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Bob Carey
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  US Stock Markets Ended Feb. 5, 2021
Posted Under: Weekly Market Commentary
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Equity markets surged higher as COVID concerns waned and quarterly earnings reports surpassed most estimates. The S&P 500 Index returned 4.67% last week, the best weekly return since early November. Equity markets were risk on as cyclical sectors trounced non-cyclicals. All 11 GICS sectors finished higher last week but cyclical sectors Energy, Communication Services, Financials and Consumer Discretionary were all up over 6%, while non-cyclical sectors Health Care, Utilities and Consumer Staples were up less than 3%. Earnings season was in full gear as 108 names in the S&P 500 announced quarterly results. The median earnings surprise was 6.95% higher than analyst estimates, a primary driver of equity returns last week. Among the most notable releases was Alphabet Inc. (Google's parent company) which, for the first time, reported their cloud business as a separate segment. Their cloud segment showed a smaller than expected loss but more importantly showed significant investment and profit expectations as they continue to grow. Alphabet showed YouTube TV advertising revenue of $7b which helped to fuel a 4Q profit higher than expectations and a 14.31% return last week. PayPal Holdings Inc., which also owns popular cash management app Venmo, announced quarterly earnings and revenue above expectations as the stock returned 14.99% last week. Boosting returns was news that Venmo was on track to produce $900m in revenue in 2021, crypto currency volume exceeded expectations and PayPal expects to add a crypto offering to Venmo in 2021. The S&P 1500 Casinos & Gaming Index returned 18.79% as a rise in online betting and COVID reopening remained significant tailwinds for the industry. Penn National Gaming Inc., MGM Resorts International, Wynn Resorts LTD, Caesars Entertainment Inc. and Las Vegas Sands Corp., the five largest names in the index, were all up more than 15% last week. Looking ahead to next week, earning season continues as 82 companies in the S&P 500 Index are expected to report quarterly results. Among those expected to report are The Walt Disney Co., General Motors Co., The Coca-Cola Co., Dupont De Nemours Inc. and Twitter Inc.
Posted on Monday, February 8, 2021 @ 8:08 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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