Your Weekly Blip 5/3/21

Your Weekly Blip 5/3/21

The Dow today closed higher by 238 points at 34,113. Trading volume was higher. Markets have been in a sideways pattern for 3 weeks now. Last week the Dow closed down 0.5% or roughly 160 points in slightly higher trading volume. For the year the Dow is up 10.7%. Both IBD and BTS indicators remain positive and retail investors continue to put money into stocks. Value stocks like banks, energy, materials and manufacturing continue to be market leaders.
The Economy and Earnings
There were a ton of earnings reports last week and the bottom line is that over 86% of S&P 500 companies are beating results by an average of 23.5%. Both of these gaps are the largest ever recorded according to research firm Refinitiv going back to 1994. Overall earnings growth is on pace to hit 44.7% in the first quarter which is the best in over a decade.
Tesla reported earnings last Monday. Revenue was higher by 74% and net income gained 304% which were solid numbers but in light of supply chain issues which CEO Elon Musk discussed on the call as “insane difficulties” Wall Street took profits and pushed shares lower.
Google reported a 34% revenue rise and net income surged by a whopping 162% as pandemic factors helped drive results. The company announced a $50 billion share repurchase program.
Microsoft reported better than expected numbers with revenue climbing 19% while profits surged 39%. The company noted that covid related digital adoption curves were not slowing down but rather accelerating which caused CEO Satya Nadella to raise forward guidance.
Apple reported a 54% revenue rise while net income grew 119%. Amazon followed suit with net income jumping 215% while revenue gained 44% on strength in cloud business and growth in Amazon Prime.