On January 20, American stock markets closed at new all-time highs. The S&P 500 index rose 1.39% to 3852 points, the NASDAQ rose 1.97%, the Dow Jones added 0.83%. Risk appetite has increased on the back of an improving epidemiological situation in the States, positive expectations from the reporting season, and partly due to the official inauguration of President Joseph Biden. The communications sector was a growth engine for the broader market, surging 3.6% on a strong quarterly report from Netflix.
Company news
- Streaming giant Netflix (NFLX: + 16.9%) performed better than expected and management announced that it is considering resuming its share buyback program.
- Bank of New York Mellon (BK: -7.3%) showed mixed results. Operating expenses were above expectations.
- Procter & Gamble’s (PG: -1.3%) earnings and earnings exceeded expectations, but the stock still declined on investor concerns about the sustainability of the results.
Today, global stock exchanges are showing positive dynamics. The first decrees of President Biden only indirectly relate to the economy, so they practically do not affect the stock market. Investor optimism is driven by factors that have been in sight for a long time. Among them are soft monetary policy, prospects for the adoption of a new package of fiscal stimuli, acceleration of the vaccination process.
Yesterday in the United States, a record number of deaths per day was recorded – 4409. Amazon has offered vaccine assistance to the US government, which has boosted investor confidence in boosting the vaccine campaign. In addition, the first studies point to the effectiveness of the Pfizer vaccine against the British strain of coronavirus.
The first quarterly reports of S&P 500 companies exceed investor expectations. Currently, the forecast assumes an average EPS decline of 5.9%, while just a week ago, EPS was forecast to fall by 8.8%. Market participants are just beginning to put optimistic expectations in the quotes in relation to reporting, so the upside potential of the S&P 500 remains.
Economic News
Noteworthy is the weekly publication of data on the number of initial applications for unemployment benefits (forecast: 910 thousand, previous value: 965 thousand). The unexpected rise in the indicator last week has raised concerns. If this time the market participants get an unpleasant surprise again, then the official report on the labor market for January will be weak.
Sentiment Index
The Freedom Finance Sentiment Index climbed to 62 out of 100. The indicator reflects market participants’ hope for a global economic recovery in 2021. Worries about the negative impact of the coronavirus pandemic are starting to wane thanks to the prospect of mass vaccinations.
Technical picture
Technically, the S&P 500 is prone to an upward movement. On the eve of the broad market index confidently overcame the historical maximum at 3827 points and continued to move to the upper border of the equidistant channel at 3860 points. Indicators indicate the likelihood of the trend continuation. The nearest resistance is the psychologically significant level of 3900 points.
Today Top Movers
Jaguar Health Inc (JAGX), a biotechnology company, surged about 30.48% at $3.81 in pre-market trading Thursday following the declaration of closing of $6.0 million issuance and sale of designation-backed note related to possible tropical disease priority review voucher.
Qutoutiao Inc (QTT) share price soared 39.41% to $3.75 during the early morning trading session on Thursday.
InspireMD Inc (NSPR) stock ascended 15.48% at $0.81 in the pre-market trading today.
BIOLASE Inc (BIOL) gained over 12.14% at $1.08 in pre-market trading on Thursday.
Top Upgrades & Downgrades
BTIG turned bullish on PayPal Holdings Inc. (PYPL), upgrading the stock to “Buy”.
Diebold Nixdorf Incorporated (DBD) has won the favor of JP Morgan’s equity research team. The firm upgraded the shares from Neutral to Overweight and moved their price target to $16.0, suggesting 43.04% additional upside for the stock.
Synaptics Incorporated (SYNA) received an upgrade from analysts at JP Morgan, who also set their one-year price target on the stock to $110. They changed their rating on SYNA to Neutral from Underweight in a recently issued research note.
Earlier Thursday BTIG reduced its rating on Senseonics Holdings Inc. (SENS) stock to Neutral from Buy.
JP Morgan analysts reduced their investment ratings, saying in research reports covered by the media that it’s rating for Maxar Technologies Inc. (MAXR) has been changed to Neutral from Overweight and the new price target is set at $55.
Analysts at Berenberg downgraded Citigroup Inc. (C)’s stock to Hold from Buy Thursday.
Latest Insider Activity
Virgin Galactic Holdings Inc. (SPCE) CFO, Treasurer Campagna Jonathan Joseph announced the sale of shares taking place on Jan 19 at $31.44 for some 56,305 shares. The total came to more than $1.77 million.
Snap Inc. (SNAP) Chief Financial Officer Andersen Derek sold on Jan 19 a total of 1,254,458 shares at $50.43 on average. The insider’s sale generated proceeds of almost $0.44 million.
Affirm Holdings Inc. (AFRM) 10% Owner Founders Fund V Management, LL declared the purchase of shares taking place on Jan 15 at $49.00 for some 75,000 shares. The transaction amount was around $3.67 million.
Adverum Biotechnologies Inc. (ADVM) Director Machado Patrick bought on Jan 15 a total 78,182 shares at $11.52 on average. The purchase cost the insider an estimated $115,174.
Important Earnings
Top US earnings releases scheduled for today include FuelCell Energy Inc. (NASDAQ: FCEL). It will announce its Oct 2020 financial results. The company is expected to report earnings of -$0.04 per share from revenues of $17.05M in the three-month period.
Analysts expect Baker Hughes Company (NYSE: BKR) to report a net income (adjusted) of $0.17 per share when the bank releases its quarterly results shortly. Revenue for the fiscal quarter ended Dec 2020 is predicted to come in at $5.42B.
Intel Corporation (INTC), due to announce earnings after the market closes today, is expected to report earnings of $1.1 per share from revenues of $17.5B recently concluded three-month period.
