The Dow closed the trading session almost unchanged falling half a point at 17,867 on tepid trading volume. It seems people are waiting for tomorrow’s labor report. In the meantime earnings reports continue to roll in.
About three quarters of S&P 500 companies have reported earnings and so far the results show a 3.1% decline in net income compared to this time last year. Prior to the reporting period the gurus had forecast a net income drop of over 5% so the results we are seeing are actually better than expected.
The elections are over and results here in Seattle were unexpected in that a block of voters known as “urbanites” won the day as transportation and other initiatives passed with ease. The “urbanites” are young, upper income tech types who desire urban density, bikes and transit. The election showed that older folks who like cars, homes and yards will either need to “get rich or get out” since the election results will push property taxes in the city up by about 8.5% affecting middle income and fixed income households.
Facebook reported earnings that were well received. CNBC’s Jim “mad money” Cramer gushed that the earnings report was “Mozart” and chided the street for not giving CEO Mark Zuckerberg enough credit for his smart capital deployment that was yielding results and laying a foundation for future growth. Earnings were 33% higher beating estimates and revenue was up 41%. MAU or “monthly active users” surpassed 1.5 billion. Facebook’s shares were up to all-time highs and the market cap crested $300 billion giving the company more value than General Electric. Facebook is fundamentally transforming advertising as 78% of ad revenue now comes via the mobile platform. The company is also rolling out video and news feeds which seem to be well received indicating that forward growth could be robust. Analysts cheered the report and Tweeted out higher target prices for the shares. To find this news just google “facebook”. Its like a whole new language!