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BenzingaEditorial

The Dow Jones – The Dark Side of COVID-19

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Stock Market

Throughout their history, the Dow and S&P 500 have been used inter-changeably to describe the overall stock market. For a long time, the Dow was the market to nearly all investors. It is easier to analyze 30 as opposed to 500 stocks. But these days, the S&P 500 is more quoted, largely because the financial services industry has endorsed it.

What can and can’t Dow Jones track?

The Dow Jones Industrial Average highlights the good and bad of today’s markets. On the other hand, you cannot track some large stock giants that don’t pay a dividend. Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN), along with a few other NASDAQ giants, skyrocketed during the past decade. But they are not in the Dow. Moreover, they are practically an asset class by themselves. As for everyone else, the Dow should do the job.

This article will analyze the dark side of the COVID-19 storyline.

The latest earnings report of 3M (NYSE: MMM) was disappointing to say the least. Its organic sales declined 13.1% in the second quarter. 3M’s disappointing sales performance is a consequence of it being exposed to badly hit markets. Safety and industrial were hit by the slowdown in the automotive and aerospace markets. Transportation and electronic boarded that same train. Even healthcare dropped as COVID-19 pandemic has caused delays in elective procedures and closed dental offices all over the world.

Weakened consumer purchasing power

Severely weakened consumer purchasing power has been shown by American Express Company’s (NYSE: AXP) earnings that plunged as consumers were forced to stay home. But the company is doing what it can to get back in the saddle by launching a financial wellness tool to help users improve their credit score. By setting a desired target, they will receive personalized recommendations on how to reach it. On the other hand, Visa (NYSE: V) recently provided an earnings beat despite the still ‘frozen’ travel category, showing a glimpse of economic recovery thanks to e-commerce.

Non-existant travel

Speaking of travel, Boeing’s (NYSE: BA) earnings were as bad as it gets. The company reported a loss of $4.79 a share on $11.8 billion in sales for the second quarter whereas analysts expected a loss of $2.57 a share on $13 billion in sales.

Oil and gas fighting for survival

Even the oil giants are existentially threatened. There is hardly an oil company with a strong balance sheet like Chevron (NYSE : CVX) yet the pandemic crushed its profits. Together with its oil peer Exxon Mobil (NYSE: XOM), these are the only two oil giants that have the status of Dividend Aristocrats. But, maintaining that dividend comes at great cost as the second quarter was disastrous for both. Exxon raised a major new debt as it increased its long-term debt from $26.3 billion at December 31, 2019 by $20.2 billion until June 30, 2020. The cash position at June 30, 2020 was $12.6 billion which means that even with the debt, Exxon does not have sufficient cash to cover 12 months of dividend payout.

Caterpillar Inc (NYSE : CAT) saw its bottom line melt 64% compared to its prior year. Although its second-quarter revenues of $10 billion topped estimates of $9.2 billion, the top line dropped 31% due to lower sales volume. The pandemic diminished demand and consequently, dealer inventories were impacted negatively.

Failing to keep up with Big Tech

On Wednesday, Cisco (NYSE: CSCO) just reported its fourth consecutive revenue decline in its quarterly guidance. The 9% revenue decline resulted in its shares falling approximately 6% during extended trading. While much of the technology sector is seeing growth as the economy is getting an online shape and companies are turning to software to run their businesses, Cisco is struggling to keep up. The problem is that its core business has been centered around expensive hardware. Hardware has been pushed aside by cloud giants. The company’s investments in software wasn’t enough to come near Amazon, Microsoft and Google. But at least it topped estimates with 80 cents of adjusted earnings per share vs. 74 cents per share expected by Refinitiv. Revenue was $12.15 billion as opposed to the $12.08 billion expected.

Intel (NASDAQ : INTC)’s fall could get even worse. Its shares plunged followings its second quarter results that saw revenue come in 6.3% better than estimates at $19.7 billion. Earnings also came in ahead of forecasts by 10.7% at $1.23. It’s the earnings guidance for the third quarter that is causing concern. Since the report, analysts have been lowering their estimates, fearing that its shaky stock could led to big losses.

The House of Mouse came close to burning in flames

The iconic business model of Walt Disney Corporation (NYSE: DIS) that many failed to copy is what made the legendary House of Mouse perfectly exposed to the pandemic. COVID-19 has shuttered Disney to pieces during the first two quarters . And if there wasn’t for its streaming star that now exceeded 60 million subscribers, it would have been in ashes by now. The net adverse impact of the pandemic on its current quarter operating profit across all business has been about $2.9 billion. Moreover, during the second quarter, pandemic-induced theme park closures melted its operating profit by 58%.

Altered consumer behaviour

Walgreen Boots Alliance (NASDAQ: WBA) profit has declined over the last three years, even though its revenue has increased. But in July, the company announced a $1.0 billion investment into VillageMD. This investment also includes opening 500 to 700 physician-staffed clinics inside their locations across 30 markets over the next five years. This big news was announced just a few days before third quarter earnings that showed  substantial negative operating income due to the pandemic. Although it was expected that COVID-19 has temporarily altered consumer behavior, Walgreen’s report showed that some of these changes could be in for the long-haul. Although WBA deserves an applause for speaking out so early in the game which is very far from over, this raises many questions and increases the level of uncertainty.

Takeaway

These 11 Dow members are reflecting the world’s ongoing battle with COVID-19. It shows how the mightiest can fall. Fortunately, there are 19 of its members who have utilized the pandemic to become even stronger or at least have a shot to emerge out of it as winners. Now, that story has a great ending. It shows how a business can always find the opportunity to thrive. This other group will also give us a good idea how will the world look like after we put this pandemic behind us.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

Big Tech Is Going Green

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Emerging Companies

The rapid adoption of digital care solutions during the pandemic is here to stay beyond this unprecedented year. Business leaders are looking beyond 2020 to use technology advancements to become better prepared for the next existential treat. As a result, tech firms are going beyond their usual aspirations as they attempt to go beyond existing practices and limitations.

The last decade has seen an exponential rise in the use of technology smart homes and energy efficiency yet this was not mirrored in healthcare. It took for COVID-19 to illustrate why this has to change as tech saved the day be enabling telehealth, telecare and telemedicine.

Technology connects people, empowers people to manage their own health and wellbeing, work better and live better by integrating our systems. Big Tech was served as our lifeboat during the lockdown. Can it save the planet is an entirely different question, but it is investing considerable effort to make it better.

Last week, Amazon (NASDAQ: AMZN) named the first recipients of capital from a $2 billion venture fund called The Climate Pledge Fund which debuted in June. The goal is to develop climate friendly technologies across all industries so along with Amazon, they can together achieve “net zero” carbon emissions by 2040. This is one decade sooner than Paris Agreement’s deadline. More precisely, Amazon plans to power its facilities and operations with 100% renewable energy by 2030 as well as electrify its fleet with 100,000 electric delivery vans it ordered from Rivian.

Meanwhile, Google (NASDAQ: GOOG) announced last week that it intends to run all of its data centers and corporate campuses around the world on 100% carbon-free power by 2030.

On September 15, Facebook (NASDAQ: FB) pledged to slash greenhouse gases and purchase enough renewable energy and offsets to cancel out carbon dioxide emissions from its global operations this year.

Apple (NASDAQ: AAPL) announced in July that it intended to become carbon neutral across its entire business, manufacturing supply chain, and product life cycle by 2030.

Back in January, Microsoft (NASDAQ: MSFT) pledged to cut its carbon emissions by 2050. This pledge includes all directly emitted carbon as well as indirect through electrical consumption. For this purpose, Microsoft is partnering with no other than BP p.l.c. (NYSE: BP) who will supply renewable energy for the tech giant as the oil giant evolves away from oil.

But, during the pandemic, there were many smaller players that played just as important roles in helping companies operate throughout the storm.

One such company is Datadog, Inc. (NASDAQ: DDOG). The monitoring cloud-based platform announced it is integrating with ServiceNow Service Graph Connector Program. Their customers will be provided an opportunity to better manage the health of their digital infrastructure and offered services. Moreover, it will equip them to better understand their overall business context.

Corporations going beyond the usual

There certainly isn’t a lack of commitments we are seeing from large corporations. The pandemic has redefined corporate imaging efforts as action needed to be taken and as soon as possible. Of course, it is also up to the government to support the digital infrastructure for technology to can truly enhance the way the world operates.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

EVs in Two Years – An Entirely Different Landscape

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EV Update

For years, Tesla (NASDAQ: TSLA) was the only one on in the EV space. Its Battery Day will be held today and expectations are high as Tesla its developments are expected to ease competition threats. Five years ago, EV buyers in the U.S. had only three electric options: Tesla’s Model X and S, along with Nissan’s (OTC:NSANY) Leaf.

Today, there are 13 battery-electric vehicle models available in the U.S., and 25 plug-in hybrid models. The figure is even greater if we include model variations. Moreover, dozens of new models will soon have their debut. The EV space will look entirely different two years from now as disruptive start-ups take the stage and established automakers join forces to adapt to the new era.

Pickups

At least five companies have announced plans to manufacture electric pickup trucks by 2021, namely Tesla, Nikola (NASDAQ:NKLA), Atlis, Hercules and Rivian. With so many EVs coming to market, there will be many new brands and more importantly, new technologies.

Solar and electric- best of both worlds

After recently revealing a partnership with an US based EV manufacturer, Worksport (OTC: WKSP) announced this morning it has entered into a strategic partnership with another EV contender, Atlis Motor Vehicles. The aggressively priced Atlis XT truck will integrate Worksport’s revolutionary solar-powered system TerraVis that the established truck tonneau cover producer recently revealed.

Established automakers

Ford (NYSE:F) could easily score with its upcoming battery-electric Mustang Mach E crossover SUV. Not to mention its upcoming electricied version of F-150, the best-selling vehicle in the US. General Motors (NYSE: GM) has joined forces with Nikola in a $2 billion partnership.

Although Fiat Chrysler Automobiles (NYSE: FCAU) is behind its peers in the EV race, it has now been granted €800 million of financing by The European Investment Bank for manufacturing battery electric vehicles (EVs) and plug-in hybrids. With its upcoming 50/50 merger with PSA Groupe with which will create a new company called Stellantis, it set to become the world’s fourth-largest automaker.

Moreover, these automakers operate under franchise laws that were originally put in place to prevent manufacturers from opening stores that competed with dealers.

Rivian, that has been backed by both Ford and Amazon (NASDAQ: AMZN), is facing a ban as Michigan auto dealers are trying to block startup electric carmakers from copying Tesla in selling and servicing consumers directly. The bill introduced in the Michigan legislature last week would block any manufacturer other than Tesla from selling cars without a dealer as an intermediary as well as from owning and operating service and repair facilities.

The 11-year-old company has raised about $6 billion for its production of R1T pickup and R1S SUV but Some of the up-and-coming EV pickup makers, have never manufactured a vehicle before. Design flaws, manufacturing challenges, or technological failures could wreck their finances and reputations before their vehicles even get off the ground.

The electric vehicle landscape is changing rapidly. There could be spectacular success but also spectacular failures. These new developments could level up the entire industry to unforeseen highs. Moreover, these advancements could be to the benefit or detriment of Tesla. Its Battery Day should reveal how strong is its tech-savvy fortress. One thing is certain, we’re entering a new era of competition in the EV space.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

This Week’s Earnings Repertoire

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Stock Market

Last week, the S&P 500 index fell 1.6% in the week’s run while NASDAQ and Dow Jones Industrial Average were dragged by the continued weakness in Big Tech. With indications slow economic recovery filled with uncertainties, the Federal Reserve also announced it will not raise interest rates for another three to four years. But despite a light earnings calendar, Adobe Inc (NASDAQ: ADBE) and FedEx Corporation (NYSE: FDX) made our whole week with their blockbuster results that blew estimates. This week, there will be more events on our earnings calendar to keep an eye on.

September 22

Sportswear giant Nike (NYSE: NKE) has some big questions to answer as it is expected to show progress toward returning to growth. But it will be operating in a much more price-sensitive environment this holiday season. Fortunately, the sportswear giant’s supply chain is among the most efficient ones in the industry and it does focus on consumers who are willing to pay a premium.

Canadian pot producer Aurora Cannabis Inc (NYSE: ACB) was a favorite among pot investors because of its bold expansion strategy. But that was before it lost steam in 2019 as its shares fell 56% last year, whereas the overall industry declined 36% due to headwinds. Management’s rash decisions such as acquisitions contributed to the effect of external headwinds, but marijuana sales have been increasing during this unprecedented year. The company has been seeing revenue growth during 2020, but not enough to turn a profit. Therefore, cost reduction efforts and growth strategy will be at the center of the conversation.

Stitch Fix Inc (NASDAQ: SFIX) seemed to have lost the pandemic- induced retail boom as its last earnings report included slumping profitability and weak user growth. Investors are waiting to see if the company managed to return to an offensive growth position.

AutoZone (NYSE: AZO) has had stellar performance over the past few years as the company has continued to grow without harming its financial position. But home office trend that reduces commuting is an existential threat to automotive parts.

Tesla (NASDAQ: TSLA) will have its shareholder meeting and beyond hyped Battery Day. To put it simply, what Tesla comes out with can greatly ease the threat of its uprising competitors.

September 23

Jinko Solar Holdings (NYSE: JKS) is a key player in the booming Chinese solar market which gives the company tremendous long-term upside.

The once-dominant smartphone maker BlackBerry Limited (NYSE: BB) is back with a new phone scheduled for 2021. Its earnings report is expected to show solid grounds on which it can deliver this comeback, but for some BB never left. It has to deliver as its competitors continue to shine with impressive results.

September 24

Drugstore chain Rite Aid (NYSE: RAD) will release its second quarter results for the quarter that ended on August 29. With its last report, the drugstore retailer delivered an earnings beat of 92.6%. Growth was achieved by keeping stores open and enhancing the digital infrastructure so its stock could  be poised for an earnings beat.

Wall Street expected Costco Wholesale Corporation (NASDAQ: COST) to deliver strong results as the warehouse retailer benefited from sharp sales growth that has been boosted by online sales.

Takeaway

That’s all folks. If anything, there will be more things happening, but we simply have to get adjusted to the fact that uncertainty is our new normal for the time being. Meanwhile, all eyes will be on Tesla and whether it will succeed in delivering yet another revolutionary discovery on its beyond anticipated Battery Day.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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