After yesterdays Turkish lira selloff or “TLS”, stocks roared back after the White House indicated that trade negotiations with China were scheduled to resume later this month. At the close the Dow was up 396 at 25,558. The only fly in the ointment was the light trading volume. Shares of Boeing had a big day and jitters over Turkey subsided when it was reported that European banks have tier 1 capital reserves over 15% and any exposure to a potential Turkish “bath” should be minimal at worst.
The Cass Freight Index, which has been around since 2005, posted its first ever double-digit year over year increase as shipments were up 10.5% and expenditures in trucking and intermodal were up 19%. The higher costs were due to tight labor, higher diesel prices and the increased utilization of electronic logs by truckers. Transportation stocks can be a bellwether so this index reading is positive.
The Dow got a huge boost from Wal-Mart which reported its best numbers in over a decade. Revenue was up 4% and net income gained 46% beating estimates on the strength of online sales. Same store sales were up 4.5% and above the 2.4% rise that gurus had forecast. The report showed that the consumer is alive and well.
Cisco Systems also reported better than expected earnings and to add a cherry on top of the whipped cream, the company raised its forward guidance. Cisco makes network switches and routers and its results are indicative of underlying strength in enterprise networking. Revenue was up 6% and net income was up by 15%.
The Boy Scout hike was great. We hoofed it 23 miles from Cascade Pass to Stehekin and then traveled down Lake Chelan and back to Seattle. The smoke from Chelan to Wenatchee was thicker than mashed potatoes. The boys did great. No issues arose as the lunkheads had fun scrambling over rocks, leaping into water holes at Bridge Creek and falling off logs in random fashion. I was reminded that when out hiking boys consume a lot of food at a very high rate of speed.