Author Archives: Rick Pendergraft

Why Facebook and Twitter Both Got Crushed After Earnings

Social networking companies Facebook and Twitter both reported earnings this past week and both saw violent drops in their stock price after the reports. Facebook dropped 19% on Thursday and according to Bloomberg, that decline erased $120 billion in market cap, more market capitalization than any decline in history. Twitter reported Friday morning and opened over 13% lower and was down ...

Read More »

Stocks Are Not Reacting Positively to Earnings in Many Cases

It is still early in this earnings season, but I am already noticing a trend that is concerning. There have been a number of companies that reported earnings and revenue numbers that beat analysts’ estimates, but the stocks have reacted by moving lower or hardly moving at all. Three banks kicked off earnings season on July 13 and Citigroup and ...

Read More »

President Trump’s Wants and Policies Are At Odds

Donald Trump has never been shy about telling people what he wants and what he doesn’t want. That was true long before he became president and it has continued since he entered the White House in 2017. Unfortunately what the President says he wants and his own policies are contradictory to one another in several instances. Let’s start with the ...

Read More »

Google’s $5 Billion Fine and Impending Earnings Report

Earlier this week the European Commission slapped a record-setting fine on Google for unfair business practices. The commission said the company unfairly pushed its apps on users and thwarted competition. Margrethe Vestager is the European Commissioner for Competition and she stated, “Google has used Android as a vehicle to cement the dominance of its search engine.” The commission claims that ...

Read More »

Fed Chairman Powell Testifies Before Congress for First Time as Chair

For the first time since being named Federal Reserve Chairman, Jerome Powell appeared before the Senate Banking Committee on Tuesday. The appearance before the committee did seem to spark a small rally in stocks that afternoon, but his comments were much more important than the light reaction we saw. Mr. Powell was thanked by members of the committee for his ...

Read More »

Banking Industry Not Meeting Expectations So Far in 2018

Heading into 2018, expectations for the banking industry were running high and many analysts were predicting that it would be a great year for bank stocks. You had the tax cuts to help the bottom line. Interest rates were rising which would allow the banks to increase the spread between lending rates and deposit rates. And there was an expectation ...

Read More »

Life, Poker, and Investing: It’s All About Probabilities

Over the last few nights, I have been watching the World Series of Poker on ESPN. I enjoy playing poker and have for a long time. My grandfather first taught me how to play when I was in kindergarten. He was visiting us from Virginia and when I got home around noon from morning kindergarten, it was just the two ...

Read More »

New Recession Indicator Trips Alarm

Monday night I heard of a recession indicator that I had never heard of before and it just triggered the first recession alarm. The indicator is the spread between the Bank of America Merrill Lynch U.S. High Yield Index Option Adjusted Spread and the Fed Funds rate. Let me state that I learned of this indicator late Monday night/early Tuesday ...

Read More »