Netflix Chills With Missed Earnings & Bond ETFs Big Promise – Daily Financial News Summary For Thursday, July 16, 2020
Thursday saw all markets close in the red. The Dow Jones was down 0.5%, while the Nasdaq dropped 0.7% and the S&P 500 dipped to 0.3%.
Amazon had a slightly down day by 0.3%, which left it sitting just below the $3,000 mark at $2,999.90. Microsoft and Apple both sunk by over 1%. Netflix was up 0.8% at the end of the day pending earnings reports, which missed estimates and sent the stock plummeting around 10% in after-hours trading to $461.29 at its low point at the time of publishing.
Federal Reserve Policy Boosts Bonds In Era of Low-Interest Rates
The U.S bond market has always been bigger than the stock market, and the trend is not expected to change anytime soon amid a dovish outlook in the sector. Immediate data indicates that over $40 trillion is invested in the bond market against $30 trillion in the stock markets.
Bonds have always been a firm favorite for investors, given the guaranteed returns on offer when dealing with high-quality bonds. While stock markets guarantee investors high returns, the risk that investors must contend with is always high.
In the run-up to the COVID-19 crisis, bonds were on high demand as investors rushed to take advantage of a high-interest rate. Bonds sold by blue-chip companies sold off as investors rushed to get hold of high coupons.
Sentiments in the bond market nosedived in the wake of the Federal Reserve passing a string of fiscal and stimulus plans to protect the market in the wake of the pandemic. Sentiments hit an all-time low as the U.S cut interest rates to record lows all in the effort of boosting liquidity levels.
While a dovish monetary policy by the Federal Reserve is likely to keep interest rates at all-time lows, investors will continue to bet on riskier corporate bonds to eke out higher returns.
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