Stocks retreated from record highs as the Dow closed off 112 at 23,329. Trading volume was heavy. Markets appear jittery heading into earnings today and tomorrow which will feature tech heavy weights like Amazon, Google and Micropoopie. There appears to be some sector rotation occurring from growth to value. BTS indicators are seeing some weakening but not enough to get out. Next Wednesday could be a big indicator when Apple will report earnings. What I have noticed is that active mutual funds are selling Apple heavily while passive index funds continue to buy it. We will see who is right come Wednesday November 1st at the “Apple Stock Earnings Smack down” hosted by Vince McMahon! Mark your calendars for what will be a big event.
Tuesday was a big day in earnings reports as IBD pointed out that several large blue chips reported solid earnings which drove stock prices and propelled the Dow to a new record close. Caterpillar beat street earnings estimates by 53%, 3M topped consensus estimates by 5%, United Technologies posted earnings 3% above estimates and McDonald’s reported a slight miss but saw its shares move higher thanks to stronger than expected US same store sales results.
Wednesday saw strong earnings from Boeing. The company posted a 2% revenue rise and a 23% drop in profits and raised its forward guidance. Both top and bottom line results beat estimates. Shares of “The lazy Bee” are up 71% this year making it the leading performer in the Dow. Seeking Alpha had an interesting note that Canada’s Bombardier was approached by both Boeing and China about purchasing the C Series passenger jet program but with the urging of the Canadian gubment they instead went to Airbus as a white knight. The C Series is a nice jet but getting it over the finish line cost Bombardier its soul.