Well then, so much for any downside earnings surprises. Today we had 40% of the total market cap of the Nasdaq reporting earnings, including Apple, Amazon, Facebook, and Google. Each one beat earnings and guidance was mostly all good. Indeed each company above beat quarterly revenue expectations by around 8 billion dollars, yes 8 Billion!
Given the out-sized impact of the four companies above, their positive earnings results bode well for the broader tech sector, and larger economy. Now all of these earnings came in after the close, so today’s equity market performance does not include these results. International markets were much weaker than domestic equities as foreign GDP numbers continue to look even worse than ours :(.
That all said, Nasdaq futures are up over 1% as of 10 PM Eastern, reflecting the monster reports released today.
The Fed made it clear that rates were not going to rise anytime soon (my lifetime?), and yields dropped on the day, driving the majority of fixed income securities higher.
Tomorrow holds a raft of energy and construction reports including Exxon-Mobile and Caterpillar. These reports will round out an exciting and mostly positive week of earnings reports.
The good earnings reports were offset by the worst contraction in GDP since we started keeping data on GDP, and unbelievably a 32.9% decline in GDP still beat expected GDP numbers! Economists expected a decline more in the range of 34%, so maybe today’s report is a win ;).
The dichotomy between economic data and earnings data creates an odd situation where major corporations are beginning to recover, while the larger economy continues to crack apart.
Till tomorrow,
Nathan