Stumbling

Markets stumble on earnings guidance and a stubbornly high number of U.S. weekly jobless claims.

Read in Browser   The Market Sum | Insight after the bell By Caleb Silver, Editor in Chief Thursday's Headlines 1. US markets fall on earnings guidance  2. Netflix disappoints with its future plans 3. US retail sales jump in June, but it may be stalling 4. Our latest reader survey results ... you are very smart! Markets Closed Dow 26,734.71 −135.39 (-0.50%) S&P 3,215.57 −10.99 (-0.34%) Nasdaq 10,473.83 −76.66 (-0.73%) VIX 28 +0.24 (+0.86%) Bitcoin $9,120.47 −$75.46 (-0.82%) US 10-Yr Yield 0.612 −0.018 (-2.86%)     Image courtesy Stu Forster/Getty   Markets Today Stocks stumbled throughout the session with the DJIA closing lower for the first day in four. Technology stocks lagged again, and we may see more of that, given less-than-stellar results from Netflix (see below). A better-than-expected second-quarter GDP report from China did little to lift sentiment as investors appear to be in a "sell the news" kind of mood lately.   U.S. retail sales spiked in June, but most economy watchers sense that was a peak, and results won't be as sunny in July. Another 1.3 million Americans filed for first-time unemployment insurance last week, barely lower than the prior week. That's not adding to the V-shaped recovery narrative, which most people are dismissing anyway.   While most investors aren't expecting miracles this earnings season, they are hoping for encouraging guidance for the rest of the year. So far, that's not what we are hearing from banks, healthcare-related companies like Johnson & Johnson, or tech stars like Netflix. Investors need reasons to believe, but those have been infrequent lately. Headlines: Netflix (NFLX) missed analyst expectations on earnings, but beat revenue expectations. Shares fell more than 12% after hours as the company provided weak subscriber growth guidance for the third quarter. The company also appointed Ted Sarandos, its chief content officer, as co-CEO, paving the way for him to take over for CEO and founder Reed Hastings. The average rate on a U.S. 30-year fixed mortgage fell to its lowest level in almost 50 years of record keeping. It is the third consecutive week and the seventh time this year that rates on America's most popular home loan have hit a fresh low. 1.3 million Americans filed for first-time unemployment claims last week, roughly the same as the prior week, as businesses have struggled to rebound and continued to lay off workers. Weekly claims have declined from a late March peak of 6.9 million weekly claims, but remain historically high. The European Central Bank has decided to leave interest rates and the €1,350 billion pandemic emergency purchase programme (PEPP) unchanged. The asset purchases are set to continue until at least the end of June 2021 and, in any case, until the central bank judges that the coronavirus crisis phase is over. As oil demand recovers, OPEC and its allies have decided on tapering production cuts to 7.7 million barrels per day from August to the end of the year. According to an agreement signed in April, the group cut output by 9.7 mb/d in May, June, and July this year.  Johnson & Johnson's second-quarter profit fell 35% from the same time last year as the pandemic forced hospitals to postpone elective surgeries, hurting profits for the company's medical device business. J&J earned $3.63 billion, or $1.36 per share, during the three months ended June 30, a 34.6% drop from $5.6 billion a year earlier.  China's economy returned to growth in the second quarter of the year, according to official data released today by the country's National Bureau of Statistics. It expanded 3.2% year-over-year, beating analysts' forecasts of 2.5% growth, after strict lockdown measures were lifted. American Airlines says it has 20,000 more employees than it needs this fall when federal aid rules expire, according to The Wall Street Journal. The airline has sent potential furlough notices to 25,000 workers, including 9,950 flight attendants. This will be on top of the 5,000 management and support jobs it said it would cut in May. The U.S. Commerce Department on Thursday said June retail sales—a measure of purchases at stores, at restaurants, and online—increased a seasonally adjusted 7.5% on the month. Retail sales totaled $524.3 billion in June, up from $487.7 billion in May and nearly back to pre-pandemic levels.     U.S. Retail Sales May Have Peaked in June Retail sales were strong in June, as expected. Economies were reopening, stores were letting shoppers inside, Americans were buying trucks ... it felt almost normal for a few minutes. Then, we know what happened two weeks after Memorial Day as cases spiked and economies were forced to close anew.   What we were buying last month tells us a lot about what we were doing without in the two months prior. Here's the category breakdown, per the Commerce Dept.: Clothing stores: +105%  Electronics stores: +37%  Furniture, home: +33% Sporting goods: +27% Gas stations: +15%  Food/beverage: -1% Non-store retail: -2% The early indicators for July are not strong. Morning Consult's Weekly Index of Consumer Sentiment shows that confidence fell sharply in the past two weeks, especially among wealthier households.     Chart courtesy Morning Consult   How Are You Feeling? We published the latest round of our reader survey today, and once again, you have all proven to be a very savvy, engaged, and intelligent group of investors. Some of you, especially those of you on the younger side, are still playing it a little risky, but that's what being young is all about.    (I ran through these results on Yahoo Finance this morning, in case you prefer the video version.)   Here are some highlights of our findings, and thank you so much for taking the survey:     You Are a Little Worried Right Now The fastest bear market in history followed by the swiftest recovery for stocks ever recorded has you feeling more trepidatious than you have in several years. But while concerns about spiking valuations, a resurgence of the coronavirus, and the upcoming U.S. presidential elections are presenting daunting waves of uncertainty, you are mostly sticking with the stocks you rode into the crisis, and you are even adding to some risky bets as you navigate a tricky recovery.     You Are Favoring Tech, Communications, and Healthcare Like a lot of investors, both retail and institutional, you have been favoring the mega-cap technology and communications stocks. Most of you have held your positions in those and even added some along the way. You are pretty confident that those sectors, and healthcare, will lead the stock market through the rest of the year.     A Few of Your Favorite Things Most of you, across age groups, love your blue chip mega-cap stocks. Apple, Microsoft, and Amazon are your top picks, which comes as no surprise. They call that a crowded trade for a reason. But, we were curious to see AT&T and Disney on your lists. Not because they aren't great companies, but they do not have the growth and the hype of the trillion dollar giants that lord over the indexes. For older investors, these may be long-term holdings that delivered solid returns and dividends over the years. But several younger investors claimed these as well.    Read our write-up on the survey to see which stocks were favored by investors in different age groups. There were a lot of surprises on both ends of the age spectrum, and as it turns out, many of you are kind of risky.   Thanks again for taking the survey. We are going to bother you again in a few weeks for another round, because collecting this over time reveals some fascinating trends, as you will see. More News: Individual Investors Stick With Stocks Despite Rising Anxiety Twitter Earnings: What to Look For Top Strategists on Where to Invest Now 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)     Shares of The Hartford rose by over 4.5% after the investment and insurance company reported an estimated $463 million in net income for the second quarter, a 24.5% increase over its Q2 19 results. Shares of homebuilder D.R. Horton climbed 4% today.     Shares of cruise lines fell as Holland America, a Carnival subsidiary, said it is downsizing its fleet of 14 ships by four. Shares of Netflix fell by 9.5% amid Q2 EPS results that failed to meet analyst expectations. Word of the Day Margin Pressure Margin pressure is the risk of negative effects from internal or external forces on a company's profitability margins. Typically margin pressure analysis will focus on the three main income statement margin calculations: the gross, operating, or net margin. Overall margin pressure can also be analyzed within contribution margins as well.     photo courtesy: atomichereitage.org   Today in History July 16, 1945: A device innocuously called "Gadget" was tested successfully near Alamogordo, N.M. It was the world's first atomic bomb, and it detonated at 5:29:45 a.m., releasing 20 kilotons of energy and vaporizing its 100-foot steel support tower. The Nuclear Age had secretly begun.   http://www.radiochemistry.org/history/nuke_tests/trinity/ Want more Investopedia market news? Sign Up for 'The Express' Get more market insights and financial headlines before the opening bell. Make your mornings more enjoyable, for free. Check it out » 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. 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