The market has exhibited that old 2019 resolve.  When it looked like all the major indices would turn south after the NASDAQ ran out of steam early, big Blue-Chip names kept the Dow buoyant and helped bring back other equity indices back. 

Market breadth has been positive all session.

I’m loving the action in Industrials. At the same time, semiconductor stocks look toppy. Fast money and momentum traders are cashing in on chips and loading up on software names.

Apple Shines

A lot of Apple bears have been on TV since Apple’s (AAPL) earnings release last night trying their best to talk down the stock, but the long term Buy and Hold thesis only got stronger.

Apple Analysts	Rating	Price Target
Evercore ISI	Outperform	$365 from $360
Raymond James	Outperform	$360 from 280
JP Morgan	Buy	$350 from $300
Citigroup	Buy	$350 from $300
Royal Bank of Canada	Outperform	$358 from $350
UBS	Buy	$355
Piper Sandler	Buy	$343 from $305
Goldman	Neutral	$300 from $192
New Street Securities	Buy
Cowen	Favorite Idea 2020	$375 from $325

Classic Kitchen Sink Quarter

I came into the day thinking Apple would be the stock of the day, but it might be Boeing.

Boeing (BA) posted a monster earnings miss, littered with red flags, which initially sent shares reeling to $309 a share in preopen action. 

• Revenue $17.91 billion against estimate of $21.67 billion
• Earnings ($2.33) a share versus consensus ($1.83)
• $2.6 billion charge for 737 Max (total hit $18.0 billion)
• Free cash flow declined $2.7 billion
• Debt climbs to $27.3 billion from $24.7 billion in prior quarter

787 monthly delivery estimates:

• 12 2020
• 10 2021
• 12 2023

So, why did the stock reverse so quickly?  The company’s new CEO David Calhoun has been prepping the street for this report since taking the job.  It’s actually a great luxury for a new CEO taking over a beleaguered company to be able to make major apologizes and take major financial hits.  Getting it all out there is in fact cathartic for the company and its shareholders.

Also this morning, Calhoun went on a charmed offensive giving a number of interviews in which he came across as component, contrite and confident.   He believes the 737 Max will be back in the air midyear, and he sees Phase 1 deal paving the way for big China order.   He dismissed the notion of a name change for the 737 Max, underscoring the fact the company won’t try to “market its way out” of its predicament.

Powell at the Plate

All eyes are on the Fed and what should be a critical question and answer period that will cover everything:

• Future rate cuts
• Repo plan (permanent scheme)
• Making QE permanent component of toolkit
• Impact of Phase One China Trade Deal
• Impact of exogenous events including coronavirus

Earnings After the Bell

FB

Typically, the stock trades higher the day of, and earnings have rallied 4 out of last five of the releases for an average gain of 3.9%.

TSLA

There are very wild swings with this stock. The last release popped the stock 17.6%, but the prior quarter release sent shares reeling 13.6%.

MSFT

Nadella is the man, as shares of MSFT have rallied 358% under his watch.  The stock rallied in four of the last five releases, and each time, shares were much higher a week later.

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