Stocks continue to creep higher thanks in part to continued progress on US China trade talks. I think Europe might be getting jealous. The Dow finished higher by 67 points on heavy trading volume at 26,452.
Bank of America reported better than expected revenue and earnings this morning with an increase in revenue of 7% and a 13% jump in profits. Consumer banking revenue was up 25% but shares of B of A were lower because the bank CFO said that net interest margins this year should be flat instead of higher due to the Fed not wanting to raise interest rates. Bank earnings so far have been good but the big concern amongst the gurus is that revenue growth is not as strong as expected. Therefore, bank stocks are getting no love even though the values are fairly cheap.
The FCC unveiled an effort to accelerate the rollout of 5G cellular technology in the US. The initiative, which will auction more broadband spectrum and create a program to bring 5G to rural areas, is a stealth infrastructure play that is geared to keeping the US competitive and in a leadership position against the wild pack of Asian tigers that are also making the push to 5G. It is expected that 5G technology will reduce latency and increase download speeds of data and voice by upwards of 100x. The US is expected to invest $275 billion in 5G networks and create 3 million jobs. Deloitte Global is predicting that 25 telecom companies will launch 5G this year and another 26 next year. 5G will enable AI, autonomous driving and the ability to order pizza online a lot faster. This will cut the time for getting a pizza from Domino’s from 30 minutes to 29 minutes.