Your Thursday Market Blip 7/26/18

Your Thursday Market Blip 7/26/18

Stocks were mixed as the Dow was up while Facebook pulled the NASDAQ lower. At the close the Dow was up 112 at 25,527 on strong trading volume. Amazon reports earnings after the bell.

The big news today was Faceplant earnings. After the closing bell yesterday, Facebook reported Q2 numbers which missed estimates. Revenue came in at $13.2 billion while the gurus were expecting $13.3 billion. “muntly” active users were 2.23 billion instead of the hoped for 2.24 billion. Gurus were shocked that revenue was up ONLY 42%! They were stunned that profits were ONLY 32% higher! The company did however lower forward margin guidance due to infrastructure investments and traders, which had been bidding the stock higher bolted like rented horses who had seen the barn. The poor guy running the “yard sale formerly known as GE” said “Really? If only GE could have a bad quarter like that!” The question surrounding Faceplant is whether this is a “bad” quarter or just a “slowdown” quarter. If it is the latter, then Facebook shares are on sale at a 20% discount.

Natural gas stocks moved higher after the US and EU announced initial trade steps and an outline to move toward an agreement that eliminates both tariff and non-tariff trade barriers. Soy beans and natural gas are the early winners in the deal. The US started exporting LNG two years ago and currently has two facilities that are up and running with more coming online. Last year LNG exports from the US increased 400% and 30 countries have signed contracts to purchase LNG from the US. Current exporters are Cheniere Energy and Dominion Resources.

In what some are calling vastly more important earnings than Facebook, chip maker AMD reported blowout earnings with a 53% revenue increase and profits that went from a loss to a big gain. Shares hit new highs and going forward CEO Lisa Su said that notebook chips and data center server chip sales were robust and that future demand from blockchain, Bitcoin, autonomous cars and the 5G rollout all indicate positive forward chip demand. When asked which single chip was selling the best Lisa replied that the Doritos Cool Ranch chips had been top sellers.