August 18, 2020

Another mixed trading session on Wall Street yesterday, with the Dow losing 86.11 points, or -0.31%.  The S&P 500 continues to fight toward an all-time high, gaining 9.14 points, or +0.27%.  The NASDAQ is in new all-time territory with a solid gain of 110.42 points, or +1.0%.

The world’s largest retailer, Walmart, reported better-than-expected 2nd quarter earnings yesterday, supported by a 97% surge in on-line sales during the period.  Analysts expected to see $135.6 billion in 2nd quarter revenue, but Walmart reported revenue of 137.7 billion.  Another key retailer, Home Depot, also reported strong financial results.  Home Depot reported profits per share of $4.02, up from $3.17 from one year ago.  Same-store sales surged 23.4% as pandemic-bound homeowners turned to home improvement projects.

What is so important about these results is that the consumer, and their willingness to spend, is a major component of gross domestic product (GDP) – the measure of economic activity and growth – and is an economic leading indicator.  3rd quarter GDP is critical to the overall recovery of the U.S. economy/GDP which took a 32.0% dive in the 2nd quarter.  Getting businesses back open and workers back to work is key to economic recovery, balanced with the ongoing threat of the coronavirus.  As pharmaceutical companies edge closer to a vaccine, the speed of a recovery hangs in the balance.

The tech-heavy NASDAQ hit an all-time high this morning reaching 11,186 within moments after the opening bell.  Moments later, the S&P 500 also hit its long awaited all-time high.  Quite a morning for new records on Wall Street!  Tech stocks and gold remain in the news, with tech driving the NASDAQ and gold breaching the $2,000/ounce level once again.