After ending the best month of profit in about three decades, the stock market started on a sour note in May as sentiment turned negative over the worsening unemployment situation and between the US and China over the spread of the corona virus.
Millions of Americans filed last week, bringing the six-week total to over 30 million since the coronavirus pandemic began closing companies across the country. With those massive economic costs, President Donald Trump threatened to cut tariffs on Chinese imports, blaming the Asian nation for misleading the world about the pandemic.
If Trump responds to his threat, it could trigger another trade war between the world's two largest economies, weakening prospects for a rapid economic recovery. All major US benchmarks, including the, and, fell about 3% on Friday.
Over the next week, we'll still see some big names from different sectors of the economy reporting their first quarter results. Here's what we're looking at:
1. Disney
The Walt Disney Company (NYSE 🙂 Reports Q2 2020 Profit After Closing Bell Tuesday 5th of May. Analysts expect sales of $ 18.05 billion and $ 0.93 earnings per share.
With the entertainment giant's theme parks around the world closed due to COVID-19, Disney is expected to generate revenue from resorts and consumer products to decline by $ 500 million or more over the period.
The Burbank, CA-based company also suffers on other fronts: there are no live sports events for its ESPN network, and there are currently no theaters open where its films can be shown. The film and TV production has been stopped and the cruise ships are docked.
Faced with these challenges in the coming quarters, Disney is unlikely to have much positive news to offer and can avoid future guidance. One bright spot could be subscriber numbers on the recently launched streaming service, Disney +, which benefits from the home environment.
Shares have fallen by 27% this year and closed to $ 105.50 on Friday, after a daily decline of 2.5%.
2. General Motors
General Motors (NYSE 🙂 will report for the first quarter before the market opens on Wednesday, May 6. The automaker is expected to show a profit of $ 0.47 on revenues of $ 32.09 billion.
Car manufacturers are among the worst hit companies in this pandemic. Global lockdowns have forced them to shut down their factories while sales have collapsed.
Last week, GM suspended its dividend and share buyback program because the largest US auto maker wants to save money. The moves announced Monday follow on from other money-saving measures taken in early April, when the company postponed 20% of the salary of salaried workers, cut the pay of top executives, and took 6,500 workers on leave.
GM stocks have fallen more than 45% this year, which is a huge underperformance against the benchmark S&P 500, which has fallen by around 13% since early 2020. On Friday, the stock dropped more than 6% to close at $ 20.90.
3. Tesla
Investors in Tesla (NASDAQ 🙂 are likely to face another volatile week. The electric vehicle maker's stock fell Friday after its CEO, Elon Musk, said in a tweet that Tesla stock is too high.
TSLA Weekly TTM
Musk posted more than a dozen times on Friday in less than 75 minutes, claiming that he sells & # 39; almost all of his physical belongings and does not own a home. He also repeated his call for the US economy to reopen.
It is not the first time that Musk has warned investors about the high price of his own shares. In the three most recent events, Tesla shares remained in the red for a year, while in the 2013 episode, Tesla fell by 30% the following month. It eventually recovered over a one-year period, according to Baird Equity Research, quoted by CNBC.
Investors became more confident in Tesla this year, after the automaker released a better-than-expected release, raising expectations that the company would be in a stronger position to withstand the delay caused by the corona virus. Shares of the Palo Alto-CA company fell more than 10% on Friday, closing at $ 701.32.
