While the NASDAQ moved higher the Dow had a case of the blues. At the close the Dow was off 118 points on higher volume to close at 20,404. Volume on the NASDAQ was higher as well indicating some divergent trends within the equity markets.
Earnings reports are now in full swing with about a third of all S&P 500 companies reporting this week. On top of the list was a report by IBM which, while net income was above estimates, revenue fell for the 10th quarter in a row indicating that big blue is singing “Moody Blues” by the King. Competition from everyone ranging from Amazon to Zillow is eating away at IBM’s base legacy products, aka lunch. Revenue was off 3% while net income was up 1%.
Morgan Stanley gave a boost to the financial sector with a fine earnings report which saw a 27% revenue gain and an 82% jump in profits. The gains came mostly via fee based wealth advisory business and bond trading operations. The report also indirectly hints at how badly Goldman Sachs has missed out on market trading opportunities since all the other firms are doing well in this arena.
Blackrock, the world’s largest money manager with $5.4 trillion under assets reported a 2% decline in revenue and a 23% increase in net income. Assets grew 5% and Blackrock benefitted from the trend of investors moving to ETFs or exchange traded funds.
Gold pulled back today but speaking of color, Starbucks was higher after it introduced a thing called the “unicorn frappuccino” which is a mango crème layered with powdery sour topping that changes color and flavor when stirred. I wonder if it mirrors our mood. Apparently it is a big hit on Instagram and Snapchat.