U.S. Stocks Rebounded for the Second Say in a Row the Dow Closed 280 Points Higher
In the early morning of the 22nd, Beijing time, US stocks closed higher on Wednesday. The three major stock indexes rebounded for the second consecutive day and completely erased Monday’s losses. The Dow component stocks Coca-Cola (56.55, 0.72, 1.29%) and Johnson & Johnson (169.49, 1.04, 0.62%) have reported beautiful earnings, boosting market confidence.
The Dow rose 286.01 points, or 0.83%, to 34798.00 points; the Nasdaq rose 133.08 points, or 0.92%, to 14631.95 points; the S&P 500 index rose 35.63 points, or 0.82%, to 4358.69 points.
The Dow Jones Industrial Average closed down 725 points on Monday, its biggest daily decline in 8 months. But on Tuesday, US stocks rebounded and the Dow rose 550 points. The three major U.S. stock indexes rose for the second day in a row on Wednesday, and by the end of the day, they all erased the huge decline that they suffered on Monday.
Sevens Report Research analyst Thomas Essaye said in a report on Wednesday: “After Monday’s crash, Tuesday was a textbook oversold rebound. However, in addition to short-term fluctuations, value stocks and cyclical stocks must re-establish leadership. Status, we also need to see the bottom of Treasury bond yields and economic growth exceeding expectations. We think both of these things will happen.”
The U.S. bond market, especially the 10-year Treasury bond yield, is increasing the volatility of the stock market. On Wednesday, the 10-year U.S. Treasury yield continued to rebound, rising 7 basis points to 1.287%. The yield fell to a 5-month low on Monday and rebounded on Tuesday. Investors worry that the decline in US Treasury yields indicates a possible economic slowdown due to the rapid spread of the delta mutant strain and the possible mistakes of the Federal Reserve.
Those sectors that are expected to benefit the most from the economic reopening continued to rise on Wednesday, continuing the rebound momentum on Tuesday. Carnival rose more than 9%. Las Vegas Sands Group (49.42, 1.64, 3.43%) rose more than 3%.
As oil prices resumed their rise, energy stocks generally rose on Wednesday.
The earnings report of Coca-Cola, a constituent stock of the Dow, boosted market sentiment. The company’s quarterly revenue has exceeded the level of 2019 before the outbreak of the new crown epidemic, and it has raised its full-year performance guidance.
Johnson & Johnson, another Dow component stock, reported better-than-expected second-quarter earnings and revenue, and raised its 2021 performance guidance.
Moderna joined the Standard & Poor’s 500 Index, and its stock price closed 4.5% higher, making the stock 20% higher than when it was announced a week ago.
After reporting better-than-expected revenue and user growth and raising its full-year outlook, Verizon’s stock price rose.
Mexican fast food chain Chipotle’s share price rose sharply. The company’s quarterly revenue exceeded pre-pandemic levels because a large number of dine-in customers returned to restaurants after the anti-epidemic ban was lifted.
Netflix (513.63, -17.42, -3.28%) announced a disappointing forecast for the number of subscribers in the third quarter after the market closed on Tuesday. The streaming media giant said it expects to have 3.5 million net subscribers in the third quarter, nearly 2 million less than analysts expected. The company also reported lower-than-expected earnings.
According to FactSet data, about 85% of the S&P 500 index companies that have announced their performance have exceeded expectations.
On Monday, US stocks fell sharply due to the global growth panic caused by the renewal of the new crown epidemic. On Tuesday, the concept stocks rebounded after reopening. On the same day, American Airlines Group rose 3% and Norwegian Cruise Line rose 9%.
Some strategists believe that the US stock market will enter a period of volatility, during which a deeper correction may occur. As the delta mutant strain spreads, investors are responding to concerns about inflation and the surge in infections with new delta mutant strains in the United States.
Data released by the US Centers for Disease Control and Prevention on Wednesday showed that in the past 7 days, the average number of newly diagnosed new coronary infections in the United States per day exceeded 35,500.
Miller Tabak’s stock strategist Matt Maley said: “I think what we are seeing now is the early warning signs that the stock market may be back in late August to October.”
But data shows that the surge in the number of new crown infections usually does not make the stock market fall in the long term. In the 14 months since the average daily number of confirmed cases in the United States reached its peak in April last year, the number of new coronavirus infections in the United States has increased four times, while the S&P 500 index has remained positive during this period.
Rich Steinberg, chief market strategist at The Colony Group, said on Wednesday: “We expect investor behavior to cause continued market volatility. As investors are used to buying on dips, we will follow the rebound. In a stressful world, they I have also become accustomed to worrying about the economic outlook and the virus epidemic. I think this market environment is nervous, but we have not seen a high degree of short-term trading behavior.”
On Wednesday, the U.S. Senate will conduct a preliminary test vote on U.S. President Biden’s infrastructure bill. Biden introduced his broad social and infrastructure agenda to Senate Democrats, after the core members of the Senate Democrats’ caucus agreed on a key step to advance the plan.
US Republican Senator Romney said on Wednesday that at least 10 Republicans have pledged to vote on the infrastructure bill next week.
The lithography machine company Asmar released its second-quarter financial report, of which net sales were 4.02 billion euros, an increase of 22% year-on-year, and remained above the level of 4 billion euros for the third consecutive quarter; net profit increased by 38% year-on-year to 1.03 billion euros. According to Refinitiv statistics, analysts on average expect Q2 revenue of 4.08 billion euros and profit of 1.02 billion euros. At the same time, ASM stated that the net new orders in the second quarter reached 8.3 billion euros, compared with 1.1 billion euros in the same period last year and 4.74 billion euros in the previous quarter.
Netflix’s second-quarter revenue of US$7.34 billion was slightly higher than market expectations, but the EPS of US$2.97 (expected US$3.14) fell short of analysts and even the company’s own performance guidance. In addition, in terms of business data, although there is a concept of entering the game field, the new 1.54 million subscribers of the main streaming media business are also lower than market expectations, the slowest growth rate in more than three years. At the same time, there are also paying users in North America. The reduction is also interpreted as a sign of market saturation.
Coca-Cola sales exceeded the level of 2019, raising expectations for full-year revenue. The company’s revenue was 10.13 billion U.S. dollars, and organic growth was 37% excluding factors such as acquisitions and exchange rates. At the same time, the number of sales excluding exchange rate and price factors also exceeded the level of the same period in 2019; adjusted EPS reached 68 cents, better than expected 56 cents. Coca-Cola also raised its fiscal year organic growth guidance to 12%-14%, which was previously a “high single-digit percentage.”
Johnson & Johnson expects sales of the new crown vaccine to reach US$2.5 billion this year. Johnson & Johnson’s revenue is 23.31 billion U.S. dollars and is expected to be 22.21 billion U.S. dollars; the adjusted EPS is 2.48 U.S. dollars and is expected to be 2.27 US dollars. In the financial report, the company also disclosed that the total sales of the new crown vaccine in the second quarter of this year were US$164 million, and the company expects total annual sales of US$2.5 billion.
NASDAQ (14631.9543, 133.08, 0.92%) exchange announced the second fiscal quarter revenue of 846 million US dollars, an increase of 21% year-on-year; adjusted EPS 1.90 US dollars better than market expectations of 1.75 US dollars. Although under the influence of the economic restart, the trading enthusiasm declined slightly compared with the first quarter, but the Nasdaq exchange still ushered in 135 IPOs in the second quarter, of which 88 were companies and the rest were SPACs.
JPMorgan Chase (152.86, 3.15, 2.10%) awarded CEO Dimon an option award, which means that he is expected to “work for a few more years.” JPMorgan Chase announced on Tuesday that it granted CEO Jamie Dimon an option of 1.5 million shares to reward the top manager for his long-term contribution to the company. According to the ten-year option clause, Dimon has the right to subscribe for 1.5 million shares of JPMorgan Chase at a price of US$148.73, but the option cannot be exercised within 5 years, and he must continue to hold the shares before mid-2031. All stocks acquired by option awards.
It is rumored that Apple (145.4, -0.75, -0.51%) next-generation iPhone SE will be a 5G mobile phone. According to the media quoted people familiar with the matter on Wednesday, all iPhones released by Apple from 2022 will support 5G, and the next-generation iPhone SE will be available in the first half of 2022 at the earliest, equipped with Qualcomm (142.17, 2.62, 1.88%) Snapdragon X60 modems. To support 5G connections. There is also news that Apple will not launch a new version of the iPhone mini model due to disappointing sales of the iPhone 12 Mini.
On July 21, local time, German chemical giant BASF (19.65, 0.33, 1.71%) announced that it has become the exclusive battery development partner of Cellforce, a joint venture of Porsche, and will jointly develop the next generation of high-performance lithium-ion batteries. According to the cooperation agreement, BASF will provide high-performance NCM (nickel cobalt manganese) cathode active materials to enhance fast charging and energy density performance. And Cellforce will provide high-performance batteries. In addition to performance, the cooperation between the two parties also emphasizes the effect of carbon neutrality. BASF expects that the carbon footprint of the cathode material production process can be reduced by up to 60%.
According to the schedule, Tesla (655.29, -5.21, -0.79%) CEO Musk, who is full of controversy in the cryptocurrency field, will work with “Wood Sister” Catherine Wood, Twitter (69.54, 1.60, 2.36%) and Square Founder Jack Dorsey attended an event on Wednesday to promote the acceptance of cryptocurrencies by institutions.
Bank of America (38.46, 0.77, 2.04%) said the global electric vehicle battery supply may be cut off as early as 2025. Affected by this, lithium battery sectors such as Livent, Lithium Americas, Albemarle, Chile Mining and Chemical have received attention.
Novartis (90.48, 0.24, 0.27%) revenue and net profit in the second fiscal quarter increased by 14% and 55% year-on-year; net revenue of innovative drugs increased by 15% year-on-year.
The Quell transcutaneous electrical nerve stimulator under NeuroMetrix was approved by the FDA as a “breakthrough therapy”. Yesterday the stock closed up nearly 208%.
Property Solutions Acquisition announced that the general meeting of shareholders approved the merger transaction with Faraday Future, and FFIE officially landed on Nasdaq on July 22.
Chembio Diagnostics, a diagnostic testing company, increased its revenue by 25% in the second quarter.
In other markets, the price of gold futures for August delivery on the New York Mercantile Exchange fell by $8, or 0.4%, to close at $1,803.40 per ounce on Wednesday, the lowest closing price in two weeks. The lowest intraday is $1794.30. The price of silver futures for September delivery rose 26 cents, or 1%, to close at $25.26 per ounce.
The price of West Texas Intermediate Crude Oil (EIA) for September delivery on the New York Mercantile Exchange rose 3.10 US dollars, or 4.6%, to close at 70.30 US dollars per barrel. London Intercontinental Exchange (120.23, 1.09, 0.91%) September delivery of Brent crude oil futures prices rose 2.88 US dollars, an increase of nearly 4.2%, to close at 72.23 US dollars per barrel.