While April ended the trading month with all the major indices in the red, it was a one of the best monthly gains since January 1987 for the Dow and the S&P 500. The Dow was up about 11.1% and the Nasdaq rose 15.5%, the best month since 2000.  

The S&P 500 was up 12.7%, gaining $2.9 trillion dollars, which is almost on par with the $3 trillion in stimulus from the government, as investor optimism returned.  All 11 S&P 500 sectors were up for the month, led by Energy, with only 29 stocks finishing the April in the red. The top performers were the bulk of the FAANG group.

April's Top % S&P 500 gainers

• AMZN reported $75.5 billion in revenue, +26% which beat consensus, however, EPS of $5.01 was $1.22 below consensus. Operating income fell to $4 billion from $4.4 billion. Online shopping due to the coronavirus boosted sales.  CEO, Jeff Bezos, stated, “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.” He added, “Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”
• AAPL beat on the top and bottom line as iphone sales and services helped propel the results. Revenue of $58.3 billion, increased 1% and EPS were $2.55. CEO, Tim Cook stated, “Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables.” He added, “In this difficult environment, our users are depending on Apple products in renewed ways to stay connected, informed, creative, and productive.  The company increased its dividend to $0.82, +6%, and is upping its share repurchase plan by $50billion. The company did not give guidance.

Portfolio Review

Yesterday, we added an Industrial rail position to our model portfolio.

Today’s Session

You will hear a lot about sell in May and go away, but do not let the start to the month spook you.  All the major indices are once again in the red down over 1.5%. Investors are mulling over the latest in the U.S. China relations, as President Trump threatens to impose $1 trillion in tariffs on China for the mishandling of the Coronavirus.  Others have suggested the U.S. punish China by defaulting on select China debt.  The President said he is exploring options, but is not supporting that action, and said "I could do the same thing but even for more money, just putting on tariffs." He added defaulting could undermine the “sanctity of the dollar.”

We will get more info on the economy at 10 am ET with the release of the ISM Manufacturing Index for April and Construction Spending for March.  Also we will get auto and truck sales for April throughout the day.