Game over for the Fed – Ep. 473
The Peter Schiff Show Podcast - A podcast by Peter Schiff
Categories:
Recorded June 7, 2019
Dow Finished the Week with a 4.7% Gain
The Dow Jones soared 263 points today, although at one point the index was up better than 350 points. But it managed to finish the week with a 4.7% gain. That is the best showing for the Dow Jones Industrials in 6 months and in fact we snapped a six-week losing streak this week. All of the major averages had positive weeks. The NASDAQ - the best gainer on the day; up 1.7% - not quite as strong on the week because it took a shellacking on Monday with the FANG stocks leading the way down - but up about 3.7% on the week. Similar gains for the Russell 2000, the Dow Transports, the S&P 500 not quite as strong as the Dow - I think up about 4.2% on the week.
What was the Catalyst?
But why? What was the catalyst for this big move up in the U.S. stock market? Was it better than expected earnings? Not really. Some companies beat estimates. Take a look at some of these recent IPO's like Zoom Video. Zoom Video was up 18% today because it earned 3 cents a share instead of the one cent that Wall Street was expecting. Now, 3 cents per share is not a lot of earnings when you're a $94 stock, but that's where the stock is.
Beyond Meat to Infinity and Beyond
Even more ridiculous is Beyond Meat, which is beyond sanity as it's going to infinity and beyond. Now, Beyond Meat was up almost 40% today, $138.65. The high was $149.46. This stock is already more than tripled its IPO price - or quadrupled, I can't really tell. Now they're still not making money at Beyond Meat, so they still haven't moved beyond losses. The company lost $6.6 million on the quarter; that's 95 cents per share. But it is an improvement, because a year ago, in the same period, they lost 98 cents a share. If you adjust it, if you back out a lot of other stuff, like stock-based compensation and things that nobody likes to count, then they only lost 14 cents per share, which was better than the 15 cents a share loss that Wall Street was expecting. So clearly that's worth an extra 40% on the price of the stock. I forget what this thing is trading; 100+ times revenue. It is a crazy multiple, but at least the stock has a viable product.
