Dow fell 67, decliners over advancers 2-1 & NAZ was off 19. The MLP index went down 1 to the 255s & the REIT index rose 1 to the 322s. Junk bond funds slid lower & Treasuries climbed higher to around 3%. Oil was even in the 67s & gold retreated 7 to 1325.
AMJ (Alerian MLP Index tracking fund)
Stock fell, with the Dow slumping for a 6th consecutive day, as rising US bond yields & disappointment over earnings weigh on investor sentiment. The $ resumed its rally, climbing to the highest in 3 months. The greenback strengthened against almost every major peer, with the € among the losers a day before the ECB's next rate decision. The region's currency weakness was no tonic for equities & the Stoxx Europe 600 Index fell along with the S&P 500 & the MSCI Asia Pacific Index after less-than-optimistic earnings forecasts from bellwethers including Caterpillar (CAT & a Dow stock). Upward momentum in the $ looks set to force a rethink on many of the most popular trades just now, giving equity investors yet another factor to grapple with after rising yields & threats to global trade roiled markets. They had been looking to earnings for some cheer, but a mixed bag of results across tech shares & industrial bellwethers is doing little to calm nerves over the growth outlook. Today's moves weren't entirely risk-off, however, & established safe-haven assets including gold & the ¥ retreated.
Boeing (BA & a Dow stock) reported a higher-than-expected quarterly profit & raised its full-year forecast for EPS & cash flow, boosted by strong demand for air travel. BA, which sold a record 763 aircraft last year & has already announced a rise in commercial deliveries in Q1, raised its full-year operating cash flow forecast to $15.0-15.5B from about $15B previously. The company also increased its 2018 core EPS forecast to $14.30-14.50 from its previous projection of $13.80-$14.00. The commercial aircraft deliveries rose 9% to 184 in Q1. Core EPS, which exclude some pension costs, was $3.64, compared with $2.17 per share, a year earlier. Total revenue rose 6.5% to $23.38B. Core operating margin rose to 10.7% from 8.5% a year earlier. Analysts had expected Q1 EPS of $2.58 on revenue of $22.26B. The stock shot up 8.99 (3%).
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
General Motors (GM) is bullish on 2018, but a weaker market for new cars is expected to weigh on the automaker's bottom line for Q1. The company has said its 2018 financial results will be “largely in line” with last year's earnings, & profits are on pace to grow in 2019, as GM benefits from strength in North America & China & the launch of redesigned Chevrolet along with GMC pickup trucks later this year. In Q1, a slow start to US sales may contribute to a decline in profits for GM. The company saw tepid sales in Jan & Feb, while sales bounced back in Mar. Overall, sales grew 3.8% during the opening qtr of 2018. GM could see an earnings boost after selling a larger share of trucks & SUVs, 2 lucrative segments. 79% of all vehicles GM sold during the period were trucks or SUVs, an increase from about 72% a year earlier. Analysts expect GM to earn an adjusted EPS of $1.24, down from $1.70 a share. Forecasts call for revenue of $34.7B compared to $41.2B in Q1-2017. Rising costs are also a potential factor. GM has warned that higher commodities expenses will be a headwind this year, though not as much as some of its rivals. Manufacturers have recently noted higher steel prices following Pres Trump's decision to impose tariffs on imports. Investors will also be watching GM's earnings report for details on intl restructuring, particularly in South Korea, & the company's vision for Cadillac. The stock fell 23¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
Stocks are back to meandering as earnings are reported. Clearly, they are not giving the support that was expected. Optimism from consumers & execs is good, but that has not translated into the kind of earnings investors had expected. Trade talks drone on with no end sight. The Dow chart below is far different from what investors have seen in several years. Dow remains close to 24K, roughly flattish in the last 3 months.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 67.71 | +0.01 | +0.0% |
| GC=F | Gold | 1,325.30 | -7.70 | -0.6% |
Stock fell, with the Dow slumping for a 6th consecutive day, as rising US bond yields & disappointment over earnings weigh on investor sentiment. The $ resumed its rally, climbing to the highest in 3 months. The greenback strengthened against almost every major peer, with the € among the losers a day before the ECB's next rate decision. The region's currency weakness was no tonic for equities & the Stoxx Europe 600 Index fell along with the S&P 500 & the MSCI Asia Pacific Index after less-than-optimistic earnings forecasts from bellwethers including Caterpillar (CAT & a Dow stock). Upward momentum in the $ looks set to force a rethink on many of the most popular trades just now, giving equity investors yet another factor to grapple with after rising yields & threats to global trade roiled markets. They had been looking to earnings for some cheer, but a mixed bag of results across tech shares & industrial bellwethers is doing little to calm nerves over the growth outlook. Today's moves weren't entirely risk-off, however, & established safe-haven assets including gold & the ¥ retreated.
Stocks Extend Drop as Optimism `Hijacked' by Rates: Markets Wrap
Boeing (BA & a Dow stock) reported a higher-than-expected quarterly profit & raised its full-year forecast for EPS & cash flow, boosted by strong demand for air travel. BA, which sold a record 763 aircraft last year & has already announced a rise in commercial deliveries in Q1, raised its full-year operating cash flow forecast to $15.0-15.5B from about $15B previously. The company also increased its 2018 core EPS forecast to $14.30-14.50 from its previous projection of $13.80-$14.00. The commercial aircraft deliveries rose 9% to 184 in Q1. Core EPS, which exclude some pension costs, was $3.64, compared with $2.17 per share, a year earlier. Total revenue rose 6.5% to $23.38B. Core operating margin rose to 10.7% from 8.5% a year earlier. Analysts had expected Q1 EPS of $2.58 on revenue of $22.26B. The stock shot up 8.99 (3%).
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing beats profit estimates, margins rise
General Motors (GM) is bullish on 2018, but a weaker market for new cars is expected to weigh on the automaker's bottom line for Q1. The company has said its 2018 financial results will be “largely in line” with last year's earnings, & profits are on pace to grow in 2019, as GM benefits from strength in North America & China & the launch of redesigned Chevrolet along with GMC pickup trucks later this year. In Q1, a slow start to US sales may contribute to a decline in profits for GM. The company saw tepid sales in Jan & Feb, while sales bounced back in Mar. Overall, sales grew 3.8% during the opening qtr of 2018. GM could see an earnings boost after selling a larger share of trucks & SUVs, 2 lucrative segments. 79% of all vehicles GM sold during the period were trucks or SUVs, an increase from about 72% a year earlier. Analysts expect GM to earn an adjusted EPS of $1.24, down from $1.70 a share. Forecasts call for revenue of $34.7B compared to $41.2B in Q1-2017. Rising costs are also a potential factor. GM has warned that higher commodities expenses will be a headwind this year, though not as much as some of its rivals. Manufacturers have recently noted higher steel prices following Pres Trump's decision to impose tariffs on imports. Investors will also be watching GM's earnings report for details on intl restructuring, particularly in South Korea, & the company's vision for Cadillac. The stock fell 23¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM earnings under pressure as sales cool off
Stocks are back to meandering as earnings are reported. Clearly, they are not giving the support that was expected. Optimism from consumers & execs is good, but that has not translated into the kind of earnings investors had expected. Trade talks drone on with no end sight. The Dow chart below is far different from what investors have seen in several years. Dow remains close to 24K, roughly flattish in the last 3 months.
Dow Jones Industrials
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