It was a concerning day in the stock market today. While the S&P 500 rallied another 1.5%, bringing this week’s gains to almost 11%, it struggled to hold those gains into the close.
That’s as another enormous jobless claims report hit the tap before the open. Oil prices took a spill as investors continue to speculate about just how much production OPEC and its allies will cut.
Oil has mattered in the recent past, but none of these horrendous jobless claims reports have mattered thus far. Another 6.6 million Americans filed for unemployment in this week’s report, just short of last week’s revised reading of 6.86 million. While it was still worse than economists’ estimates of 5.3 million, this estimate was the closest over the past three weeks.
Still, if the market rallied on the past two reports, surely this wouldn’t be the one to derail equities. Particularly as the Federal Reserve unleashed another $2.3 trillion in stimulus.
In the Fed’s latest minutes release — which was earlier this week — it was pretty clear it’s worried about the economic consequences of the novel coronavirus. It’s also clear that the Fed is willing to do whatever is necessary.
The Fed’s latest plan is aimed at helping small- and medium-size businesses. It will purchase up to $600 billion in loans via the Main Street Lending Program and lend up to $500 billion to states and municipalities. The Fed will also facilitate purchases of investment-grade ETFs and bonds that slipped into junk territory after March 22.
Movers in the Stock Market Today
Disney (NYSE:DIS) shares are rising on news that Disney+ just surpassed 50 million global subscribers. This comes only five months after its U.S. launch and it has since been released in over a dozen countries. The platform is now available in Austria, France, Germany, Ireland, Italy, Spain and Switzerland after launching over the last two weeks.
Starbucks (NASDAQ:SBUX) withdrew its full-year guidance due to the coronavirus crisis, after reporting preliminary second-quarter earnings of 32 cents per share. That missed analysts’ expectations of 39 cents per share. Further, the company said that weakened results in China impacted earnings by 15 to 18 cents.
Starbucks says it’s able to provide forward guidance with any reasonable amount of certainty. However, management expects the negative impacts to be “significantly greater” in the third quarter. Despite the news, shares rose about 3.2% on the day.
Loop Capital cut its price target on Facebook (NASDAQ:FB) to $215 from $245 over concerns about digital ad revenue. However, the analyst maintained a “buy” rating. Also interesting, Loop Capital raised Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) price target from $1,320 to $1,400. According to the analyst, it’s believed that search-related ads will be one of the last areas in advertising to see budget cuts.
Microsoft (NASDAQ:MSFT) Teams usage continues to skyrocket. Calls that involved video jumped from 21% to 43% as more people are working remotely. Overall meeting minutes rose from 900 million on March 19 to 2.7 billion minutes on March 31. As of the most recent report, Teams had passed 44 million daily active users in mid-March.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.