Stocks continue to trade near highs but in mixed fashion as the Dow fell 6 points to 20,951 while the S&P and NASDAQ made small gains. Trading volume was heavier on the Dow.
After the closing bell on Wednesday both Tesla and Facebook reported earnings. Tesla’s numbers were a bit disappointing but revenue shot higher by 135% as vehicle sales continued at a record pace. The company’s profits however were “not” as it posted a huge loss thanks to increased spending stemming from Tesla’s rush to get ready for the Model 3 launch in July. Shares fell about 5% but are still near all-time highs.
Facebook posted top and bottom line results that were better than expected. The company reported a 49% increase in revenues as it now boasts 5 million advertisers and 1.9 billion users. Net profits were up 73% and analysts at several firms boosted share price targets from the current $150 level to the $170 to $190 level.
Oil prices fell to a 5 month low as WTI crude fell 5% and traded below $46 per barrel. The reasons behind the drop is stubbornly high US and global stockpiles in the face of production cuts by OPEC and Russia suggesting US production coupled with soft demand growth are affecting markets. The elephant in the room with global oil prices these day is US shale production which is starting to lessen the impact that OPEC has had over pricing. In the US, gasoline stockpile reports indicate that demand for gasoline has fallen 8% this year. All those Tesla, Leaf and Prius owners are having an effect and OPEC is powerless to stop it.