.21%) Bitcoin $11,418.07 +$313.09 (+2.82%) US 10-Yr Yield 0.536 −0.005 (-0.92%) Year-to-Date Dow 26,428.32 (-7.74%) S&P 3,271.12 (+0.96%) Nasdaq 10,745.27 (+19.30%) Russell 2000 1,480.43 (-11.30%) Crude Oil $40.43 (-34.49%) US 10-Yr Yield 0.536 (-71.40%)     Photo courtesy GettyImages   Markets Today U.S. markets ended the week and the month on a fruitful note as tech stocks, led by Apple, rallied on the heels of strong earnings reports yesterday. Apple, which announced a 4-for-1 stock split yesterday, soared to a new record high, and became the most valuable company in the world by market cap.    The EU reported its worst quarterly GDP decline since records began, falling 12.1% last quarter, which was even worse than the U.S. But European countries have succeeded in taming the coronavirus, so their rebound is in full-effect. We can see it in manufacturing and industrial reports, but also in consumer spending.    Here in the U.S., Congress remains divided over the next stimulus bill but with a week to go before policymakers take a summer break, time is running out. Headlines: Microsoft has held talks to buy the TikTok video-sharing mobile app from Chinese owner ByteDance, according to multiple media reports on Friday, citing unnamed sources. A TikTok acquisition could make Microsoft, a major provider of business software, more concentrated on consumer technology, which Microsoft has moved away from somewhat in recent years. President Trump plans to announce a decision ordering China's ByteDance  to divest its ownership of the music-video app as soon as today. The Eurozone's GDP shrank  by 12.1% in Q2 compared with the previous quarter, according to preliminary flash data released today. Economic activity in the 27 European Union countries fell by 11.9%. From the same quarter last year the declines were 15% for the euro area and 14.4% in the EU. All figures are the sharpest quarterly declines since records began in 1995. Sanofi and GlaxoSmithKline are receiving $2.1 billion from the U.S. government for the development, manufacturing and delivery of 100 million doses of their COVID-19 vaccine candidate. The Phase 1/2 study is expected to start in September.  A panel of international health experts said Gilead Sciences' remdesivir is worth prescribing for patients with severe COVID-19, although evidence of its benefits remains inconclusive, according to the British Medical Journal. The effectiveness of most interventions with remdesivir is uncertain because most of the trials so far have been small and have limitations, the authors said in a review for the journal. The European Commission signed a 63 million-euro ($74 million) contract with Gilead this week for batches of the drug to be made available in European Union countries from early August. The European Commission will launch a full-scale antitrust investigation next week into Google's bid to buy Fitbit, reports Reuters. The company that is synonymous with fitness trackers is set to be acquired for $2.1 billion in a deal announced in November. Google has said it will not use Fitbit's health and wellness data to target ads and plans to give users the choice to review, move, or delete their data, but evidently this is not enough. Pinterest shares closed up 36% on Friday after the company reported second-quarter earnings which reflected how people turned to the service for at-home cooking, remote work and activities during the stay-at-home orders. The company saw total revenue of $272 million, an increase of 4% year-over-year, though it said advertiser demand continued to be affected. Chevron reported an $8.3 billion loss in the second quarter as the pandemic "significantly reduced demand." As oil prices dropped, the company's average price per barrel of oil and natural gas liquids dropped more than 60% year-over-year. Chevron lost $1.59 per share on an adjusted basis, while revenue came in at $13.49 billion. In the same quarter a year ago the company earned $2.27 per share on $36.32 billion in revenue. Caterpillar reported that cost reduction and prioritized spending helped it offset a $1.4 billion decline in dealer inventories during the second quarter and post better-than-expected results. The heavy equipment maker posted adjusted per-share earnings of $1.03 on revenues of $10 billion. Analysts were expecting revenue of just $9.38 billion for the quarter. Despite that, the $10 billion in sales represented a 31% decrease compared with the $14.4 billion the company reported in the second quarter of 2019.     chart courtesy BEA   Savings and Personal Income Start to Slide Just as the stimulus payments ended last week and unemployment started to rise in July, U.S. personal income (excluding transfers) increased 1.4%, but declined 3.6% year over year. The U.S. savings rate remains elevated at 19%, down from 24.2% in May.    There is strong evidence that shows U.S. consumers were banking their stimulus payments in May and June, and saving for a rainy day. They may not have known that the rainy days of May would last through the summer, and potentially beyond. As Congress debates the latest stimulus bills just before its members head out for a vacation, the drop in personal income and savings should be a red siren blaring in their ears as Americans, especially those who have lost their jobs, start to run low on cash.     Chart courtesy MorningConsult   European Consumers are Feeling Much Better The stark difference in consumer confidence between U.S. and European consumers is a reflection of how we have handled the virus over the summer. We simply have not handled it well in the U.S., and while consumer spending was rising in the first few weeks of July, that quickly faded over the past two weeks, while it has been steadily rising, or staying level, throughout Europe's major economies. What to Expect Next Week Despite the uncertainty and the stop and start rally for tech stocks, July was a winning month for U.S. markets. Here's a look at how the major U.S. markets, along with China, Europe, and other asset classes have performed year-to-date.   Chart courtesy YCharts     Events Next Week Sunday, August 2: Chinese Caixin Manufacturing Purchasing Manager's Index (PMI) (July) Japanese Preliminary Gross Domestic Product (GDP) (Q2) Monday, August 3: Market Holiday in Canada for Civic Holiday U.S. ISM Manufacturing PMI (July) German Manufacturing PMI (July) Tuesday, August 4: Disney and Activision Blizzard Report Earnings Reserve Bank of Australia Interest Rate Decision U.S. Factory Orders (June) Chinese Caixin Services and Composite PMI (July) Japanese Services PMI Wednesday, August 5: Square Reports Earnings U.K. Services PMI (July) Eurozone Services PMI (July) U.S. ISM Non-Manufacturing PMI U.S. Trade Balance Brazilian Central Bank Interest Rate Decision Thursday, August 6: Uber Reports Earnings Bank of England Interest Rate Decision Reserve Bank of India Interest Rate Decision U.S. Weekly Initial Jobless Claims Chinese Trade Balance (July) Friday, August 7: U.S. Unemployment Rate (July) U.S. Nonfarm Payrolls (July) Canadian Employment Change and Unemployment Rate (July) Earnings Wind Down With the big FAANG blowout at the end of July done, earnings season is winding down, but there are still some big names left to report. The biggest is Walt Disney (DIS) whose earnings analysts expect to plummet due to a sharp drop in theme park and cruise revenue. Online payments processor Square (SQ) is also likely to be hard-hit, as the economic disruption from the pandemic is likely to decrease payments volume as people have less money to spend. One possible leading indicator is the substantially lower payments volume from fellow payments company, Visa.   On the flip side, video game maker Activision Blizzard (ATVI) may actually stand to benefit from the quarantine. With activities like movie theaters and live music off limits due to COVID-19, video games are a major form of media left unaffected. Analysts are expecting earnings growth and the largest revenue gain in years this quarter when ATVI reports this week.   Finally, Uber (UBER) falls a bit in the middle, as it has businesses that are helped, and those that are hurt, by the quarantine. On one hand, the pandemic has cut down on travel and the desire of most people to get into a stranger's car, so analysts are predicting a sharp drop-off in revenue for Uber's ride-sharing segment. However, with dine-in restaurants closed, Uber's food deliver segment, Uber Eats, is expected to see substantial growth. How much the latter's growth will offset the former's decline remains to be seen.   U.S. Unemployment Next Friday, the Bureau of Labor Statistics will release a whole array of data on the U.S. labor market. Most notably, economists expect the July unemployment rate to decline slightly to 10.3%. Just as the number of weekly initial unemployment claim hasn't continued to drop, this relatively small estimated drop in unemployment doesn't point to a quick recovery for the job market.   Central Bank Decisions After the U.S. Federal Reserve held rates as is last week, next week we have four more central banks announcing interest rate decisions. Australia, Brazil, India, and the U.K. all have interest rate and monetary policy announcements.  More News: Alphabet (GOOGL) Sells Off After Revenue Decline Qualcomm Rockets to All-Time High on Huawei Settlement Apple (AAPL) Hits All-Time High After Blowout Quarter SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. LEARN MORE  > (chart courtesy YCHARTS)     Since it's the end of the month, we are giving you July's winners and losers, today.   L-Brands, the retail conglomerate, was the best performing stock of the month in the S&P 500, and it got there by shrinking its business, killing brands, and laying off workers. Shares of AMD soared in July as Intel's losses were AMD's wins.     Energy companies continue to rack up losses in 2020, with three oil services and production companies among the worst ten stocks of the month. Cruise ships and airlines also can't catch a break, as the resurgence of the coronavirus has destroyed luxury and discretionary travel. Intel missed a big launch deadline, and investors punished the stock, pushing it down 20% for July. Word of the Day Personal Income Personal income refers to all income collectively received by all individuals or households in a country. Personal income includes compensation from a number of sources, including salaries, wages, and bonuses received from employment or self-employment, dividends and distributions received from investments, rental receipts from real estate investments, and profit sharing from businesses.     Photo: AtlasNetwork.org   Today in History 1912: Milton Friedman is born in Brooklyn to Ethel Landau Friedman, a storekeeper, and Jeno Saul Friedman, who dealt in "unsuccessful 'jobbing' ventures." After decades as America's leading conservative economist and one of the world's greatest intellectual defenders of free markets, Friedman wins the Nobel Prize in economics in 1976. How can we improve the Market Sum? Tell us at marketsum@investopedia.com 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