Stock Market Today: New Record Highs; An $8 Trillion Opportunity

Stock Market

[Editor’s note: This story was updated on Feb. 5 to correct the list of companies that report earnings tonight.]

It’s been a very interesting week, made even more interesting by the action in the stock market today. Can we recap for just a moment?

On Friday, stocks dropped into the weekend, as the S&P 500 shed 1.8%. On Monday, stocks gapped higher, but gave up a bulk of the gains by the close. Still, it closed higher by 74 basis points.

The SPDR S&P 500 ETF (NYSEARCA:SPY) added 1.5% on Tuesday and another 1.1% on Wednesday. In the latter session, the SPY actually hit new all-time highs. That follows the PowerShares QQQ ETF (NASDAQ:QQQ) hitting new all-time highs earlier this week.

The action is impressive given the coronavirus’ impact on the Chinese economy and the Asian equity market. Will there be headwinds later as a result? Possibly.

Earnings Recap

Ford (NYSE:F) shares were hammered on Wednesday, sinking 9.5% after disappointing quarterly results. Fourth-quarter earnings of 12 cents per share missed expectations by 3 cents. Revenue sank 5% year-over-year to $39.7 billion, but that was largely expected as Ford has cut back on its sedan business.

What didn’t beat estimates? Management’s outlook. The company expects 2020 EBIT (earnings before interest and taxes) of $5.6 billion to $6.6 billion, well short of the $7.4 billion estimate. Shares now sit on a important support level.

Disney (NYSE:DIS) shares also sank on Wednesday, falling 2.3%. That’s despite the company beating on earnings and revenue expectations. Plus, despite many estimates near and in the low 20-million range, Disney+ came in with 26.5 million subscribers. Clearly the company has momentum, even if the stock is declining after the results. The question is, will bulls circle back to this one sooner rather than later?

And get ready, Twilio (NYSE:TWLO), Peloton (NASDAQ:PTON) and others report after the close. Here’s a trade preview for TWLO and PTON.

Movers in the Stock Market Today

The coronavirus outbreak is expected to cause China’s oil consumption to drop 25% this month thanks to the slowed travel within China. If the virus peaks in the next few weeks, oil demand could be at least 10% lower compared to March a year ago.

Industry executives are prepping for demand to sink by 3.2 million barrels per day in February against last year’s consumption figures. If it materializes, it will represent more than 3% of global oil consumption.

Microsoft’s (NASDAQ:MSFT) LinkedIn unit will see CEO Jeff Weiner step down to executive chairman in June after 11 years at the helm. His role will be filled by current senior vice president Ryan Roslansky.

Biogen (NASDAQ:BIIB) surged 17.5% due to a positive ruling from the United States Patent and Trademark Office. The case had to do with a key patent protecting the multiple sclerosis drug, Tecfidera which was a top seller for Biogen, making up about 30% of sales last year.

The autonomous vehicle industry could be an $8 trillion dollar market opportunity according to Cruise CEO Dan Ammann. Where’s that figure coming from? $500 billion for data insights, $2 trillion for freight, $500 billion for in-vehicle experiences and a whopping $5 trillion in ride-hailing.

But safety first. Ammann says a “super-human level of safety performance” for its autonomous vehicles is what Cruise hopes to reach. Remember, Cruise is a unit of General Motors (NYSE:GM), as it battles Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Waymo and others in the autonomous driving race.

Spotify (NYSE:SPOT) announced that it will be acquiring The Ringer, including owner Bill Simmons and about 90 of his employees. This is Spotify’s fourth podcast acquisition in the past year, as the company continues to grows its podcast business now with more than 700,000 to choose from. As The Ringer writer Shea Serrano would say, “Shoot your shot.”

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long DIS, TWLO and PINS.

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