All three major U.S. indices fell Thursday, with the S&P 500 falling more than 1%. The 10 year treasury yield fell to 0.6% Yields fall when prices rise.
Facebook reported revenue and earnings per share of $17.74 billion and $1.71, against estimates of $17.33 billion and $1.74. Moreover, the company said April has seen a stabilization in advertising spend, contrary to the contractionary trend to end March.
This could potentially be a positive indication of consumer spend. And with Facebook’s $584 billion market cap and its 6.4% up move, it seemed possible the S&P 500 wold get a lift Thursday.
And Microsoft (MSFT) - Get Report, worth over $1 trillion, rose 1%. Microsoft earnings do not illustrate much about the broader environment in terms of cyclicality, but it does give investors confidence that the accelerated shift to the cloud in the work-from-home environment is indeed a theme and that camping out in growth tech could prove effective in harsh times.
Meanwhile, consumer spend for the month of April fell 7.5%, an outcome investors were expecting and a backwards looking indicator.
Jobless claims for the past week were 3.8 million, sending the total to over 30 million and the unemployment rate into the teens in percentage terms, another specced outcome.
But valuations have been stretching to levels not seen in years, against risks that lockdowns may be met with more spread of Coronavirus. Meanwhile, Morgan Stanley’s Chief U.S. Equity Strategist Mike Wilson recently noted in his research that the S&P 500 should meet near-term resistance at the 2,900 mark, which is roughly where the index sits.
Underperforming sectors Thursday were cyclical, with the Invesco Regional Banking Index (KBW) down 3.64%.
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