Your Thursday Market Blip 4/30/20

Your Thursday Market Blip 4/30/20

Stocks ended the month of April with a pullback as the Dow fell 288 points to 24,345 on heavier trading volume. For the month of April the Dow rebounded about 12% and for the year is off about 13%.
So why are markets rebounding for the month of April when it seems the world is falling apart? The gurus are pointing to the fact that the market is a forward indicator and does not look at just today or tomorrow but is gazing out at how things might be in 6 months. With this in mind Mr. Market is seeing a gradual economic reopening, a dramatic expansion of testing, news of potential virus treatments and more virus and economic data coming in which removes some of the uncertainty and allows for better forward projections. This however does not mean things cannot change. There is still much uncertainty that could cause a recalculation of the forward view and thus result in another pullback if the forward picture darkens.
Microsoft reported a 15% revenue gain and a jump in profits of 23%. The company’s cloud division saw a 27% jump in revenue which was driven by a 57% increase for its Azure cloud platform.
Tesla posted surprise profit with a gain in net income of 143% while revenue was up by 32%. The results are stunning compared to Ford which posted double digit revenue declines and a huge loss. GM reports earnings next week and is also expected to follow in Ford’s footsteps or in this case… tire tracks. Elon “Megalomaniac” Musk said the company has enough liquidity to fund important capex projects like the Berlin giga factory and the Cybertruck facility in the US. Chinese production and sales are going well but the Tesla Semi launch was pushed back to 2021. Backlogs are at a record level and the company said it was considering a subscription autonomous driving program.