Stocks decoupled from oil prices on Monday, good news for equity investors as crude was bludgeoned again. West Texas Intermediate (WTI) futures sank as low as $13 per barrel amid speculation that the glut of domestic oil is so severe that storage capacity will be exhausted in a matter of weeks.
- The S&P 500 added 1.45% on its way to a six-week high.
- The Dow Jones Industrial Average added 1.49%
- The Nasdaq Composite jumped 1.11%
- For the first time in some time, Disney (NYSE:DIS) was the Dow leader, gaining 5.20%.
Stocks were boosted Monday by reports that a novel coronavirus vaccine could come to market as soon as this year. And on that note, there are inklings of gradual reopenings in various states as well.
A coalition of Western states, including California, the largest individual economy in the U.S., are coming together to draft reopening plans. New York Gov. Andrew Cuomo forecast some reopenings in the Empire State by mid-May.
Also, President Donald Trump said retailers, including Dow components WalMart (NYSE:WMT) and Walgreens (NASDAQ:WBA), will make more coronavirus testing kits available, which could aid in the effort to at least reopen some areas.
In late trading, 24 of 30 Dow stocks were higher and none of the losers were lower by 1% or more.
This Is Strange
Boeing (NYSE:BA) was back at it again today, meaning it had more bad news to deliver, but somehow the stock was in the green late in the session. For starters, the company is canceling its $4.2 billion purchase of Brazil’s Embraer (NYSE:ERJ) with that company’s CEO saying there’s no chance the deal can be brought back to life.
The costs savings are beneficial to Boeing, but there’s still chatter that the company needs more capital from somewhere, perhaps the federal government. Boeing reports first-quarter earnings before the bell Wednesday and it’s safe to say those results will be dismal.
Another Weird Surprise
Caterpillar (NYSE:CAT) traded higher today despite Morgan Stanley downgrading the industrial machinery maker to “underweight” from “equal weight.” That comes ahead of the company’s Tuesday morning earnings report.
How much downside is baked into the name here is debatable, but what’s not up for debate is that Caterpillar is an another example of economically sensitive name liable to deliver disappointing earnings.
Albeit in modest fashion, Apple (NASDAQ:AAPL) was a Dow loser today on news that it could delay production of its 5G iPhone by a month. Due to effects of Covid-19 on the company’s Asian supply chain, there’s been ample talk that this product could be delayed.
Earlier today, Wall Street Journal reported as much, but added that simply because Apple is pushing back the production date, that doesn’t mean the launch date will also be delayed.
The issue for Apple may not be when the 5G iPhone comes to market, but rather if when it does, will consumers be in good enough shape to proceed with upgrades from older models?
Apple reports earnings after the close Thursday.
3M (NYSE:MMM) delivers first-quarter results before the market open on Tuesday and judging by its ranking among the best Dow performers today, it looks like investors are betting on some good news.
3M is a major producer of N95 respirator masks, making it something of a coronavirus play and that appears to be priced into the stock ahead of earnings. What could move 3M following the report is some commentary about the safety and growth of its dividend and just how much its benefiting from virus-related sales.
Bottom Line on the Dow Jones Today
For those craving some near-term direction and clarity on the Dow, this could be your week as 11 members of the index step into the earnings confessional, including four tomorrow.
Let’s be honest: Boeing and Caterpillar aren’t going to set the world on fire and that places some burden on Microsoft (NASDAQ:MSFT) Wednesday and Apple the following day to pick up the slack. Let’s see of they’re up to the task.
Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.