The Dow went one way today while the NASDAQ went the other. Earnings reports are coming so fast that it is hard to keep up with them. At The close the Dow fell 28 points at 26,805. The NASDAQ jumped 66 points at 8,185. Trading volume was up and IBD has markets listed in rally mode. Amazon reports earnings after the close.
Boeing reported a 21% revenue decline and net income that was down 59%. The 737 Max fiasco has held back about $5 billion a quarter in revenue. Commercial Airplane division CEO Kevin McAllister was given the old “heave ho” yesterday as the company scrambles to get back on track. The current 737 Max production rate is 42 planes per month but since none of them are being delivered there is no revenue generated and thus cash flow and net income results for the quarter were terrible. Meanwhile the services and defense segments continue to perform well. The company kept its dividend steady and shares were higher as market gurus felt the results were not as bad as feared.
The mother of all short squeezes was on today after Tesla reported a “surprise” profit. The company posted an 8% revenue decline and profits of $1.86 per share which was much better than loss that gurus had expected. Elon Musk said the company should be cash flow positive going forward and outlined progress on solar roofs, the Model Y, the new truck and production of a semi-truck. The company is also getting ready to build and sell cars out of the Gigafactory 3 plant in China and is working on new battery technology as well. Tesla lowered its projection for car sales but the news of cash flows being positive was unexpected and is a game changer in terms of perceived sustainability and establishing a more accurate valuation for the company. On a side note some buyers of the Model 3 with the smart summons feature are apparently having smart summons races in parking lots. Go figure!