Stocks continue to trade in boring fashion. The Dow closed the day up 39 points on lighter volume to close at 20,689. The NASDAQ was a tad higher. IBD still has the rally under pressure and investors most likely are waiting for earnings reports to hit the wires starting next week.
The shares of two disruptive stocks hit new highs today. One was Tesla and the other was Amazon. While Tesla is not profitable, its revenues are growing fast and it is a cutting edge energy company that uses the sun’s rays to power cars and homes in a decentralized manner. While Ford sells more cars in a week than Tesla does in 3 months, the later now has a higher market cap than the former. Amazon, meanwhile, is a tech, retail, entertainment, logistics and grocery store all rolled into one. It is all about ordering and distribution. Tesla today went over $300 per share while Amazon crested the $900 share mark. Wow!
First quarter 2017 earnings reports are about to come out starting next week and according to Dr. Ed Yardeni at Yardeni Research, the guru consensus has been lowered a bit but still calls for a 9.2% gain in earnings by companies in the S&P 500 Index. Going forward the estimates have been raised slightly but overall they are calling for a good year in earnings growth. Brain Wesbury at First Trust has plugged these estimates into his market models and feels that if they play out as expected then there might still be lots of food left on the table for investors. Let’s hope the phrase “analysts were surprised” does not come into play on the downside in relations to these estimates.
WTI crude oil was up 1.5% to $51 per barrel as lower US stockpiles offset news of a resumption in oil exports from Libya. Natural gas was up 5% today after Cheniere CEO Jack Fusco noted that Asian buyers are moving away from fixed contracts to spot pricing. This shift gives them flexibility and favors US exporters like Cheniere who sell on these terms. The US began to allow gas exports a few years ago and apparently it is having the effect of making global pricing more transparent.