Diamonds and Dogs

10/17/19

So far so good for the banks. Morgan Stanley (MS) is trading up 3% back near three-month high following earnings this morning. Morgan Stanley easily beat estimates as they repurchased $1.5 billion worth of shares during the quarter or 2% of their outstanding shares. Book value and Tangible book value increased 12% year-over-year to $39.73/share. All the big banks are reporting strong numbers and trading near recent highs or all-time highs.

New acquisition, but same old IBM. Big Blue is trading down 6% not far from a nine-month low following third quarter earnings. IBM completed its acquisition of Red Hat for $34 billion. The deal was expected to reignite earnings and sales growth, but as usual IBM beat earnings estimates thanks in large part to share buybacks, but sales once again missed estimates and actually declined 3.9% to $18.03 billion. Maybe its too early for Red Hat to make any difference at IBM, but shareholders are losing their patience.