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Daily Reports @ WJR

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WJR November 2019 Reports

November 20, 2019 It’s been fairly easy to spot the relationship between stock prices and news about the trade war with China, and we’ll spot it again today.  Yesterday, President Trump threatened an increase in Chinese tariffs if there is no “phase one” agreement with the Chinese.  Also yesterday, the Senate passed a “Hong Kong Human Rights and Democracy” bill, further irritating the Chinese. The bill would impose sanctions on Chinese officials who behave badly.  It now moves to the House, where a similar bill has already passed.  The Chinese are threatening “strong countermeasures” if the bill becomes law. In response, stock markets overseas are lower, with many off by three-quarters of a percent this morning. With somewhat cheerier news, retailer Target reported an adjusted profit of $1.36 per share, 17 cents better than expected.  Target shares are looking to open about 9 percent higher.  And Lowe’s is out with...
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WJR October 2019 Reports

October 31, 2019 The S&P 500 closed at a record level yesterday after the Federal Reserve meticulously followed the widely anticipated script.  They cut short term rates be a quarter of a percent but apparently brought this easing cycle to an end, or at least paused until early 2020 at the earliest.  At 9:30 this morning we’ll get the latest the PCE.  That’s the personal consumption expenditure index and it’s reportedly the Fed’s favorite inflation indicator.  Any big uptick in future inflation may convince the Fed that the next necessary step might be a rate increase. Expect that today’s reading will reflect only a one-tenth of one percent increase. Shares of Fiat Chrysler are looking to open more than 3 percent higher on word of their 50/50 merger with the parent of Peugeot.  In European trade Peugeot shares are more than 13 percent lower. Shares of Apple, Facebook and Kraft-Heinz...
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WJR September 2019 Reports

September 30, 2019 It’s the last day of the third quarter.  For all the recent volatility, the S&P 500, including dividends, is about one percent higher than its level of June 30th.  Not doing quite as well recently is the price of bitcoin, down 34 percent over the last three months including a drop of 20 percent just last week. Another company has joined the long list of retailers operating while bankrupt.  Forever 21 has filed for Chapter 11 protection and will close almost 200 of their 800 stores as mall-based retailers continue to lose sales to online rivals. Another hard-luck story (maybe a hard-boiled story) this morning is the earnings report from Cal-Maine Foods.  A 30 percent drop in egg prices resulted in a 94 cent per share loss, nine cents worse than expected.  Cal-Maine stock is more than 5 percent lower pre-market. The Institute of Supply Management releases...
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WJR August 2019 Reports

August 30, 2019 It looks like we may finish August with another upswing in stock prices, although the futures are off their early morning highs. Later this morning, the Bureau of Economic Analysis will report the June figures on personal income and spending in these consumer-driven United States.  Expect that income rose by three-tenths of a percent, but (true to form) spending rose one-half of one percent. On the earnings from, Dell Technologies reported higher desktop computer sales on an earnings beat.  Shares of Dell are about 9 percent higher.  Big Lots shares are higher by about 18 percent as sales were better than expected and adjusted profit of 53 cents was a 13-cent beat.  Campbell Soup reported 49 cents versus the expected 41 cents and Tesla shares are about 4 percent higher as China announced that it will exempt 16 models from Chinese auto import tax.  AI video company...
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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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