Diamonds and Dogs

8/16/19

After a 10% decline yesterday, General Electric (GE) is rebounding 3.3% thanks to more insider buying and a number of people defending their accounting practices.  GE sold off yesterday after a Madoff whistleblower said, GE was bigger fraud than Enron and Worldcom. He continued to say the company was hiding losses and predicted a bankruptcy. The CEO, Larry Culp bought another $2 million shares yesterday, a GE board member came on TV to defend their accounting and famed investor, Stanley Drunkenmiller said he supported Larry Culp and bought more stock.

Not a good year for Deere (DE). The farming equipment maker is down 2% not far from a 52 week low missing earnings estimates. Deere also cut its fiscal full-year guidance for the second time in two quarters. The stock, however, is already down 4% year to date after dropping more than 7% this week.Poor weather has impacted U.S. farm income and, by extension, Deere's agricultural equipment business. Poor growing conditions can often carry a silver lining for farmers—they push up commodity prices leading to better demand in the future. But investors got a surprise on Monday from the USDA when the agency increased its estimated U.S. crop size, despite the continuing weather problems. That sent corn prices, and shares of agricultural input providers such as Deere, much lower for the week.