Amazon, Apple and Tesla bring Friday fear for investors

Markets retreat as investors digest earnings from Amazon and Apple, whilst Elon Musk tweets that Tesla's stock is too high and Trump threatens China with more tariffs

There is an old Wall Street adage that goes “Sell in May and go away” based on the fact that stock market returns have historically had much stronger returns between November and April than the rest of the year.

Today this would have most likely been playing on the minds of many investors as May kicked off with the S&P 500 closing down 2.81% as all sectors ended the day in the red whilst the Nasdaq was down 3.20%, wiping out the week's earlier rally. Given the increasing number of market strategists and analysts that have been stating the market has rallied too far too fast in the face of Coronavirus, today's performance may not be all that surprising.

Investors look to have wasted no time in cashing in some of their chips following April's extraordinary rally, whilst also taking time to reassess the outlook for the economy’s hangover in a post-lockdown world. That Apple removed guidance for the next quarter looks to have played a part in reminding investors of the uncertain times companies have ahead of them, whilst Trump reminded us there are other threats aside from Coronavirus for us to remember, as he threatened China with more Tariffs in the afternoon following his take on how they have responded to the pandemic.

Amazon has been one of the leaders in the market's extraordinary rally from the lows in March, but today it was also the company that led us lower - the stock today down -7.60% following gains of almost 27% in April. This came as CEO Bezos told shareholders to “take a seat” for its plans ahead on it’s earnings call, stating that Q2 profits would be spent on best dealing with Coronavirus.

Although today’s sell off was pronounced, the retreat does little to dent the gains achieved in April that saw the S&P 500 up 12.7% and the Nasdaq up 15.4%.

Here are today's main market takeaways:

• Every sector finished lower, led by Energy (-6.00%) and Consumer Discretionary (-4.61%), as investors reassess the economic outlook and look to lock-in some profits

• Markets continued lower in the afternoon as President Trump threatened imposing further tariffs on China following his view on how they have dealt with the Coronavirus pandemic

• Amazon fell -7.60% after announcing last night on it’s earnings call that it will spend all it’s Q2 profits on its coronavirus response, whilst profits also came in lower than analysts expected

• Apple's (-1.61%) earnings received a mixed reception as the company refused to provide guidance for the quarters ahead given COVID but it did report profits and revenues that were better than expected

• Tesla (-10.30%) CEO Elon Musk announces, via a tweet no less, that the stock is too high, leading the stock tumbling