Stocks continue to trade mixed as the height of the earnings season is upon us. At the closing bell the Dow was down 15 points at 24,999.99999 while the NASDAQ gained 98 to 7,281. Trading volume was higher. Markets have done very well in January and some are now starting to worry they might be a bit stretched and due for a possible pullback. While indicators at IBD remain positive, Dan the Man over at BTS Capital is still in cash due to concerns over higher than normal levels of volatility. If volatility drops it could signal a longer move higher for markets, but elevated levels of volatility indicate increased chances of a pullback. The general feeling amongst money managers is that large US growth stocks should do well and there is a lot of value in the US midstream gas pipeline sector. There is concern over slowing economies in Europe and China but this could change if a trade deal is hammer out.
Microsoft posted good earnings as the company grew revenue by 12% and earnings by 15%. The results matched and topped expectations but the company lowered its forward guidance sending investors scurrying for the sidelines as the stock fell a couple bucks per share.
After a scandalous 2018, Facebook (aka Faceplant) reported much better than expected Q4 numbers sending shares up over 10% on the day to close at $166. Facebook posted a 30% revenue gain and an 8% rise in profits. Gurus responded to the results by raising share target prices from $190 to $225. Stability in user trends were impressive as the company continues to plow dollars into upgrading its technology and security.
Tesla reported good results with a 120% increase in revenue and a 163% increase in profits. Shares were up slightly on the news. If you are short Tesla, you refer to Elon as “Elon Meglo Musk” and if you are long Tesla he is known simply as “Mr Incredible”. I wonder if he is dating Elasta Girl? I did crawl by the Seattle Tesla store today while stuck in traffic and it was a beehive of activity. Conversely, I went by the Bentley dealer and there was only one guy standing in the parking lot with a bunch of pigeons perched on his head, tumble weeds blowing by and vultures circling overhead. Of course, this is purely anecdotal evidence and is in no way a buy or sell recommendation.