Stocks began the day up nicely on good earnings reports but then word leaked out that Iran had apparently snatched a British oil tanker in the Straits of Hormuz. This news dropped equity markets lower and caused a jump in oil prices. The Dow finished the day down 68 at 27,154. Trading volume was mixed. For the week the Dow was down about 0.6%.
In the “bad news is good news” department, Boeing reported that it will take a $4.9 billion after tax charge for costs related to the 737 Max crisis when it reports earnings next Wednesday. The gurus were happy with this because it was not as bad a feared and it gave them clarity on how the 737 Max crisis was affecting the company going forward. On the call the company said it expects to have the 737’s flying by the end of the year and be at a 57 plane per month production level by next year. Morgan Stanley analyst Raj “B3” Lalwani (B3 means “Boeings Biggest Bull”) was thrilled with the news and put the stock at a buy rating with a $500 price target.
Redmond based software/cloud giant Microsoft reported good earnings as cloud revenue grew “only” 64%! Even with all this growth Microsoft has 13% of the cloud market compared to Amazon at over 30% but Microsoft appears to be gaining ground on the “big smile”. With overall quarterly revenue higher by 12% and profits up 21% Microsoft beat guru estimates and cheered investors who pushed the shares to an all-time high of $140. The company continues to buy back stock and raise its dividend.