Your Wednesday Blip 7/29/20

Your Wednesday Blip 7/29/20

Stocks were generally higher thanks to earnings reports, stimulus talk, comments by the Federal Reserve and positive housing data. At the final bell the Dow gained 160 points on heavy trading volume to close at 26,539. The Federal Reserve noted that while the economy is improving any forward progress will be highly influenced by whether the covid-19 outbreak can be controlled.
Boeing reported a loss of $2.4 billion and a revenue drop of 25% as it continues to struggle with the 737 Max and the commercial aircraft industry in general. While the defense business proved resilient CEO Dave Calhoun said that not a day goes by without an airline customer calling to request a delay on the delivery of new aircraft. For the quarter the company delivered 20 airplanes and has a backlog worth $326 billion. Boeing still has $20 billion in cash and another $12 billion in marketable securities so they are ok for now but getting the 737 Max flying again is critical and this keeps getting pushed back. The 737 Max launch now looks like late this year or early next year.
Shares of Eastman Kodak continue to amaze as gurus work to figure out the financial value of the company as a major US based provider of active pharmaceutical ingredients. After bolting almost 300% yesterday, shares of the 132 year old company exploded another 300% today as Robinhood investors jumped on the stock in a speculative fever. This story reminds me of when news broke that Oprah had invested in Weight Watchers. That stock shot higher only to eventually return to earth.
Starbucks reported earnings yesterday and they were ugly. Revenue was down 38% and the company lost 0.46 cents per share for the quarter. Both top and bottom lines however were better than expected. US same store sales were down 40% while international sales were down 37%. Some of Starbucks locations in places like Seattle’s CHOP zone, saw sales go to near zero as peaceful rioters went grande latte on these locations. Going forward however the company has been reopening stores and getting back to business. CEO Kevin “Green Shoots” Johnson noted the company has a significant digital advantage over the competition and a recent acceleration in downloads for the mobile rewards app has been taking place.

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