Market Wrap-Up: Week of 4/21/2019

Good afternoon everyone. In case you missed it, here’s what happened in the markets this week. Earnings season is officially underway, and it’s like Christmas and Halloween all rolled into one. Facebook stock rose 9% in after-hours trading on Wednesday following their first-quarter earnings report. The company exceeded revenue expectations despite the Federal Trade Commission’s ongoing inquiry. And then there’s 3M. On Thursday the industrial giant cut it’s 2019 earnings estimates and revealed plans to lay off 2,000 workers. This sent the stock price down 13% and brought the overall Dow Jones Industrial Average down with it.

 

Closer in the C-suites, adventurer in the streets. Patagonia made the announcement this week that it will become more “selective” of its corporate clients. This change is in line with their goal to focus on “other mission-driven companies that prioritize the planet.” Patagonia’s company branded vests have become somewhat of an Indiana Jones meets Gordon Gecko symbol of corporate America. So much so that since the announcement, vests with the logos of JP Morgan and Goldman Sachs have been selling for upwards of $200 on eBay. This is a significant markup for an article of clothing that retails for $99 to $139. And, an interesting departure for a company that started out as an outdoor clothing brand. The vests have joined the likes of McDonald’s plastic straws as symbols of a bygone era that have found a new home on eBay. Marketwatch has more on this topic here.

Out for blood. Elizabeth Holmes, the former CEO of the now-defunct Theranos, appeared in court this week. Her attorneys were able to successfully argue for a delay in her trial date. This was the first time she had been spotted in public since HBO’s documentary, The Inventor: Out for Blood in Silicon Valley. And for most of us, this was the first time we’d seen her in public wearing anything other than a turtle neck.

You get loan forgiveness and you get loan forgiveness and everybody gets loan forgiveness!!!

Senator Elizabeth Warren has announced her plan to forgive $50,000 in student loans for households under $100,000/year in income. And, to partially cancel student loans for anyone making up to $250,000/year. How does she plan to fund this? From her proposal for an Ultra-Millionaire Tax. This being a 2% tax on wealth exceeding $50 million with an extra 1% tax on wealth exceeding $1 billion. This could also be known as the Patagonia Vest Tax.

We are in the battle for the soul of this nation
— Joe Biden

She’ll face stiff competition from Joe Biden who announced his intention this week to run for the “soul of this nation.” Whether or not he’s successful remains to be seen. However, it should be noted that it is currently impossible to run for the soul of any nation. In America only corporations have been granted the same rights as individuals.

And last but not least…

So hot right now. The US economy beat expectations by growing at a rate of 3.2% in the first quarter of this year. This was well above the consensus estimate of 2.5%. However, inflation numbers came in lower than expected at 1.7% for the same period. And what does this mean for the markets? For the time being it looks like investors will be able to have the best of both worlds. A strong economy with low inflation means there’s a good chance the Fed will continue their pause in interest rate hikes. If you’re looking for more information on this topic, CNBC has an article here.

In other news…

Microsoft hit $1 trillion in market cap propelled in large part by Microsoft Office 365 and LinkedIn on Thursday.

Marvel’s the Avengers: Endgame premiers in theaters and is expected to rake in close to $1 billion globally this weekend.

Thanks for reading. I hope everyone has a great weekend. We’ll see you next week!

*These are the general views of Stanton Burns and they should not be construed as investment advice for any individual. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Stanton Burns does not maintain positions in any securities mentioned as of the writing of this article. Past performance is historical and does not guarantee future results.