Stocks were lower Friday morning after the latest batch of corporate earnings results suggested a grim outlook for the current quarter and President Donald Trump threatened retaliation on China over the coronavirus pandemic.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Earnings results from some of the most heavily weighted companies in the major U.S. stock indices came in mixed after market close Thursday. Amazon (AMZN) posted first-quarter sales that jumped 26% over last year, but warned that $4 billion in expected coronavirus-related costs could drag operating income negative to the tune of $1.5 billion.” data-reactid=”17″>Earnings results from some of the most heavily weighted companies in the major U.S. stock indices came in mixed after market close Thursday. Amazon (AMZN) posted first-quarter sales that jumped 26% over last year, but warned that $4 billion in expected coronavirus-related costs could drag operating income negative to the tune of $1.5 billion.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile, Apple (AAPL) reported quarterly revenue growth that slowed dramatically over last year, and declined to offer an outlook for the first time in years due to uncertainty over the pandemic.” data-reactid=”18″>Meanwhile, Apple (AAPL) reported quarterly revenue growth that slowed dramatically over last year, and declined to offer an outlook for the first time in years due to uncertainty over the pandemic.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Separately, during a briefing Thursday, President Donald Trump said his phase one trade deal with China was now eclipsed by the more imminent reality of the coronavirus pandemic, which originated in the country. Trump has criticized China over its handling of the outbreak and claimed he had seen evidence that the virus was started in a Wuhan lab, though other U.S. officials have downplayed that claim.” data-reactid=”19″>Separately, during a briefing Thursday, President Donald Trump said his phase one trade deal with China was now eclipsed by the more imminent reality of the coronavirus pandemic, which originated in the country. Trump has criticized China over its handling of the outbreak and claimed he had seen evidence that the virus was started in a Wuhan lab, though other U.S. officials have downplayed that claim.

Click here for complete coverage of Warren Buffett and Berkshire Hathaway.Click here for complete coverage of Warren Buffett and Berkshire Hathaway.
Click here for complete coverage of Warren Buffett and Berkshire Hathaway.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Despite ending the regular session lower on Thursday, the S&amp;P 500 closed out April on a high note and posted its best monthly gain since 1987. The blue-chip index climbed a total of 12.68% for the month, but was still off 14% from its record high on February 19, and down nearly 10% year to date.” data-reactid=”33″>Despite ending the regular session lower on Thursday, the S&P 500 closed out April on a high note and posted its best monthly gain since 1987. The blue-chip index climbed a total of 12.68% for the month, but was still off 14% from its record high on February 19, and down nearly 10% year to date.

“We forecast further gains in most risky assets between now and the end of next year. This reflects our expectation of a rebound in economic activity starting in the second half of 2020, alongside the continuation of massive monetary and fiscal policy support,” John Higgins, chief markets economist for Capital Economics, wrote in a note Thursday.

“Admittedly, risky assets have already recovered quite a lot of the ground that they lost after the outbreak of coronavirus. And two key downside risks remain,” he added.

“First, success in containing the virus could be reversed as economies reopen. Second, the consensus for policy support might break down,” he said. “But assuming these risks do not materialize, we anticipate that the rally will continue.”

Still, equities are entering what has historically been a tougher six-month period in terms of comparable returns.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="During that time frame, the S&amp;P 500 have averaged returns of just 1.5% during the May through October period since 1950, according to LPL Research data, and ended the period higher just 64.3% of the time. In more recent history, however, stocks produced positive gains in seven of the past eight six-month periods between May and October, and as much as 10% during the similar period in 2013.” data-reactid=”38″>During that time frame, the S&P 500 have averaged returns of just 1.5% during the May through October period since 1950, according to LPL Research data, and ended the period higher just 64.3% of the time. In more recent history, however, stocks produced positive gains in seven of the past eight six-month periods between May and October, and as much as 10% during the similar period in 2013.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The recent stock rally comes despite mounting evidence of the damage the coronavirus pandemic and social distancing measures have inflicted on the domestic economy. A government report Thursday showed another 3.8 million Americans filed for new unemployment claims last week, bringing the total over the past six weeks to more than 30 million.” data-reactid=”39″>The recent stock rally comes despite mounting evidence of the damage the coronavirus pandemic and social distancing measures have inflicted on the domestic economy. A government report Thursday showed another 3.8 million Americans filed for new unemployment claims last week, bringing the total over the past six weeks to more than 30 million.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But the outbreak at least showed further signs of easing on Thursday, fueling hopes that businesses could slowly begin to open across more jurisdictions and lead to a recovery in economic activity. U.S. coronavirus cases rose just 1.2% on Thursday for the slowest pace of increase of the month, according to Bloomberg and Johns Hopkins compiled data. Overall cases have topped 1.05 million in the U.S. and 3.2 million globally.” data-reactid=”40″>But the outbreak at least showed further signs of easing on Thursday, fueling hopes that businesses could slowly begin to open across more jurisdictions and lead to a recovery in economic activity. U.S. coronavirus cases rose just 1.2% on Thursday for the slowest pace of increase of the month, according to Bloomberg and Johns Hopkins compiled data. Overall cases have topped 1.05 million in the U.S. and 3.2 million globally.

9:33 a.m. ET: Stocks open lower after tepid tech quarterly results

Here were the main moves in markets, as of 9:33 a.m. ET:

  • S&P 500 (^GSPC): -49.96 points (-1.72%) to 2,862.47

  • Dow (^DJI): -380.37 points (-1.56%) to 23,965.35

  • Nasdaq (^IXIC): -171.22 points (-1.93%) to 8,720.13

  • Crude (CL=F): +$1.16 (+6.16%) to $20.00 a barrel

  • Gold (GC=F): -$6.90 (-0.41%) to $1,687.30 per ounce

  • 10-year Treasury (^TNX): -0.7 bps to yield 0.618%

9:00 a.m. ET: Exxon Mobil reports first quarterly loss in decades, Chevron cuts capital expenditures again

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Quarterly results from oil majors Exxon Mobil (XOM) and Chevron (CVX) reflected the early impact of the misery in oil markets at the corporate level.” data-reactid=”53″>Quarterly results from oil majors Exxon Mobil (XOM) and Chevron (CVX) reflected the early impact of the misery in oil markets at the corporate level.

Exxon Mobil reported its first quarterly loss in at least 32 years, with losses totaling $610 million for the first three months of the year versus income of $2.4 billion in the same quarter a year ago. However, the company departed from other major oil companies in sticking to its previously announced plans to cut capital expenditures by $10 billion to $23 billion for the year.

Chevron, on the other hand, cut its capital expenditures plans again following crude oil prices’ April slump. The company cut its capex plans buy $2 billion to $14 billion, after originally planning capex to come in at $20 billion for the year. These reductions are mostly going to hit Chevron’s shale production, with activity in both the Permian Basin and Canada getting slashed. Refining operations are also going to bear some of that cut. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="While Chevron eked out a first-quarter profit, its results highlighted some of the demand destruction for downstream products that have resulted from the coronavirus pandemic. Jet fuel demand was down 75%, and diesel demand dropped 25%, the company said in a presentation Friday. ” data-reactid=”60″>While Chevron eked out a first-quarter profit, its results highlighted some of the demand destruction for downstream products that have resulted from the coronavirus pandemic. Jet fuel demand was down 75%, and diesel demand dropped 25%, the company said in a presentation Friday.

7:23 a.m. ET Friday: Stock futures fall

Here were the main moves in markets ahead of the opening bell, as of 7:24 a.m. ET:

  • S&P 500 futures (ES=F): down 59.5 points, or 2.05%, to 2,843.00

  • Dow futures (YM=F): down 461.00 points, or 1.90%, to 23,769.00

  • Nasdaq futures (NQ=F): down 229.00 points, or 2.55%, to 8,759.5

  • Crude (CL=F): -$0.03 (-0.16%) to $18.81 a barrel

  • Gold (GC=F): -$7.00 (-0.41%) to $1,687.20 per ounce

  • 10-year Treasury (^TNX): -1.3 bps to yield 0.612%

6:02 p.m. ET Thursday: Stock futures open lower

Stock futures pointed to a lower open on Friday, as investors braced for more earnings and data that are all but certain to show how badly the coronavirus has stifled global growth.

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:02 p.m. ET:

  • S&P 500 futures (ES=F): down 38 points, or 1.31%, to 2,864.5

  • Dow futures (YM=F): down 260 points, or 1.07%, to 23,970.00

  • Nasdaq futures (NQ=F): down 157.25 points, or 1.75%, to 8,831.25

Wall Street and New York Stock Exchange in Downtown Manhattan, New York City, USAWall Street and New York Stock Exchange in Downtown Manhattan, New York City, USA
Wall Street and New York Stock Exchange in Downtown Manhattan, New York City, USA

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