MidWeek Commentary

HI Market View Commentary 11-02-2020

HI Market View Commentary 11-02-2020

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Market Recap
WEEK OF OCT. 26 THROUGH OCT. 30, 2020
The S&P 500 index fell 5.6% last week, causing the market benchmark to end October in the red, as US stocks tumbled broadly amid escalating COVID-19 cases just days before the US election. The S&P 500 ended the week at 3,269.96, down from last week’s closing level of 3,465.39. A week ago, the index had still been in positive territory for October, but this week’s slide put the index into the red for the month; it recorded a 2.8% drop for October. With just two months remaining for 2020, the S&P 500 is now up just 1.2% for the year to date. All of the S&P 500’s sectors fell this week. Consumer discretionary had the largest percentage drop of the week, down 6.6%, followed by a 6.5% slide in the industrial sector, and a 6.4% slip in technology . The broad decline came as COVID-19 cases continued to climb across the country and world, raising concerns that some of the restrictions seen in the spring could be reinstated and cripple the US economy just as it was beginning to recover from the last round of shutdowns. Underscoring the worries, France and Germany unveiled new restrictions this week, including a national lockdown in France and a one-month shutdown in Germany of restaurants, bars, fitness studios, concert halls and theaters. Adding to investors’ jitters, the US is just days away from its presidential election. The industrial sector’s decliners included American Airlines Group (AAL), whose shares fell 10% as the airline operator reported it swung to a Q3 adjusted loss from a profit in the year-earlier quarter although the loss was narrower than analysts feared. Revenue tumbled from the same quarter a year earlier but still topped the Street view. Airlines have been hit hard by the pandemic as travel demand has tumbled. Boeing (BA) shares shed 14% as the aerospace company said it swung to a Q3 core loss per share, although the per-share loss was narrower than analysts expected. The company has been hurt not only by lower demand amid the pandemic but also due to the ongoing grounding of its 737 Max planes for safety concerns. In the technology sector, Intel (INTC) shares tumbled 8.3% as investors continued to react negatively to guidance the chip maker issued last week for its data center revenue to fall by 25% year over year in the fourth quarter. The stock decline came as many analysts cut their price targets on the stock this week. Among consumer discretionary stocks, shares of Royal Caribbean Group (RCL) fell nearly 13% as the cruise operator reported it swung to a wider-than-expected Q3 adjusted loss per share. Royal Caribbean also said it expects a loss on both GAAP and adjusted basis for Q4 and fiscal year 2020, depending on the timing and extent of return to service. The focal points on next week’s calendar will be the election Tuesday and the Labor Department’s release of October employment data Friday. Investors will also keep an eye on manufacturing readings due Monday from Markit and the Institute for Supply Management as well as service-sector readings from Markit and ISM due Wednesday. Provided by MT Newswires.

Where will our markets end this week?

Depends on Election results – Higher

DJIA – Bearish

SPX – Bearish

COMP – Bearish

Where Will the SPX end November 2020?

11-02-2020           

Earnings:   

Mon:            CLX, EL, WM, MOS, PYPL, RMBS, SKWS

Tues:            EMR, HUM, JCI, MCK

Wed:            HTL, WEN, CF, GDDY, MRO, VAC, NUS, QCOM, WYNN

Thur:           GOLD, BMY, CAH, CNK, D, DUK, GM, TREE, MUR, ODP, PZZA, PPL, DDD, EA, FLS, GPRO, HLF, IQ, ROKU, BABA, BUDI

Fri:              CVS, MAR,

Econ Reports:

Mon:            Construction Spending, ISM Manufacturing,

Tues:            Factory Orders, Auto, truck

Wed:            MBA, ADP Employment, Trade Balance, ISM Services

Thur:           Initial Claims, Continuing Claims,  Productivity, Until Labor Costs, FOMC Rate Decision

Fri:               Average Workweek, Non-Farm Payrolls, Private Payrolls, Unemployment Rate, Hourly Earrings, Wholesale Inventories, Consumer credit

Int’l:

Mon –            

Tues –          US Election

Wed –         

Thursday –    

Friday-         

Sunday –       

How am I looking to trade?

All positions are mostly protected and now looking for OTM covered calls to add for full collar positions.  Just trying to get to the elections and earnings. 

EARNINGS

BIDU         11/05 est

DIS             11/12 AMC

www.hurleyinvestments.com 

www.myhurleyinvestment.com = Blogsite

customerservice@hurleyinvestments.com = Email

Questions???

5 More COVID Charts Democrats — And The Press — Don’t Want You To See

I & I Editorial Board

October 29, 2020

I&I Editorial

When coronavirus cases started spiking in June, Democrats and the press treated it as a fresh sign that President Donald Trump had failed to contain the disease.

“There are now about 30,000 new cases per day in the United States, about 10 times higher than the roughly 3,000 new cases per day in the European Union,” noted one outlet.

“Experts from Europe have criticized a series of failings in the U.S., which they said had left Americans exposed to infection while in Europe, as lockdown eases, infection remains low,” reported another.

Joe Biden emerged from his bunker in the summer long enough to declare that “while other nations took steps to get control over COVID-19, Trump took no responsibility.”

So how do Joe and company explain the fact that coronavirus cases are now exploding in Europe at rates far higher than the U.S., that the share of positive test results is higher in Europe, as is the case fatality rate?

“There’s no question that the European region is an epicenter for disease right now,” said the World Health Organization’s Dr. Michael Ryan. “Right now we are well behind this virus in Europe so getting ahead of it is going to take some serious acceleration in what we do.”

The chart below shows daily new cases per 100,000 population in the U.S., Europe and a sampling of European countries.

Here’s a quick summary of some of the key figures released so far today:

  • 18,820 infections in Poland, a new record, and 236 new deaths.
  • 15,663 infections in the Czech Republic, a new record.
  • 14,964 infections in Germany, a new record, and 85 new deaths.
  • 8,616 infections in Switzerland, a new record.

Another way to look at this is to measure the share of tests that are returning positive results. The lower than percentage the better.

Meanwhile, say what you want about U.S. health care, but the disease is less deadly here than it is in most of Europe, based on case fatality data.

So where is all the outrage about Europe’s failure to contain this disease? Or credit to the U.S. for having a better handle on it than Europe? Where are the stories recognizing that this disease travels how it travels, and that there is little any government agency can do about it?

Better to ignore those points, since they undermine the Democrats’ claim that every coronavirus death in the U.S. is Trump’s fault because he – what? – didn’t keep the economy shut down longer? Didn’t impose an unconstitutional nationwide mask mandate?

Never mind that studies are piling up that show lockdowns have been ineffective.

As the Federalist reports, “In countries with strict lockdown measures such as France, cases rose by 25% in the past 14 days, topping the ‘record 18,000 threshold.’ Spain mandated drastic lockdown measures, some of which prevented children under 14 from playing outside for more than an hour, yet it maintains similar case numbers to France. The United Kingdom, whose government ordered a full stay-at-home order for seven weeks, has a ‘record levels’ of infections.”

What about the lack of a national mask mandate? Well, the current rise in cases in the U.S. is coming at a time when 35 states have statewide mask mandates, and many of the other 15 states have local mandates in their urban areas.

Democrats and the press also are unwilling to make it clear to the public that the risk of death from coronavirus remains almost entirely concentrated among the sick and elderly.

CDC
CDC

Almost 59% of deaths are among those 75 and older, according to the Centers for Disease Control, despite the fact that they account for a mere 7.2% of cases.

At the other end of the spectrum, those under 50 account for nearly 65% of the COVID-19 cases, but a tiny 5% of deaths.

No. All this must be hidden so that the public remains in a state of panic, at least until the election, since that will make voters more likely to blame the current president for our problems.

— Written by the I&I Editorial Board

https://www.cnbc.com/2020/10/29/apples-weak-iphone-sales-show-people-were-waiting-for-the-new-models-.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Apple’s weak iPhone sales aren’t a huge problem — people were waiting for the new models

Kif Leswing@KIFLESWING

KEY POINTS

  • iPhone revenue dropped 20% year-over-year in the quarter ending in September.
  • But the iPhone sales situation isn’t as bad as it looks because Apple didn’t launch its new phones until October this year.
  • Apple said it expects iPhone revenue to grow in the December quarter, which included $55.96 billion in iPhone sales in the same period last year.

Apple reported earnings on Thursday and investors did not like the results. Apple stock dropped as much 5% in extended trading even though the company beat Wall Street expectations for both profit and revenue.

The drop was likely because iPhone revenue came in at $26.4 billion, which was 20% lower than the same quarter last year.

Apple sales in China also suffered, mainly because of weak iPhone sales, Apple said. Revenue from China dropped to $7.95 billion from $11.13 billion a year before, a 29% decrease.

But the iPhone sales situation isn’t as bad as it looks. This year, Apple’s new iPhones went on sale about a month later than before, as Apple telegraphed over the summer.

So the iPhone weakness may be partly because people were waiting for the new iPhone 12, which didn’t go on sale until October. In fact, both Apple CEO Tim Cook and CFO Luca Maestri said that iPhone customer demand was strong and grew until mid-September — when Apple typically releases new iPhones.

“This is a very impressive level of performance when we consider that this year we did not launch and ship any new iPhone models during the quarter,” Apple CFO Luca Maestri said about Apple’s fiscal fourth-quarter, which ended in September.

Apple presented several supporting points on Thursday:

Demand was higher than last year during the first part of the quarter. Through mid-September, when Apple held a launch event with new Apple Watches but no new iPhones, demand for iPhone 11 models “grew double digits and was well above our expectations,” said Maestri.

Cook went into more detail: “If you look at iPhone and you look at it in two parts, one pre-mid-September which is pre- the point at which the previous year we would have launched iPhone, that period of time which is the bulk of the quarter, iPhone was growing from a customer demand point of view and of course the not shipping new iPhones for the last two weeks of September makes that number in the aggregate a negative,” Cook said.

Growth expected in the holiday quarter. Apple expects iPhone revenue to grow in the December quarter — despite the fact that the new iPhone 12 models were launched 4 weeks into the quarter and two new iPhone models haven’t gone on sale yet. Last year Apple reported $55.96 billion in iPhone sales in the period.

China also expected to grow. “Greater China is a region that was most heavily impacted by the absence of the new iPhones during the September quarter. Still, we beat our internal expectations in the region, and iPhone customer demand grew through mid-September,” Cook said.

Cook then said that he expects China revenue to grow in the December quarter.

“A larger percentage of China revenue is made up of new iPhones. And so that’s the reason the number for the total quarter started with a minus sign. But given what we see in the early going with the new iPhones, we’re confident we’ll grow in Q1,” Cook told CNBC’s Josh Lipton in an interview.

Supply constraints. Apple says that it is “supply constrained” for iPhones, which means that they are selling faster than Apple can make them.

https://www.cnbc.com/2020/10/29/stock-market-futures-open-to-close-news.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Dow closes more than 150 points lower as Wall Street posts its worst one-week sell-off since March

Fred Imbert@FOIMBERT

Yun Li@YUNLI626

Stocks fell on Friday, led by major tech shares, as Wall Street wrapped up a difficult week in which coronavirus cases rose, U.S. fiscal stimulus talks broke down and traders braced for next week’s presidential election.

The Dow Jones Industrial Average closed 157.51 points lower, or 0.6%, at 26,501.60. At one point, the Dow was down more than 500 points. The S&P 500 dropped 1.2% to 3,269.96 and the Nasdaq Composite pulled back 2.5% to 10,911.59.

The Dow and S&P 500 fell 6.5% and 5.6%, respectively, and posted their biggest weekly losses since March. The Nasdaq lost more than 5% over that time period and also had its worst one-week performance since March.

Those weekly losses came as the seven-day average of new coronavirus cases in the U.S. hit an all-time high this week, according to data from Johns Hopkins University. In Europe, Germany and France announced new lockdown measures to curb the virus’ spread.

“Massive policy stimulus, positive medical developments and high hopes for a return to pre-pandemic economic activity levels have provided a solid boost to equity markets,” strategists at MRB Partners wrote in a note. “However, mounting new economic restrictions, particularly in Europe, despite being forecastable and in lagged response to the re-acceleration in COVID-19 infections, only caught investors’ attention this week, triggering sharp losses.”

In Washington, Senate Majority Leader Mitch McConnell adjourned the Senate until Nov. 9, making it highly unlikely for Democrats and Republicans to reach a deal on new fiscal stimulus before the election on Tuesday. Treasury Secretary Steven Mnuchin, meanwhile, accused House Speaker Nancy Pelosi of miscasting the state of the stalled negotiations, calling it a “political stunt.”

Traders had been betting on both sides reaching a stimulus deal before Tuesday’s vote as some recent data shows the economic recovery could stall without new aid. This is all taking place as traders prepare for choppy market moves next week amid the U.S. presidential election.

Data compiled by RealClearPolitics showed former Vice President Joe Biden holding an average lead of more than 7 percentage points over President Donald Trump. However, that lead has narrowed since early October.

Gina Bolvin Bernarduci, president of Bolvin Wealth Management, said several of her clients were concerned about the election outcome and how it would impact their investments.

“We have had more calls about the election recently than we had during the big sell-off in March,” said Bernarduci. “I think it’s going to be a few volatile days, but there are factors that affect the market more than who wins the election.”

“Investors should also keep in mind what happened four years ago. Everybody thought that if Trump won, that would have been bad for the market, yet we made [more than 100 new highs] in four years,” Bernarduci said.

The Dow, S&P 500 and Nasdaq all posted their first back-to-back monthly losses since March. The Dow lost more than 6% this month while the S&P 500 and Nasdaq each declined by more than 5% in October.

Apple and Amazon fall on earnings, Alphabet gains

Shares of Apple fell 5.6% after the tech giant reported a 20% decline in iPhone sales and failed to offer investors any guidance for the quarter ahead. Amazon dropped 5.5% even after the e-commerce giant reported blowout third-quarter results with a big beat on the top line.

Meanwhile, Twitter lost more than 21% after the social media company reported user growth that fell short of expectations. Facebook was off by 6.3% amid a surprise decline in active users in Canada and the U.S.

Shares of Alphabet bucked the negative trend for tech stocks, rising 3.8% after the Google parent company posted quarterly results that topped Wall Street expectations.

https://www.cnbc.com/2020/11/02/as-congress-adjourns-with-no-stimulus-deal-millions-suffer.html

Out-of-work Americans are outraged that Congress has yet to pass another coronavirus stimulus deal

Alicia Adamczyk@ALICIAADAMCZYK

Some days, Cheyenne Berg skips meals to ensure that she has enough food to feed her two young daughters.

The 30-year-old lost her job in March when she got sick (tests for Covid-19 came back negative, but she was out of work for a month) and has been struggling to find part-time work while homeschooling her kids. She is living off $1,200 per month in unemployment benefits in Oregon and has had to choose to pay rent over buying groceries for herself, she says. The internet her kids need for virtual schooling was shut off at one point when she couldn’t pay the bill.

Though she declined to say which party she is supporting, she says the stimulus negotiations have had a major impact on how she will vote this year. She’s one of countless out-of-work Americans outraged that Congress has yet to pass another stimulus package.

“I did not choose to be unemployed, none of us did,” Berg says. “I have kept my faith because of the good Lord, Jesus, but the selfishness and the carelessness of our government has sickened me to the core.”

As the U.S. enters the eighth month of the coronavirus pandemic, Berg is far from the only American left wondering where her next meal will come from. Last week, about 22 million people collected unemployment benefits of some kind. Food insecurity has more than doubled as a result of the Covid-19-induced economic crisis and affects almost a quarter of all U.S. households, according to researchers at Northwestern University.

If Congress fails to pass another coronavirus stimulus deal, an estimated 5 million people will exhaust all of their unemployment benefits next month, according to a letter sent by Democratic House Speaker Nancy Pelosi last week.

Millions more gig and part-time workers will lose their benefits altogether at the end of the year when the Pandemic Unemployment Assistance program expires. Plus, utility and student loan bills that were deferred are all coming due soon, just as the nationwide eviction moratorium is set to expire.

The Senate, House of Representatives and White House have all given different timelines for a relief package. The Senate is currently recessed until after the election after confirming Amy Coney Barrett to the Supreme Court. Majority Leader Mitch McConnell told radio host Hugh Hewitt last week that the chamber will handle relief “right at the beginning of the year,” with legislation targeted toward helping struggling small businesses and hospitals.

Pelosi has said she wants a deal sooner, but negotiations between House Democrats and Treasury Secretary Steve Mnuchin have hit wall after wall, with both sides refusing to budge on their pet stimulus issues. President Donald Trump, meanwhile, told reporters last week that “we will have a tremendous stimulus package immediately after the election.”

Brittany Maynard also hopes Congress will eventually come to an agreement and “do everything in their power to help the American people.” The 34-year-old owns a hair salon in Kentucky and has lost an estimated $16,000 in income over the course of the pandemic.

Though her husband works, she says it’s not enough to make up for the shortfall in her income. She is considering getting a second job, but she has an autoimmune disease and knows it would be risky.

Another stimulus package would go a long way to help her family and others she knows.

“I know there are families who have it way harder than we do and that hurts my heart,” Maynard says. “It doesn’t seem that help will be coming anytime soon.”

Congress’s inaction infuriates Ashley Hartley, a 31-year-old mother of three who left her job in March to care for her kids.

I’ve always been proud to be an American, but this is sickening.

Ashley Hartley

“I’ve always been proud to be an American, but this is sickening,” says the Idaho resident. “Why are we working every day and contributing to society when this is what we get when we need help?”

Hartley is routinely kept up at night wondering how she and her partner will pay all of their bills. She’s also concerned about the number of mothers she sees leaving the workforce and what the past few months have done to the nation’s collective mental health.

“How are we sitting here, how is Congress not being pushed?” she says. “They’re letting poor people suffer. I don’t understand it.”

She notes that after seven months, the $1,200 stimulus check is the equivalent of about $5 per day. That’s not enough for anyone to live off of, she says.

“You can’t retroactively feed somebody, you can’t retroactively put someone back in their house,” says Hartley. “We need help now, like yesterday. Three months ago would have been nice.”

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