Your Tuesday Blip 10/27/20

Your Tuesday Blip 10/27/20

Four major items (the four horseman of the apocalypse?) continue to drive market action and they are “Election, Stimulus, Earnings and Infections”. The Dow closed the day lower by 222 points at 27,463. Trading volume was lower. The NASDAQ meanwhile gained 72 points to 11,431 as tech stocks jumped on merger news. After yesterday’s drubbing, IBD moved markets to “rally under pressure”.
This is a big week for earnings. So far today Harley Davidson made some noise and posted its best quarterly results since 2015 with sales down 8% while net income grew 50%. Harley has been consolidating dealers and trimming the number of models it sells and the results are paying off. In the healthcare space, Pfizer reported a 4% sales drop and a 4% earnings drop. The company is working on a vaccine for covid-19 and now has 42k people enrolled in its phase III trials. Merck posted earnings that beat estimates with a 1% sales increase and a 15% jump in net profits.
In economic news the Commerce Department reported that US factory orders for big ticket items rose 1.9% in September. This is better than the 0.5% reading that gurus had expected. While this is positive US factories continue to face significant headwinds from supply chain disruptions and potential shutdowns over rising covid infection rates.
Tech stocks got a boost when chip maker AMD (Advanced Micro Devices) reported better than expected results with revenue up 56% and net income gaining 128%. AMD focuses on computing and graphics chips for PCs and data centers. During the call CEO Lisa “The Brain” Su said the company has entered into an agreement to buy Xilinx in an all stock deal valued at $35 billion which many feel will further boost margins and possibly take market share from rival Intel.