“This is another sign that the strong have only gotten stronger,” said Ryan Detrick, chief investment strategist at LPL Financial.
The results drove Nasdaq futures 0.8% higher. Amazon’s stock rose 5% in premarket trading, while Apple and Facebook shares increased 6%.
Why it matters: Together with Microsoft, these companies now account for more than a fifth of the S&P 500 and have driven the Nasdaq to a string of recent highs. Thursday’s results justify recent gains, and give tech enthusiasts good reason to maintain the momentum.
“It’s a bright green light for the bulls this morning to buy tech stocks, as the results were staggering across the board,” Wedbush Securities analyst Daniel Ives told clients. He thinks Apple’s market value could hit the $2 trillion mark by the end of the year.
Europe’s economy suffers record slump in GDP
The quarter-on-quarter slump in EU GDP is the worst on record, and follows a fall of 3.2% in the first three months of the year.
Compared with the same period a year ago, the drop in output in the April-to-June quarter was 14.4%. That’s worse than the 9.5% slump recorded Thursday by the United States.
Across the Atlantic: The US economy contracted at a 32.9% annual rate from April through June, also its worst drop on record.
Recent surveys of business activity suggest Europe’s economy is now in recovery mode. But the specter of another wave of coronavirus cases looms.
Germany’s center for disease control, the Robert Koch Institute, said this week that a recent spike in cases was “very disturbing.” In France, new daily cases have crept back to the same level as when its lockdown lifted in early May. Spain and Italy have also recorded increases.
Germany, Europe’s biggest economy, suffered less than other big EU countries in the second quarter, reporting a 10.1% hit to GDP. France, Italy and Spain, which were hit harder by the pandemic, recorded falls of 13.8%, 12.4%, and 18.5%, respectively.
Watch this space: The United Kingdom recently reimposed quarantine measures for travelers arriving from Spain, a move that will slow the recovery in its vital tourism industry.
The country is already looking significantly weaker than its neighbors.
“The difference is larger than expected and with reopening measures being locally reversed for [the third quarter], Spain looks set for a prolonged slump,” said Bert Colijn, senior economist at ING.
Twitter’s hack was the result of a phishing attack
“This attack relied on a significant and concerted attempt to mislead certain employees and exploit human vulnerabilities to gain access to our internal systems,” Twitter said, adding that it had “significantly limited” access to its internal tools since then.
Remember: The July 15 security incident led to the takeover of accounts belonging to Barack Obama, Joe Biden, Jeff Bezos and many others. The compromised accounts were then used to promote a bitcoin scam.
While the scope of the incident was huge in its own right, it could be just the tip of the iceberg. Cybersecurity experts and policymakers now worry that the bitcoin scam may mask a much more troubling data breach.
Investor insight: Twitter shares have managed to climb 3% since the incident. The company posted strong user growth last quarter and is exploring a subscription option to offset a sharp drop in its core advertising business.
- US personal income and spending data for June posts at 8:30 a.m. ET.
- The Chicago Purchasing Managers Index for July arrives at 9:45 a.m. ET.
Coming next week: Can Congress agree on a stimulus deal before their August recess?