This blog is now closed. Click here for May 1, 2020 stock market news.
Apple said its revenue reached $58.3 billion in the quarter ended in March, a 1% increase from a year earlier. That beat analyst estimates, but fell far short of Apple’s pre-coronavirus guidance of between $63 and $67 billion.
The company began facing the fallout from the coronavirus early on, as the pandemic spread through China, where the bulk of iPhone manufacturing takes place. Apple warned in February that it would miss its previous revenue guidance for the first quarter of 2020. China is also one of the company’s biggest markets, accounting for roughly 15% of its overall revenue.
The results come right after it posted record earnings in the last three months of 2019, spurred by the resurgence of iPhone sales thanks to its latest flagship device, the iPhone 11.
And the pandemic hasn’t stopped Apple from continuing to roll out new devices — it launched a new version of its low-cost iPhone SE earlier this month, as well as new models of the iPad and Macbook Air in March.
United Airlines said it expects to burn through $40 million to $45 million a day, on average, during the course of the current quarter, even though it has already grounded about 90% of its flights for the quarter.
But the airline said it has the resources to weather the current coronavirus crisis, despite saying that it has taken demand for air travel to “essentially zero.” As of Wednesday, the company said it has $9.6 billion.
The guidance comes as United reported its first loss since the first quarter of 2014. Overall it reported a loss excluding special items of $639 million, worse than a loss of about $500 million on that basis forecast by analysts surveyed by Refinitiv. The net loss for the quarter came to $1.7 billion.
Shares of United were lower in after-hours trading following the report.
The company had already warned of a total pre-tax loss of $2.1 billion. Its executives will speak with investors on Friday morning.
The other three major US airlines - American, Delta and Southwest - have all reported first quarter results that included their first losses in years.
Amazon sales jumped 26% in the first three months of 2020, but the company’s profits took a hit as it scrambled to manage the coronavirus pandemic.
Net income for the quarter fell nearly 31% to $2.5 billion, or $5.01 per share, compared to the $3.15 billion in income Wall Street analysts had projected.
CEO Jeff Bezos warned shareholders that the June quarter could also be a challenging one for the online retail giant’s finances.
April was a hell of a month for the stock market, with the Dow and the S&P 500 both logging their best monthly performance since January 1987.
The Dow climbed 11.1%, and the S&P 500 rose 12.7%.
The Nasdaq Composite gained 15.4% for the month, its best performance since June 2000.
Part of the April rally was a rebound from March, which was the worst month since 2008 – the height of the financial crisis – for stocks. Hopes about reopening the economy and potential coronavirus treatments also helped push stocks higher this month.
On top of that, the Dow had history playing in its favor: “Historically, April has been the best month of the trading year, and this April didn’t disappoint,” according to a note from Bespoke Investment Group.
Still, on the final trading day of the month the three major benchmarks finished in the red. Another bleak look at the US labor market and inaction from the European Central Bank weighed on investor sentiment.
Extreme turbulence continues to rock the oil market.
US oil prices spiked 25% on Thursday to $18.84 a barrel, marking the second straight day of monster gains. Although crude remains at depressed levels far too low for US shale companies to make money, oil is now at a two-week high.
The rebound eases fears of a return to negative prices hit last week. Crude plunged to nearly single-digits on Tuesday, sinking as low as $10.07 a barrel. But it’s nearly doubled since then.
The recovery reflects bets by oil traders that the unprecedented collapse in fuel demand is over.
“Hopes of a gradual easing of global lockdown conditions have helped lift oil prices,” analysts at RBC Capital Markets wrote in a note to clients Thursday. RBC’s real-time tracker of US traffic patterns showed slight improvements in several cities compared with their recent lows.
Ryan Fitzmaurice, energy strategist at Rabobank, also credited technical changes, including the restructuring of the United States Oil Fund (USO), an ETF that imploded earlier this month.
Perhaps announcing the death of cereal was premature.
Kellogg’s (K) reported in its better-than-expected earnings report that sales of its cereals jumped 3% because of the coronavirus pandemic. The company makes a number of well-known cereals, including Rice Krispies, Corn Pops and Frosted Flakes.
Its frozen food products, which includes Eggo’s, fared even better with sales jumping 9%. Overall revenue for the company grew 8%.
Kellogg’s shares advanced nearly 4% higher in early trading.
People still need to see doctors for routine checkups and care even if they don’t have any Covid-19 symptoms. That’s a big reason why business is booming for virtual health company Teladoc.
Teladoc (TDOC) reported a more than 40% jump in revenue for its latest quarter after the closing bell Wednesday, topping Wall Street’s forecasts. In an interview with CNN Business Thursday morning, Teladoc CEO Jason Gorevic said that remote visits nearly doubled in the quarter – to more than 2 million.
“We see this growth persisting into the future,” Gorevic said. “We’re seeing massive growth in not just general medical visits but also for mental health and dermatology. There is a proliferation across all specialties and significant demand from more physicians looking to be able to use the platform.”
The good news may have already been priced into the stock, which has nearly doubled in 2020. Shares fell about 6% Thursday. But Gorevic thinks Teladoc will remain a leader in an increasingly crowded field of virtual health providers and companies offering in-home medical care.
He also isn’t too concerned about possible competition from Amazon (AMZN), which recently acquired online pharmacy PillPack and is also partnering with JPMorgan Chase (JPM) and Warren Buffett’s Berkshire Hathaway (BRK.B) on a healthcare venture named Haven.
“There are plenty of rumors about Amazon and other techs getting into the space,” Gorevic said. “But we see them more likely as partners than competitors. There is a difference between providing technology solutions and actually providing health care.”
Frontier is the second US airline to require passengers to wear masks or face coverings on flights beginning May 8.
Customers must wear masks when they’re around Frontier ticket counters and gate areas, as well as during flights. Young children will be exempt from the policy.
JetBlue (JBLU) announced a similar policy on Tuesday.
An hour into the trading day, the Nasdaq Composite pared its modest losses and briefly turned green.
The index was last up 0.1%, pushed higher by gains in consumer and tech stocks.
All major US benchmarks are on track for a historically good performance this month, and the Nasdaq is looking at its best gain since June 2000.
For Comcast (CMCSA), the financial effects of the coronavirus pandemic are a mixed bag.
The cable company reported its first-quarter earnings on Thursday and revealed it added 477,000 high-speed internet customers during the period – the best quarterly result in 12 years.
But Comcast’s movie and theme park units were hit particularly hard. Sales for the company’s film unit fell 22.5% from last year, while theme-park sales fell 31.9%.
NBCUniversal’s CEO Jeff Shell spoke a bit about the future of the movie theater business on Comcast’s earnings call.
AMC Theatres (AMC) said this week that it would ban Universal’s movies after comments Shell made about the success of the studio’s animated film, “Trolls World Tour,” which bypassed theaters for a digital release.
Overall, Comcast’s first-quarter profit dropped nearly 40% to $2.1 billion and sales fell almost 1%. Shares were down about 4.5% early Thursday.
US stocks opened lower on the last trading day of the month.
Some more bleak jobs data weighed on market sentiment, as another 3.5 million Americans filed for initial unemployment benefits last week. The total of first-time claims climbed above 30 million over the past six weeks.
Meanwhile in Europe, the European Central Bank said it would take no more action on its key policies, although it did inject some more stimulus into the European economy.
Despite some bleak economic data hinting at the disruption the coronavirus pandemic is causing the economy, it was a historically good month for stocks.
The S&P 500 is on track for its best month since October 1974, and the Dow is looking at its best month since January 1987.
The Nasdaq is on track for its best monthly performance since June 2000.
Investors don’t like joblessness. They don’t like inaction from central banks. That’s why stock futures are sinking this morning.
3.5 million Americans filed for initial jobless claims last week, the Labor Department announced Thursday. That makes 30 million Americans who have filed for initial claims since mid-March.
The ECB said it would take no more action on its key policies, although it did inject some more stimulus into the European economy.
Americans may not know the name Reckitt Benckiser (RBGLY), but it’s the maker of one of the most in-demand products right now: Lysol. And it just reported a blowout first quarter.
The British company said sales rose 13.5% because customers are buying a lot of disinfectants to help guard against coronavirus. CEO Laxman Narasimhan noted “strong consumer demand” in March and April.
But Narasimhan also warned the company is “uncertain how quickly this will change in the months ahead.”
Last week, the company garnered global attention when it put out a statement warning people not to consume Lysol after President Donald Trump suggested the possibility of injecting disinfectants to protect people from coronavirus.
Another 3.8 million Americans filed for first-time unemployment benefits in the week ended April 25.
In total, more than 30 million people have filed first-time claims since mid-March as the coronavirus pandemic is forcing businesses to close and lay off workers.
How bad is the coronavirus economy? The worst ever, says Fed Chairman Jerome Powell.
The recovery will be long and painful, but the economy could begin to bounce back significantly in the third quarter as businesses reopen, he added. While we won’t go back to pre-coronavirus levels for quite some time, the third quarter could provide some economic relief.
“We will enter the new phase – and we are just beginning to maybe do that – where we will begin formal measures that require social distancing will be rolled back, gradually, and at different paces in different parts of the country. And in time, during this period, the economy will begin to recover,” Powell said.
“People will come out of their homes, start to spend again, we will see unemployment go down, we will see economic activity pick up,” he added. Exactly then that happens is “very hard to say,” although he reiterated the third quarter could get a “fairly large increase” in economic activity.
Unemployment has shot higher for minorities in the United States – much faster than it has for white Americans, Federal Reserve Chairman Jerome Powell said at a press conference yesterday.
Just a few months ago, the US labor market was the best-ever for minorities, Powell noted. Now, minorities are among the first to lose their jobs as stay-at-home orders have shuttered restaurants, movie theaters, retailers and many other businesses.
“It is heartbreaking, frankly, to see that all threatened now,” Powell said. “All the more need for our urgent response and also that of Congress, which has been urgent and large, and to do what we can to avoid longer run damage to the economy.”
Powell noted that people “who are least able to bear it have been the first to lose their jobs, and they have little cushion to protect themselves.
“That is a very big concern,” Powell said.
The Fed committee said in its statement yesterday that it will continue its stimulus policy for the “medium term.” How long is that?
“It’s between now and the long term,” Fed Chairman Jerome Powell said.
He provided three reasons why the Fed doesn’t think it can ease up on its economic rescue plans in the near term.
1) The amount of time to get coronavirus under control is “very much shrouded in uncertainty.”
2) The damage to the US economy is severe. Workers who are out of work can lose skills and have difficulty restarting their careers. Businesses won’t fully restart for quite some time, and some will go out of business. The Fed’s tools to address those issues are imperfect, Powell noted.
3) The crisis is global. Foreign economies will weigh on the US economy.
American Airlines (AAL) posted a significantly worse-than-expected loss in the first quarter, its first loss since emerging from bankruptcy six years ago.
American, the world’s largest airline, posted a $2.2 billion net loss. Excluding special items, the loss still came to $1.1 billion, worse than the $808 million loss forecast by analysts surveyed by Refinitiv.
The bad times are far from over: American said it expects to lose $70 million a day in the second quarter, as demand for travel has fallen more than 90%. Those losses will come despite cutting $12 billion in costs for the rest of this year.
Tapestry (TPR), which owns luxury brands Coach and Kate Spade, reported a 20% sales decline in the first quarter as a result of 90% of the company’s stories being closed.
The company reported a revenue loss of $677 million compared to a $117 million profit for the same period a year ago. Sales at Coach sank 20% and Kate Spade sales slipped 11%.
However, it signaled that operations will return to some normalcy. It said a “vast majority” of its stores across Asia have reopened and 40 stores in North America will reopen Friday for “contactless curbside or storefront pickup service only.”
The company warned it’s taking “additional actions to further streamline its organization,” including layoffs. Shares fell 3% in premarket trading.
