Your Thursday Market Blip 2/23/17

Your Thursday Market Blip 2/23/17

Stocks were mixed at the close with the Dow up 34 to 20,810 on heavy trading volume. The Dow has now posted 10 up sessions in a row. IBD and BTS continue to confirm the rally.

In earnings reports, Tesla posted mixed results. The company had an 88% increase in sales but a bigger loss than expected. Elon Musk said Tesla was close to producing the Model 3 but said it might need to raise capital to make it happen. The news of a capital raise caused shares to drop as this event has been anticipated with trepidation due to a possible delusion of current stock holders.

Airbus also reported an 8% revenue gain but posted a loss after the company took a big hit on cost overruns for its development of the A400 which is a military cargo plane similar to the C130. Some are calling it “The White Elephant” and Airbus said the project will continue to be a financial drag through 2018. Commercial aircraft sales are steady and while Airbus has increased its production rate, analysts noted they trail Boeing significantly in terms of efficiency and profitability.

Gold prices hit a three-month high on Thursday after the minutes of the latest Federal Reserve policy meeting dampened expectations of an interest rate hike in March. Dennis “The Menace” Gartman, editor of The Gartman letter reported on CNBC that the way to play gold was not with strong US dollars but with a weak euro. He noted that over the past three years the gold ETF GLD was down about 8% in US dollars but in euros it is up almost 19%. Gartman’s comments were interesting and could be further evidence of rising uncertainty in Europe’s political situation. Gold closed the day up $16.89 at $1,250 per ounce.