Markets traded fairly tamely and in a mixed fashion with the Dow up and the NASDAQ down. Investors are straddling the fence, waiting to see what the Fed will do, and if the economic fundamentals will continue to stay strong in the face of international headwinds. The Dow finished up 49 points and closed at 26,252.
Nordstrom reported earnings yesterday, and the stock jumped about 15% today. This was an interesting earnings report because profits and forward guidance were both lower than last year, but the market had priced in super low expectations. Profits were about 5% lower than last year, and they actually targeted slower sales than previously expected. Nordstrom’s stock has been beaten down like Wazzu in the last 6 Apple Cups and is about 40% lower than the buyout offer price from a year ago.
Splunk reported better than expected earnings, increasing revenue by 33% from the previous year and reporting 250% higher earnings than expected. They also announced that they will be acquiring SignalFX, a cloud app performance company, for roughly $1 billion. They also announced that they will be switching to subscription-based products, which will temporarily discombobulate their revenues and cash flows. On this news, the stock traded off about 9%.
Bonds are getting bleak over in Europe. This week, Germany tried to sell $2 billion of 30 year 0% interest bonds, but didn’t even sell half of that as they only had buyers for $824 million. There are now $16 trillion worth of negative yield bonds worldwide, which is why we continue to see high demand for bonds here in the U.S. I messaged Bill yesterday and told him to take out a Swiss loan so they could pay him to look at their money!
No updates from the scouts today, and they will start to head back home in a couple days. If you haven’t seen the pictures of their adventures yet, feel free to check them out on the Greystone Faceplant page!