Stocks closed mixed a day before the July jobs report is due out. The Dow worked both sides of the fence before ending the day off 3 to close at 18,352. Trading volume continued to wilt like a tomato plant in the hot sun. Utility stocks led the way higher.
The Bank of England’s Monetary Policy Committee or MPC unveiled the “British Bazooka” by lowering the bank rate from 0.5% to 0.25% in an effort to stimulate the economy and support the inflation target of 2%. The news sent the UK stock exchange higher while the British pound fell in price. This move was done to soften any affects associated with the Brexit vote. It helped boost stock exchanges around the globe and caused one guru to say that it all but killed any chances of a US rate hike this year.
Tesla reported earnings last night and they were a mix of hope and fear. Revenue was up 33% but the per share loss doubled from $0.48 per share to over a buck. The company is also not giving 3 month guidance and pinned the larger loss on capital investments in bringing the model 3 to production. Shares of Tesla have declined recently but still hold above $220 per share as long term believers in Elon Musk, close their eyes and dream of the day when the technology behind this company bears fruit. It reminds me of when Amazon first came out and was posting huge losses. People would ask Jeff Bezos when they could expect profits and all he could tell them was “trust me”. While Amazon paid off it is still too early to tell if Tesla shareholders will enjoy the same ride as do the buyers of its cars.
Gold closed the day up a bit gaining $2 an ounce to $1,366 while WTI crude oil continued to rebound gaining 93 cents per barrel to $41 and change.