US Stock Markets Ended Feb. 7, 2020

Equities roared higher last week as the S&P 500 index returned over 3.0%. Stocks were fueled by waning global risks of a coronavirus pandemic and robust quarterly earnings results. According to Bloomberg, heading into last week Low Volatility and Momentum were two of the best performing factors year-to-date. Last week factor returns reversed course as the two worst performing factors were Momentum and Value, while large Size and High Volatility were the top performers. Earnings season hit full stride as 112 names in the S&P 500 index declared their quarterly results. Twitter Inc. announced quarterly results and soared 15% on Thursday. The social media platform announced daily average users and ad revenue both came in higher than analyst expectations. Google's parent company Alphabet Inc. announced earnings slightly ahead of estimates but revenues were short of expectations. However, the stock returned 3% return for the week after Google's earnings call highlighted $3b in YouTube subscription revenue with over 20m paying users and cloud sales backlog worth over $11b. Uber Technologies Inc. soared over 9% on Friday after the company announced quarterly results which included news they should be profitable by 4Q20 and full year profitable in 2021, nearly a year earlier than analysts expected. Ford Motor Co. plummeted nearly 10% after announcing disappointing earnings and revenue guidance fueled by delays in their new Explorer SUV launch and a change in leadership as Jim Farley was named COO. Biogen Inc. was the biggest mover in the S&P 500 last week returning nearly 26%. The large pharma company won a court battle for 5 years of exclusivity for their Tecfidera patent, which was being challenged by generic pharma maker Mylan NV, who predictably pledged to appeal the ruling. Looking ahead to next week, quarterly earnings season continues as mega-cap companies Cisco Systems Inc., PepsiCo Inc., NVIDA Corp., AbbVie Inc. and CVS Health Corp. are all expected to report.
Posted on Monday, February 10, 2020 @ 8:16 AM

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.