Diamonds and Dogs

1/31/18

Boeing (BA) leading a rebound in the markets. The world's biggest plane maker, Boeing is up 5% to new highs thanks to better than expected earnings. Boeing easily beat expectations as sales rose 8.9% year/year to $25.37 billion. Boeing shipped between 810 and 815 commercial aircraft in 2018, as much as 6.8 percent more than the industry-record 763 jets it delivered in 2017. Boeing dramatically raised full year 2018 earnings to $13.80-14.00 a share verse $11.90 estimates. Operating cash flow is expected to increase to approximately $15.0 billion this year. Boeing couldn't be doing any better.

Drug stocks taking a hit following Tump's State of the Union speech. Eli Lilly (LLY) reported better than expected earnings, but the stock is down 4% back to a two month low. The better-than-expected quarterly profits were driven by demand for its new diabetes and psoriasis treatments. Lilly is also raising earnings forecast for 2018 due to the recent U.S. tax changes. But President Trump put shareholders in the selling mood after stating last night he wants to lower drug prices going forward. The good news for Eli Lilly is they have $9 billion in cash being freed up due to tax code changes to use for share buybacks, dividends and other investments.