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Daily Reports @ WJR

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WJR August 2019 Reports

Ron is away today.  See you Tuesday! August 15, 2019 Trying to predict daily stock price movements lately has become a lot like herding overly caffeinated cats. Earlier this morning the Dow futures went from triples digits highs to triple digits lows on an announcement of tariff retaliation from China.  Within the past hour, China reportedly stated that they are hoping for a compromise on the new tariffs.  The futures immediately bounced back in to the green. Solidly in the green this morning this morning are shares of Walmart.  $1.27 in quarterly profit came in a nickel ahead of estimates on better than expected sales and 37 percent growth in their online business.  In spite of the Chinese trade uncertainly, Walmart raised full-year guidance and shares are more than 6 percent higher pre-market. In China, Alibaba also reported better than expected results. Over in marijuana world, Canopy Growth missed the...
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WJR July 2019 Reports

July 31, 2019 Okay, so there’s a lot of earnings news this morning, but we’ll get to that in a minute. More importantly to most anyone’s investment portfolio is the direction of interest rates.   If you look back to 1960, the Federal Reserve has cut interest rates, on average, more than 25 times per decade. This afternoon at 2 o’clock, the Federal Reserve is universally expected to cut short-term interest rates by a quarter of a percent.  That will be the first interest rate cut in 11 years.  Of course, that lack of rate cuts can be explained by the near-zero rates adopted during the Great Recession of 2008 and 2009.  However, it is remarkable that we haven’t had a rate cut this decade, while Central Banks across the globe have continued to cut rates, some even below zero. Okay, back to earnings – Last night Apple reported very strong...
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WJR June 2019 Reports

June 28, 2019 It’s the last trading day of the first half of 2019.  If you include dividends, the S&P 500 is almost 18 percent higher since New Year’s Day.  Keep in mind that since 1950, the S&P has hit its highest point of the year in the second half of the year 74 percent of the time.  Of course, every second half is a new second half and this one might get off to a sloppy start unless we get good news out of this weekend’s meeting of the minds at the G20 in Japan.  Last night, Nike reported better than expected sales, but earnings of 62 cents per share in the fourth quarter fell 4 cents short of estimates and 7 cents lower than last year’s fourth quarter.  Still Nike shares are only fractionally lower on expectations of a 79-cent profit in fiscal 2020’s first quarter. At 8:30,...
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WJR May 2019 Reports

May 31, 2019 Welcome to the last day of May.  The conventional wisdom is “sell in May and go away.”  It has been very conventional, but not very wise until this year.  In fact, it hasn’t worked well since 2012, but this May is certain to finish with stocks in the red. There are two factors driving stock prices lower this morning.  The Chinese Purchasing Manager’s Index released overnight showed actual contraction in Chinese manufacturing, which was not expected.  Also unexpected was another visit from “Tariff Man.”  President Trump threatened a series of increasing tariffs on all Mexican imports, starting at 5 percent if the Mexicans don’t take action to stop illegal immigration to the U.S. A lot of imports from Mexico are not finished goods – they’re materials used in production here, but a lot of cars are built there too.  Reflecting that, shares of Ford Motor are lower...
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WJR April 2019 Reports

April 30, 2019 Someone once said that the stock market is like marriage – the secret to success is sufficiently low expectations.  Now, I didn’t say that, but someone did. True or not for marriage, those are words that stock prices rely on this week.  Earnings estimates for the first quarter had been lowered so much, more than 80 percent of all S&P companies are meeting or beating them.  Perhaps more importantly, however, is that while earnings aren’t higher than last year, a much rumored “earnings recession” just isn’t happening. This morning, Merck, McDonald’s, Mastercard, Pfizer, Ingersoll-Rand and ConocoPhillips are all out with better than expected earnings and revenue numbers.  General Electric shares are 10 percent higher after reporting 14 cents per share of adjusted earnings, which was a nickel better than the average estimate. Beating on earnings but missing on sales are Eaton, Eli Lilly and General Motors.  Apple...
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WJR March 2019 Reports

March 29, 2019 For anyone who gets their kicks out of buying volatile and unpredictable shares of stock, today may be your day.  Lyft, a company that lost over 900 million dollars last year on sales of 2.2 billion and self-admittedly may NEVER make any money, comes public today after pricing shares at 72 dollars apiece.  Could be we’re looking at another Amazon, which had a similar profit story many years ago.  Or, it could be another Snap, which has dipped to about 11 bucks, down from 27 after its IPO last year.  Be careful out there, folks. It’s the last trading day of the quarter, and we do have one earnings warning this morning.  DowDupont, which is about to split into three separate companies, warned that the current quarter will be a little bumpy. Blackberry reported 11 cents of adjusted profit this morning, which was almost double the expected...
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WJR February 2019 Reports

February 28, 2019 Predicting the next recession has become a popular parlor game for market prognosticators.  Of course, a recession is normally described as two consecutive quarters of negative Gross Domestic Product.  At 8:30, we’ll get the delayed first read on 1st quarter 2019 GDP.  However, nobody expects a negative number.  Expect something in the rage of a 1.8 to 2.5 percent increase. J.C. Penney announced earnings of 18 cents per share this morning, which was 8 cents better than expected on better than expected sales.  That has Penney shares up more than 20 percent pre-market.  That’s the good news.  The bad news is that the shares are still only trading around a buck and a half each – the literal definition of a “penny stock.” Horizon Pharmaceuticals shares are more than 20 percent higher on a positive drug test. We’ll find out about how things are going in the...
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WJR January 2019 Reports

January 31, 2019 Yesterday, we were hoping to not hear any bitter words out of the mouth of Fed Chairman Jerome Powell.  We didn’t expect that the words would be coated in sugar, honey and whipped cream with a cherry on top. The Fed, which put interest rate increases “on auto-pilot” not long ago, officially disengaged the auto-pilot yesterday for fear that the economy might nose-dive at too fast of a rate.  And since rising stock prices are a function of solid earnings and low interest rates, stock prices wasted no time in soaring off the runway. Today we’ll get earnings reports from 37 members of the S&P 500.  Earnings guidance for 2019 has cooled off to an expected increase of only about 6 percent on average after a double digit rise last year.  Blame a coordinated slowdown in international economies.  Should we get some good news regarding trade, that...
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WJR December 2018 Reports

Ron is taking a Holiday break.  He will return in January.  Here's to a great 2019!   December 21, 2018 The stock market hates uncertainty.  Currently, we’re uncertain as to how high interest rates are headed, we’re uncertain how severe an apparent global economic slowdown will be and now we’re uncertain whether much of the Federal Government will be functioning past midnight.  In the U.K., they’re not even certain if they can get a flight out of Gatwick Airport. Seems like the only thing we’re certain about is that people continue to spend a lot of money on sneakers.  Last night Nike reported 50 cents of adjusted quarterly profit, which was 4 cents better than expected, and Nike shares are looking to open about 8 percent higher. The famous other hand belongs to Carmax, with shares about 8 percent lower pre-market.  Earnings were better than expected but used car sales...
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WJR November 2018 Reports

November 30, 2018 This weekend’s G-20 meeting in Argentina will be more than just a little three-day weekend for world leaders.  Traders will watch closely for ANY kind of cooperation between Presidents Trump and Xi regarding trade.  Any substantive breakthrough, which seems unlikely, would likely trigger a big relief rally in stocks.  However, some sort of progress may be enough to soothe the market vertigo we’ve been seeing since September. Experiencing some turbulence in the pre-market, shares of Gamestop are at a 10% discount.  Last quarter’s 67 cent per share profit was a dime better than expected, but current quarter guidance was weak, as sales are forecast to drop between 2 and 6 percent. The famous other hand belongs to image processing producer Ambarella.  21 cents of profit more than doubled the 9-cent estimate, but Ambarella raised guidance and the shares are almost 15 percent higher.  Shares of Marriott are...
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