Stocks closed Friday’s session lower thanks to earnings reports and China trade news which is going back and forth like a kid picking petals off a daisy. At the close the Dow was off 109 at 25,270. Trading volume was lower for the Dow but higher for the NASDAQ. For the week the Dow was up about 580 points or 2.4%. Earnings and economic data continue to be positive but there are exceptions.
The October jobs report was much better than expected. The gurus had hoped for 193,000 new jobs but the economy delivered 250,000 jobs and the unemployment rate held at 3.7%. All sectors added jobs and the data showed accelerating wage growth of 3.1% over the past year. The report indicates that the Federal Reserve will continue to increase interest rates one more time this year and 3 to 4 times next year.
Starbucks posted a better than expected earnings report sending shares to an all time high. Sales were up 11% and net income was higher by 13%. The gurus were hoping for comp store sales growth of 2.4% but the company delivered 3% on a global basis and 4% in North America. Shares of Starbucks have been flat for the past 3 years and finally appear to be on the verge of starting a new growth trend.
Apple reported earnings and guidance that disappointed Wall Street even though revenue was up 20% and net income was higher by 41%. Shares traded lower on the news in part because Apple announced it would no longer report unit sales. The gurus responded with worries that the company has something to hide. Suppliers to Apple like Broadcom and Universal Panel Display also traded lower in sympathy.
Yesterday John and I were near Satsop, WA so we decided to swing by and look at the 24,000 or so parked diesel Volkswagen’s that are just sitting out in the rain. Check out our Facebook page for some pictures. These cars came from Washington, Oregon and Alaska and this is one of the collection sites for the northwest. Where they are going is unknown. Maybe we should ship them back to Germany. Looking at all these cars is like listening to a bad joke.