Dow: 15,276, +60 (+0.40%) S&P 500: 1,659, +8 (+0.51%)
Insulting the king of Bahrain on Twitter? That’s going to land you in jail (seriously) — but reading and forwarding your daily MarketSnacks to friends certainly won’t. Check out why investor enthusiasm pumped the Dow up 60 points Wednesday (despite some painful European headlines).
#1. Google Shares Hit $900 on Music News
The time of the day is 9:35 AM EST… and the number is $900. At that approximate moment, Google’s (GOOG) stock topped the $900/share mark (less than 3 months after hitting $800) because of a slew of announcements from Google’s nerd field day I/O conference.
Watch out Pandora… Google introduced All Access, their version of a premium music streaming service. All Access boasts new user-friendly features (Chicago Tribune), to compete with Pandora, Spotify, Amazon, and take a big leap out in front of Apple.
Move the f**k over Siri… Google also released its answer to Apple’s voice search engine titled, “Conversation Search.” Coming to Chrome browsers on mobile and desktop, users will be able to ask Google any question without having to touch a screen or keyboard — simply saying, “OK Google” brings up the search assistant.
Adios MapQuest*… and “hola” to the new/improved Google Maps. During the developers meeting Wednesday, Google announced they have completely redesigned Maps to be more user-friendly. Coupled with 3D integration from Google Earth, Google Maps added an “Explore” feature to help you find local restaurants, attractions, and other tourist activities instead of asking the woman at the front desk.
*To those still using MapQuest, please untie the sweatshirt around your waist and remove the schrunchie from your hair. It’s time to grow up.
#2. European Economies Contract
Those 17 countries that use the Euro… are in an 18 month cold streak. The euro countries Wednesday announced the gross domestic product (the most general gauge of economic output) for the first quarter, and overall the eurozone’s GDP shrank, again, for the sixth straight quarter by 0.2%. The tallest of the european economic dwarfs was Germany, which squeaked out some growth, while the others got crushed, led by Greece.
Economic Contraction sucks… and should be avoided at all costs. In the US we had two straight quarters of contraction after the financial crisis, which is the technical definition of a recession. In Europe the debt crisis has caused the economies to stagnate for basically the last 5 years. Woof.
What’s the problem again?… the debt crisis, dummy. A handful of countries are desperately trying to reduce their debt through austerity measures – cutting public spending by firing public workers and slashing benefits, which trickles through the economy. Also, despite efforts by the central bank to reduce interest rates, in countries not called Germany, banks are too afraid to lend to small businesses, so, yeah, things are still f***ed in Europe. #3.
#3 John Deere Earnings Disappoint
“Take me for a ride on your big green tractor”… Sure thing Jason Aldean, but only if it’s not a John Deere. Deer & Co (DE) dropped its 2013 earnings expectations a full percent Wednesday during their Q1 earning reports.
Their just “stuck in colder weather”… sang Zac Brown. Not exactly, Zac. Its cold and wet weather to be specific. Due to the weather conditions, farmers have become reluctant to spend big on new equipment that they potentially may not use. Farming equipment and crop prices have taken a beating so far in 2013.
The main concern… Analysts have been worried that the agricultural equipment cycle already peaked from the surge in sales post-recession. The announcement today reinforced this belief, giving investors the chills and shrinking DE stock 4.4%.
#4. Homebuilder Confidence Up — But Not Optimistic
Build on this… The National Association of Home Builders “confidence index” rose in May, but remains in slightly pessimistic territory (CNBC). Although the housing market has been improving since early 2012, deep confidence among developers has stalled so far this year like a bad baseball game.
Why the not-so-smiley face?… Weather. We didn’t know people were so soft, but according to the NAHB report, this cold spring has hurt construction efforts and homebuyer traffic. The result? A slowdown in the housing market’s recovery mojo.
- Some hefty housing data for ya: April Housing Starts & Building Permits
- Your Thursday morning serving of Weekly Jobless Claims
- 1st Quarter Earnings Reports: LG, Bank of Hawaii, Rent-A-Center, Six Flags…
MarketSnacks Fact of the Day: The famous “black box” data recorders on commercial airlines are actually brightly colored (so they can be easily found in plane wreckage) and the 1st FAA-approved version was created by Lockheed (now weapons company Lockheed-Martin) in 1958.