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The Dow Jones is climbing today despite an expected 38% decline in GDP for the second quarter. Investors still have hope for recovery as several states work to reopen their economies.
This morning, Lowe's Cos. Inc. (NYSE: LOW) reported quarterly results. Investors cheered news that homebuying rebounded nicely after the COVID-19 scare. Weekly mortgage applications came in just 1.5% lower than this point last year, a massive recovery from one month ago, when applications were off 35% year over year.
Before we get into this story and more, here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
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Now here's a closer look at today's most important market events and stocks. We'll also discuss the stories that slipped under the radar of the mainstream financial press on Wednesday.
The Top Stock Market Stories for Wednesday
- Today's big news is the dramatic downturn expected for the U.S. economy. The Congressional Budget Office expects that U.S. GDP will decline by 38% during Q2, thanks to the COVID-19 shutdown. At least 26 million Americans could lose their jobs by the time this crisis ends. In addition, the CBO expects that the U.S. deficit will pass $2.1 trillion in 2020 and $600 billion next year. Congress is currently debating another $3 trillion stimulus effort designed to provide support to Americans and small businesses.
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- Around the globe, Johns Hopkins reports that nearly 5 million people have contracted COVID-19. In the United States, at least 1.5 million infections have hit Americans. The news this morning is that U.S. President Donald Trump may consider a travel ban from Brazil after the South American nation suffered its largest day of new cases and deaths. The nation reported 17,408 new cases, bringing its total to 271,628. That figure is the third highest in the world, after Russia and the United States (again, no one believes China's numbers). Meanwhile, China has been locking down more than 100 million people after a resurgence of cases. Reports have emerged that a run on food has stoked concerns about supply shortages in beef, poultry, and pork. The nation's import figures for meat have surged by 82% year over year during the first four months of 2020. It has also dramatically increased its strategic reserve of rice.
- Meanwhile, shares of Moderna Inc. (NASDAQ: MRNA) plunged after vaccine experts raised concerns that the biotech company failed to provide enough information about its phase 1 drug trial. Moderna had announced earlier this week that the company's vaccine had provided antibodies in all 45 participants of the trial. The company also used the stock's surge earlier this week to issue a stock offering at $76 per share. Shares plunged to $67.36 this morning.
Stocks to Watch Today: SPOT, AAPL, LOW
- Shares of Spotify Technology SA (NYSE: SPOT) rallied on Tuesday after it announced it has signed an exclusive deal with comedian and podcast host Joe Rogan. The $100 million deal will bring the popular podcast The Joe Rogan Experience and its 11-year library of content exclusively to the Spotify platform.
- Apple Inc. (NASDAQ: AAPL) has also made a big move in its content strategy. The company has secured the rights to "Greyhound," a World War II battleship film starring Tom Hanks. The tech giant will see this film – which cost $50 million to produce – skip movie theaters and go straight to streaming. The company paid Sony Corp. (NYSE: SNE), which produced the film, $70 million for 15 years of streaming rights.
- Shares of Lowe's Cos. Inc. (NYSE: LOW) popped 5.6% after the company reported a huge spike in same-store sales during the first quarter. The company also reported a massive spike (80%) in online demand. The firm reported an 11.2% jump in same store sales, which helped push its EPS to $1.77 on the quarter. Wall Street had anticipated EPS of $1.32. Revenue came in at $19.68 billion, which was well above the consensus estimate of $18.32 billion.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.