The Dow closed the trading week up 33 to 21,830 on lighter trading volume while the NASDAQ retreated on weakness in tech stocks. For the week the Dow gained about 1.1% or approx. 240 points to an all-time high.
It was a rough day for northwest stocks as both Amazon and Starbucks took hits thanks to tepid earnings reports. Starbucks missed estimates for both same store sales growth and revenue. The company is seeing less traffic in malls and will close Teavana stores but its digital rewards program is so successful it is causing bottlenecks at product pickup lines. Starbucks reported an 8% revenue gain and a 12% net income increase. Shares were off by 9% showing that markets can be brutal task masters if perfection is not delivered to the gurus.
Amazon meanwhile beat on revenue estimates with a 25% increase but its net profits fell 78% and missed estimates due to heavy spending on everything under the sun as the company builds warehouses, buys grocery stores and hands out free bananas. Web services grew 41%. In downtown Seattle the company has started stocking its bug eye dome with plants but this process will take about a year to complete. The idea is to have a jungle environment where employees can go and swing from ropes, walk on suspension bridges and lounge in “nests” while they contemplate future projects.
On the economic front, real GDP grew at a 2.6% annual rate in the second quarter of 2017. The best news in today's GDP estimate was that for the second straight quarter, we had an increase in each major part of business investment – investment in equipment, commercial construction, and intellectual property.
I am taking the lunkheads on a hike this weekend to Hidden Lake Lookout in the North Cascades Park. There will be 11 scouts on the hike which is an eight mile trip to an elevation of about 6,800 feet and a lookout. It is great to see the older scouts enjoy these challenging hikes where character building happens way more than at a bowling alley.