Stocks went on a roller coaster ride as the Dow opened down 100 points then gained 140 then faded a bit and closed with a gain of 37 at 26,186 on heavy volume.
The Federal Reserve meeting ended yesterday with interest rates unchanged at the range of 1.25% to 1.5% with banks earning 1.5% on reserve balances. This meeting was Janet Yellen’s last as the chair and she will be replaced by Jerome Powell on Monday. The fed is signaling 3 rate hikes this year and is keeping an eye on rising inflationary pressures. Janet did well in providing a quiet stable hand at the helm of our nation’s central bank.
Facebook reported better than expected earnings and shares moved higher as a result. The company came in with a 47% gain in revenue and an 83% jump in profits. What is stunning to me is that Facebook has a massive $560 billion market cap and yet is growing revenue at a 40% plus clip.
Microsoft, aka “Micropoopie” reported a 12% increase in sales while net income fell 1% but still managed to do better than expected. Mr. Softy is firing on all cylinders as Azure Cloud services, Office 365, Xbox and LinkedIn are posting robust growth numbers. With Steve Ballmer long gone and new CEO Satya Nadella steering the company into the cloud, things are looking good. The company is sitting on $140 billion in cash and while the outlook appears solid some gurus are warning that valuations are a bit stretched and to proceed with caution.
AT&T reported good earnings and shares move up nicely. The “US of Amazon” reports earnings after the close today.