Down day for stocks, expect for Apple, Amazon, and Facebook
The S&P 500 is down 0.7% as most stocks trade lower, except for Apple (AAPL 409.34, +25.59, +6.4%), Amazon (AMZN 3163.71, +111.83, +3.7%), and Facebook (FB 251.61, +17.15, +7.3%), which are up big after exceeding quarterly expectations. The Nasdaq Composite opened higher by 1.5% but is now trading lower by 0.2%. The Dow Jones Industrial Average is down 1.1%, and the Russell 2000 is down 2.3%. Apple and Amazon are predominately responsible for the gains in the S&P 500 consumer discretionary (+0.5%) and information technology (+0.4%) sectors. In fact, these are the only two sectors trading higher, with energy (-2.2%), industrials (-2.0%), health care (-1.6%), and financials (-1.2%) leading the broader retreat.Alphabet (GOOG 1463.86, -67.59, -4.4%) has been a noticeable drag on the market after it reported its first-ever yr/yr decline in revenue, and so has the uncertainty surrounding the next coronavirus relief bill. Reports indicate that negotiations will continue through the weekend, as lawmakers continue to disagree on its contents.  Aside from these mega-cap earnings, there's been four other Dow components that reported results today. Merck (MRK 79.69, +0.71, +0.9%) has pleased investors, while Exxon Mobil (XOM 41.61, -0.27, -0.6%), Chevron (CVX 82.22, -4.05, -4.7%), and Caterpillar (CAT 130.96, -5.77, -4.2%) have underwhelmed. Elsewhere, U.S. Treasuries are trading little changed but are down from overnight highs. The 10-yr yield is up one basis point to 0.55% after touching 0.52% at its low. Gold futures ($1990.30, +23.60, +1.2%) are nearing $2000/ozt. The U.S. Dollar Index is up 0.4% to 93.39. Reviewing today's economic data:Personal income declined 1.1% m/m in June (Briefing.com consensus -0.9%) following a downwardly revised 4.4% decline (from -4.2%) in May. Personal spending increased 5.6% m/m (Briefing.com consensus 5.9%) on the heels of an upwardly revised 8.5% increase (from 8.2%) in May. The PCE Price Index rose 0.4% m/m, as expected, while the core-PCE Price Index, which excludes food and energy, jumped 0.2% m/m, which was also in-line with expectations. The key takeaway from the report is that a 2.2% m/m gain in wages and salaries as the economy reopened was not enough to offset the 8.9% m/m decline in personal current transfer receipts. This consideration highlights the risk to the recovery trajectory that would be exacerbated at this juncture without further government assistance.The Q2 Employment Cost Index increased 0.5% (Briefing.com consensus 0.6%), seasonally adjusted, for the three-month period ending in June 2020 after increasing 0.8% for the three-month period ending March 2020.The key takeaway from the report is that employment costs held relatively steady with the same period a year ago.The final July reading for the University of Michigan Index of Consumer Sentiment slipped to 72.5 from the preliminary reading of 73.2 and the final June reading of 78.1.The key takeaway from the report is that the Expectations Index fell back to a six-year low, exposing a potential headwind for spending activity that is integral for stronger growth.The Chicago PMI for July increased to 51.9 (Briefing.com consensus 42.0) from 36.6 in June.