Dissecting This Weeks S&P 500 Earnings
S&P 500 traded positively today (+1.39%) although down -1.32% from the close of last week. The index traded lower Thursday due to the disappointing news unfortunately, leaked from Gilead Sciences, Inc. (NASDAQ:GILD). It was suggested their experimental Remdesivir drug trials, which had hopes to be an effective treatment against the COVID-19 virus, has not been successful.
Interestingly and in contrast to a lot of sectors, 80% of stock within the Consumer Staples sector out performed their earnings per share (EPS). Now, we wait until next week to hear from the “Big 5 in tech” : Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL) Facebook, Inc. (NASDAQ:FB), Google (Alphabet Inc) (NASDAQ:GOOG) (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT).
Traders predicted the economy would be hit hard with everything that has taken place over the last couple of months. The pair discuss whether the initial reaction to Coronavirus fears were overly drastic as further economic data is released, interpreted and forecasted. The overall sentiment remains whether or not the market movement to such news is in fact scarier than the original fear itself.
There are 3 trading strategies Roger Scott believes are worth pursuing in the current market environment to provide investment opportunities without having to much exposure to negativity volatility:
1) Go bottom-fishing: look for stocks where the price has dropped as of late and are therefore undervalued. The key to this strategy however, is to recognize stocks with the best possibility for upside and prospects of recovery. This strategy requires patience and is a longer-term play. Take a closer look at the expanding TV services Walt Disney Co (NYSE:DIS) is now providing.
3) Non-directional Options strategies especially when volatility is high – making premiums higher (increased profit for less risk). Examples: Iron condor, bear call spreads, bull put spreads.
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