The US stock market managed to score some gains after a decline in the first half caused by the unprecedented drop in oil prices. After the WTI contract for May plunged into the negative territory, the June contract also declined by nearly 20%.
Investors also mostly ignored the initial jobless claims data, which showed an increase of 4.4 million, suggesting an unemployment rate of around 20%. The April US PMI data showed historic lows with Flash US Composite Output Index at 27.4 vs 40.9 a month earlier and Flash US Services Business Activity Index at 27.0 versus 39.8 in March, both showing the fastest reduction since the series started in 2009.
In addition, last week the Congress passed an additional stimulus package that includes $484 billion for the Paycheck Protection Program and Health Care Enhancement Act. The Treasury also issued new guidance for the program, explaining that the loans are meant for companies with little access to capital and urged publicly traded companies to return the previously contracted PPP loans.
The earnings season also continues to be in the spotlight. According to FactSet data, 24% of the companies in the S&P 500 had reported their financial results by April 24. Of these companies, 60% posted better-than-expected earnings, and the same amount reported revenues above estimates.
In this way, the S&P 500 managed to inch up by 0.48% last week. The Dow Jones Industrial Average and the NASDAQ Composite performed better with gains of 0.53% and 0.86%, respectively.
This week, investors will focus on the first-quarter GDP report, which could provide a clearer picture of the impact from the coronavirus outbreak. On Saturday, JPMorgan forecasted that the real GDP fell by 9.9% between January and March on a seasonally adjusted annual rate. The research team pointed out the 17.3% projected decline in real consumption and drops in spending for other types of services.
Let’s now take a closer look at some individual companies that Financial Advisors kept on their radars last week based on data compiled by TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors. Q.E.P. Co., Inc. (OTCMKTS: QEPC) remained on the top spot, followed by Amazon.com, Inc. (NASDAQ: AMZN). On Tuesday, Jefferies analyst Brent Thill raised the price target on Amazon to $2,800 from $2,300 on the back of “attractive growth-adjusted valuation and upside to forward profit estimates”. The analyst also believes that Amazon could reach $4,000. The eCommerce giant is scheduled to report its first-quarter earnings on April 30.
Amazon was followed by Tesla Inc. (NASDAQ: TSLA), which will report its results on April 29, with investors already having lowered their expectations due to the drop in demand and production halt. However, investors are still looking forward to seeing the outlook for the rest of the year.
Then there is Boeing Co (NYSE: BA), which has a big week ahead as it reports its results, will hold its annual meeting and re-opens its plant in Charleston, South Carolina this weekend. The company is also facing a deadline to apply for an aid package from the federal government.
The fifth most-searched ticker last week was Enterprise Products Partners L.P. (NYSE: EPD), which jumped three spots in the ranking. Last week Enterprise Products Partners’ stock gained 7.41%, but it still remains over 40% in the red since year-to-date.
Enterprise Products is a midstream natural gas and oil pipeline company. Like most oil and gas companies in the US, it took a heavy beating on the back of declines in crude prices, but recently it has adopted a number of measures to deal with the supply glut. On April 17, Enterprise Products said it would convert space in Mont Belvieu, Texas to hold gasoline and diesel fuel. In addition, the company would allow producers to ship oil on its Seaway pipeline, enabling dual-direction service.