WJR April 2010 Reports
April 30, 2010
We’ll get a little respite from the torrent of earnings reports today. Among major firms, only Chevron, ITT and Simon Property report today. However, there are a couple of interesting economic reports on the way.
At 8:30 we’ll hear the advance first quarter GDP number. That’s the Government’s first of three estimates of how the economy performed from January through March. Wall Street is expecting an increase of 3.9 percent, as the economic recovery continues.
At 9:45 the Chicago Purchasing Managers’ Index is expected to read 60, which would reflect continuing expansion of the economy in the Midwest.
Finally, just before 10 o’clock, the University of Michigan’s final verdict on April Consumer sentiment is expected to read 71. The preliminary reading was 69½, which was a big drop from the March number of 73.6. So, we’ll see how much ground we can recover.
Word around Europe is that the Greek bailout plan may well be unveiled tonight, or at least hammered out over the weekend.
Outside of China, Asian stocks rose overnight. European markets are mixed at this hour. Adjusted for fair value, the futures on the S&P 500 index are higher by more than 3 points, the Dow futures are up 33, and the NASDAQ futures are a bit more than 4 points above fair value.
After yesterday’s downgrade of the sovereign debt of Spain, things have seemingly calmed down in Europe and our stock market should be able to tack on to yesterday’s gains, at least at the open.
Reportedly, talks are progressing on the Grecian bailout. This morning, an auction of Italian debt went well, easing fears of a contagion spreading through the weaker European economies.
Earnings reports continue to reflect better than expected profits. This morning, Colgate-Palmolive, Starwood Hotels, Motorola, ConocoPhillips, Viacom and Procter & Gamble all reported better than expected operating earnings. P&G raised the lower end of earnings guidance for the year. However, the stock will likely dip a little as the revised guidance is less than analysts had expected. ExxonMobil missed their number, earning $1.33 per share, eight cents lower than expected.
Chinese and Japanese stocks were weaker overnight, but Europe is recovering nicely this morning.
Weekly jobless claims numbers come at 8:30. The consensus number is not great – 447,000 new claims are expected.
Oil is up 85 cents this morning, at just over 84 dollars per barrel.
At this point, our futures are in just about as good as they were 24 hours ago, in fact even a bit better. Adjusted for fair value, the futures on the S&P 500 index are higher by more than 9 points, the Dow futures are up 55, and the NASDAQ futures are about 14 points above fair value.
Stocks around the world slipped on the Greece yesterday. Midday yesterday, the sovereign debt of Greece was downgraded to junk status. Portuguese debt was also downgraded and this morning, short-selling of stocks in Greece has been banned. You may remember short-sale prohibitions from about a year and a half ago in our stock market near-meltdown.
Of course, nobody likes a market meltdown, unless you’re betting on one. That, of course was the topic of yesterday’s Senatorial inquisition of Goldman Sachs executives. Whether you like Goldman Sachs or not, you had to love our Senators’ performance. It was almost like watching an 11 hour long version of the film Casablanca as one actor after another expressed “shock that there is gambling going on here.” The Goldman execs were asked to disclose just everything about their business model except for the amount of campaign contributions made by big investment banks over the past 20 years or so. That might be interesting information. No one on the panel, by the way, offered a refund.
Comcast, Norfolk-Southern and Wynham worldwide are all out with better than expected earnings this morning.
At 2:15 this afternoon the Federal Reserve Open Market committee wraps up a two day meeting. Expect no change in short term interest rates.
Stocks overseas are sharply lower after yesterday’s dive in the U.S. However, it looks like we’ll make up some lost ground at 9:30.
At this point, adjusted for fair value, the futures on the S&P 500 index are higher almost 6½ points, the Dow futures are up 55, and the NASDAQ futures are about 14½ points below fair value.
It’s another morning chock-full of blowout earnings reports, and it’s a good thing. That good news on corporate health will shield stock prices from more economic worries overseas.
Locally, the big earnings report of the morning is of, course, Ford Motor. Earnings of 2 billion dollars boil down to 46 cents per share of operating earnings versus the 31 cent estimate. Ford also raised guidance. However, revenue was a couple billion dollars light of expectations, and shares of Ford are bid about 10 cents lower in the pre-market.
DuPont made $1.24 versus the $1.06 estimate. 3M’s $1.40 per share was a 19 cent beat, and they raised guidance. McGraw-Hill and FPL Group also beat estimates and last night, Texas Instruments also reported a higher than anticipated profit of 52 cents per share.
We’re still a week away from Cinco de Mayo, but that won’t stop a Senate panel from whacking away at today’s piñata, also known as Goldman Sachs.
Worries about rising interest rates in China had the Shanghai index 2 percent lower, and the big fat Greek debt problems have European markets about 1½ percent lower. So while our futures are a touch lower, things could be a lot uglier. At this point, adjusted for fair value, the futures on the S&P 500 index are down about 4½ points, the Dow futures are down 9, and the NASDAQ futures are about 4½ points below fair value.
The Dow Jones Industrial average has now gone up for 8 straight weeks as the bull born about 13 months ago continues to run. While the fear mongers have threatened doom and gloom throughout, we’ve had about a third of the S&P 500 report quarterly earnings, and more than 4 out of 5 of them have reported higher earnings than even the analysts’ lofty expectations.
Caterpillar reported 36 cents per share after a charge for the new healthcare law. Take out the charge and they made 50 cents per share, which is easily better than expected. Increased business in China provided the boost. Whirlpool reported $2.13 in profit, versus the expected $1.33. They also raised full year guidance. Humana beat estimates by a nickel and International Paper raised their dividend by 400 percent, going from 2½ cents per share to 12½ cents.
Later today we’ll hear from Texas Instruments. Expect 51 cents of operating profit, versus one cent a year ago. Tomorrow, we’ll get the highly anticipated numbers from Ford Motor.
Chinese stocks were a bit lower overnight, but most of Europe is trading higher.
There’s not a lot of movement in our futures this morning, but the direction we have is up. At this point, adjusted for fair value, the futures on the S&P 500 index are up 1½ points, the Dow futures are up 21, in part on the Caterpillar report, and the NASDAQ futures are about 2 points above fair value.
A couple of important economic reports come this morning, and they reflect an economy that’s been throwing mixed signals. At 8:30, the March Durable Goods report is expected to show a four-tenths of a percent increase. Orders for Durable Goods, stuff that lasts more than a couple of years, have been on a pretty consistent upswing since last summer. That indicates a strengthening economy. Last month’s report was up one half of one percent.
New Home Sales, on the famous other hand, have been on a fairly consistent downtrend since last summer, in spite of big government tax credits, which are about to expire. The March report is expected to reflect an annualized rate of New Home Sales at 330,000 versus the February number of 308,000.
Earnings reports continue to flow. This morning Honeywell and Xerox checked in with better-than-expected results. Travelers blamed harsh winter weather for pretty ugly results. Travelers made $1.22 per share, which was a 15 cent miss. They also guided lower for the entire year.
It’s one of those funny mornings when the futures look like they’re pointing higher, but there’s really not much going on in front of the Durable Goods number. At this point, adjusted for fair value, the futures on the S&P 500 index are up about a point. The Dow futures are up 7, but the NASDAQ futures, in spite of disappointing guidance from Amazon and Microsoft last night, are about even fair value.
The stock market, which has been scaling its famous “wall of worry” slowly but steadily for months, will likely lose a little footing at 9:30 this morning. Worries about the soundness of the Greek budget figures have resur>
Earnings reports continue to pile in. No big surprises so far this morning. Verizon, Pepsico and Southwest Airlines all pretty much matched expectations. Phillip Morris International, Marriott and AutoNation did a little better than analysts had predicted. Microsoft reports later on today.
At 8:30 we’ll find out about the March wholesale inflation figures. Expect a headline number of four-tenths of one percent, with the core rate, excluding food and energy rising at just a tenth of one percent.
The weekly jobless claims report at 8:30 should once again reflect about 460,000 new claims, as the job market continues to struggle. At 10 o’clock, expect that March Existing Home Sales rose to an annualized rate of 5.25 million, which would be an increase from just over 5 million in February.
The Greek debt worries have the dollar index higher by almost 30 basis points and that’s helping push the stock futures lower.
At this point, adjusted for fair value, the futures on the S&P 500 index are down 7 points. The Dow futures are down 38, and the NASDAQ futures are particularly weak, now at about 17 points below fair value.
Earnings season is starting to feel like a trip to Lake Wobegone, where all of our children are above average.
Four of the 30 members of the Dow Jones Industrial report earnings this morning. Thus far, AT&T checked in with 59 cents of operating profit versus the expected 54 cents. Boeing also beat estimates, earning 70 cents per share. That’s a six cent beat.
McDonald’s stock hit an all-time high yesterday and this morning they reported a dollar of quarterly profit which was 4 cents better than expected. Global same store sales also rose more than expected. Morgan Stanley’s profit also crushed estimates, on revenue that was 15% better than expected.
Look for Apple stock to rise 4 percent or more this morning, after reporting a 90% jump in quarterly profit on a nearly 50% growth in sales.
It’s a big day for General Motors as they repay the U.S. and Canadian government loans. Could be that you’ll be able to buy stock in the new GM by the end of the year.
Asian markets wee mostly higher overnight, Europe is mostly lower. We’re splitting the difference. At this point, adjusted for fair value, the futures on the S&P 500 index are flat. The Dow futures are down 9 points, but the NASDAQ futures, on the strength of the Apple results, are about 9 points above fair value.
On Friday stock prices dove in the wake of the Government’s lawsuit against Goldman Sachs. Yesterday afternoon, stock prices bounced higher on the news that the SEC’s decision to sue was based on a 3 to 2 vote, strictly along party lines. Usually, a suit like this is pursued on a unanimous vote. The party line vote may lend some credence to the suspicion that the suit is more of a timely political tool than a winnable legal argument.
Speaking of the Goldman firm, earnings last quarter came in at $5.59 per share, versus the expected $4.01. Goldman held compensation at lower levels than normal in the quarter, which in part led to the stronger than expected earnings.
TD Ameritrade and Coca-Cola each announced better than expected numbers, as did Johnson & Johnson. J&J did, however, lower guidance slightly, blaming the revision on currency fluctuations. Delta Airlines, Forrest Labs and US Bank matched estimates. The major miss of the morning is Northern Trust, which made 64 cents per share, which was 7 cents short.
That popular duo of Ben Bernanke and Tim Geithner will be entertaining the House Financial Services Committee this morning.
Japan and China were flat overnight, but most other markets overseas are higher.
At this point, adjusted for fair value, the futures on the S&P 500 index are higher by about 6½ points. The Dow futures are up 36 and the NASDAQ futures are 9½ points above fair value.
Through last Thursday, the quarterly earnings reports were terrific. Then Friday, the SEC charged Goldman Sachs with fraud. While that won’t stop the earnings reports yet to come, but it will surely diminish the amount of attention they’ll get.
Financial stocks took it on the chin Friday as traders speculated on which of the other big Wall Street investment banks might also find themselves in the SECs sights. Goldman stock was almost 13 percent lower Friday. This morning Goldman shares are indicated down another dollar to dollar and a half per share.
Eli Lilli reported earnings of $1.18, which was 8 cents per share better than expected. Lilly did lower guidance for the remainder of the year due to the impact of the new health care reform law. Citigroup checked in with 14 cents per share of operating profit. They were expected to break even.
IBM will report earnings later today.
At 10 o’clock, the Conference Board’s index of Leading Indicators is expected to have risen 1.1%
All overseas markets followed us lower overnight. Chinese stocks were off almost 5% overnight, not only on the Goldman news, but also on word that the Chinese Government is taking further steps to tamp down soaring real estate prices.
Looks like we’re on the way to lower prices at 9:30. At this point, adjusted for fair value, the futures on the S&P 500 index are down about 5½ points. The Dow futures are down 40 and the NASDAQ futures are 6½ points below fair value.
April 15, 2010
Those gangbuster earnings reports we talked about yesterday sparked a nice hundred point surge in the Dow yesterday, or almost one percent. The tech-laden NASDAQ index rose even more on a percentage basis, up almost 1.6 percent.
UPS is out with much better than expected earnings and higher guidance to the rest of the year. We’ll get last quarter’s numbers from Google just after 4 o’clock this afternoon.
At 10 o’clock this morning, we’ll get the results of the most recent Philadelphia Fed Survey. That’s a poll of East Coast businesses and it’s expected to indicate continuing economic recovery. Expect a reading of 20 from the prior reading of 18.9.
One new deal this morning, as Apache is buying Mariner Energy for 2.7 billion dollars in cash and stock. That values Mariner at about a 45 percent premium to yesterday’s closing price.
Stock futures are pointing to lower prices at 9:30, but the futures are reflected higher prices than they were a couple of hours ago. We’ll see if the weekly jobless claims number at 8:30 rocks that boat at all. New claims are expected to have fallen to the 440,000 level last week.
At this point, adjusted for fair value, S&P futures are down 2 points and the Dow futures are down just 15, and the NASDAQ futures are about 3½ points below fair value.
April 14, 2010
Three big companies from three very different industries reported quarterly earnings since the close of trading yesterday. The common adjective would be, well, fantastic.
Last night Railroader CSX reported 78 cents of profit versus the expected 69 cent. Computer chip maker Intel, whose stock is indicated 4 percent higher this morning, reported 43 cents. That beat estimates by a nickel. This morning, JP Morgan Chase checked in with 74 cents, beating the 64 cent estimate. JPM shares are bid about 3 percent higher in the pre-market.
At 8:30 this morning, the release of the March Consumer Price Index is expected to try to convince us that prices only rose one-tenth of one percent last month. The March Retail Sales report will also be out at 8:30. It’s expected to show a 1.2 percent increase after February’s two-tenths of a percent rise.
Overseas, we have a sea of green and we’ll be heading north at 9:30 as well.
At this point, adjusted for fair value, the S&P 500 futures are higher by almost 5 points, Dow futures up 43, and the NASDAQ futures are just about 11½ points above fair value.
The Dow Jones Industrials closed above the 11,000 mark for the first time in over a year and a half yesterday, which, of course, means nothing, in that we’ll probably open below 11,000 this morning. But it gives the media something report, since people seem to love big, round numbers.
The round numbers that came from Alcoa last night weren’t quite big enough. Alcoa, which was expected to report operating earnings of 11 cents per share made a dime on lower than expected revenue. So, while they’ve reversed direction from a year ago, one major brokerage house issued a downgrade and Alcoa shares are indicated to open about 3 percent or so this morning.
Harley Davidson and Priceline also suffering downgrades, while Expedia and ConocoPhillips were granted thumbs-up this morning.
Railroader CSX reports earnings today, and after the close we’ll hear from Intel. Intel is expected to report 38 cents versus the 11 cent operating profit from a year ago.
Asian markets were mixed overnight, but outside of Spain, European stocks are lower at this hour.
Our futures have been lower all morning, but they have improved a bit over the last fifteen minutes. At this point, adjusted for fair value, the S&P 500 futures are down about 2 points, Dow futures down 14, and the NASDAQ futures are just about 6½ points below fair value.
At long last, here come the earnings. First quarter earnings reports start to flow with Alcoa’s report later today. Overall, earnings are expected to impress. We’ve had very, very few companies warn about lower than expected results. Comparisons to last year’s first quarter, when it looked like the financial world was in free-fall, are extremely easy. Yet, stock prices have risen about 7 percent in the first quarter and a lot of that enthusiasm may have already discounted good earnings news. We’ll see.
The Great Big Fat Greek Bailout may be a step closer this morning. Although the i’s and t’s have yet to be dotted and crossed, a 40 billion dollar fund has reportedly been cobbled together as Europe prepares to lend Greece the money at a below-market rate of 5 percent.
Mirant and RRI Energy are joining forces in a stock swap deal, shares of both companies are being bid higher. California Pizza Kitchen stock has been halted pending news, and the news is expected to be that they’re looking to take the company private.
Broker upgrades go to St. Jude Medical, Texas Instruments and Carnival Cruise Lines.
No general direction overseas overnight. The dollar index is about a half-percent lower and although our futures are off their highs of the morning, they are indicating slightly higher stock prices at 9:30.
At this point, adjusted for fair value, the S&P 500 futures are up 2 points, Dow futures up 15, and the NASDAQ futures are just about a half-point above fair value.
Earnings reports start to flow in force on Monday and as we head into the weekend there is a whole lot of nothing on the calendar. The sole economic report today is the 10 o’clock is a report on wholesale trade, and if you’re saying to yourself – “So what?” you’ve got it pretty much summed up.
The downer of the day yesterday may well have been the stock of Forest Labs, off 12 percent on word that an FDA panel gave the thumbs-down to their anti-COPD drug Daxas.
On the famous other hand, watch shares of bond insurers today. Ambac shares are looking up 26 cents this morning. What’s the big deal? Well, if your stock is only worth 64 cents, a 26 cent pop is worth about 40 percent. Ambac reported $1.93 of fourth quarter profit. The only estimate out there on Ambac was for a loss of $3.34. MBIA shares are on the rise as well.
JC Penney and Abercromie received broker upgrades this morning. American Eagle Outfitters was downgraded.
Overseas markets are a sea of green. The dollar index is lower about one-fifth of one percent, and here we go again – dollar down, futures up.
At this point, adjusted for fair value, the S&P 500 futures are higher by more than 3½ points, Dow futures up 31, and the NASDAQ futures are about 6½ points above fair value.
Our late afternoon selloff yesterday stretched overseas overnight and we’re likely to see a little more weakness at 9:30 this morning.
Not helping matters any are a third straight day of spiking interest rates in Greece. One Greek official described them as “barbaric” interest rates. He did not, however, use the term “moronic” to describe levels of debt the Greek Government has taken on. Hopefully, someone in Washington is paying attention.
If you think that airline service and perks are going downhill in this era of consolidation, it could be that you ain’t seen nothin’ yet. Last night, word leaked that United and U.S. Airlines are in merger talks. Shares of both companies are indicated to open higher.
Costco, BJ’s Wholesale, TJmax, Macy’s, Target, Gap, TJX, Limited and American Eagle are all out with much better than expected same-store sales reports for March. Abercrombie and Fitch appears to be the only retailer with a disappointing report this morning.
The dollar index is up a little less than a half-percent once again this morning. That has oil falling about seventy cents and is helping put the stock futures under some pressure.
At this point, adjusted for fair value, the S&P 500 futures are lower by more than 3½ points, Dow futures down 32, and the NASDAQ futures are about 4 points below fair value.
The weekly report from the Mortgage Bankers Association is of some note this morning. The rate of new mortgage applications is slowing considerably, and for the reason why – look no further than interest rates. As the Federal Reserve wound down its purchases of mortgage-backed securities last week, interest rates definitely hit the accelerator. The average rate for the 30 year fixed conventional rose more than a quarter of a percent to 5.31 percent. Not good news if you’re looking to buy or refinance, but suffice it to say that the current rates may be the best rates you’ll see for a while.
Later today, Alan Greenspan testifies before the Congressional Financial Crisis Committee, with the latest version of his speech entitled “It really wasn’t my fault, you know.”
Ben Bernanke will also be speaking later today at a conference in Dallas.
At 10 o’clock, the Energy Information Agency issues their weekly report on oil and gas inventories. Light sweet crude is actually about a half-dollar lower this morning, but is still over 86 dollars per barrel.
There’s not much price movement overseas and certainly no discernable direction.
The dollar index is up about a third of a percent, and not surprisingly, our futures are pointing a bit lower, but odds are that we’ll drift around the flat line the rest of the week as we awaiting next week’s corporate earnings reports. At this point, adjusted for fair value, the S&P 500 futures are lower by 3½ points, Dow futures down 19, and the NASDAQ futures are about 5 points below fair value.
It’s been quiet. Really quiet. We’re right on the cusp of 1stquarter earnings reporting season and hardly any major companies have issued a warning that they will disappoint when it’s their turn at bat. That’s not exactly take-it-to-the-bank great news, but we could be looking at another reporting season with 70 to 80 percent of companies meeting or beating expectations.
Overnight Australia’s Central Bank was expected to raise short term interest rates and they did not disappoint. Another quarter of a percent puts their rate at 4¼ percent, versus our rate of near zero percent.
The only economic report of any note this morning is the ICSC-Goldman Sales Report. It’s from the International Council of Shopping Centers and measures comparable store sales trends at major retailers. Although it only covers about 10 percent of all retail sales, the news is promising. Week-over-week sales are up 2.1 percent. Year-over-year sales are higher by 4.7 percent.
Japanese stocks traded about a half percent lower overnight, but most other markets overseas are flat to a little higher. The dollar index is up almost a half percent and that has our futures under a little pressure.
At this point, adjusted for fair value, the S&P 500 futures are lower by 3 points, Dow futures down 19, and the NASDAQ futures are a little more than 6 points below fair value.
First quarter earnings reports won’t start to roll out in volume until next week. We will get a smattering of earnings and economic reports over the next few days. But, truth be told, spotting Tiger Woods at a singles bar in Augusta will be a lot more likely than spotting any important economic news.
For instance, the best we can do today will be the ISM report on March activity in the services sector at 10 o’clock. Expect continued improvement to a reading of 54 from last month’s 53. Pretty exciting stuff, no?
Light sweet crude oil has once again bubbled up over 85 dollars per barrel on hopes of continuing worldwide economic recovery. Some analysts are now more confidently predicting 100 dollar oil by the 4thof July.
A lot of overseas markets are taking our lead from Friday – that is – they’re closed. Europe, Hong Kong, China, Taiwan and Australia were closed overnight in observance of Easter Monday.
Nevertheless, the dollar index is down a little, so the step-by-step rally we’ve seen for much of the last thirteen months should continue here in the U.S.
At this point, adjusted for fair value, S&P futures are higher by 4½ points, the Dow futures are up 33, and the NASDAQ futures are almost 6 points above fair value.
Daily Reports @ WJR
For an explanation of "fair value" please click here.