Morning Market Thoughts
Good morning. Twitter (TWTR) is up this morning on news that it beat analysts’ estimates for Q3 earnings and revenues, and that it is giving 350 employees the ability to file for unemployment benefits. Twitter also reported that it had a 7% increase in the number of daily active trolls (er, users). This is, in my view, a gift. It gives you an opportunity to sell the stock a bit higher, and then get out of Dodge.Panera (PNRA) pretty much sums up the current dynamic in the market. The company reported great earnings and gapped up 4.85% yesterday morning. By the end of the day, it closed down 1.77% from the prior day’s close, and down 6.3% from the intraday high. This is a classic “gap and crap”. And the earnings were GOOD!!!
Other companies report great earnings and they just start flying all day and never look back. That’s Boeing (BA) and Netflix (NFLX). Netflix is still up 27% after hitting a high at 29.5%. Over 7 days of trading, NFLX has continued to run with only a brief rest. I’m not recommending that you buy it here. I am recommending that you look at it and marvel at the aggressiveness of buyers. They really want Netflix. (I’m going out on a limb here and positing the notion that Netflix will continue to see more growth because of fallout from the election season. If people are as tired and disgusted with what they are seeing on TV these days with a media that no longer has any resemblance with real journalism, but rather, is a George Orwellian government propaganda outlet, more than a few are going to start cutting the cable and going to, among other things, Netflix. Now, maybe I’m wrong about that, and maybe I am just an outlier. But I think that this election is to traditional media as Colin Kaepernick’s knee is to NFL ratings. It prompted a lot of viewers to reassess what they were spending their time doing, which was watching sporting events that just aren’t that interesting anymore.
This benefits Netflix a lot. And it is a macro thing — a secular trend toward individualized viewing habits rather than robot-like viewing of the same shows night after night. Look at the weekly chart for confirmation (or non-confirmation) that I am right. Again, I could be wrong…but this breakout is a pretty bullish development.
OK, that’s it for my morning rambling.
See you in the forum. And don’t forget — Amazon (AMZN) and Google (GOOGL) report earnings after the bell today. Should be a hoot.
Dan
Market Update