The day opened with the SPX down -7.36, but with a steady stream of selling until we reached a low of SPX 2,721.17 (-68.65). Get this one.....you will laugh....it apparently didn't dawn on traders or the media until yesterday that the start of earnings this week might have some companies reporting horrendous numbers. AND THEY WILL.
We had a very strong market the last two weeks, and a pullback was healthy, but the media is blaming it on earnings concerns. I am quite sure people knew earnings were coming up, and are concerned about them.
By the close, 2/3 of the losses were made back as the MINIS closed down -20.25. Despite the large selling of 328.60 Dow points, AAPL was higher by $52.6, AMD was up $2.56, and AMZN was up 126. People are buying the winning stocks from before the virus.
This is a chance for every CEO who has been massaging numbers for the last 3 years to show good growth to pull all the dirty laundry from under the bed. Bad numbers are not their fault, after all, it is the virus and the President for shutting down the country. They are as much a victim as if they had contracted the virus.
As a matter of fact, some CEO's may even take a draconian approach to reporting earnings in an attempt to look like super heroes after this passes. By putting a huge negative spin on earnings, they can have a lower high-water mark to reach when the country reopens.
MARK MY WORDS
Many international companies will need the help as they WILL move their manufacturing process out of China to other cheap labor countries, or back to the US. I am betting Cambodia, Vietnam and the Philippines gets the lions share of jobs. Can we trust China again? Shame on us if we do.