Coronavirus Claims Wall Street Headlines

Earnings and lockdown leniency overshadowed dismal jobs numbers

by Patrick Martin

Published on May 8, 2020 at 3:14 PM
Updated on Jun 24, 2020 at 10:16 AM

In what's become the new normal, it was a hectic week on Wall Street. The Dow Jones Industrial Average (DJI), the S&P 500 Index (SPX) and the Nasdaq Composite (IXIC) are all cruising toward sizable weekly wins, but not without some drama. Lockdown leniency gave stocks an early-week boost, but dismal unemployment numbers kept gains in check. The tech-rich Nasdaq reclaimed breakeven for the year, while oil prices went on a roller-coaster ride. U.S.-China drama continues to grab headlines as well, first for a spat over the latter's role in the coronavirus pandemic, and then later amid reassurance of the January phase one trade deal. 

Plenty of Earnings Winners, Losers to Unpack 

Another week, another packed list of corporate reports. PayPal (PYPL) nabbed a record high after its first-quarter earnings beat. Analysts flooded Beyond Meat (BYND) with bull notes after its own top-line dominance, although the plant-based meat substitute manufacturer did suspend its 2020 guidance. With so many hesitant to spend, e-commerce name Etsy (ETSY) was dinged up in the earnings confessional, but the brokerage community remains optimistic.

Papa John's (PZZA) continues to distance itself from its controversial past, but took a breather post-earnings this week. And as oil prices fluctuate amid dwindling demand, Marathon Petroleum (MPC) eked out a slimmer-than-expected first-quarter loss.

COVID-19 the Culprit Behind Everything

In the understatement of the century, the coronavirus crisis directly impacted the narratives of many companies this week. For some, there's good news; Starbucks (SBUX) got a lift after outlining its reopening policy. Drug stocks such as Inovio Pharmaceuticals (INO) remain intriguing amid their involvement in a potential coronavirus vaccine, while the entire biotech sector as a whole is flashing a bullish signal for the summer.

On the other end of the spectrum, hospital supplier Community Health (CYH) has been under immense pressure during the pandemic, and options traders are piling on. Plus, the airline sector is in such bad shape that Warren Buffett and Berkshire Hathaway (BRKA) dumped their shares, while puts roared in popularity among these airline stocks.

Retail Earnings in Focus Next Week 

Next week the calendar will feature an earnings docket packed with retail names. As investors flock to safe-haven assets like gold, here's one lesser-known mining stock that could resume its uptrend in the coming months. In the meantime, keep an eye on these Fib levels for the SPX, as well as any stocks drifting toward to their initial public offering (IPO) multiple.


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