The Market Sum | Insight after the bell Tuesday, August 18, 2020 Headlines 1. S&P 500 breaks pre-COVID high 2. US homebuilder confidence also hits new highs 3. Oracle looks to take TikTok too 4. Walmart reports better-than-expected earnings Dow
27,778.07
−66.84
(-0.24%) | | S&P
3,389.78
+7.79
(+0.23%) | | Nasdaq
11,210.84
+81.12
(+0.73%) | | | | | | Bitcoin
$12,039.97
−$230.17
(-1.88%) | | US 10-Yr Yield
0.669
−0.014
(-2.05%) | | | | Photo courtesy GettyImages/guvendemir [Gabe Alpert will be guest writing Market Sum, because Caleb is taking some much-deserved time off] Markets Today Just about six months from the market's previous high point on Feb. 19, the S&P 500 finally topped its previous record. Closing at 3,389.78, just 0.09% higher than February's high, markets are now back to where they were before the COVID-19 crisis hit the U.S. That's honestly pretty surprising, as the pandemic and quarantine haven't gone away. Neither has GDP fully bounced back nor has unemployment fallen below double digits. That's just one more reminder that the economy and the stock market are not the same thing, and they shouldn't be treated as such.
A correction from yesterday. Some of our readers correctly pointed out that we said Long Term Capital Management collapsed in 1982, when the correct year was 1998. We apologize for the error.  Chart courtesy YCharts [NEW READER SURVEY: We are running another two-week survey of our U.S.-based readers to gauge your sentiment and see what moves, if any, you have been making with your money given the market recovery and current economic conditions. We'll share the results, as always, and we thank you for your time and participation.] Headlines: - Walmart crushed Q2 earnings estimates. Adjusted EPS was $1.56 on revenue of $137.74 billion. U.S. same-store sales were up 9.3%, versus an expected gain of 5.4%. U.S. e-commerce sales rose 97%.
- Amazon is expanding offices in six U.S. cities as it prepares to add 3,500 new corporate jobs. 2,000 of the jobs will be in Manhattan, while the others will be spread across Phoenix, San Diego, Denver, Detroit, and Dallas. This move comes as other tech giants, such as Facebook and Twitter, are shifting more towards working remotely.
- Senate Republicans plan to introduce a "skinny" coronavirus relief bill, reported Politico. The legislation is expected to include $300 in unemployment benefits until Dec. 27, another round of money for the Paycheck Protection Program, $10 billion for the U.S. Postal Service, and liability protections. It's unclear if Democrats, who have been asking for $600/week in benefits, will accept.
- Oracle is interested in buying TikTok, according to the Financial Times and Bloomberg. The tech giant has reportedly held preliminary talks with TikTok owner Bytedance and has made a preliminary approach to other parties, including the venture capital firm Sequoia Capital, to partner with it in a bid for the app's operations in the U.S., Canada, Australia, and New Zealand. Microsoft is already in discussions with TikTok, which needs to find an American buyer by Nov. 12.
- ViacomCBS is reportedly negotiating the sale of its tech news and review site CNET to media holding company Red Ventures. The price currently being discussed is roughly $500 million, but the deal is not final. This is one of a number of divestments that ViacomCBS is working on, such as the sale of book publisher Simon & Schuster and its midtown Manhattan headquarters building.
- Uber will continue to operate its food delivery UberEats business in California even while it suspends its ride-hailing service. Starting this Friday, the company is being forced to categorize drivers in the state as employees. Revenue from UberEats doubled in Q2 to $1.2 billion, while its ride-hailing business suffered.
- Also in Uber news, both Uber and Lyft are reportedly considering switching to a franchise licensing business model in California in order to avoid having to classify drivers as workers. Uber already does this in Germany and Spain. Neither company has committed to this change and both are waiting to see how the legal battle of Assembly Bill 5 turns out.
- Epic Games says Apple plans to terminate all its developer accounts and cut it off from iOS and Mac development tools on August 28. The Tencent-backed video game developer has asked a U.S. District Court to stop this "retaliation." Epic's battle royale game Fortnite was recently kicked off the App Store after it tried to circumvent Apple's 30% commission fee. Apple says it will not make an exception for Epic.
- Tesla CEO Elon Musk is now the fourth-richest man in the world, according to the Bloomberg Billionaires Index. His net worth has grown by $57.2 billion to $84.8 billion this year as shares in the electric car maker rallied 339%.
- The Financial Times and McKinsey have announced the long list for their Business Book of the Year Award. The 15 titles were chosen from more than 400 entries and the winner will receive a £30,000 prize. Last year's winner was Invisible Women by Caroline Criado Perez.
- U.S. home-builder confidence in the market for newly-built single-family homes has surged to match the record high set in Dec. 1998. This has more than doubled the price of lumber since mid-April. "Such cost increases could dampen momentum in the housing market this fall, despite historically low interest rates," said NAHB Chairman Chuck Fowke. Lumber futures were around $730/1,000 board feet this morning. The NAHB has asked the Trump admin to boost domestic production and work with Canada on a new lumber agreement to end tariffs averaging more than 20%.
Shares of Amazon are up by 4% after the e-commerce company announced it's adding 3,500 jobs in six major cities. Alphabet's stock price rose by over 2.5% following Google's parent company reporting quarterly revenue results that beat analyst estimates. Shares of Kohl's are down by over 14% amid the department store chain posting a Q2 loss and declining sales. Fellow clothing retailer PVH's stock price fell by nearly 6% on investor concerns for the retail sector's future. Word of the Day NAHB/Wells Fargo Housing Market Index The NAHB/Wells Fargo Housing Market Index is based on a monthly survey of members belonging to the National Association of Home Builders (NAHB). The index is designed to measure sentiment for the U.S. single-family housing market and is a widely watched gauge of the outlook for the U.S. housing sector. Since housing is a large investment, housing market indices help to monitor the overall health of the economy. The NAHB/Wells Fargo Housing Market Index is a valuable indicator for financial analysts, the Federal Reserve, policymakers, economic analysts, and the news media.  Image courtesy GettyImages/Pgiam Today in History Aug. 18, 1982: As a bull market suddenly materialized out of nowhere, daily trading volume on the New York Stock Exchange exceeded 100 million shares for the first time, with 132,681,120 shares changing hands. New York Stock Exchange flyer, "Key Dates in the History of the New York Stock Exchange," 1992; http://www.nyse.com Want more Investopedia market news? Sign Up for 'Chart Advisor'
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