Apple reported its earnings yesterday, and also noted that it had bought back $20.8 billion of its stock in the year’s second quarter. That’s down from its record $22.8 billion worth of buybacks in the first quarter, but still ranks as the second-largest ever among S&P 500 companies, according to S&P Dow Jones Indices.
Apple's first quarter repurchases made up the entirety of 12 percent of S&P 500 buybacks. Companies in the broad index bought back $189 billion in the first quarter, according to S&P Dow Jones Indices, and are on pace to be about flat in the second quarter.
If Apple hadn’t bought back its stock, the S&P 500′s total buybacks wouldn’t have set a new record high in the first quarter. Subtracting out Apple buybacks from all quarters would have left first quarter buybacks trailing the third quarter of 2007.
Wednesday, August 1, 2018
Tuesday, July 31, 2018
Inklings of Inflation
Are we seeing signs of higher inflation? According to the Wall Street Journal, consumers are starting to see higher prices for recreational vehicles, soda, beer and other goods that now cost more to make as a result of recent tariffs on metals and parts.
U.S. steel and aluminum prices are up 33 percent and 11 percent, respectively, since the start of the year. Producer prices, a measure of what businesses are paid for goods and services, have also climbed to their highest level in years. The producer-price index rose 3.4 percent in June from a year earlier as energy and shipping costs climbed along with metal prices.
Those higher costs are starting to show up in what we pay for retail goods. Consumer prices rose 2.9 percent in June from a year earlier, the Labor Department said, the highest rate in more than six years.
U.S. steel and aluminum prices are up 33 percent and 11 percent, respectively, since the start of the year. Producer prices, a measure of what businesses are paid for goods and services, have also climbed to their highest level in years. The producer-price index rose 3.4 percent in June from a year earlier as energy and shipping costs climbed along with metal prices.
Those higher costs are starting to show up in what we pay for retail goods. Consumer prices rose 2.9 percent in June from a year earlier, the Labor Department said, the highest rate in more than six years.
Monday, July 30, 2018
That Huge GDP Number
Gross domestic product grew by 4.1 percent in the second quarter, according to numbers released by the Commerce Department on Friday. This is the best quarter we've seen since a 4.9 percent in the third quarter of 2014. What went right?
- Personal consumption expenditures rose 4 percent
- Business investment grew 7.3 percent
- Exports added 1.06 of the 4.1 percent total with their largest positive result since the fourth quarter of 2013
- Federal government outlays increased by 3.5 percent
Friday, July 27, 2018
Facebook's Big Plunge
After its disappointing earnings report on Wednesday, Facebook's stock took a bath yesterday with its biggest single-day drop since it started trading publicly in May 2012. On a market-capitalization basis, the company saw $120 billion erased, the biggest one-day loss in U.S. stock-market history.
The decline exceeded the previous record set by Intel, which had a $91 billion single-day loss in September 2000. In just a single day, the decline in Facebook’s market value was roughly the entire market value of McDonald’s or Nike.
Remember, though, that a loss of this magnitude is only possible if the company is gigantic to begin with. Facebook dropped to a $510 billion valuation from a peak of $630 billion, after an eye-popping 472 percent run-up in its stock price since going public.
The decline exceeded the previous record set by Intel, which had a $91 billion single-day loss in September 2000. In just a single day, the decline in Facebook’s market value was roughly the entire market value of McDonald’s or Nike.
Remember, though, that a loss of this magnitude is only possible if the company is gigantic to begin with. Facebook dropped to a $510 billion valuation from a peak of $630 billion, after an eye-popping 472 percent run-up in its stock price since going public.
Thursday, July 26, 2018
Millennials: Not Good Investors
According to a new study from Bankrate.com, many millennials think cash is the best long-term investment. Almost one in three millennials said cash instruments, such as savings accounts and certificates of deposit, are the best place to invest money they won’t need for the next 10 years. That compares with only 21 percent of older generations, most of whom prefer the stock market.
Cash is, of course, not a good investment, especially these days. Only 18 percent of all American adults are earning more than 1.5 percent on their savings, at a time when top-yielding national available savings and money-market accounts are yielding interest rates of more than 2 percent. Baby boomers are the generation most likely to earn more than 1.5 percent on their cash.
Millennials - defined as those between the ages of 18 and 37 - aren't even doing that well. More than one in five millennials said they’re earning less than 1 percent interest on their savings, while roughly 19 percentsaid they’re not earning any interest whatsoever, according to the study.
Cash is, of course, not a good investment, especially these days. Only 18 percent of all American adults are earning more than 1.5 percent on their savings, at a time when top-yielding national available savings and money-market accounts are yielding interest rates of more than 2 percent. Baby boomers are the generation most likely to earn more than 1.5 percent on their cash.
Millennials - defined as those between the ages of 18 and 37 - aren't even doing that well. More than one in five millennials said they’re earning less than 1 percent interest on their savings, while roughly 19 percentsaid they’re not earning any interest whatsoever, according to the study.
Wednesday, July 25, 2018
Google's investment Savvy
What helped fuel Google's earnings blowout earlier this year? The same thing that fuels a lot of our wealth: Alphabet, Google's parent company, is a savvy investor. Alphabet gained more than $1 billion just on its outside investments in the first quarter. Alphabet was the most active and largest corporate investor in the tech sector in 2017, surpassing international players like both SoftBank Group of Japan and Intel’s Intel Capital.
During the quarter Alphabet reported Monday, one investment, Glassdoor Inc., was sold for $1.2 billion to a Japanese human resources company called Recruit Holdings, while another, the electronic signature company DocuSign had a strong IPO. Two security investments have paid off recently as well, as cloud security firm Evident.io was acquired by Palo Alto Networks and Zscaler went public in the first quarter.
Alphabet’s investments gained more than $3 billion in the first quarter. With the $1 billion-plus disclosed Monday, the total gains for Alphabet’s investments in the first half of the year account for nearly one-third of Google’s GAAP net income figure for that period.
During the quarter Alphabet reported Monday, one investment, Glassdoor Inc., was sold for $1.2 billion to a Japanese human resources company called Recruit Holdings, while another, the electronic signature company DocuSign had a strong IPO. Two security investments have paid off recently as well, as cloud security firm Evident.io was acquired by Palo Alto Networks and Zscaler went public in the first quarter.
Alphabet’s investments gained more than $3 billion in the first quarter. With the $1 billion-plus disclosed Monday, the total gains for Alphabet’s investments in the first half of the year account for nearly one-third of Google’s GAAP net income figure for that period.
Tuesday, July 24, 2018
A Big Week for Earnings
If you're looking for information on the biggest stocks in the market, this is the week to pay attention. There are 174 S&P 500 index companies scheduled to report earnings this week, and 11 of the 30 Dow Jones Industrial Average components are on the docket as well.
The most important Internet stocks are all up this week. Facebook reports Wednesday afternoon, Amazon.com is scheduled for Thursday afternoon, and Twitter reports on Friday morning.
We've already had one big Internet blowout: Alphabet, Google's parent, reported yesterday, with revenue of $26.24 billion, up from $20.91 billion in the second quarter of 2017 and higher than the average analyst estimate of $25.58 billion. Its share price jumped by nearly 5 percent in after-hours trading yesterday.
The most important Internet stocks are all up this week. Facebook reports Wednesday afternoon, Amazon.com is scheduled for Thursday afternoon, and Twitter reports on Friday morning.
We've already had one big Internet blowout: Alphabet, Google's parent, reported yesterday, with revenue of $26.24 billion, up from $20.91 billion in the second quarter of 2017 and higher than the average analyst estimate of $25.58 billion. Its share price jumped by nearly 5 percent in after-hours trading yesterday.
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