Stock indexes this morning are pushing higher, with the S&P 500 and Dow Jones Industrials at 1-week highs. Mostly better-than-expected S&P 500 company quarterly earnings results are underpinning stocks today. Also, stronger than expected U.S. economic data bolsters confidence in the economic outlook and is bullish for stocks. Finally, an easing of the Covid pandemic is supporting gains in stocks.
EBay and PayPal Holdings both jumped to more than +5% today to record highs on better-than-expected quarterly earnings results. EBay rallied after it reported late Wednesday Q4 adjusted EPS of 86 cents, better than consensus of 82 cents, and said it expects Q1 adjusted EPS of $1.03 to $1.08, well above consensus of 85 cents. PayPal rose after it reported Q4 net revenue of $6.12 billion, stronger than the consensus of $6.09 billion, and said it expects Q1 adjusted EPS about +50%, better than consensus of +48.7%.
Technology stocks were undercut today by a -10% plunge in Qualcomm after it reported Q1 adjusted revenue of $8.23 billion, below the consensus of $8.25 billion.
Today's U.S. economic data was mostly bullish for stocks. Weekly initial unemployment claims fell -33,000 to a 2-month low of 779,000, showing a stronger labor market than expectations of 830,000. Also, Dec factory orders rose +1.1% m/m, stronger than expectations of +0.7% m/m. On the negative side, U.S. Q4 nonfarm productivity fell -4.8%, weaker than expectations of -3.0% and the biggest decline in 39-1/2 years.
Stocks are seeing support from optimism that the U.S. economic recovery can gather momentum as the Covid pandemic recedes after the 7-day average of new U.S. Covid infections on Wednesday fell to a 2-1/2 month low of 136,963.
European economic data today was negative for global growth prospects and stock prices after Eurozone Dec retail sales rose +2.0% m/m, weaker than expectations of +2.8% m/m. Also, the German Jan Markit construction PMI fell -0.5 to 46.6, the eleventh consecutive month the index has remained below 50.0 and in contraction.
Stocks continue to be undercut by the ongoing pandemic, which is undercutting economic growth and corporate profits. Globally, Covid infections have risen above 105.012 million, and deaths have exceeded 2.281 million.
The VIX S&P 500 Volatility Index ($VIX) this morning fell to a 1-1/2 week low of 22.00 and is currently down -0.55 at 22.36, falling back sharply from last Friday's 3-month high of 37.51. The VIX is down sharply from last March's 12-1/4 year high of 85.47 but is well above the late-November 11-1/4 month low of 19.51.