Dow inched up 3, advancers over decliners about 3-2 & NAZ gained 12. The MLP index fell 1 to the 263s & the REIT index was off fractionally in the 353s. Junk bond funds fluctuated & Treasuries were marginally lower. Oil fell to the 67s & gold sank another 11 to 1228 (near a one year low).
AMJ (Alerian MLP Index tracking fund)
Fueled by a 20% sales jump in its prescription drugs business, Johnson & Johnson (JNJ, a Dow stock & Dividend Aristocrat) posted a 3% increase in Q2. Still, the world's biggest maker of health care products trimmed its forecast for 2018. The prescription medicine business, which had lagged its medical device business until a couple years ago, accounted for ½ its $20.8B in total revenue. That business has prospered from wider use of its cancer & immune disorder medicines & its $30B acquisition of Swiss drugmaker Actelion last year. That deal brought JNJ Opsumit & other drugs for high blood pressure in the lungs, a business that could hit $2.5B in sales this year. The company reported EPS of $1.45, up from $1.40 a year ago. Adjusted for one-time gains & costs, EPS came to $2.10, 4¢ better than expected. The $20.83B in revenue, up from $18.84B in the year-ago qtr, also topped expectations for $20.21B. The results come on the heels of a $4.69B jury verdict against JNJ last Thurs in a 22-plaintiff lawsuit alleging its iconic baby powder contained asbestos & caused their ovarian cancer. The company plans to appeal that verdict & is fighting about 9K lawsuits alleging that talc in its baby powder & Shower to Shower caused ovarian cancer or mesothelioma, despite significant evidence that talc, an inert element, is safe. Prescription drug revenue totaled $10.35B, while medical devices & diagnostics products brought in $6.97B, up 3.7%. That segment is now entering the 3rd year of a restructuring program that's included several divestitures. JNJ now expects full-year EPS of $8.07-8.17, down a bit from its Apr forecast for $8-8.20. It anticipates revenue of $80.5-81.3B, down from its prior forecast of $81-81.8B. Analysts are expecting $81.2B in sales & EPS of $8.10. The stock rose 5.01.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Stocks started the day slightly lower & that was followed by buying. Powell is talking about a rising chorus on concern about tariffs plus the JNJ earnings were a solid plus. Techs have been responsible for much of the recent rally, helping take the Dow up 1K this month. However the tech stock rally may have priced in all the good news already. Then there are the trade wars which show no signs of getting better for some time. The bulls are happy to see the Dow holding above the important 25K level.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 67.47 | -0.59 | -0.8% |
| GC=F | Gold | 1,229.50 | -10.20 | -0.8% |
Stocks opened lower, led by the NAZ, which is seeing a drag from the likes of Netflix (NFLX), as the
company posted weaker-than-expected subscriber numbers late yesterday. Other
tech leaders, including Amazon (AMZN) & Facebook (FB), are also falling in
sympathy as investors assess these stocks, which have been
hovering at all-time highs. Elsewhere, the S&P 500 & the Dow declined
in early trading as investors digest results from Goldman Sachs (GS) &
UnitedHealth (UNH), each of which exceeded expectations on profit & revenue targets. Along with earnings, Federal Reserve Chairman Jerome Powell,
appearing before the Senate Banking Committee, reiterated that the US
economy is in good shape. "Incoming data show that, alongside the strong
job market, the U.S. economy has grown at a solid pace so far this
year" he said indicating that interest rates will
continue to rise at a gradual pace. This is the first of the Fed's 2-day
semiannual monetary policy report to Congress amidst growing concerns of
the impact of tariffs on the economy.
Techs tumble as investors weigh recent rally
US industrial production rebounded last month after being dragged down in May by a fire at an auto parts plant. The
Federal Reserve said that industrial production, output at factories, mines & utilities, climbed 0.6%
in Jun, recovering from a 0.5% drop in May. The May reading was
warped by a fire at a Michigan parts factory that disrupted production
of Ford (F) Motor's F-series pickup trucks, America's bestselling vehicle. American
industry continues to look healthy despite trade conflicts with China,
Europe & Canada & a rising $ that makes US products more
expensive abroad. Factory production rose 0.8% last month after falling 1% in May. Mining output
increased 1.2% in Jun, its 5th straight monthly gain, on
increased production by oil & gas companies, while utility production dropped 1.5%. The
US economy shows signs of strength strong. Growth clocked in at a
lackluster 2% annual pace in Q1, but is
expected to hit 4% growth Q2, helped by tax
cuts. Unemployment is at 4%, consistent with what economists
consider full employment. But the economy could
face obstacles. The US & China, the world's 2 largest
economies, are locked in a trade war over American complaints that
Chinese companies steal trade secrets & force US firms to hand over
technology in return for market access. Pres Trump has
threatened to impose tariffs on up to $550B in Chinese goods.
That could raise prices for consumers & disrupt manufacturing supply
chains. Trump also enraged US allies like the
EU & Canada by slapping tariffs on imported steel &
aluminum & is threatening to target auto imports next.
US industrial production is on the rise
Fueled by a 20% sales jump in its prescription drugs business, Johnson & Johnson (JNJ, a Dow stock & Dividend Aristocrat) posted a 3% increase in Q2. Still, the world's biggest maker of health care products trimmed its forecast for 2018. The prescription medicine business, which had lagged its medical device business until a couple years ago, accounted for ½ its $20.8B in total revenue. That business has prospered from wider use of its cancer & immune disorder medicines & its $30B acquisition of Swiss drugmaker Actelion last year. That deal brought JNJ Opsumit & other drugs for high blood pressure in the lungs, a business that could hit $2.5B in sales this year. The company reported EPS of $1.45, up from $1.40 a year ago. Adjusted for one-time gains & costs, EPS came to $2.10, 4¢ better than expected. The $20.83B in revenue, up from $18.84B in the year-ago qtr, also topped expectations for $20.21B. The results come on the heels of a $4.69B jury verdict against JNJ last Thurs in a 22-plaintiff lawsuit alleging its iconic baby powder contained asbestos & caused their ovarian cancer. The company plans to appeal that verdict & is fighting about 9K lawsuits alleging that talc in its baby powder & Shower to Shower caused ovarian cancer or mesothelioma, despite significant evidence that talc, an inert element, is safe. Prescription drug revenue totaled $10.35B, while medical devices & diagnostics products brought in $6.97B, up 3.7%. That segment is now entering the 3rd year of a restructuring program that's included several divestitures. JNJ now expects full-year EPS of $8.07-8.17, down a bit from its Apr forecast for $8-8.20. It anticipates revenue of $80.5-81.3B, down from its prior forecast of $81-81.8B. Analysts are expecting $81.2B in sales & EPS of $8.10. The stock rose 5.01.
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson beats revenue, profit projections for 2Q
Stocks started the day slightly lower & that was followed by buying. Powell is talking about a rising chorus on concern about tariffs plus the JNJ earnings were a solid plus. Techs have been responsible for much of the recent rally, helping take the Dow up 1K this month. However the tech stock rally may have priced in all the good news already. Then there are the trade wars which show no signs of getting better for some time. The bulls are happy to see the Dow holding above the important 25K level.
Dow Jones Industrials
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