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D&D Note

D&D Note (7-26-2012) ~ Super Mario Lifts Markets, Facebook Plummets

D&D Note (7-26-2012)

Mario Draghi, the European Central Bank President, comments today that the ECB will do whatever it takes to preserve the Euro lifted markets into rally mode. His comments open the door up for another round of LTRO (Long-Term Refinancing Operation) from the ECB. The real question is can the ECB or will the ECB be able to do anything without the blessing of Germany. Most investors see this move today as a rally based on hope and not substance.

Facebook (FB) reported their first quarterly earnings today and came in mostly in line with expectations. The stock went up 3% initially in After Hours trading but then sank more than 11% leaving the stock now at an all time low of $23.86 a share.

Zynga (ZNGA) fell through the floor today tumbling 40% after a bad earnings miss.

So far roughly 66% of companies have beat the street’s earnings expectations.

Apple (AAPL) remained under pressure today after missing earnings due to pent up demand for the iPhone 5 due out this Sept/Oct.

Here are the Q3 numbers for Apple:

Q3 EPS $9.32 – EST $10.37

Q3 iPhone 26m – EST 28.4m

Q3 iPad 17m – EST 15.4m

Q3 REV 35.02b – EST 37.25b

Q3 Mac 4.0m – EST 4.3m

Q3 42.8% gross margin – EST 43.8% — (people buying cheaper products)

And Q4 guidance: 

Q4 EPS = $7.65 – EST $10.27

Q4 REV 34b – EST 38.01b

Apple’s usual low guidance sets them up for a potential huge beat in the next earnings season like we saw the quarter following their last earnings miss due to pent up demand for iPhone sales.

The DOW (INDU) gained 212 points at 1.7%. The S&P 500 (SPX) gained 22 points at 1.7%. And the Nasdaq (COMP) rose 39 points at 1.4%.

Oil gained 43 cents to $89.40 a barrel.

Gold rose $7.00 to close at $1,615.10 an ounce.

The 10-Year Note fell pushing the yield up to 1.43%.


About ddinvestments

Trading Partner for D&D Investments


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