After a 725 point selloff yesterday the Dow recovered and closed up 549 at 34,511. The market volatility is causing whiplash to those focused on trying to pick tops and bottoms. These head fake trading days garner headlines and buzz but quality stocks and mutual funds tend to plough through this noise like a US Coast Guard cutter.
The Economy and Earnings
IBM posted earnings that bested guru estimates with a 3% increase in revenue and a 7% increase in profits. While this is not anywhere near the results we typically see for big tech firms like Microsoft it shows that efforts by the company to get on board the cloud train appear to be bearing fruit. IBM’s cloud and cognitive software sales rose 29% while the global business services cloud revenue gained 35%. CEO Arvind Krishna was happy with the results and said the company remains on track to deliver full year revenue which IBM has not been able to do for the past 10 years. Arvind also noted that the “corporate spend cycle” for all things cloud based continues to improve both for domestic and international business.
Items of Interest
John was talking with someone in the insurance industry who said the rush of people from Washington signing up for a long term care policy is causing a nationwide log jam of applications. One company said they usually get 100 applications per week for the whole country but are now getting 1,200 per day thanks to the bums rush from Washington residents looking to avoid the tax! As a result, underwriters are busier than a one legged man in a fanny kicking contest. The deadline to have a policy in place exempting you from the tax is October 31st. Please call us or respond to this email if you have questions about this situation.