So much Q2 earnings data is starting to flood in, and for the most part companies are reporting almost passable results! Like I’ve said before, these results are being compared to bottom of the barrel expectations, but on some level an earnings beat is an earnings beat…
The biggest news on the day was Tesla handily beating expectations, even as revenue and deliveries fell year-over-year. Other notable earnings were a positive results from Biogen, Nasdaq, Netgear, Kinder Morgan, and Whirlpool. On the negative side Microsoft, CSX (but there should be no surprise that rail traffic slowed to epic lows) and Chipolte did not fare so well. In light of the state of the world, I’d consider these to be pretty great results! They confirm a ‘the world is having a hard time, but recovering’ narrative, not the more pessimistic ‘COVID is going destroy everything’ narrative.
On the economic side, the only major release was existing home sales which rose 21% in June, as opposed to a major drop in May. Not anything to write home about, but hopefully a data point that portends more recovery ahead.
Despite all the earnings excitement today, markets were fairly muted, with emerging markets lagging the most.
On the factor side, today was a clear risk-off day where Low Volatility shined and Small Cap lagged pretty significantly.
On the fixed income side, most sectors of the market saw gains today, led by longer term bonds and lower quality issues.
Tomorrow is another exciting day in corporate earnings with Twitter, Southwest and American Airlines, Dow Chemical, Citrix, Union Pacific, Intel, Mattel, and tons more reporting.
Only one link today, US childcare providers need a bailout, quick!
Till tomorrow,
Nathan