Commenting on Microsoft, AT&T and Abbott Labs’s earnings and today’s trading so far, Gorilla Trades strategist Ken Berman said:
Q4 2020 hedge fund letters, conferences and more
Microsoft, AT&T And Abbott Labs Report Bullish Numbers
The major indices are all significantly lower following a wild and very active morning session on Wall Street. While on Fed days, like today, stocks are usually stuck in narrow ranges, the ongoing earnings season and the continued trading frenzy in some of the most-shorted issues led to wild moves in several sectors of the market. Several hedge funds have been liquidating some of their widely held positions to cover their mounting losses on their bearish bets against the likes of AMC (AMC, +237%), GameStop (GME, +136%), leading to losses for some of the leaders of the bull market.
On a positive note, Microsoft (MSFT, +2.8%), the first tech giant to report yesterday afternoon, has been pushing higher this morning despite the broad selloff, just as AT&T (T, +0.9%) and Abbott Labs (ABT, +1.9%), which published bullish numbers in pre-market trading. In economic news, the durable goods report was mixed, but crude oil inventories unexpectedly plunged by nearly 10 million barrels, triggering a rally in the commodity's market. Following the Fed’s announcements at 2 pm EST, Apple (AAPL, +0.1%), Tesla (TSLA, +0.3%), and Facebook (FB, +2.4%) will all report earnings in after-hours trading, so the tech sector could be in for more fireworks.
Market Wrap
Dow: 30,567, - 370 or 1.2%
S&P 500: 3,787 - 63 or 1.6%
Nasdaq: 13,430, - 197 or 1.4%
Russell 2000: 2,130, - 19 or 0.9%
Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a more than 5-to-1 ratio on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 141 stocks hit new 52-week highs. The major indices have been trading below their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday selling pressure. Materials, financials, communication services, and industrials have been hit the hardest this morning, with all of the main sectors being in the red, and only energy stocks and consumer staples showing meaningful relative strength. Stay tuned!
