S&P 500, Amazon, Tesla and Goldman Sachs outlook
Leaving behind the previous very strong upward week for the major US stock markets, we could suppose that a cooling down may follow up in the current, as a natural take profit trend could occur. Even though the DJ Industrial and the S&P had similarly performed two weeks in a row moving higher and in the current are in red, the Nasdaq seems to be forming its own path by leading the upward race in the current.
In more detail, on Tuesday the S&P 500 left behind -0.48% closing at 3609.53, the Nasdaq 100 dropped by -0.3% closing at 11,977.49 and the Dow Jones decreased by -0.56% finishing the session at 29783.35.
Everything so far is moving as we have expected weeks ago. You can check some of the previous analysis on the stock market which could possibly give you an idea on creating a trading strategy.
Today, we will be looking in the stocks that made some of the most significant headlines in the previous days.
Amazon gets into pharmaceuticals
Retail giant Amazon moved slightly higher by +0.15% yesterday and closed at 3,135.66 USD. Amazon captured the headlines by announcing it will now be opening an online pharmacy store through its platform.
With this move, Amazon now enables customers to order online medication or prescription refills and have them delivered to their door in a few days. This is a very smart move by Amazon and the timing of the move couldn’t be more perfect.
First, with the experience Amazon has with online services it will support millions of people to get their prescribed drugs easier and faster. Second, purchasing medicines online is safer for the time being as the coronavirus pandemic has not been controlled yet and a lot of people are advised or obligated to stay home.
According to various sources, for now, the pharmacy service will be offered in the US and consumers will be required to set up their own profile and their doctors will be sending their prescription to it. This is another big step for Amazon as it continues to open its platform to more consumer needs. I could say that pharmacies without online services could come under pressure as Amazon has a big advantage against them.
Goldman Sachs downsizing once again
Goldman Sachs was among the winners yesterday as it gained +1.02% on the normal trading session and closed at $224.65. Despite the major bank’s move higher yesterday, the news regarding its future steps seems to lean to the negative.
Goldman Sachs is now preparing for the second round of firings in the current year that aim to reduce its workforce. It is very evident that Goldman Sachs is taking measures to become more cost-effective and further support its economic position in the current uncertain economic environment.
As it was re-affirmed on Tuesday by Fed Chair J. Powell that the US economy has a long way to go to overcome the adverse effects of the covid-19 outbreak, GS could be looking to take more measures in the future. Goldman’s latest downsizing announcements are a part of a bigger plan announced in January to reduce costs worth of US$1 billion in expenses, and it’s attempting to do just that.
Yet, Goldman has benefited from the circumstances derived from the pandemic with a considerable amount of money flowing inwards from its trading desk activities. However, bringing costs significantly lower seems to remain a priority for the firm and it could also be an attempt to increase its stock price.
Tesla rises to the top on Tuesday
Tesla was the biggest winner for all the major US indexes on Tuesday as it gained +8.21% and closed at $441.61.
Tesla Inc’s rally came after headlines that the electric car maker will be joining the S&P 500. This has only added to the excitement of investors as on a year to date basis Tesla is up +427.82%.
Tesla’s performance during the past year has also been exceptional after it posted a fourth consecutive quarterly profit this summer. This was also a very important requirement for the company to enter the S&P500 in the first place. In fact, that was the only requirement missing for Tesla, as its large market cap surpasses 400B USD. We would like to caution traders that the overexcitement for Tesla could prove short-lived.
I would advise traders to focus on the overall picture of the company and to keep in mind that the Electric vehicle sector is becoming increasingly popular with competition expected to rise significantly in the next years.
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