Commenting on Zoom Video Communications Inc (NASDAQ:ZM)’s earnings report and today’s trading Gorilla Trades strategist Ken Berman said:
[kalrman]
Q2 2020 hedge fund letters, conferences and more
The first London Value Investor Conference was held in April 2012 and it has since grown to become the largest gathering of Value Investors in Europe, bringing together some of the best investors every year. At this year’s conference, held on May 19th, Simon Brewer, the former CIO of Morgan Stanley and Senior Adviser to Read More
The major indices are all sporting modest gains at midday despite a bearish overnight session, with the Nasdaq once again pulling its weight in early trading. Yesterday’s star Apple (AAPL, +2.4%) hit another new record this morning similarly to Zoom Video Communications (ZM, +33%) which reported blowout earnings in pre-market trading. Despite announcing an up to $5 billion stock sale, Tesla (TSLA, -1.9%) also held up well, so the runaway rally in tech stocks is still intact. While the uptick in the number of new COVID cases in the U.S. is a warning sign for bulls, it could fuel further gains in the market-leading sector.
Zoom Video Communications and Tesla Lead
In economic news, the much worse-than-expected European Consumer Price Index (CPI) delivered a major blow to global risk assets, as the indicator’s dynamic is strongly recessionary. Meanwhile, the U.S. ISM manufacturing PMI provided a sizable bullish surprise for the second month in a row, coming in at 56.0, so the growth gap between the U.S. and Europe could widen in the coming months. That said, construction spending grew by less-than-expected in August, but the recovery is still on track in the sector according to the latest data.
Market Wrap
Dow: 28,521, + 91 or 0.3%
S&P 500: 3,510, + 10 or 0.3%
Nasdaq: 11,883, + 107 or 0.9%
Russell 2000: 1,569 + 10 or 0.4%
Market breadth has been relatively weak in early trading yet again, with advancing issues only outnumbering decliners by a 6-to-5 ratio on the NYSE at midday. Only 26 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 82 stocks hit new 52-week highs. The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday buying pressure. The key sectors have been showing a much more bullish picture this morning compared to yesterday, with only the defensive healthcare and utilities losing ground, and with materials, consumer-related issues, and industrials joining the tech rally. Stay tuned!
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