Monday July 16, 2018 – Friday July 20, 2018
On Monday retail sales for June were up .5%, on top of the 1.3% gain from the prior month. The Empire State manufacturing survey for July fell 2.4 points to 22.6 and business inventories for May rose .4%. Earnings season is underway and expectations are very high. Markets ended the day mixed and West Texas Intermediate crude fell 3.9% to close at $68.24 a barrel, after the U.S. government said some buyers could get waivers permitting them to continue purchasing Iranian oil.
On Tuesday industrial production for June rose .6% compared to the prior month’s .5% decline and the housing market index for July remained unchanged at 68. The U.S. dollar gained in strength after Fed Chair Jerome Powell told a Senate committee that interest rates will continue to rise. Tech shares rallied and the Nasdaq composite rose .6% to close at an all-time high.
On Wednesday housing starts for June fell 12.3% to an annualized 1.173 million units, and the EIA petroleum status report for the week ending July 13th saw crude oil inventories rise 5.8 million barrels. The Federal Reserve released its Beige Book economic conditions which raised concerns over growing inflation due to tariffs. Labor shortages are constraining business expansion, and consumer spending is increasing.
On Thursday jobless claims for the week ending July 14th were down 8,000 to 207,000, the lowest level since December 1969. Markets pulled back modestly as President Trump expressed his displeasure of the Fed’s recent interest rate hikes. The yield on 10-year Treasuries ended the day at 2.84%.
On early Friday markets were mostly unchanged as investors considered trade worries and additional comments by President Trump critical of the Federal Reserve. Now let’s take a look at some stock.
Netflix Inc. (NASDAQ: NFLX) reported second quarter results and missed its subscriber estimates, sending shares down by over 15% during Monday’s after hours. Netflix reported revenue of $3.90 billion, increasing 40.3% year over year but falling short of estimates. Netflix fell to under $350 per share on Tuesday morning.
Bank of America Corp. (NYSE: BAC) reported second quarter results on Monday, with net income up 33% to $6.8 billion, driven by improved operating performance and the benefits of tax reform. Bank of America returned $6.2 billion to shareholders in the second quarter through common dividends and share repurchases. Shares of the company rose to over $30 on Tuesday.
Google, a subsidiary of Alphabet Inc., (NASDAQ: GOOGL) was fined $5 billion on Wednesday by the European Commission for illegal practices regarding Android mobile devices. Google must end the practices within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet.
eBay Inc. (NASDAQ: EBAY) announced second quarter financial results on Wednesday and delivered revenue of $2.6 billion, increasing 9%, primarily driven by gross merchandise volume (GMV) of $23.6 billion. eBay grew active buyers by 4% across its platforms, for a total of 175 million global active buyers.
IBM (NYSE: IBM) announced second quarter results on Wednesday with cloud revenue of $18.5 billion over the last 12 months, up 23%. IBM returned $2.4 billion to shareholders through $1.4 billion in dividends and $1.0 billion in gross share repurchases. IBM shares rose to over $149 on Thursday post announcement.