Earnings Pour Forth Like A Cold Draft Beer

Equities start the day higher as earnings pour forth like a cold draft beer (who’s thirsty now?). Earnings Earnings  Earnings, that’s the soup du jour as 260+ companies hit the tape (how bummed are junior research analysts right now). The biggest move overnight was FB, up a meaty 7% as I sat down in my imitation luxury space chair (is it just me or do these Aeron chairs hurt your back?). Doug Kass pointed this out on Twitter but would you believe Facebook’s market cap is larger than both DIS and GM combined? That doesn’t zuck right? Disney did $6B in PROFIT in FY 2013 and is currently smaller than Mark’s baby (did $1.4B in profit FY2013).  I mean have you walked around Disneyworld lately?  You got people buying $30 toys like they cure Hepatitis C. Hotels charge mortgage like rates and the lines for Small World are longer than the “Free Pizza” queue at my local college. Plus they are going to reboot Star Wars!   How exciting is that?  Well, anyway, who am I to complain about market valuations, maybe FB is going to be the larger than AAPL one day. S&P 2,000? Not yet, but hang tight. Earnings are fine and macro data feels like it has finally turned (Weekly claims hit its lowest level since 2006 this morning), so I think that magical 2 handle is imminent. 

After the open we spent most of the morning in “indecision” mode. Some good earnings, some bad earnings, some good eco data, some bad eco data (new home sales whiffed hard and flash PMI came up a bit short) which in the end caused us to drift around. After 30 minutes we were in negative territory. 1.5 hours later we had printed a new all-time high. So you got me. Besides FB the other big winners were UA +14%, which clearly protected their house, TSCO +6.5%, which I guess has plenty of tractors in supply, FLS +5.5%, must be serving a bunch of flow, and DPS +4.3% because Dr Pepper is awesome. Losers were DHI -11%, off that home sales #, TRIP -5%, because maybe people are using travel agents again, QCOM -6.5%, because China just isn’t there yet, and PCP -5.5%, because you ever seen what this stuff does to kids? (please tell me someone gets that reference).  Up and down we went and by lunch we sat on 1,989, up 0.13%. Not bad, just need one more round of clearly positive data to break higher.  Or maybe we need SPX skew to move lower and gamma to move higher. Or the other way around. Are there people that care about skew and gamma?

The afternoon saw chunky moves in a couple real estate dot coms!  Bloomberg reported that Zillow may be looking to acquire Trulia! How about them apples? Trulia popped 32% on the news and Zillow eeked out a 15% gain. Two companies that still don’t have this whole “profitability” thing down are potentially looking to join forces? And they each added billions in mkt cap on the news? Sure why not!  USA!  USA!  Ok ok, short interest is pretty high in both and their moves were probably short covering but still, don’t make Janet Yellen scold the tech sector again. We closed at 1,987, which unfortunately was flat on the day. Not enough good news for higher, not enough bad news for lower. Let’s call it a wash and go enjoy the sunshine. 

Final Score:  Dow -2bps, S&P500 +5bps, Nasdaq -8bps, Rus2k -18bps. 

News Highlights:

We’ll end tonight with one of the coolest pranks I’ve ever seen.  My son is a huge comic book fan and when I showed him this video he flipped out.   Now he thinks there are real X-Men.   Mission accomplished.


Have a good night.