• US Initial Jobless Claims highest since March
• Tesla (TSLA.US) and Microsoft (MSFT.US) quarterly results above expectations
• Twitter (TWTR.US) reported record growth in daily active users
• Tesla (TSLA.US) and Microsoft (MSFT.US) quarterly results above expectations
• Twitter (TWTR.US) reported record growth in daily active users
US indices launched today’s session lower amid rising cases of COVID-19 and further escalation of tensions between the United States and China. The US recorded more than 1,100 new coronavirus deaths for a second straight day on Wednesday. Meantime US ordered China to close its consulate in Houston amid accusations against Beijing of spying. President Donald Trump said that other consulate closures were "always possible". China called the order an "unprecedented escalation" by Washington and warned it would be forced to respond.
Also recent claims report weighed on market sentiment as it showed initial claims increased for the first time since March. On the corporate front Microsoft and Tesla posted better than epxected quarterly results although the report for Microsoft pointed to slower growth. Earnings from AT&T came above expectations while Blackstone came in line with expectations and investors await the report from Intel which will be published after the market close.
Senate Republicans and the White House reach an agreement regarding tentative stimulus plan, of which $16 billion will be allocated for testing and more than $100 billion will go toward schools. Meantime Treasury Secretary Steven Mnuchin told CNBC that the Republican coronavirus plan will extend the unemployment insurance “based on approximately 70% wage replacement". He also told that the White House is focused on "putting another trillion in quickly, that’ll be CARES 4.0. If we’ve got to come back for CARES 5.0, for more money, the president will consider that the time".
S&P500 (US500) futures erased most of their earlier gains after weaker than expected claims report. If sellers will manage to push the index below the 3240.8 pts support level an downward impulse towards 3172.9 could be launched. On the other hand, once buyers regain control, the resistance at 3338.6 may be at risk. Source: xStation5Microsoft (MSFT.US) reported better than expected quarterly results. The technology company earned $1.46 per share on revenues of $38.03 billion, while market expected earnings of $1.34 per share on revenues of $36.5 billion. Despite the pandemic revenue rose 13%. The company said the increase in the number of home-based workers boosted its cloud computing business, but the pandemic has also slowed sales to small businesses as well as ad revenue for its LinkedIn unit. Meantime, Slack accused Microsoft of anticompetitive practices in an EU complaint.
Tesla (TSLA.US) stock rose 5% after the closing bell. Company released second-quarter earnings of $2.18 per share excluding some items on revenues of $6.04 billion while Refinitiv analysts had expected earnings per share of 3 cents on revenues of $5.37 billion. Automaker posted its first full year of profitability based on GAAP and it is likely that the company will join the S&P 500 index.
Twitter (TWTR.US) added 20 million users in the period, fueling a 34% year-on-year increase in its userbase to 186 million. However earnings of -$1.56 came in below analysts’ expectations of -$0.16. Also revenue dropped 19%, and company posted a net loss of $1.2 billion. Advertising sales plunged 23% due to the coronavirus pandemic.
Twitter (TWTR.US) stock jumped about 6% in pre-market trading and now the price is heading towards major resistance at $39.68 per share. Should a break above occur, another upward impulse could be launched with $43.30 per share as a potential target for buyers. On the other hand, breaking below the upward trendline may trigger a bigger downward move. Source: xStation5AT&T (T.US) – posted quarterly earnings of 83 cents per share while analysts expected earnings of 79 cents. Revenue came in line with market estimates. The company said the Covid-19 pandemic impacted results across all its businesses.
American Airlines (AAL.US) reported quarterly loss of $7.82 per share, compared with analysts’ expectations of a $7.70 per share loss. Revenue came in above estimates. Company will sell $1.2 billion in senior notes, increasing its available liquidity to $16.2 billion.
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