January 17, 2020
It’s been a fantastic week for stock prices and it looks like it might get fantastic-er as we head toward a three-day weekend for traders.
Financial companies continue to see mostly green arrows. This morning, State Street Bank shares are about 3 percent higher after reporting $1.73 of adjusted profit, which was 70 cents better than a year ago and 4 cents better than expected. Regions Financial missed the 39-cent estimate by a penny, but revenue was better than expected and the shares are fairly inactive pre-market.
In the oil patch, Schlumberger shares are up a couple percent on an earnings and revenue beat.
Shifting into reverse by about 3 percent this morning are shares of CSX. Lighter shipping loads get the blame for an earnings shortfall there.
At 10 o’clock, the University of Michigan will give us their first look at January Consumer Sentiment. Expect a reading of 99.5, pretty much unchanged from the December reading.
Asia was higher as Chinese GDP came in as expected. European markets are also in the green as are our futures.
Adjusted for fair value, the S&P 500 futures are up about 7½ points. The Dow futures are up 49 and the NASDAQ futuresare about 27 points above fair value.
January 16, 2020
The Dow Jones Industrial Average closed at a record and above the 29,00 level yesterday after pen met paper on Phase One of the Chinese trade deal. The S&P 500 also closed at a record level and both should climb higher along with the NASDAQ this morning.
Helping the push higher is the earnings report from Morgan Stanley, as the big financial institutions, with few exceptions, continue to make lots of money. Morgan Stanley reported $1.30 of adjusted quarterly profit, which was 28 cents better than expected on better sales than expected. Morgan Stanley shares are bid about 1½ percent higher this morning.
With somewhat less than wonderful news is coatings, material and glass producer PPG Industries. $1.31 in profit missed by 3 cents on lower than expected sales and PPG is indicated about 4½ percent lower pre-market.
The Census Bureau will give us the official word on domestic December Retail Sales shortly. Expect a three-tenths of a percent overall increase, but six-tenths of a percent is you ignore automotive sales.
Most of Asia was higher overnight, most of Europe is a bit lower.
At this point, adjusted for fair value, the S&P 500 futures are up about 15 points. The Dow futures are up110 and the NASDAQ futures, after a flattish performance yesterday,are about 51 points above fair value.
January 15, 2020
The big deal of the day is clearly the Phase One deal between the U.S. and China. Some of the details have been reported, but no matter what the details, the hope that we might go through a period of time without the imposition on additional tariffs should keep most traders in a buying mood.
Earnings reports from the big financial firms continue to roll out. The star of the morning appears to be Blackrock. Profit of $8.34 cents per share came in 65 cents better than the $7.69 cent estimate.
Bank of America and Goldman Sachs shares are little changed pre-market. Bank of America beat the 69-cent estimate by a nickel. Goldman’s profits appear to be a big miss. However, there’s a huge charge for litigation expenses in there and it’s not clear how much of that was baked into the estimates
PNC also reported good earnings, as did United Health, although sales at United Health were a little disappointing and the shares are fractionally lower.
Target shares are looking to open about 7 percent lower on disappointing same store sales over the Holidays,
The Producer Price Index is expected to reflect a 1.4 percent annual rise in that measure of inflation.
Asia was lower overnight, and outside of London, so is Europe.
Our futures have perked up a bit over the past half-hour. At this point, adjustedfor fair value, the S&P 500 futures are upabout 3½ points. The Dow futures are up 6 pointsand the NASDAQ futures are just about 24 points above fair value.
January 14, 2020
It’s the first day of the rest of your life and it’s the first day of fourth quarter earnings season. That’s not as profound, but it’s likely important if you have equity investments.
Last year’s 30 percent plus return in the S&P 500 wasn’t fueled by great earnings, but in large part by lowered interest rates. Absent any economic kerfuffle that would cause rates to fall further, earnings are going to have to accelerate if 2020’s market will bear any resemblance to 2019.
So far this morning, so good. JP Morgan Chase reported $2.57 of adjusted profit. That was22 cents better than expected on batter than expected sales. Delta Airlines went one better by beating the $1.40 estimate by 30 cents. Delta shares are looking to open about 4 percent higher. At the top of the hour, Citigroup reported $1.90, which was a 6-cent beat.
The famous other hand once again belongs to Wells Fargo, where 93 cents fell 17 cents per share short on lower than expected revenue.
In the big deal of the day, VISA is buying fintech firm Plaid for 5.3 billion dollars.
Asia was mixed overnight, Europe is just a little bit lower.
As we head into the ring for the first round of earnings season, the futures are indicating a split decision. At this point, adjustedfor fair value, the S&P 500 futures are down about a point. The Dow futures are up 9 and the NASDAQ futures are just about a point below fair value.
January 13, 2020
The winter storm of fourth-quarter earnings reports starts tomorrow, as the major banks will try to confirm the recent optimism in their stock prices. Today, however, will be a bit of a calm before that storm.
Shares of At Home appear to be the stars of the morning, bid higher by more than 12 percent. At Home says that fourth quarter sales and earnings will be at the high end or above previous guidance. Of course, a 12 percent move isn’t all that uncommon for a 5-dollar stock that spouts some good news.
Lululemon Athletica shares are looking to open about 2½ percent higher on strong holiday sales.
It looks like the Phase One trade Deal with China with get signatures on paper this coming Wednesday. The deal reportedly calls for a reduction in some tariffs, the cancellation of others and additional Chinese purchases of agricultural goods.
Last Friday, the Dow breeched the 29,000 level before all major indexes fell back. This morning it looks like a sizable piece of those price drops will reverse.
It’s coming of Age Day in Japan, where the stock market was closed overnight.
The rest of Asia was generally higher. European markets are mixed.
Our futures are off their earlier highs. At this point, adjustedf or fair value, the S&P 500 futures are higher by about 10 points. The Dow futures are up 93 and the NASDAQ futures are about 36 points above fair value.
January 10, 2020
There’s one semi-big corporate purchase in the news this morning. Eli Lilly will buy skin-disease company Dermira for about 1.2 billion dollars. That price of $18.75 per share isn’t much higher than yesterday’s closing price for Dermira. However, that stock has roughly tripled in price over the past three months.
At 8:30 the December Jobs Report is expected to cool off to a reasonable addition of 160,000 new jobs. The November addition was 266.000. The unemployment rate is expected to remain at a near-to-rock-bottom 3.5 percent.
Shares of Six Flags Amusement Parks are indicated to open about 11 percent lower. Six Flags says that development of parks in China is lagging behind expectations as is their full-year domestic revenue estimate.
Yesterday’s 200-plus-point rally brings the Dow Jones Industrial Average within a whisker of the 29,000 level. And in case you’re keeping score, the S&P 500 has now been positive for 15 of the last 17 years and 40 of the last 50.
Most overseas markets are a little higher following our add-on rally yesterday.
Our futures are higher once again, but things could change with the Jobs Report just about 15 minutes from now. At this point, adjustedfor fair value, the S&P 500 futures are higher by about 6 points. The Dow futures are up 35 and the NASDAQ futures are about 30 points above fair value.
January 9, 2020
And just like that, Chinese trade has apparently replaced Iranian terror in the collective mood of the stock market trading algorithms.
Iran’s presumed “standing down” resulted in a nice stock rally yesterday and this morning’s word that Chinese Vice-Premier He is coming to Washington next week to sign Phase One of the Chinese trade deal will propel stock prices yet higher in the early going today.
What’s not propelling higher are prospects for most brick-and-mortar retailers. Last night, Bed Bath and Beyond reported a quarterly loss of 38 cents per share, which was 40 cents shy of the two-cent profit estimate. Bed Bath and Beyond shares are looking to open about 11 percent lower.
J.C Penney shares, at just north of a buck apiece are looking 2½ percent lower after reporting a 7½ percent decline in Holiday same store sales and predicting a similar full year decline. Shares of Kohl’s are indicated about 7 percent lower on disappointing Holiday sales figures.
The Weekly Jobless Claims report just about ten minutes from now is expected to hang in there at about 210,000 new claims.
The Japanese market was more than 2 percent higher overnight. In fact, all major markets are again in rally mode this morning. At this point, adjusted for fair value, the S&P 500 futures are higher by almost 17 points. The Dow futures are up 151 and theNASDAQ futures are about 61 points above fair value.
January 8, 2020
It’s been an interesting overnight in the financial markets, to say the least. Last night, on news that the Iranians had launched missiles into Iraq, the Dow futures sank more than 400 points. Now, as it appears that the attack was relatively benign and may even mark the end of heightened tensions over the Soleimani killing, it appears that stocks will actually rise modestly in the early going.
Although quarterly earnings reports won’t be rolling out in volume until next week, there are a couple of interesting reports in this morning and another one on the way. Shares of the second-largest home builder in the U.S. are looking to open almost 5 percent higher this morning. Lennar reported a profit of $2.13 per share, which is 23 cents better than expected. They also raised 2020 guidance. Also raising guidance this morning was Constellation Brands. Those shares looking to open almost 4 percent higher.
The famous other hand belongs to last year’s worst Dow performer, Walgreens-Boots Alliance. Shares are looking 6 percent lower as $1.37 missed the estimate by 4 cents. Walgreens did, however, reaffirm full year guidance.
Bed Bath and Beyond will report after 4 o’clock this afternoon.
Asia was lower overnight, but Europe is higher. At this point, adjustedfor fair value, the S&P 500 futures are higher by about 5 points. The Dow futures are now down 28 points, all of that loss due to weakness in Boeing in light of the Iranian passenger airline crash. The NASDAQ futures are 10points above fair value.
January 7, 2020
Truth is, there’s not a lot of conviction for stocks to move in any particular direction this morning. Traders await to see what, if any direct retaliation the Iranian government will pursue against United States’ interests.
Yesterday, early fear of immediate retaliation faded as the trading day unfolded and most early losses disappeared by 4 o’clock.
This morning, Pier One shares are about 13 percent lower after losing about 16 percent yesterday. Pier One will be closing about half of its remaining stores. That’s about 450 stores.
This week’s major corporate earnings news will start to roll out tomorrow, when we’ll hear from Lennar, Constellation Brands, Bed Bath & Beyond and the company whose stock was the worst Dow performer of 2019. That would be Walgreens-Boots Alliance.
This morning we’ll get the December ISM report on the services industries here in the U.S. Expect a reading of 54.9, pretty much in line with the November report.
Overseas markets are higher this morning, in spite of the Mid-East tensions.
Our futures have been bouncing around the flat line but have dropped a little since the top of the hour. At this point, adjusted for fair value, the S&P 500 futures are lower by about 2 points, the Dow futures are now down about 19, butthe NASDAQ futures are 5 points above fair value.
January 6, 2020
If you came into the new year expecting another nice, smooth 30 percent gain in stock prices, perhaps it would be best to drive by looking for bumps in the road ahead instead of looking in the rear-view mirror. That’s not to say that the current mid-East tension will make it a lousy year for investing, but if you’re one of those who try to predict the future, count on something significant happening that you just didn’t see coming.
There’s nothing significant on the economic calendar today.
Shares of two companies are heading in opposite directions. Cracks are showing in the shares of egg producer Cal-Maine Foods. A 21-cent per share loss last quarter surprised analysts that had predicted a 3-cent profit. Cal-Maine shares are looking to open almost 14 percent lower.
Smile Direct Club shares are looking to rise about 8 percent on word that they will be peddling a complete line of dental care products at Walmart.
Oil prices are about one percent higher, and gold is up nearly two percent on the heightened mid-East tensions.
Asian markets were lower overnight by one to two percent. Europe is about one percent lower and we’ll see red arrows at 9:30 as well. At this point, adjustedf or fair value, the S&P 500 futures are lower by 19 points, the Dow futures are now down about 182 points and the NASDAQ futures are 65 points below fair value.