Your Wednesday Market Blip 11/20/19

Your Wednesday Market Blip 11/20/19

Trade talks took a turn south after Trump said he is not averse to adding more tariffs if a phase one deal is not signed. Adding to this was a vote in the Senate condemning China and opening the door for sanctions if China uses violence to squash protests in Hong Kong. China was furious over this saying the US should not interfere in their domestic head cracking. At the close the Dow was down 112 at 27,861. Trading volume was up. Market indicators are good for now and Lipper reported that money market balances are near an all-time high of $3.41 trillion which is a level not seen since 2009.

Target reported better than expected earnings causing shares to gap up to new highs. Revenue was up 5% and net profits gained 25%. Online sales were up 31% and while they only represent 7% over overall revenue, they accounted for 38% of profit growth. The company purchased an ecommerce outfit last year called “Shipt” and used it as a vehicle to roll out online sales with same day delivery and store pickup options. Chairman and CEO Brian “Bullseye” Cornell said, "The Target team did an excellent job serving our guests” (talk about “corporate speak”) and gave optimistic forward guidance heading into the Christmas shopping season.

Lowes Home Improvement reported revenue that was flatter than a sheet of plywood but clocked a 36% increase in profits as the company continues to improve operating efficiencies. The results surpassed guru estimates and shares moved higher.

Tesla is a multifaceted business with cars, charging stations, battery production, solar roofs and power walls. One interesting aspect of the company is its foray into grid level batteries for energy storage. Last year the company sold and installed the world’s largest grid level battery in Australia to a wind farm company and so far, the results are encouraging as the $66 million cost on the project has netted almost that in revenue. The battery pack gets free electricity from the wind farm and then sells this power to the grid when the grid is faced with an interruption. The Tesla system can instantly convert from charging to discharging which minimizes the price spikes that occur in the time gap between the interruption and other base load plants having to power up. Due to its success, the wind farm which owns the project has announced it will expand the Tesla battery pack capacity by 50% plus more operators are announcing similar projects around Australia. Goo’day Mate!

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