The Dow ended the trading week with a 69 point move higher to 27,210. Trading volume was light. For the week the Dow eked out a quarter point gain and for the year is up 16.5%.
Earnings reports are coming in fast and furious today and they were generally better than expected. Here is a quick breakdown:
-Starbucks reported better than expected numbers sending shares to an all-time high. Revenue growth was 8% and profits were up 26%.
-McDonald’s beat estimates and shares hit an all-time high. Sales were flat and net income gained 3%.
-Tweeter reported a whopping 829% increase in profits as sales were up 18%. Shares gained 9% on the news.
-Amazon reported a 20% revenue jump but only grew profits by 3% thanks to slowing cloud revenue and higher expenses related to delivery investments. Shares declined a bit.
-Alphabet (aka Google) reported strong results thanks to cloud growth and YouTube action. Shares were up 8% and the company will buy back $25 billion in stock.
-Alaska Airlines posted a 6% revenue rise and a 31% increase in net. Shares moved up as these results were better than expected and bode well for the company going forward.
The first GDP growth reading of the 2nd quarter came out and it was higher than expected at 2.1%. The gurus had expected a reading of 2%. The Q1 number was 3.1%. Strength in the consumer sector was responsible for the beat as consumer expenditures rose 4.3%. Business investment fell 5.5% with most of the drop attributed to a 10% falloff in spending on structures. Consumers make up 2/3rds of the economy and industry comprises the other third. Overall the report indicates that the US economy is good and a recession is not in the cards maybe for a year or two.