Stock News and Updates for October 29, 2014

 If you look at the language of the Fed, at the end of the day, the global economy has been driving rates.  The fed policy will be dictated by the global economy, not the US economy.


 

3D Printer Stocks Plummet

Shares of popular 3D printing companies dropped sharply as Hewlett Packard announced they will be entering the market and producing a 3D printer that is up to 10x more efficient than any competitors.

GoodYear Tire Rises

GoodYear is up over 5% based on profits and solid guidance.  Much high than the street was expecting.

Dow Slips over 100 points

  • Dow Slips Over 100 points due to Feds decision to stop quantitative easing
  • Sees strength in the broader US economy
  • Interest rates will stay near zero for a while
  • The dollar moved up – indicating potential higher interest rates in the future
  • Gold Falls

 NASDAQ Trails Major Indices

  • Facebook shares dipped over 6% which was the biggest drag – disappointment due to pace of growth
  • Gilead dips nearly 3%
  • Biotech stocks were also under pressure

Stocks Hitting All-Time Highs

  • Marriott @ 74.06
  • AMGEN @ 159.07
  • Apple @ 107.22
  • Costco @ 131.75

Will Interest Rates Go up or be under pressure?

We think what the markets are where they should be.  Long rates are improving.  Rates should drift higher led by the front-end of the yield curve.

Is the Economy ready for the end of quantitative easing?

There is no question the economy is ready.  The economy is in good shape.  the fed reacted to significant improvement in employment and GDP growth.

What is Contributing to Lower Inflation?

  • Technology and Innovation
  • Energy
  • Global Economy is soft
  • a 2% goal of inflation in today’s world is a high bar
  • Risks is the expansion of the money supply

Should we get back into fixed income investments?

  • Long end of the rate curve makes sense now
  • Long date of treasuries are attractive
  • High yield looks interesting

Greenspan says he doesn’t see rates increasing

  • First rate hike will disrupt the economy
  • Fed is trying to create a good communication plan to avoid disruption
  • If we move to 1% funds rate, we’re just moving slightly – it won’t be too disruption

Reporting Earnings Today

  • VISA (V)
  • Baidu (BIDU) – expected to miss
  • Kraft (KRFT)
  • Dreamworks (DWA)
  • Take Two Interactive – look for a loss of $.59/share

Today’s Takeaways

  • Dow closes down 32 points
  • Facebook plunges
  • Job market upgraded
  • Economy is slowly making progress and we don’t need emergency monetary policy
  • Earnings have been good
  • Fed is managing schizophrenia on wall street
  • There is no real change in Fed policy
  • S & P closed down 3 points
  • NASDAQ closes down 15 points thanks to Facebook
  • As long as interest rates don’t skyrocket, we’ll be in good shape

Earnings Reports

  • Visa revenues beat estimates – 3.23B vs 3.19B – stock rises 3.3% after hours ($2.18/share) – Guidance for revenue growth in 2015 projected at 10% – hints at buyback