Stock Market Today: Disney Halts Dividend; Worst ADP Report Ever


Equities tried to push higher on Wednesday, with bulls hoping to erase the late-session selloff on Tuesday. However, it was a tricky session in the stock market today.

The S&P 500 ended down 0.7%. The index first opened higher on the day, reversed and took out Tuesday’s low. It closed near session lows. The back and forth continues amid a difficult time for investors.

On the one hand, they still have to dig through corporate earnings reports — for instance, Shopify (NYSE:SHOP) and General Motors (NYSE:GM), which reported this morning — while also deciphering a plethora of economic data.

For the latter, let’s have a look.

Economically Speaking

April’s ADP jobs report came out with some pretty extreme numbers. It showed a 20.2 million fall — a record — which missed expectations for a job loss of 20 million. The prior report was revised lower to a 149,000 decline, from a previously reported decline of 27,000.

Keep in mind, the ADP report only goes through April 12, so the numbers are likely worse in reality. The decline in the ADP report is more than double the total numbers lost during the Great Recession. Don’t forget, on Thursday we get the weekly jobless claims report and on Friday, investors get the labor report.

As the novel coronavirus pandemic rocks the economy, the European Union expects a 7.5% contraction in 2020. This is the worst economic crisis since the Great Depression. Now it all depends on how safely economic activity can be restarted and how it will rebound.

According to Bank of America (NYSE:BAC) CEO Brain Moynihan, consumer spending is finally starting to recover. The merchant and consumer sides have both seen positive growth over the last two to three weeks, he added. Specifically, Moynihan pointed to strength in restaurant and gasoline sales, as consumers start to drive more.

Movers in the Stock Market Today

After a bumpy session, Disney (NYSE:DIS) shares ended about flat. That comes after an earnings miss, revenue beat and a halting of its dividend. Remember, Disney pays two dividends per year, not four, and management says the skipped payment will save it $1.6 billion in cash.

On the plus side to its mixed earnings report, the company says its Disney+ platform has more than 54 million subscribers.

To help with recent struggles due to the pandemic, Uber (NYSE:UBER) announced today that it will lay off 3,700 employees. Cuts to its customer support and recruiting teams amount to roughly 14% of its 26,900 employees. The company also announced that CEO Dara Khosrowshahi will forgo his base salary for the rest of the year.

Apple’s (NASDAQ:AAPL) has a new competitor for its popular AirPods product. Microsoft’s (NASDAQ:MSFT) Surface Earbuds are available for pre-order today — along with the Surface Go 2, Surface Book 3 and Surface Headphones. The Surface Earbuds have a price point of $199 and will be available May 12, while the Surface Headphones 2 will be $249.

AbbVie (NYSE:ABBV) just got the final stage of approval from the Federal Trade Commission for its $63 billion acquisition of Allergan (NYSE:AGN). As part of the agreement, Allergan will divest brazikumab to AstraZeneca (NYSE:AZN) and AbbVie will also divest zenpep to Nestle (OTCMKTS:NSRGY).

Nio (NYSE:NIO) is up about 10% after delivering 3,155 vehicles in April. That’s up 105.8% from March deliveries and up 108.7% year-over-year. CFO Steven Feng said, “with the positive order and delivery momentum, we remain committed to further improving our gross margin and operational efficiency.”

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Kenwell is long DIS and AAPL.

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