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Bond Yields Squeezing Equities; NFLX, LRCX, LVS Beat, TSLA Misses
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It was a tough day for stock market indices today, competing as it is with U.S. Treasury bond yields at their highest levels in over a decade and a half. Both the 2-year and the 10-year — which remains an inverted yield curve, and has for about a year and a half — increased from already high levels: the 10-year reached 4.91% today, its loftiest perch since March 2007 (a few months prior to the Bear Stearns bankruptcy), and the 2-year hit 5.22% — its biggest payout since December 2000!
The markets had no chance to recover from this. The Dow shed -327 points, -0.96%, and it outperformed the other major indices on the day. The S&P 500 was next, -1.35%, while the Nasdaq lost -219 points, -1.62%. The small-cap Russell 2000 — which had been bouncing back of late but has taken these bond yields particularly hard — sank -2.11% in Hump Day trading today. All these indices are down for the past week and between -2.5% (Dow) and -5.4% (Russell) over the past month alone.
Maybe Q3 earnings results will cheer everybody up? Maybe not. Tesla (TSLA - Free Report) , as predicted, posted misses on both top and bottom lines for the quarter, with earnings of 66 cents per share missing the 73 cents in the Zacks consensus (and well off the $1.05 reported in the year-ago quarter), and revenues of $23.35 billion missed the estimate of $24.38 billion. This was on quarterly deliveries down -7%, which had been previously reported. Tesla shares sold off nearly -5% in regular trading today, but are up marginally in the after-hours.
Netflix (NFLX - Free Report) , on the other hand, made a case for it being the only, or one of the only, irreplaceable home streaming services, as it easily beat expectations on its Q3 bottom line: $3.73 per share versus expectations for $3.46 (and the $3.10 per share posted a year ago). Net adds amounted to 9 million in the quarter, with global paid subscriptions +10.8% year over year. Netflix also announced a price hike: to $11.99 for regular and $22.99 for premium service. Even at the low end, that’s nearly double what Apple (AAPL) charges per month for streaming. Shares of NFLX are up +12% on the news in late trading.
Lam Research (LRCX - Free Report) also surpassed expectations easily in its quarterly report this afternoon, as Q3 earnings season continues to heat up: earnings of $6.85 per share were well passed the $6.07 in the Zacks consensus, on revenues of $3.84 billion — surging beyond the expected $3.41 billion. Gross margins came in at 47%. The semiconductor processor increased full-year revenue guidance to $3.7 billion, above the $3.6 billion analysts had been looking for. But, as LRCX stock is up more than +90% year to date, the stock is selling off -3% on the news.
Las Vegas Sands (LVS - Free Report) posted better-than-expected numbers in its fiscal Q1 report out this afternoon, with 55 cents in earnings per share outpacing estimates by 2 cents, while revenues in the quarter of $2.8 billion outshone the $2.69 billion anticipated. Travel and tourism, particularly in Macao and Singapore, were cited in the company’s press release. Shares, which are still down for the year, are up +4.6% in late trading today. Questions or comments about this article and/or author? Click here>>
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Bond Yields Squeezing Equities; NFLX, LRCX, LVS Beat, TSLA Misses
It was a tough day for stock market indices today, competing as it is with U.S. Treasury bond yields at their highest levels in over a decade and a half. Both the 2-year and the 10-year — which remains an inverted yield curve, and has for about a year and a half — increased from already high levels: the 10-year reached 4.91% today, its loftiest perch since March 2007 (a few months prior to the Bear Stearns bankruptcy), and the 2-year hit 5.22% — its biggest payout since December 2000!
The markets had no chance to recover from this. The Dow shed -327 points, -0.96%, and it outperformed the other major indices on the day. The S&P 500 was next, -1.35%, while the Nasdaq lost -219 points, -1.62%. The small-cap Russell 2000 — which had been bouncing back of late but has taken these bond yields particularly hard — sank -2.11% in Hump Day trading today. All these indices are down for the past week and between -2.5% (Dow) and -5.4% (Russell) over the past month alone.
Maybe Q3 earnings results will cheer everybody up? Maybe not. Tesla (TSLA - Free Report) , as predicted, posted misses on both top and bottom lines for the quarter, with earnings of 66 cents per share missing the 73 cents in the Zacks consensus (and well off the $1.05 reported in the year-ago quarter), and revenues of $23.35 billion missed the estimate of $24.38 billion. This was on quarterly deliveries down -7%, which had been previously reported. Tesla shares sold off nearly -5% in regular trading today, but are up marginally in the after-hours.
Netflix (NFLX - Free Report) , on the other hand, made a case for it being the only, or one of the only, irreplaceable home streaming services, as it easily beat expectations on its Q3 bottom line: $3.73 per share versus expectations for $3.46 (and the $3.10 per share posted a year ago). Net adds amounted to 9 million in the quarter, with global paid subscriptions +10.8% year over year. Netflix also announced a price hike: to $11.99 for regular and $22.99 for premium service. Even at the low end, that’s nearly double what Apple (AAPL) charges per month for streaming. Shares of NFLX are up +12% on the news in late trading.
Lam Research (LRCX - Free Report) also surpassed expectations easily in its quarterly report this afternoon, as Q3 earnings season continues to heat up: earnings of $6.85 per share were well passed the $6.07 in the Zacks consensus, on revenues of $3.84 billion — surging beyond the expected $3.41 billion. Gross margins came in at 47%. The semiconductor processor increased full-year revenue guidance to $3.7 billion, above the $3.6 billion analysts had been looking for. But, as LRCX stock is up more than +90% year to date, the stock is selling off -3% on the news.
Las Vegas Sands (LVS - Free Report) posted better-than-expected numbers in its fiscal Q1 report out this afternoon, with 55 cents in earnings per share outpacing estimates by 2 cents, while revenues in the quarter of $2.8 billion outshone the $2.69 billion anticipated. Travel and tourism, particularly in Macao and Singapore, were cited in the company’s press release. Shares, which are still down for the year, are up +4.6% in late trading today.
Questions or comments about this article and/or author? Click here>>