Market Wrap-Up for Jan.25 (AAPL, NFLX, SBUX, PG, CAT, HAL, more)
Despite the shortened holiday trading week, the markets were able to wrap up another round of solid gains. The rally in stocks has been global in scope, especially in Japan, where they have decided to super-size the printing press strategy when it comes to monetary policy.
Looking specifically at today’s tape, we saw investors piling into names that reported earnings numbers, including the likes of Starbucks (SBUX), Halliburton (HAL), KLA Tencor (KLAC), and Procter & Gamble (PG). Shares of Caterpillar (CAT) did not participate in the rally after the company released global sales data that was worse than expected. The big winner of the day for the second straight session was Netflix (NFLX), a non-dividend name that I dig into a bit more below.
The Proverbial Bandwagon
Anyone that has had an eye on the markets these last two days can’t help but notice the enormous spike in Netflix (NFLX) shares. Oh to be short this market and particularly shares of Netflix — the stock now is up 60% in just a little over a day.
The amazing part of this move is to see and hear the pundits scramble to justify the gains, talking about how users are watching popular TV shows in binges, as if this is a new development. That has always been the lure for Netflix users, but the lack of newer releases has been what has hurt them (and actually still remains a problem). Now if I was still actively trading, there is no way I would want to step in front of a stock moving so quickly. It’s amusing to see how analysts can reinvent a company’s attractiveness when the bulk of the storyline hasn’t really changed.
This story ties in well with investors that love to follow the latest hot picks from pundits on all platforms. Don’t forget most of these experts also buy at the exact bottoms and sell right at the very top (yeah right). If you believe that, you will likely be enduring a bit of financial hardship, as the manic daytime chatter our financial media brings to viewers almost always does more harm to portfolios than good.
Those remaining with Apple (AAPL) shares can attest to how quickly the media’s love can shift from one name to the next. Meanwhile, dividend investors quietly go about their business piling up dividend payouts and increases over time. It’s a tough gig, but some investors have to do it!
Looking Toward Next Week
Looking ahead to the next week for stocks, we will get a slew of earnings from across many sectors, with companies like Kellogg (K), Boeing (BA), Merck (MRK), Chevron (CVX), and Hershey Co. (HSY) reporting results.
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