U.S. markets and stock exchange traded funds rebounded Thursday as optimistic investors looked to technology giants ahead of their earnings reports.
On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) rose 2.5%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 0.8%, and iShares Core S&P 500 ETF (NYSEArca: IVV) gained 1.6%.
“It’s a big day in technology today in anticipation of their results,” Tim Ghriskey, Chief Investment Strategist at Inverness Counsel, told Reuters. “The earnings season so far has resulted in significant positive earnings surprises. We think that’s helping to fuel today’s rally in anticipation of positive surprises from these companies.”
Apple Inc, Amazon.com Inc, and Alphabet Inc are set to reveal their third quarter results after the closing bell. All three companies have enjoyed a surge in demand for their products and services as people were stuck at home during the coronavirus pandemic.
Further adding to the positive mood, the latest data showed the U.S. economy expanded at a record pace in the third quarter after the government doled out over $3 trillion in pandemic aid. A separate report also revealed that weekly unemployment claims dipped last week.
“It’s positive data, but it’s a little bit backward looking because you have COVID-19 cases on the rise again which doesn’t really send a strong signal about the fourth quarter,” Shawn Snyder, Head of Investment Strategy at Citi Personal Wealth Management, told Reuters.
While the economy and corporate America enjoyed a strong third quarter, many market watchers are looking for strong forward guidance, especially as with continued rounds of coronavirus infections.
“What I’m not looking at is what happened in the last quarter: because the recovery was so strong, it’s almost a given that there is an improvement,” Luca Paolini, Chief Strategist at Pictet Asset Management, told the Wall Street Journal. “What I want to see is companies feeling confident [enough]to give us guidance for the next few quarters.”
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