Dow Falls as Economy Shrinks and Wall Street Preps for Tech Earnings

[Yo_Mama_Been_Loggin]

Stocks fell sharply Thursday after the U.S. economy contracted the most on record in the second quarter and Wall Street prepared for earnings from America's largest and most powerful tech companies.

The U.S. economy backpedalled at an unprecedented pace in the second quarter as the coronavirus pandemic upended the U.S. economy by forcing businesses across the country to close their doors.

The Commerce Department reported Thursday that gross domestic product, which measures the output of the economy, dropped 9.5% between April and June, which equals an annual pace of 32.9%. Economists polled by FactSet had been expecting the economy to shrink by 34.6%.

"Second quarter GDP dropped us in a deep hole, as expected, but estimates are for us climbing out in the third quarter," said Robert Frick, corporate economist at Navy Federal Credit Union. "We got a clue to just how quickly we'll climb out in this morning's unemployment claims, which rose again after declining for weeks. A healthy third quarter rebound is not a foregone conclusion unless unemployment and Covid-19 are brought under control."

https://www.msn.com/en-us/money/markets/dow-falls-as-economy-shrinks-and-wall-street-preps-for-tech-earnings/ar-BB17mV53?li=BBnbfcN

Heckuva job Trumpy

[CanonRay]

2. What makes him think it's going up in Q3?

I don't see any great prospects on the horizon

[uponit7771]

3. Every money program has been pushing a vaccine despite the multitudes of studies showing

... humans don't have more than a month of immunity from CV19.

We'll be waiting on an anti-vaccine for CV19

[CanonRay]

4. We're one third Q3 and no vaccines all that close.

[uponit7771]

6. Right ... And If the Chinese or Russian vaccines were all that effective we'd

... hear about it by now

[TheFarseer]

5. From what I hear

Best case scenario we have a vaccine the start of next year and best case scenario it’s only partially effective similar to a flu vaccine. As you point out, no guarantees you can convince knuckle heads to take it even if it is affordable to most people.

[tandem5]

7. GDP falls by a third and the dow intially drops by 1.5%. That's an insult...

The stock market is a fraud (what else is new).

[Hortensis]

9. Close to a dozen huge companies are reportedly doing very well

in the middle of all this, like a booming market for new cars (!), skewing the picture for all the rest because of their size.

[ProfessorGAC]

8. S&P Down Too

Only about half as much as the Dow.
Both curves look the same for the day.
Big drop early, then inching it's way back since.
I don't think the GDP news is causing a panic.
Otherwise, the selloff would have gone on for more than 60 or 90 minutes.

[Hortensis]

10. I read it was actually slightly better than anticipated. nt

[ProfessorGAC]

11. I Hadn't Heard That

But, a 32% contraction is a big deal.
Yet, it caused no panic for more than a short sell-off.
Not sure what that means, but I find it interesting.
Perhaps, it's because the economy will actually rebound, and they think this is zero?

[Hortensis]

12. 2nd qtr just marginally, but they had plenty of warning.

As for the rest? I've heard the experiences of a few huge companies doing well are propping up the market.

[ProfessorGAC]

13. There's Likely Something To That

But, much of that is linked ultimately to retail sales.
If UE keeps rising, & supplemental benefits get cut off, retail sales will take a beating.
Those "propping" firms won't be doing as well.
Yet, for 3/4ths of today, the indices slowly crept up.

[Hortensis]

14. Yes. Microsoft may be happy. I'm not.