The US stock market declined last week amid concerns that the impact of the coronavirus will be larger than expected. On Sunday, the IMF suggested that the outbreak would reduce global growth by 0.1% and China’s economy would slow down by 0.4 percentage points to 5.6%. Nevertheless, expectations are that the impact would be short-term, although there is still a possibility that the spread of the virus would continue for longer and would affect more countries, IMF Managing Director Kristalina Georgieva said.
Markets also dipped on the back of Apple Inc (NASDAQ: AAPL) warning that its sales would be affected by the coronavirus epidemic. The tech giant said it does not expect to meet its revenue forecast for the first quarter due to slower production and weaker demand in China.
On the other hand, some investors displayed confidence that the Chinese government and central bank will put more measures in place to offset the impact of the virus. The central bank already cut the interest rates and the government said it would reduce the required pension contributions and insurance fees.
In this way, the S&P 500 and the Dow Jones Industrial Average lost 0.97%, and 0.82% respectively between February 18 and February 21. The tech-heavy NASDAQ Composite dropped by 1.60% over the same period.
The earnings season also had an impact on stock market performance. By February 21, 87% of the companies in the S&P 500 reported their financial results, according to FactSet. Out of these companies, 70% posted better-than-expected earnings and 66% reported a revenue surprise.
Let’s now take a closer look at some individual stocks that were in the spotlight last week. TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, has compiled a list of most searched tickers among Financial Advisors last week. The list is led by Tesla Inc (NASDAQ: TSLA). Last week, the EV maker received approval from a German court to clear 220 acres of forest for its Gigafactory near Berlin. The company is expected to start building the factory by mid-March.
On the second spot was Apple Inc. (NASDAQ: AAPL), which, as mentioned earlier, has warned investors that it might not meet its revenue forecast this quarter. Apple previously had expected sales between $63 billion and $67 billion for the quarter.
Microsoft Corporation (NASDAQ: MSFT) and Amazon.com, Inc. (NASDAQ: AMZN) ranked as the fourth and fifth most-searched tickers, respectively. Last week, Microsoft said it would invest $1.1 billion in Mexico to build a new data center and invest in training labs and skills programs. Amazon announced the launch of its virtual health clinic Amazon Care in Seattle. The app developed for Amazon employees allows virtual consultations, prescription delivery and scheduling of follow-up appointments.
Among the giants that made the list of the top five most-searched tickers, there was also one smaller company, the $6.6 billion Virgin Galactic Holdings, Inc. (NYSE: SPCE), which ranked on the third spot.
Virgin Galactic’s shares soared by more than 23% on Tuesday and Wednesday but declined on the following days to close the week nearly 12% in the green and over 180% higher year-to-date. The stock was soaring as the market was buzzing over the company CEO George Whiteside’s talk at the Barclays Industrial Select Conference. Investors were anticipating that the CEO would provide more details and timelines regarding the company’s plans to launch commercial space flights. The presentation was private and none of his remarks have been made public yet.
On the other hand, on Thursday, Morgan Stanley issued a warning on Virgin Galactic, saying that the stock’s growth comes on the back of enthusiasm around space travel and a “modest correction is overdue”. Morgan Stanley analyst Adam Jonas also posed a question whether Virgin Galactic will conduct a capital raise, which could result in a sell-off.
Virgin Galactic is expected to deliver its financial results for the last quarter on February 25. Analysts are expecting the company to post a loss of $0.21 per share and revenue of $748,000. However, given that the company has not yet launched its product, the main takeaway from the company’s financials is whether it has enough liquidity to remain afloat until the launch.