Stocks jumped on trade optimism with material and banks leading the way while utility stocks fell as investors rotate out of safe havens into risk assets. The Dow closed up 182 points to a new record high of 27,674. Trading volume was off a bit. Stocks are breaking out to the upside and both IBD and BTS indicators are positive.
Tesla shares jumped 4% after Elon “The Encyclopedia” Musk tweeted out the date and location of the unveiling of the Tesla cyberpunk truck. The date is November 21st and the location is the SpaceX rocket plant in California which combines as the Tesla design center. Every geek and car lover in the region will be there! Executives at Ford, GM and Dodge will be watching closely as well. I wonder if it will come with a gun rack and a Trump bumper sticker.
Shares of Bellevue based travel company Expedia were whacked today after reporting disappointing earnings. The company posted a 9% revenue increase and a 7% drop in net profits. The reason for the shortfall was not a lack of people traveling or Canada but Google. Expedia CEO Mark “Trip” Okerstrom said that Google has increasingly directed travel search traffic to its own travel business which is hurting Expedia, TripAdvisor and other travel companies. Google is “at the top of the funnel” and thus plays a significant part in directing traffic. Now I know why Google is expanding their offices so much in Kirkland over the past year.
The latest economic figures to come out are encouraging. The ISM service sector readings released this week show accelerating growth in the US consumer segment which makes up two thirds of the US economy. The gauge rose to 54.7 well above expectations calling for a reading of 53.5. The employment index jumped from 50.4 to 53.7. The new orders index increased from 53.7 to 55.6 and business activity went from 55.2 to 57. The only thing that went down was the prices paid index which declined from 60 to 56.6. This all points to continued strength in the US economy.