Earnings Don’t Matter.

Tale of the Tape

Good evening everyone. All of a sudden it feels like everything is just fine fine fine. The market continues to rip your face off and if you are not in, you’re feeling the FOMO.

The weird thing though is that sentiment indicators are nowhere close to euphoric. The Stocktwits Sentiment Index is still much closer to historic lows at .398 bullish and the CNN Fear and Greed Indicator is now Neutral but just barely.

Meanwhile, we’re seeing some insane moves in individual equities. Amazon’s making all time highs up nearly 19% in the last six sessions. Tesla’s up 56% since April 2. $AMD’s up 29% since April 3. Its Crazy Eddie Sh*t over here! (See below for more.)

The S&P 500 closed up 3% today and is now up 27% from the March 23 bottom. Talk about insane moves. Historic really. 

An 18% move from here would get us back to the all time high and we’re more than halfway there.

Financials lagged, which has been kinda bullish for the broader market and today was no exception. JP Morgan and Wells Fargo reported earnings this morning and their numbers were an atrocity, yet they both only finished down 4%. 

The Financials sector did manage a fractional gain up .33% finishing 2nd worst for the day behind, you guessed it, Energy.

Tomorrow, we get Citi, PNC, and Goldman Sachs before the market open. Should be a sitcom. (See more below)

S&P 5002,846+3.06%
Russell 20001,237+2.09%
Dow Jones23,949+2.39%

Earnings Don’t Matter

Ok, quick rant here. 

Earnings do not matter. This whole earnings season is meaningless. Next quarter could be meaningless as well. This has never happened before and it may never happen again but here’s why this is happening. Expectation is still the name of the game but the focus has shifted.

All that matters now is how bad COVID winds up being, how long this quarantine misery continues, and how able businesses are to ramp back up internally and on the demand side.

The focus of expectations has shifted from earnings to how long it will take to get business back on track. 

This is the game. This is what’s moving markets.

Bank Earnings

JP Morgan and Wells Fargo missed earnings badly. 

If we were not in the middle of an unprecedented global economic shutdown, these stocks would have crashed on such numbers. But they didn’t. Please see our rant above.

$JPM reported earnings of $0.78 per share, well off estimates of $2.49 per share. They missed by a light year but only fell 4%.

$WFC reported $0.01 per share versus consensus estimate of $0.22 per share but only dropped 4%. They too missed by a light year.  

The rest of the banks will proceed to report in the coming days and the numbers will have nothing to do with the performance of the stocks.

Johnson & Johnson

$JNJ jumped 4.5% after posting better than expected earnings. The company increased its dividend from $0.95 to $1.01. Nice. Medical devices got dinged by COVID while pharmaceuticals benefited.

New 52 Week highs???

Stocks made some crazy moves today. CRAZY. 

Here are the S&P 500 names that ticked new 52-week highs.

$AMZN △ 5.28%
$DG △ 3.79%
$EQIX △ 4.82%
$LLY △ 4.63%

$NEM △ 0.20%
$NFLX △ 5.28%
$REGN △ 4.24%
$WMT △ 2.95

The WWE is Essential. In Florida. lol

The mayor of Orange County, Florida declared the WWE an “essential business”. 

Here’s ESPN with more. 

In other news, Florida Veteran Buys Van Winkle 25-Year Decanter for $40K to Support Staff at His Favorite Restaurant.

No One is Driving

Check out this great chart provided by Arity showing the total miles traveled since March 10. (Gray lines are states.) Here’s the full excellent post, America’s personal travel behavior has changed during COVID-19.

Chase Manhattan Trading Room circa 1983

Today on Stocktwits…

Via fraudgaurantee 

Earnings Tomorrow…

Be sure to know when your stocks are reporting. Here’s the full earnings calendar.

Links that Don’t Suck

How a Family Burned Through $2 Billion  

The Day I Decided to Stop Being Afraid of Heights

SoftBank Expects Nearly $17 Billion Loss on Tech Fund via WSJ  

Unemployment Checks Held Up by Coding Language Almost No One Knows  

A Radical New Vision for India’s Cities

As Other Carmakers Retrench, Volvo’s Battery Lab Plugs Away

Vince McMahon Will Attempt to Sell XFL in Bankruptcy

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