October 26, 2018 Weekly Wrap up LIVE from the floor of the NYSE

Monday, October 22, 2018 – Friday October 26, 2018

On Monday there wasn’t much economic news as financial and energy companies struggled while waiting for earnings season to kick in.  In addition to trade issues with China, the killing of a journalist in Saudi Arabia’s Turkish consulate continued to stoke geopolitical worries.  However, tech shares were the bright spot, pulling up the Nasdaq composite by .3%. 

On Tuesday, markets plummeted early after Caterpillar and 3M released disappointing quarterly results and forecasts.  However, losses eased significantly after strong earnings by McDonald’s and Procter & Gamble.  The Dow Industrials ended down 125 points and West Texas Intermediate crude fell 4.2% to $66.26 a barrel. 

On Wednesday new home sales for September declined 5.4% to an annualized 553,000 units, and the EIA petroleum status report for the week ending October 19th saw reserves jump 6.3 million barrels.  The Fed released its Beige Book for September and it wasn’t as strong as recent Fed assessments.  Consumer spending was described as modest and manufacturing and wage growth was described as modest to moderate.  Investors were worried about the potentially slowing economy, and markets fell sharply with the Dow Industrials losing 608 points, erasing all of its gains for 2018.  The Nasdaq Composite fell 4.4% and entered correction territory.  Ten year Treasuries’ yield dropped seven basis points to 3.1%. 

On Thursday durable goods orders for September rose .8% and jobless claims for the week ending October 20th rose 5,000 to 215,000.  The pending home sales index for September rose .5%.  Markets roared back after tech companies calmed investors with solid earnings.  The Dow Industrials rose 401 points, the S&P 500 gained 1.9%, and the Nasdaq Composite closed 2.95% higher. 

On Friday third quarter GDP came in at an annualized 3.5%, slightly higher than expectations, and real consumer spending was up 4%.  Markets opened sharply lower on some disappointing quarterly results from the tech sector.  Now let’s take a look at some stocks.

Amazon.com, Inc. (NASDAQ: AMZN) on Thursday reported third quarter revenue that fell short of analysts’ estimates. The e-commerce giant said revenue rose 29% to $56.6 billion, however, expectations were $57.1 billion. Net income jumped more than 10 fold to $2.8 billion from $256 million year over year.

Alphabet Inc. (NASDAQ: GOOGL) reported its third quarter financial results on Thursday with revenue increasing 21% to $33.7 billion, missing expectations of $34 billion. Advertising accounted for most of revenue, reaching almost $29 billion. Net income was $9.2 billion, or $13.06 per share.

Microsoft Corporation (NASDAQ: MSFT) reported on Wednesday its quarterly earnings. Total revenue came in at $29.1 billion, beating estimates of $27.9 billion, and revenue growth across the company was strong, especially its cloud segment.

Tesla, Inc. (NASDAQ: TSLA) reported its quarterly financial results and crushed estimates, sending shares 10.2% higher on Thursday. The stronger than expected earnings were due to Tesla’s Model 3 delivery and production, allowing it to return to profitability.  Tesla reported revenue of $6.8 billion, increasing almost 129% year over year.

Chipotle Mexican Grill, Inc. (NYSE: CMG) on Thursday reported third quarter results with same-store sales falling short of analysts’ estimates. Revenue increased 8.6% to $1.2 billion and the company said the increase was driven by new restaurant openings and a 4.4% increase in comparable restaurant sales.  Net income was $38.2 million, or $1.36 per diluted share.

  1. Darren Chin 12 months ago

    $AMZN massive high wave daily candle that closed in the lower fib bracket. May be pulled to the 50% fib (1489.89)

    • Ronald S 12 months ago

      Don’t think many realize how big the future of video games and streaming is. Many also don’t realize that $amzn owns Twitch and is leading the charge.

      • Andrew Ross 12 months ago

        $amzn $nflx when you realize BOTH are on their way to ZERO; you will be ahead of the game; remain short max position BOTH!

    • Harold Cooper 12 months ago

      Heavy hitter $AMZN has either completed 5 waves down, or is nearing completion indicating corrective strength is due but that this may only be the start of a correction and not the end with another leg down expected.

      I expect most tech stocks to follow.

      • Kevin Kleinman 12 months ago

        $AMZN need about a 30pt drop to be at a b/e margin due to the lagging price drop. At lunchtime i will likely average down on the same strike to make some progress here.

      • Eran Cohen 12 months ago

        I like a bounce here for $1650 maybe tomorrow. Oversold territory, definitely worth noticing amazon going into Holiday Earnings

      • Arnold Palmer 12 months ago

        $AMZN down over 100 pts today, can’t wait for the next big bounce on this baby

  2. Paul Donohue 12 months ago

    $MSFT just surpassed $AMZN in market cap today, $MSFT has bounced from support at $98 levels looks greater for a breakout to $120 next week. $MSFT likely to hit $1 Trillion market cap before $AMZN $SPY $QQQ $DIA

  3. Allen Patrelli 12 months ago

    For growth you need to increase the price not decrease, especially if the demand is high as @elonmusk taunted.. instead we are seeing inconsistency from the basic law of supply and demand unless… the demand is actually weaker than announced. $TSLA $TSLAQ

    • Jane Lugo 12 months ago

      rip all these longs, forgetting that just a few months ago $tsla was at $350 and now its still $20 below that

    • Don Amador 12 months ago

      What do you put the probability out at of 100% that either of the two known DOJ inquiries in to Musk/ $TSLA or any other currently active DOJ investigations in to similar result in an indictment of Musk?

      • Thomas Coutts 12 months ago

        The problem with shorting $TSLA is that is making money and as such is massively undervalued. Is this simple really…

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