The Hunt for Red October is Nowhere in S&P Sight
A quarter of the way through 3rd quarter earnings season, with over 130 companies in the S&P 500 reporting earnings already, there appears to be support again in stocks. Why you ask?
Earnings and revenue growth is real. Chipotle stock is trading above $200 per share, Apple stock is trading above $300 per share and Google stock is trading above $600 per share. Will we see stock splits ahead? Shareholders sure would hope so. Questions still remain among investors and traders, but two real things are for sure this current earnings season: 1) 85% of S&P companies that have reported earnings issued a positive surprise, with the industrial sector flawless in positively reporting and 2) Over 65% of of S&P companies have reported a positive surprise on revenues. Both positive earnings and revenue releases in the 3rd quarter to-date are beating the average over the 2nd quarter earlier this year. The numbers are real, for now, so investors have the wind at their backs as they dip in with buyer’s caution.
Here’s some key action from this week:
Apple (AAPL) delivered all-time record revenues, shares are trading at $308 per share today.
Dow component Caterpillar (CAT) easily beat the street and acquired a German engine maker for $810 million in cash, shares are trading at $78 per share, better than the high $50s range where the stock started the year.
Amazon (AMZN) proved online retailing is not just a fad, but here to stay with top-line growth over 40% year-over-year in their earnings release yesterday. AMZN shares are trading at $169 per share.
Ebay (EBAY) beat analyst estimates, shares are trading at $28 per share.
General Electric (GE) announced a bid for Clarient (CLRT) at a 30%+ premium on shares. Clarient shares are trading a few pennies from the $5 buyout price.
Netflix (NFLX) continues to perform, proving to naysayers there was another 25 points of upside in shares this week. NFLX shares are settling at $169 per share at the moment.
All-in-all, the upward trend has been your friend in October:
As gradual rising tides lift all boats, the bulls are still in control of the recent stock market rally.
Disclosure: No Positions in stocks mentioned.