Good morning, Bull Sheeters. Investors have hit pause on this incredible stocks rally with Asia and Europe down this morning. U.S. futures are also in the red.

But that’s after the Nasdaq hit yet another all-time high yesterday, and the S&P 500 has now battled back to within 1.6% of break-even for 2020. It’s also after the U.S. topped 130,000 coronavirus deaths. And it comes as too many frazzled parents have no idea if America’s schools will fully reopen in September, and companies wonder which state or city will be the next to close down bars, restaurants and businesses. The uncertainty feels like an all-time high, too.

Let’s check in on today’s action.

Markets update

Asia

• The major Asia indexes are mostly lower in afternoon trade. Shanghai is the lone major index in the green.
• The focus is again today on Hong Kong after a number of popular tech services, including Facebook’s WhatsApp and Telegram, said they will cease handing over data to authorities. And TikTok is pulling out of the region altogether as the fallout of Beijing’s new security law forces tech companies to pick a side.
• Speaking of TikTok… U.S. Secretary of State Mike Pompeo says the U.S. is “looking at” banning TikTok and other Chinese social media apps over security issues.

Europe

• The European bourses faltered at the open, with Stoxx Europe 600 down 0.55%.
• In a further sign Europe is open for business, the Louvre in Paris opened its doors yesterday, quickly selling out of the 7,400 tickets on offer. That’s roughly one-quarter the normal crowd, however, and losses are piling up.
• A key piece to Bayer’s mega Roundup weedkiller settlement case is in limbo, sending shares down 3.8% in the opening minutes of trade.

U.S.

• The major averages started the week on a tear with the Dow on Monday gaining 450 points and the Nasdaq hitting a fresh all-time high. Futures today point to a negative open.
• Among the stellar movers yesterday were Amazon, which topped $3,000 for the first time ever, and Netflix, which jumped 3.3% to hit a record high. And Tesla is up 36% in the past five days. It too hit a record.
• Speaking of record highs… Epidemiologists are tracking a different kind of rally. The U.S. yesterday notched its 27th straight day of record daily coronavirus cases.

Elsewhere

• Gold is flat.
• The dollar is up
• Crude is falling, with Brent continuing to trade in a tight range between $42- and $43/barrel.

***

Q2: What to look for

Let’s talk earnings. ‘Tis the season, after all.

Next week is the first big week on the quarterly reporting calendar with JP Morgan Chase, Bank of America and Wells Fargo all scheduling analyst calls. It should give us, in many cases, the clearest picture yet of the economic destruction from the quarter that just passed—Q2.

Beginning three months ago, we got a startling number of companies pulling guidance, so much of what we hear will truly be new. Investors, so far, have gone easy on companies for their EPS misses. The big question remains: does earnings-per-share even matter this year, or will some other metric emerge to determine the fitness of companies in the age of COVID? Perhaps it will be cash flow or debt levels or top-line growth.

Now, let’s look back at Q1. For many (non-tech) companies, it was a brutal quarter that nevertheless will look better than what we’re about to hear.

Taken in aggregate, S&P 500 companies saw the top- (sales) and bottom lines (earnings) fall quarter-on-quarter, as this BofA breakdown shows:

There was just one exception to that. Health care outperformed all other segments in both earnings and sales in Q1. (If you had thought it would be tech, you’re not alone.)

But there’s a big disconnect between business performance and share price. YTD, the best performing S&P sector, shares-wise, is not health care. Yep, it’s tech. Health care is trading nearly flat—up just 0.7% in 2020—while tech is up nearly 17%.

That makes some sense. Investors mostly look forward, so share price tends to more heavily reflect future performance. Hence, investors are betting that tech is the sector best positioned to weather this crisis, and to grow in the post-COVID economy as well.

But is the recent run-up in tech stocks truly justified? Here’s where these earnings calls are important. We’ll begin to see which of these high-flyers are the next great hope, and which are nothing but hype.

***

Have a nice day, everyone. I’ll see you here tomorrow.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

A note from my Fortune colleagues on a timely new initiative:

Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

Chasing meaningful returns. Is ESG investing—that is, dedicating a portion of your portfolio to companies that uphold “environmental, social, and governance” principles—something retirement savers should even consider? Patrick Pizzella, the U.S. deputy secretary of labor, has his doubts. Here's why. 

A long awaited IPO. Peter Thiel's Palantir has long been tabbed as a sure-thing IPO. The secretive big data specialist credited with tracking down Osama bid Laden has in fact filed with the SEC to go public. Beyond that, little is known about its finances or how much it's seeking.

A Biden bounce? We're about four months away from Election Day, and Wall Street is looking into its crystal ball to see whether a Trump or Biden presidency is good for stocks. JPMorgan came out with a contrarian call yesterday, noting “the consensus view is that a Democrat victory in November will be a negative for equities. However, we see this outcome as neutral to slight positive.” Here's why.

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

Quote of the day

“They knew that government ‘help’ to business is just as disastrous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.”

Yep, that's Ayn Rand, that most famous and influential of small-government advocates, in a 1960s essay. That quote is being trotted back out onto the Internet this morning after we learned that the Ayn Rand Institute won approval for a Paycheck Protection Program loan of up to $1 million, according to Reuters. Lest you think this is a stroke of hypocrisy with a capital H, the institute responded to Reuters with a link to an op-ed from May in which a board member and senior fellow wrote: “We will take it unapologetically." They add, "the government has no wealth of its own…. It can only redistribute the wealth of others.” Objectivism at its finest.