Earnings and disease. That’s what’s in the news today. While the broader markets continue to see pressure following coronavirus concerns, individual companies are reporting strong earnings. As some may consider this a “stock picker’s” market, the unusual dynamic has been created. Usually, with strong earnings we see things like the SPY and QQQ push toward new highs. But that’s different right now due to increased global economic uncertainty thanks, in part, to China.
Meanwhile, the U.S. Federal Reserve left interest rates unchanged. However, in Canada, the Bank of England may opt to decrease interest rates. It could become Mark Carney’s last contribution before giving up his governorship of the Bank.
Stock Market Today: Coronavirus Is Still A Thing; And Growing
Not only is the coronavirus a “thing,” it has become a “big thing” at that. Broader stocks and oil fell lower over the last 24 hours. Furthermore, China has reported its biggest, single-day increase in coronavirus-related deaths so far. The death toll has jumped to 170, up from 132 yesterday. Across the country (China) the number of confirmed cases has climbed to more than 7,700. Though this “growth rate” is slowing, it’s also important to note that unlike the SARS outbreak in the past, the current virus has a much lower fatality rate.
But that doesn’t discount the fact that the disease continues to spread. Now India has confirmed its first case. This has all contributed to a shakeup in global confidence with one of the world’s largest economies essentially on lock-down. Cryptocurrencies have benefited from this along with gold and gold stocks. However, U.S. crude and tech stocks have felt the strain.
Stock Market Today: Tesla Crushes Estimates
One of the highlights of today is Tesla. The electric car company set new records after surging some 11% after its earnings report. In the stock market today we’ve already seen EV stocks follow suit. Elon Musk, CEO and founder of Tesla, expects to deliver more than 500,000 vehicles this year. He also has a positive outlook on profit and cash flow.
The company beat estimates on both revenue and profit for the 4th quarter. But profit margins themselves fell. This can be accounted for after the company took at the low-cost/ high-volume approach to launching its Model 3.
Stock Market Today: First-Quarter GDP
Similar to what we saw from the Fed yesterday, Thursday will see the first reading of Gross Domestic Product in the 4th quarter of last year. That comes out at 8:30 AM EST. The expectations are for the annualized growth rate to remain around 2.1%. Keep in mind that this comes a day after the Central Bank said it wasn’t content with the way inflation is being treated at the moment.
Chairman Jerome Powell explained that this figure is still below its target. The Bank will keep a close watch on this as well as current trends suggest a risk of global disinflation. In the near-term, this could be true considering the impact of the coronavirus on both the global and Chinese economies.