Markets today traded mixed on light volume as the S&P 500 fell while the Dow pulled out a gain of 8 points to 20,957.
Apple, the big fruit company out of Cupertino, CA, reported earnings after the closing bell yesterday and the numbers were a bit disappointing. Profits were higher by 11% beating estimates but iPhone sales were off and thus revenue missed expectations but still managed a 5% gain. The company increased its dividend by 10% and is now sitting on a cash pile of close to $250 billion. IPhone sales were slower because people are awaiting the launch of the iPhone 8 sometime later this year. Apple’s stock was off 2% overnight but analysts stepped in and even with the mildly disappointing quarterly results they view the shares favorably pending the launch of the iPhone 8.
The Federal Reserve met yesterday and again today but no rate hikes came out of the meeting. In general most economists are still calling for 2 more rate hikes in 2017 and odds makers are saying there is a 75% chance of a rate hike in June based on what transpired at this month’s meeting.
In the “not much fun” category, Puerto Rico declared a form of bankruptcy today in New York City as it tries to dig out from a recession that started in 2006 and is still going strong. The island has roughly $120 billion in bond and pension debts and creditors have been unrelenting. It will be interesting to see where this goes and how it might affect muni bonds.