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End of Day Briefing - Tuesday August 4, 2020

Stocks rise along with longer-dated Treasuries

Dow +164.07 at 26828.47, Nasdaq +38.37 at 10941.24, S&P +11.90 at 3306.51

[BRIEFING.COM] The S&P 500 gained 0.4% on Tuesday to close at session highs in a tight-ranged session, even as negotiations surrounding the next coronavirus relief bill remained deadlocked. The Nasdaq Composite (+0.4%) kept pace with the benchmark index to close at a record high, while the Dow Jones Industrial Average (+0.6%) and Russell 2000 (+0.7%) outperformed.

According to media reports, Treasury Secretary Mnuchin said negotiators are no closer to a deal than a week ago while Senator Perdue (R-GA) estimated that stimulus talks could last an additional two weeks. While discouraging, the broad market was not deterred by the news, as nine of the 11 S&P 500 sectors closed higher.

The energy sector rose 2.5% amid higher oil prices ($41.68/BBL, +0.66, +1.6%), followed by gains in the real estate (+1.4%), utilities (+1.4%), and materials (+1.3%) sectors. The health care (-0.5%) and financials (-0.4%) sectors were the lone holdouts.

Financial stocks were pressured by some curve-flattening activity in the Treasury market, which reflected some growth-related angst given that lawmakers remained divided over stimulus talks. The 2-yr yield increased one basis point to 0.12%, while the 10-yr yield fell five basis points to 0.52%.

Within the tech space, Microsoft ($MSFT 213.29, -3.25, -1.5%) cooled off from yesterday's TikTok-driven rally, while Advanced Micro Devices ($AMD 85.04, +7.37) surged 9.5% to fresh record highs. AMD shot higher after Jefferies raised its price target on the stock to $95 from $86 on a view that it will capitalize on Intel's ($INTC 49.13, +0.83, +1.7%) production issues.

Gold futures ($2020.80/OZT, +$33.80, +1.7%) also rallied to new highs above $2000/OZT. The U.S. Dollar Index declined 0.1% to 93.27 after trading higher in the morning.

Tuesday's economic data was limited to the Factory Orders report for June, which increased 6.2% m/m ( consensus 5.2%) following a downwardly revised 7.7% increase (from 8.0%) in May.

  • The key takeaway from the report is the affirmation that business spending picked up in June as economies reopened, evidenced by a 3.4% increase in new orders for nondefense capital goods excluding aircraft that was up slightly from the 3.3% increase noted in the Advance Durable Goods Orders report.

Looking ahead, investors will receive the ADP Employment Change Report for July, the Trade Balance report for June, and the weekly MBA Mortgage Applications Index on Wednesday.

  • Nasdaq Composite +21.9% YTD
  • S&P 500 +2.3% YTD
  • Dow Jones Industrial Average -6.0% YTD
  • Russell 2000 -9.1% YTD

Market Snapshot

SP 5003306.51+11.90(0.36%)
10-yr Note +27/320.504
NYSEAdv 1902 Dec 1057 Vol 863.3 mln
NasdaqAdv 1938 Dec 1288 Vol 3.9 bln

Industry Watch

Strong: Energy, Utilities, Real Estate, Materials
Weak: Health Care, Financials

Moving the Market

-- Stock market closes at session highs in tight-ranged session

-- Reports indicated coronavirus relief bill negotiations remained deadlocked

-- Longer-dated Treasuries continued to advance

Stocks end higher as lawmakers wrangle over next stimulus bill

Stocks closed the session higher across the board. Investors are waiting to see if lawmakers can break the stalemate in Washington over a new coronavirus relief package. Meanwhile, all eyes are on earnings this afternoon, with Disney ($DIS), Wynn Resorts ($WYNN), Fox Corporation ($FOXA), and Activision Blizzard ($ATVI) reporting.

ECONOMIC EVENTS: In the U.S., factory orders beat estimates with a 6.2% climb in June.

Meanwhile, Al-Jazeera reported that large scale amounts of wounded are being reported from a "a huge blast that ripped through Lebanon's capital, Beirut." "The massive explosion on Tuesday at Beirut's port released a shockwave which caused widespread damage to buildings, shattering windows in different parts of the city," added the Al-Jazeera story.

TOP NEWS: Shares of Ford ($F) were 2.5% higher after the company announced that Jim Hackett plans to retire from the company. Jim Farley has been named the company's new president and CEO and will join the board, effective Oct. 1, Ford reported this morning.

As analysts opine on the odds of Microsoft ($MSFT) buying TikTok's operations in the U.S., which President Donald Trump has said he'd be fine with, Axios' Dan Primack reported that sources tell him that Apple ($AAPL) has also expressed interest in buying the social video sharing platform. However, Primack has since tweeted that an Apple spokesperson tells Axios that there are no discussions about buying TikTok and the company isn't interested.

Meanwhile, Apple announced that longtime marketing head Phil Schiller will step down from his role and continue to work at the company as an Apple Fellow.

In other news, Senator Elizabeth Warren sent a letter to the SEC asking for an investigation into "potential incidents of insider trading" prior to Eastman Kodak's ($KODK) July 28 announcement of the Trump administration's $765M loan to support the production of generic drug ingredients. Later, the Wall Street Journal reported that the SEC is investigating the loan. Additionally, Eastman Kodak independent director George Karfunkel disclosed a 4.4% stake in the company, down from the 15.5% stake he disclosed on December 6, 2019. The reduced stake is the result of a donation of 3M shares of Eastman Kodak to Congregation Chemdas Yisroel on July 29, 2020, according to the filing.

MAJOR MOVERS: Among the noteworthy gainers was Blink Charging ($BLNK), which rose over 8% after it signed an agreement with Cushman & Wakefield ($CWK) for the marketing and potential deployment of Blink charging stations and related services to C&W clients throughout the United States. Also higher were Harmonic ($HLIT) and SolarEdge ($SEDG), which gained a respective 24.9% and 13% after reporting quarterly results.

Among the notable losers was DBV Technologies ($DBVT), which slid 42.9% after received a non-approval letter from the FDA for its peanut allergy patch. Also lower were Virgin Galactic ($SPCE) and Ralph Lauren ($RL), which fell 13.7% and 4.4%, respectively, after reporting quarterly results.

Source: (

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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