It was another interesting day in the markets. The NASDAQ hit a new record high on heavy volume thanks to upside moves by Netflix, Amazon and Faceplant. The Dow fell on lighter volume closing at 24,657, down 42 points for the day.
After 100 plus years as a member of the Dow Jones Industrial Index, General Electric has been removed from the index and replaced with, of all things, Walgreens. GE has seen its shares fall like a rock lately due to bad investments in assets that derived value from gubment subsidies plus ill timed purchases of oil field services companies. One example was the purchase of Alstom in Europe. As part of that deal, GE promised to create 1,000 net new jobs at Alstom but now wants to back away from that vow and France is saying that if the jobs are not “created” then they will hit GE with a fine. The gurus are thinking that GE will be broken up sometime soon and the parts sold off like grandpa’s tools at a yard sale.
Starbucks, the Seattle based coffee and restroom giant, reported that sales are not meeting expectations and thus the company lowered forward guidance and said it will close 150 stores. The news sent shares lower and renewed calls for Starbucks to “get it in gear”. Ever since 2015 the shares of Starbucks have traded in a flat range of approx. $65 on the high end and $51 on the low end where it seems to find lots of support. Starbucks has been making gains in China and bought assets from Nestle but has seen founder Howard Schultze retire and has been hit with growth concerns.
Jeff Bezos, Warren Buffet, and Jamie Dimon have selected Atul Gawande as the CEO for their new healthcare company, which has yet to be named. Gawande is a professor at Harvard Medical School, an author of best-selling books, as well as a surgeon that practices general and endocrine surgery. He believes that “the system is broken, and better is possible”.