Tuesday morning, despite warm news on the Chinese trade talks and upcoming Iranian oil sanctions, the stock market fell early on across the DJIA, S&P 500, and Nasdaq.
Poor quarterly earnings reports are weighing down the market and namely Alphabet (NASDAQ: GOOGL), and the Minnesota Mining and Manufacturing company, or 3M Co. (NYSE: MMM). Both have slipped three points since the opening bell, shaving off about 1.6% of their stock prices.
Although Apple has been and continues to be one of the world’s greatest companies, the tech giant posted poor Q2 results. These results are called “poor,” however, only because the company’s revenue growth was not quite as fast as projected (which was lightning-fast in the first place). Apple does face a few challenges. One is Apple’s high prices, which discourage customers from buying new phones right up to the brink of planned obsolescence. There’s also, of course, a problem in the developing markets that Apple has used to rapidly grow, as those countries become saturated with smartphones, and then buy fewer phones. Further, there’s competition overseas, largely from Android, outside Apple’s turf in North America, the UK, Australia and Japan.
To account for 3M Co. as well, their Q1 earnings report was weak, pulling down the stock.
The biggest winner today has been Chevron Corp. (NYSE: CVX), which has climbed 3.5 points or 3%, responding to positive news about Chevron’s planned merger with Anadarko Petroleum, an oil explorer. Chevron, however, is now forced to compete with a higher bid from Occidental Petroleum (NYSE: OXY), a company backed by Warren Buffett’s $10 Billion USD. It is quite possible this week that we’ll see a bidding war for Andarko.
The story of the oil market, finally, loops back around to Iran. One concern for domestic oil companies and consumers should be whether or not the Emirates and Mohammed Bin Salman Al Saud decide to live up to their promise of keeping oil prices steady. Still, when the waivers expire next week for China, India, Japan and other major Iranian-oil customers, fuel prices will rise, ultimately creating winners and losers in the United States. It seems to me that higher gas prices will make the average American, in the short run, a loser.