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It Is Time For Earnings To Take Center Stage
Michael Kramer and the Clients of Mott Capital own GOOGL
Earnings take center state with companies like Facebook reporting today, and tomorrow we get Microsoft, Intel, and Amazon. It doesn’t get much bigger, and Facebook didn’t disappoint.
But first…
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Broader Markets
The S&P 500 continued to bounce around today, with the index finishing the day slightly higher up about 20 bps. The index managed to stay on the breakout side of the of the downtrend we crossed on April 11, and it has acted as support, to this point.
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VIX
Meanwhile, the VIX has remained on the other side of 20, and that is also a positive.
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Facebook, may have put some questions to rest, with its strong quarterly results. The company reported daily active user was up 13 percent to 1.45 billion on average. The second quarter will give a better reading of active users post the data scandal, but my gut suggests that the impact will be minmal, at least from my usage, and I have noticed a slowdown in my friends ussage either.
Revenue for the quarter grew to $11.97 billion, versus estimates of $11.41 billion. EPS came in better than expected, at $1.69, vs. estimates of $1.35. Shares were up about $12 in the after-hours trading around $171. I got the retest of $150; post-results wrong!
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AMD
Another call I got completely wrong was AMD, shares of that one are jumping after hours as well, to around $10.70. The company reported better than expected earnings per share of $0.11 per share, vs. estimates of $0.09 per share. Meanwhile, revenue also topped estimates at $1.65 billion, vs. estimates of $1.57 billion. The company also sees revenue in the second quarter at $1.725 billion, better than estimates of $1.57 billion.
0 for 2, out of five earnings predictions, and if you count Alphabet from Monday, that makes 0 for 3.
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Tomorrow
Tomorrow Amazon, Microsoft, and Intel report. I think if Intel can put a good report on the back of Texas Instruments, and Qualcomm it will give the semis a good jolt. The group has been walloped in recent days and needs to some positive newsflow.
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Boeing
Boeing had a nice bounce today following its strong results, but the stock action didn’t impress me so much. Shares where up about 4 percent, basically regain the lost ground from yesterday.
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Cat
To this point, Caterpillar has been able to stay above support at $143, and I think that is a huge positive. It is a critical level for the stock.
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Yield
Finally, the 10-year got to a significant level today, right around 3.04 percent. We could see a considerable acceleration higher if we rise much above current levels.
That’s it.
-Mike
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