Monthly Archives: August 2020

Stock futures fall slightly after S&P 500 and Dow notch best August since 1980s

A man walks past the Wall Street Charging Bull in New York, the United States, March 24, 2020.
Wang Ying | Xinhua News Agency | Getty Images

Stock futures dipped in overnight trading on Monday after Wall Street notched its fifth consecutive month of gains.

Futures on the Dow Jones Industrial Average fell about 50 points. The S&P 500 futures and the Nasdaq 100 futures were down 0.1% each.

Shares of Zoom Video jumped more than 17% during extended trading after reporting another blowout quarter. The video conferencing company’s revenue more than quadrupled in the fiscal second quarter compared to a year ago.

The S&P 500 and the Dow just wrapped up their best August in more than 30 years. The blue-chip average rallied 7.6% in August for its fifth positive month in a row and its biggest August gain since 1984. The S&P 500 also rose for a fifth month straight, up 7%, clinching its best August since 1986.

The tech-heavy Nasdaq jumped 9.6% in August, posting its best monthly performance since 2000.

Zoom In IconArrows pointing outwards

“While growth and momentum names continue to be the primary driver of returns, value and cyclicals have begun to participate,” Mark Hackett, Nationwide’s chief of investment research, said in a note on Monday.

In August, top performers in the S&P 500 have been mostly reopening stocks — cruise line operators, airlines and hotels. Royal Caribbean and MGM Resorts both gained about 40%, while FedEx and Gap jumped 30% each. Delta Air Lines and Norwegian Cruise Line were also among the S&P 500 leaders in August.

The Dow’s composition changed on Monday with Apple’s 4-for-1 stock split taking effect. Salesforce, Amgen and Honeywell replaced longtime components Exxon Mobil, Pfizer and Raytheon Technologies.

Investors are awaiting a key jobs report on Friday, which is forecast to show payrolls continued to rebound in August. Economists polled by Dow Jones forecast that 1.255 million jobs were created in August.

“With regard to US jobs, it’s important to keep in mind that the Fed’s new inflation target policy may impact how the market receives this news,” Kristina Hooper, Invesco’s chief global market strategist, said in a note.

“Normally, a good jobs report would spark concern that the Fed might tighten in order to proactively combat inflation and economic overheating. That concern has gone by the wayside, at least for now, with the Fed’s new policy,” Hooper said.

In a major policy shift, the Federal Reserve announced last week it will allow inflation and employment to run higher than its target before it considers raising interest rates.

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Author: Yun Li

September uncertainty will mark a volatility comeback, top strategist Lindsey Bell warns

The Dow is coming off its best August since “Ghostbusters” dominated the Billboard’s top 100 list 36 years ago.

But it’s the next four weeks that could give investors a scare.

Ally Invest’s Lindsey Bell predicts volatility will make a big comeback due to seasonal trends combined with rising uncertainty.

“In September, you usually see the chance of a positive return on the month very low — below 50%,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Monday. “We are going to see the rubber really hit the road.”

She ranks uncertainty as September’s biggest overall market risk. Bell cites the stalemate over a second virus relief package on Capitol Hill, upcoming fiscal budget debates, the presidential election countdown and corporate conference season as headwinds.

“With the increase of uncertainty, you’re going to see an increase in volatility,” said Bell. “We’ve seen it today. The VIX index is creeping back up.”

The VIX, or CBOE Volatility Index, is considered the market’s fear gauge and reflects future volatility over a monthly time span. Over the past two months, the index is down more than 13%. But it’s up 18% over the last five sessions.

Bell expects the uncertainty to drive frequent 1% to 1.5% daily swings in September.

“As we get closer to the election and some of these other events, it gives room for that type of volatility in the market to return,” she said.

Bell, who has been taking a barbell approach to investing, suggests using weakness as a strategic opportunity. She believes cyclical or value groups will eventually find solid footing on better news surrounding the coronavirus and a vaccine. She uses the consumer discretionary group as an example.

“You may want to consider rotating out of the bigger names like an Amazon or Home Depot … which have done very well and have helped carry the sector into some smaller names that haven’t done as well on a year-to-date basis,” said Bell, a CNBC contributor.

But she wouldn’t buy value at the expense of the year’s winners.

“Remain in some of these growth and tech areas that have continued to do well,” Bell said. “You can hide out there to an extent because they don’t necessarily need economic growth to do well.”

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Author: Stephanie Landsman

Stock futures flat in overnight trading after S&P 500 and Dow notch best August since 1980s

A man walks past the Wall Street Charging Bull in New York, the United States, March 24, 2020.
Wang Ying | Xinhua News Agency | Getty Images

Stock futures were flat in overnight trading on Monday after Wall Street notched its fifth consecutive month of gains.

Futures on the Dow Jones Industrial Average fell about 30 points. The S&P 500 futures and the Nasdaq 100 futures were both little changed.

Shares of Zoom Video jumped more than 17% during extended trading after reporting another blowout quarter. The video conferencing company’s revenue more than quadrupled in the fiscal second quarter compared to a year ago.

The S&P 500 and the Dow just wrapped up their best August in more than 30 years. The blue-chip average rallied 7.6% in August for its fifth positive month in a row and its biggest August gain since 1984. The S&P 500 also rose for a fifth month straight, up 7%, clinching its best August since 1986.

The tech-heavy Nasdaq jumped 9.6% in August, posting its best monthly performance since 2000.

Zoom In IconArrows pointing outwards

“While growth and momentum names continue to be the primary driver of returns, value and cyclicals have begun to participate,” Mark Hackett, Nationwide’s chief of investment research, said in a note on Monday.

In August, top performers in the S&P 500 have been mostly reopening stocks — cruise line operators, airlines and hotels. Royal Caribbean and MGM Resorts both gained about 40%, while FedEx and Gap jumped 30% each. Delta Air Lines and Norwegian Cruise Line were also among the S&P 500 leaders in August.

The Dow’s composition changed on Monday with Apple’s 4-for-1 stock split taking effect. Salesforce, Amgen and Honeywell replaced longtime components Exxon Mobil, Pfizer and Raytheon Technologies.

Investors are awaiting a key jobs report on Friday, which is forecast to show payrolls continued to rebound in August. Economists polled by Dow Jones forecast that 1.255 million jobs were created in August.

“With regard to US jobs, it’s important to keep in mind that the Fed’s new inflation target policy may impact how the market receives this news,” Kristina Hooper, Invesco’s chief global market strategist, said in a note.

“Normally, a good jobs report would spark concern that the Fed might tighten in order to proactively combat inflation and economic overheating. That concern has gone by the wayside, at least for now, with the Fed’s new policy,” Hooper said.

In a major policy shift, the Federal Reserve announced last week it will allow inflation and employment to run higher than its target before it considers raising interest rates.

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Author: Yun Li

Stocks making the biggest moves after hours: Zoom Video, Eastman Kodak, Tesla & more

Zoom founder Eric Yuan poses in front of the Nasdaq building as the screen shows the logo of the video-conferencing software company Zoom after the opening bell ceremony on April 18, 2019 in New York City.
Kena Betancur | Getty Images

Check out the companies making headlines after the bell

Zoom Video — Shares of Zoom Video jumped more than 9% after reporting another blowout quarter. The video conferencing company said its revenue more than quadrupled in the fiscal second quarter compared to a year ago. Its earnings came in at 92 cents per share, easily beating analyst expectations of 45 cents per share, according to Refinitiv. The stock has soared more than 370% this year.

Eastman Kodak — Shares of Eastman Kodak popped more than 13% after hedge fund D.E Shaw disclosed a 5.2% stake in the company in a 13-G filing. The stock has been highly volatile in recent weeks after the Trump administration announced plans to award the onetime photography pioneer a $765 million loan to produce drug ingredients. The loan was later put on hold as regulators started a probe on how Kodak disclosed the government deal.

Rackspace Technology — Shares of Rackspace Technology slid more than 7% after the cloud computing company reported a quarterly loss. Rackspace said it lost 20 cents per share in the second quarter, versus an estimate of 15 cents in earnings per share, according to FactSet. Its revenue was in line with expectations.

Tesla — Shares of Tesla rose 3% in extended trading, building on momentum following its 5-for-1 stock split that took effect on Monday. Trading was heavier than normal during Monday’s session as Tesla shares exchanged hands 115.6 million times, well above its 30-day volume average of 73.3 million. The stock surged 12.5% on Monday, bringing its 2020 gains to more than 495%.

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Author: Yun Li