Thursday, April 17, 2014

Markets inch higher ahead of the long weekend

Dow was off 16, advancers over decliners 3-2 & NAZ rose 9.  The MLP index jumped 2+ to the 482s for a new record (up 20 YTD) & the REIT index lost 1 to the 289s.  Junk bond funds were little changed to lower & Treasuries retreated.  Oil advanced to near its highest level in the last year.  Gold fell as signs of gains in the US economy eroded demand for the metal.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLK14.NYM....Crude Oil May 14....104.29 Up ...0.53 (0.5%)

Live 24 hours gold chart [Kitco Inc.]

Google isn’t immune to setbacks caused by the global shift to mobile computing.  Costs are rising & it said yesterday that revenue, excluding sales passed on to partners, was $12.2B in Q1, another stumble as the company missed a projection for $12.3B.  GOOGL’s audience is migrating to smartphones, where the company gets less ad money for marketing spots than on desktops & tablets.  While CEO Larry Page boosted the number of promotions by 26%, average prices slipped 9%.  EPS was $5.04, slightly ahead of $4.97 a year earlier.  CFO Patrick Pichette said that the increase in operating expenses was largely tied to legal costs & other spending related to acquisitions, especially of home-automation service provider Nest Labs.  The search company is in good shape amid rising revenue and healthy profits, he said.  “There you have it: strong results -- and the optimism that provides us the confidence to fund strategic growth opportunities,” Pichette added.  Still, smartphones are dragging down prices for digital ads, with smaller screens limiting the number of promotions that can be displayed, while marketers are becoming more selective in using them.  The cost per click for search advertising on smartphones dropped 35% in the US during Q1, according to researcher IgnitionOne.  Tablets, which have larger screens & are more like traditional desktops, saw ad prices rise 29%.   The stock dropped $20+.  If you would like to learn more about GOOGL, click on this link for Trend Analysis: 

Google Sales Miss Underscores Challenges of Mobile Transition

Google (GOOGL)

Pepsico, a Dividend Aristocrat, boosted profit more than estimated in Q1 & increased revenue for snacks & beverages globally, excluding the negative impact from currency fluctuation.  The results will help the company fend off calls to separate its dominant snacks business from the struggling North American beverages unit.  The company’s board has stood firm against pressure to split up, allow more focused marketing & spur faster growth.  The company responded with a pledge to improve performance & cut $5B in costs over 5 years starting in 2015, extending a plan already under way.  Organic revenue, which strips out currency fluctuation & the effect of structural changes, rose 5% for snacks globally & 3% for beverages.  EPS excluding some items totaled 83¢, beating the estimate of 75¢.  “Investors are likely to be very happy with what they are seeing out of PepsiCo right now,” CFO Hugh Johnston said.  “I don’t know why you’d want to disrupt it.”  Revenue advanced 0.3% to $12.6B, beating the $12.4B estimate & EPS increased to 79¢ from 69¢ last year.  PepsiCo Americas Beverages volume was little changed, an improvement from a 3% decline a year ago.  A 1% soft drink decline was offset in part by a 2% increase in non-carbonated beverages in North America.  In Latin America, declines in Mexico spurred by new soft drink taxes depressed volume by 1%.  The stock rose 78¢.  If you would like to learn more about PEP, click on this link for Trend Analysis:

PepsiCo Quarterly Net Rises 13%, Giving CEO Respite From Peltz’s Pressure

Pepsico (PEP)

General Electric's, a Dow stock, new focus on oil and gas equipment helped the company to post strong Q1 results.  Lower overall net income than a year ago was due to the sale of NBC Universal.  The industrial divisions, especially oil & gas, performed well & that the global economic environment was improving.  "U.S. gets a little bit better every day. Europe is improving. The growth markets continue to expand and will provide growth during the year even with volatility," said CEO Jeff Immelt.  The company earned $3B on revenue of $34.18B, down from $3.5B on revenue of $34.94B during last year.  On a per share basis, EPS was 30¢.  Adjusted to reflect continuing operations & remove the effect of one-time charges, EPS was 33¢.  GE calculates that EPS rose 9% compared with last year, when the sale of NBC Universal & other items are removed.  Analysts expected EPS of 32¢ on sales of $34.45B.  GE sold its remaining interest in NBC Universal last year as part of a new focus on building & servicing big, complicated industrial equipment such as aircraft engines, power plant turbines & oil & gas drilling equipment.  The next step in that direction will be to complete a public offering of its consumer credit card division, expected later this year.  Operating profit from industrial operations rose 12%, as strong growth in their bigger units made up for lackluster results in smaller ones.  Oil & gas profit rose 37% to $446M.  GE had been a relatively small player in oil & gas equipment until it started buying companies 5 years ago.  The company is still working to cut costs in what it calls a "simplification" effort.  It expects to cut costs $254M in Q2, on its way to a goal of cutting $1B in costs for the year.  The stock rose 44¢.  If you would like to learn more about GE, click on this link for Trend Analysis:  

GE 1Q earnings fall, outlook strongAP

General Electric (GE) 

stock chart

Traders were not anxious to take major new positions going into a 3 day weekend with Putin on the loose.  There was buying today on hopes that situation is calming down, but I don't think so.  Putin is calling the shots with the US & euro powers only following him.  Earnings came in a little better today, although sluggish revenue growth is a nagging problem that is not going away.  Dow remains down about 270 YTD.

Dow Jones Industrials

I’m a huge fan of INO & from what I have seen so far, their service Marketclub!  This isn’t a stripped down version, everything in MarketClub is available to you.  I don’t want to give everything away, but you’ll have unlimited access to my favorite three tools: Trade Triangles, Smart Scan & Alerts!  The best part is that the MarketClub customer support team will be providing UNLIMITED support!  You can call or email for an instant response to any question, comment or concern.

Here’s that link:

I’d recommend you jump on this now.

No comments: