The market got a little pop at the open as the bulls tried to reclaim support but the bears are starting to land some blows.
Economic news was once again a disappointment as Consumer Confidence fell for a fourth straight month. The index posted a reading of 62 in June, down from 64.4 in May. Elsewhere, the Case Shiller 20-City Home Price Index gained 1.3% as19 out of 20 cities saw an increase in home prices. However, expectations were for a 1.5% gain.
There are a few notable earnings reports this week for the companies off cycle as 2Q earnings officially start the second week of July.
Shares of Apollo Group (APOL, $34.96, up $2.49) are getting a nice pop today despite announcing results that were UNAUDITED. Where’s the SEC when you need them?
The company reported profits of $1.20 a share on revenue of $1.13 billion. Analysts were expecting earnings of 97 cents a share on revenue of $1.12 billion. This may sound good but enrollments are down double-digits and could continue to fall if new laws are passed.
We have been talking about the troubling signs in student-debt loans as the industry approaches $1 trillion in red ink. Apollo Group gets taxpaying-funded financial aid from the government who decided it was a good idea to let these schools promote getting a degree online in your pajamas. Besides there being no jobs, these commercials are a joke and fill up the advertising spots that Apollo pays for with our money. Nice, huh?
Management sugar-coated the results and if you read the company’s filings, they will say the results are unaudited. We were expecting a disappointing quarter from Apollo and although shares are up 8% today, longer-term, we believe the stock falls below $30.
As we head to press, the market has traded in a tight range but is showing gains. The Dow is up 25 points to 12,527 while the S&P is advancing 5 points to 1,318. The Nasdaq is higher by 12 points to 2,848.
We have added a chart for today’s new option trade so that we can show you a better picture on why we are expecting triple-digit profits. Subscribers, check the Members Area for the updates.