On today’s episode of Free Lunch, Ryan McQueeney discusses the end of the ECB’s bond-buying policy and China’s first major purchase of U.S. soybeans in months. He also highlights news affecting GE, Robinhood, Adobe, and Costco.
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Free Lunch is presented by Zacks Investment Research. It is streamed live, four times per week, and features breaking news and analysis from Zacks strategists. Free Lunch is available on YouTube, Facebook Live, Twitter, Ustream, and more.
Two pieces of major macroeconomic news were making headlines this morning. First, European Central Bank President Mario Draghi announced today that the central bank is officially ending its Quantitative Easing bond-buying program that started in the wake of the financial crisis.
Draghi also said that the ECB is cutting growth forecast and has seen weaker-than-expected data recently, but nonetheless, the QE policy will conclude.
The other major news involves the U.S-China trade war. Today, Beijing made its first major purchase of U.S. soybeans in months, offering some relief to American farmers that have been hurt by weakened demand. China’s soybean purchase is another sign of progress in the trade dispute as both sides inch closer to a long-term agreement.
Meanwhile, shares of General Electric (
GE - Free Report) were up about 9% in morning trading after JPMorgan analyst Stephen Tusa offered his first upgrade of the stock in two and a half years. The analyst now has a “neutral” rating on the struggling conglomerate and said that the “known unknowns” for the company are now easier to quantify.
Elsewhere, investors were surprised by an announcement from free stock trading app Robinhood, which revealed today that it would be entering the checking and savings account game. Robinhood’s accounts will feature a stunning 3% interest rate, sending a clear message to the likes of Bank of America (
BAC - Free Report) , Citigroup ( C - Free Report) , and Chase ( JPM - Free Report) .
On the first half of today’s program, Ryan recaps all of these stories, offering both the key facts and his own perspective on the news. Later, the host previews today’s major earnings reports from Adobe (
ADBE - Free Report) and Costco ( COST - Free Report) .
One of the simplest ways to determine what a stock might do after its report is to look at the latest trends in its earnings outlook and share price. Over time, earnings and share price trends will tend to follow each other. If a company is consistently improving its earnings outlook, its stock will tend to rise alongside that.
However, recent market volatility has caused a divergence between earnings trends and share prices for both Adobe and Costco. Want to hear more about what this divergence might mean for both companies in the aftermath of today’s report? Check out the show to hear Ryan’s take!
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