Big Tech Beats Earnings Estimates
Amazon revenues were up 40% year-over-year while its earnings of $10.30 per share beat analyst estimates by $8.80.
Apple’s revenue and earnings were also higher than estimates. The company stated that the release of iPhone 12 will be postponed by several weeks and also announced a four-for-one stock split.
Alphabet’s earnings were less spectacular but the company comfortably beat estimates with revenue of $38.29 billion and earnings of $10.13 per share.
Facebook’s revenue was up almost 11% year-over-year despite the challenges brought by coronavirus pandemic while the company’s earnings of $1.80 per share easily beat analyst expectations.
Not surprisingly, all these stocks are gaining ground during the premarket trading session. The Big Tech was the main driver of the market’s upside move from the bottom reached in mid-March, so S&P 500 futures are also up in premarket trading.
Coronavirus Aid Package Negotiations Have Yielded No Deal Yet
While traders cheer the great results of big tech companies, their attention may later shift to coronavirus aid package negotiations.
At this point, there are no signs of progress. The $600 weekly unemployment benefits are about to expire, and failure to maintain the program in some form may put heavy pressure on consumer activity.
While there is always a chance of a last-minute deal, worries about the stimulus package may put some pressure on stocks later in the trading session.
Personal Income Fell By 1.1% In June
Personal Income declined by 1.1% month-over-month, while analysts expected a decline of 0.5%. The pace of the decline has decreased compared to May when Personal Income fell by 0.5%.
Meanwhile, Personal Spending increased by 5.6% month-over-month, mostly in line with the analyst consensus which called for an increase of 5.5%.
While Personal Income is under pressure due to the negative impact of the coronavirus pandemic, Personal Spending is supported by various government aid programs.
That’s why failure to reach a deal on the new coronavirus aid package may have a significant negative impact on the market.
For a look at all of today’s economic events, check out our economic calendar.