Macro + Earnings

Good day! Sorry about yesterday I was traveling all day and got home late and was unable to post. It wasn't a pretty sight so lets forget about it and take what we have today and go from here.

Macro: Today an article came out from the U.K. Guardian that said France and Germany were closer to a deal to help the Euro zone crisis. The reports state that they are prepared to leverage the European rescue fund from 440 billion euros to 2 trillion euros (2.76 trillion dollars). This news is what the market wanted to hear and stocks climbed on the news. The Dow was up 180 points or 1.58% today. These reports have not been verified from France or Germany, however, so be careful. I will surely keep my eye on this situation in the days to come.

Also in the news today, Moody's cut Spain's sovereign rating down 2 notches from Aa2 to A1. If the Euro zone problem continues to escalate their rating could be cut further, along with other European nations. The more their rating is cut, the more yields go up and the harder it will be for Spain to fund themselves.

The European crisis right now certainly looks gloomy, although there is the prospect of France and Germany alleviating the crisis in the short-medium term. I'm just not sure how long-term of a fix anything or anyone can do to really fix the problem. No doubt, it will be exciting to see it all play out.

Stocks:
As I highlighted Sunday, earnings season is upon us. I have to say I am very confused because reports on Apple said 4Q earnings disappointed while reports on Intel and others said 3Q earnings were out. It makes sense to me that these are 3Q earnings since the 3rd quarter of the year just ended and they are now reporting on it. Anyway, how about the earnings?

Goldman Sachs disappointed with its first quarterly loss since the financial crisis and second since going public. This is a result of increased govt. regulation on many aspects of previously lucrative departments of the bank. For ex proprietary trading (trading of the firm with the firm's money to make money for itself) has been regulated greatly.

Apple missed earnings by .23 cents per share. This is due largely in part to lower than expected iphone sales due to a late release of the iphone 4s. The 4s was released after the 3Q closed and will have a great impact on next quarter's earnings. Already they have sold 4 million iphones, much greater than the 2 million they sold in the same time frame following the release of the iphone 4. Growth is huge, with revenue up 39%, net income up 54%, and iphone sales up 21% since last year. According to CEO Tim Cook the market is huge and growing at an enormous rate in China. This will surely be an incredible opportunity for Apple here moving forward. The stock is down 6.68% after hours on the earnings miss. Given the growth potential and the miss on earnings being due to a late iphone release with sales already setting records, I view this as an opportunity to buy Apple stock.

During the week I'll be posting less frequently as my school load is beginning to become heavy with midterms approaching. I may post less frequently either way and make sure when I do post it is well thought out analysis beyond financial news. We will just have to see what happens. Goodnight everyone. If you're out there, please do comment I'd love to start dialogues here. Thanks.

Cheers,
EZ