April 30, 2013
The Fed starts its two-day conference today so that it can issue a statement tomorrow afternoon telling us that the economy is growing, but sluggishly, therefore our Central Bank will continue to execute the same money printing plan they have been following until they run out of ink.
Perhaps more interesting to the market will be the results of the European Central Bank confab on Thursday. The thought is that maybe - just maybe – the Europeans will notice that the U.S. and Japan are having an absolute blast trying to devalue their respective currencies. And who could resist joining in?
Joining the earnings parade this morning were Pfizer and Nuance Communications, neither meeting with a lot of cheer from traders. Pfizer reported operating earnings of 54 cents, two cents short of estimates and lowered full year guidance. Pfizer shares are lower by 4 percent pre-market. Nuance, the maker of the popular speech recognition software, reported 34 cents. That’s a six cent miss and Nuance shares look to open more than 9 percent lower this morning.
On the famous other hand, big broker and investment bank UBS reported earnings that about doubled estimates on sharply-rising investment management fees. UBS is about 7% higher pre-market.
The April Chicago PMI comes at 9:45 and the Final reading on April Consumer Confidence at 10 o’clock. But in front of that, stocks are looking weaker, but not by much. Adjusted S&P futures are down 2 points, the Dow futures are down almost 18, and the NASDAQ futures are less than 2 points below fair value.April 29, 2013
The big rush of earnings reports is in the rear-view mirror at this point. So far, there’s good news and maybe not-so-good news. Corporate earnings are holding up, with about 80 percent of major companies are meeting or beating expectations. Revenue, however, is another matter. Only about 40% of companies have reported better-than-expected sales. That top-line growth will eventually have to pick up, as you can only cut expenses so much in trying to improve the bottom line.
Speaking of which, Eaton just reported operating earnings of 82 cents, which was 3 cents better than expected. However, revenue was lower than expected and Eaton lowered the current quarter and full year earnings forecast.
The big news this week will come from the Federal Reserve and the Labor Department. The Fed’s Open Market Committee starts another two-day meeting tomorrow, and the April Jobs Report is due on Friday morning.
This morning, we’ll have to be content with the March Personal Income and Consumption numbers at 8:30 (expect four-tenths of a percent and zero, respectively.) We’ll also get pending home sales numbers at 10 o’clock.
Not much movement is Asia overnight. Europe is slightly higher and our futures have been slowly climbing all morning long. At this point, adjusted S&P futures are higher by about 5 points, the Dow futures are up 49, and the NASDAQ futures are almost 9 points above fair value.
April 26, 2013
The early direction of stock prices may well be determined at 8:30 this morning, with the Government’s first guess at first quarter Gross Domestic Product. Many expect that GDP rose nearly 3 percent, after climbing only four-tenths of a percent in the fourth quarter. The GDP is a combination of consumer spending, business capital spending, exports and government spending. This first quarter, stabilizing government spending is expected to contribute to the big increase.
Speaking of big increases, DR Horton shares are looking to open more than 6 percent higher this morning. Horton reported earnings of 32 cents per share, which was pretty close to double the expected profit.
VF Corp is also out with better than expected numbers this morning. VF shares are higher by about a percent and a half.
Last night, Amazon’s 18 cents of earnings easily beat the 8 cent estimate. However, sales estimates for the current quarter were pretty conservative and it look like the shares are giving up yesterday’s 2 percent gains in the pre-market today.
Hong Kong and a few minor Asian markets were higher overnight, but major markets there and in Europe are lower.
A cursory look at the futures looks pretty bleak. However, after you adjust for fair value, the indexes aren’t looking so bad. Not great, mind you, but not as bad. At this point, adjusted S&P futures are lower by about 2 points, the Dow futures are down 14, and the NASDAQ futures are about 7½ points below fair value.
April 25, 2013
At 8:30, the Weekly Jobless Claims Report is expected to read 350,000, and we will get the Kansas City Fed’s manufacturing report at 11. However, most attention grabbing are the earnings reports that continue to pile in.
This morning, Biogen Idec, Pulte Homes, Southwest Airlines, UPS and Dow Chemical all beat expectations with last quarter’s earnings. ExxonMobil reported about 15 minutes ago quarterly earnings of $2.12 per share, which is 7 cents better than expected.
The miss of the morning was 3M. Blaming a stronger dollar and its impact on international profits, 3M reported $1.61. That was 2 cents more than last year, but it fell short of estimates and 3M also lowered their full-year guidance by 10 cents or so. 3M shares are about 3 ½ percent lower pre-market.
Chinese stocks fell overnight, but most other major overseas markets are higher.
Our futures had been on the rise all morning, but were hurt by that 3M report about 45 minutes ago. At this point, adjusted for fair value, futures on the S&P up 7 points, the Dow futures are up 54, and the NASDAQ futures are 11 points above fair value.April 24, 2013
As if all the rain wasn’t enough, we have a flood of corporate earnings news this morning, and for the most part, it’s been pretty good.
First and foremost to folks around Detroit would be the news from Ford Motor. Record North American profits more than offset substantial European losses. Overall operating earnings of about 41 cents per share beat expectations by 4 cents and Ford reaffirmed full-year guidance. Ford shares are pretty much unchanged in the pre-market.
Whirlpool and Boeing shares are both looking to open higher, after better-than-expected earnings reports. Procter & Gamble beat estimates, but guided lower for the current quarter. Procter & Gamble shares are off about 3 percent this morning.
And not to be forgotten, Apple beat estimates last night, but cut current quarter guidance from about 9 dollars to 7 dollars. A 15% hike in the dividend and an expanded share buyback program were trotted out to appease the traders, but Apple is again indicated well below 400 dollar level at this point, down about 13 dollars per share.
Most markets overseas were nicely higher overnight, with Italy being a notable exception. Our futures are off their highs, but are still mostly positive. At this point, adjusted for fair value, futures on the S&P up a little more than a point, the Dow futures are up 15, but due to the gravitational effect that lowered guidance is having on Apple, the NASDAQ futures are 7½ points below fair value.
April 16, 2013
You may have paid taxes yesterday, your portfolio probably lost value yesterday. Yet, the events in Boston remind us how much for which we have to be thankful, and to not take the blessings of our lives for granted.
We are still very early in earnings season, but so far the big boys are showing no signs of disappointing. This morning, Johnson & Johnson reported $1.44 per share, which was 4 cents better than expected. Coca-Cola beat the 45 cent estimate by a penny. Blackrock also gave was a positive surprise and Goldman Sachs beat the $3.88 estimate by 41 cents. On the famous other hand, Target just cut its first quarter forecast.
Yesterday morning, it was obvious that gold was going to have a bad morning. But a bad morning evolved into an absolute rout by the afternoon. So much so, that it appears that someone with a huge gold position may be bringing it all to market. So far this morning, gold has recovered about 25 dollars of yesterday’s $140 per ounce loss.
If anyone out there is still worried about inflation, we’ll get the March Consumer Price Index at 8:30. Expect no change at all, due to falling energy prices. The core rate is expected to rise two-tenths of a percent.
Asia was mixed. Europe is mostly lower, but we’re headed sharply higher at 9:30. At this point, adjusted for fair value, futures on the S&P up 10 points, the Dow futures are up 113 points and rising and the NASDAQ futures are about 18 points above fair value.
April 15, 2013
Happy Tax Day, everyone. You should enjoy this one. Next year will be much more painful. I’d suggest doing some calculations in advance to avoid a nasty surprise.
Some people sprint for the gold. But Sprint and gold are moving in opposite directions this morning. Dish has made an informal offer to buy Sprint for cash and debt totaling 7 dollars per share. Sprint shares are trading even higher than that pre-market, up around 13 percent. Gold, as they say, is a different story. Gold, silver, and oil are all dropping this morning. Gold was down over $100 per ounce earlier, and is now just above $1,400 per ounce, down over 6 percent. All those market timers who fell for the sales pitch and “turned their IRA into a gold IRA” are once again getting a belated lesson in the value of diversification.
Citigroup just announced $1.29 of quarterly earnings. That’s about 12 cents better than expected. Revenue was also higher than expected.
Overnight, we learned that China’s GDP was up an annualized 7.7 percent last month. Unfortunately, traders were looking for something more like 8 percent. That has overseas markets outside on Thailand, India and New Zealand in the red. Our futures are off their lows, but not by much.
At this point, adjusted for fair value, futures on the S&P lower by about 7½ points, the Dow futures are down 49 and the NASDAQ futures are about 14 points below fair value.
April 12, 2013
If you hold stock in JP Morgan Chase, your income is going higher. JP Morgan announced this morning that they’ll raise their dividend from 30 cents per share to 38 cents. I’ll do the arithmetic for you – that’s a 26 percent increase. The bank’s shares now pay a dividend of more than 3 percent. Remember the days when you could get 3 percent by DEPOSITING in the bank, rather than buying its stock?
Anyway, JP Morgan made $1.58 per share last quarter, 20 cents more than expected. Revenue was a hair short, however, and the shares are lower by almost one percent pre-market. Wells Fargo reported just 15 minutes ago, earning 92 cents, which was 4 cents better than expected. Wells is raising their dividend by 20 percent, to 30 cents per share.
Eli Lilly is cutting 30% of its U.S. sales force – that’s about 1,000 salespeople hitting the unemployment line.
At 8:30 the March Retail Sales report is expected to be flat, the March Producer Prices are actually expected to decline by two-tenths of a percent on declining gasoline prices, and a little later this morning, the University of Michigan’s first look at April Consumer Sentiment is expected to get just a touch better.
In spite of our gains yesterday, most overseas markets are lower at this hour, and we’ll give a little back at the open after four consecutive days of gains.
At this point, adjusted for fair value, futures on the S&P lower by about 5½ points, the Dow futures are down 36 and the NASDAQ futures are about 10 points below fair value.
April 11, 2013
Alittle slip of the lip at the Federal Reserve (like giving a bunch of big banks an advance look) gave the rest of us a look at the most recent Open Market Committee minutes at 9 o’clock yesterday morning rather than the scheduled 2 o’clock. But that information, together with some positive economic news from overseas resulted in a broad-based rally in stock prices, up to record levels on the Dow and the S&P 500.
This morning, the news is more of a mixed picture. Costco March sales rose only 4 percent, rather than the expected 5.2%. Blame lower gas prices and a stronger dollar. By the way, the Japanese yen continues to decline toward being worth only a penny. This morning, a dollar will buy you 99.7 yen.
Yum Brands reports that sales in China fell 13% in March as people there were evidently afraid of ordering Kentucky fried flu, as the bird-flu concerns persist.
And Microsoft suffers a couple of downgrades this morning, due in part to disappointing Windows 8 results and a general decline in personal computer sales. Goldman Sachs now has a “sell” rating on Microsoft shares.
Weekly jobless claims at 8:30 are expected to drop to 360,000 after last week’s rather ugly 385,000.
Japanese stocks were up 2 percent overnight, China was a little lower. Other markets overseas are generally higher, but not by a lot. Our futures have been losing steam most of the morning. At this point, adjusted for fair value, futures on the S&P are flat, the Dow futures are up 5 but with Apple shares down about 2 dollars pre-market, the NASDAQ futures are about 6½ points below fair value.
April 10, 2013
For those who keep track of meaningless records, let’s start out by noting that we alternated up and down markets for 14 consecutive trading sessions, which is a record. Some would say that indicates a market consolidating its gains, and preparing to move higher. I would say that today is another day, and predictions are very difficult, especially when they involve the future.
Suffice it to say that the streak is over. We’ve had two consecutive up days and the futures this morning are pointing higher.
Pointing lower this morning, by 3 percent or so, are shares of Family Dollar stores. Family Dollar missed the quarterly earnings estimate by a penny, but revised guidance lower for the year. There has also been a lot of insider selling in Family Dollar shares of late, which is seldom a good sign.
Earnings season gets into gear today as we’ll hear from Ruby Tuesday, CarMax, Bed Bath & Beyond, Fastenal and Constellation Brands. An earnings warning from biotech firm Affymetrics sent shares lower yesterday. Shares of First Solar soared, as they raised 2013 estimated earnings to 4 buck from $3.60.
At 2 o’clock, the minutes of the fed’s March meeting will be released, which should be an interesting read, but in the meantime, we’re headed higher again, although the futures are off their highs of the morning.
Adjusted for fair value, futures on the S&P are higher by almost 4 points, the Dow futures are up 38 and the NASDAQ futures are about 8 points above fair value.
Alcoa got earnings season off to a staggered start last night. Sales were lower than expected, which wasn’t a big surprise. But earnings for the quarter came in quite a bit better than expected at 11 cents per share due to a lot of cost-cutting. That’s a penny higher than a year ago and 3 cents better than expected.
Last night’s roller coaster ride came courtesy of JC Penney. Ron Johnson was recruited to take over the company based on the success of Apple while he was there. That was the bright idea of hedge fund manager Bill Ackman, whose fund owns 18% of Penney. Well – maybe not such a bright idea. Penney stock is down about 55 percent over the past year, and Johnson was shown the door last night. Penny stock rallied about 11 percent on the news, but then would up 8 percent lower after-hours on the announcement that Johnson’s replacement will be former Penney CEO Mike Ullman.
Advanced Micro Devices should also be an interesting stock today. It’s been reported that AMD chips will be the chip of choice in the next-generation Xbox.
The National Federation of Small Business sentiment survey slipped another 1.3 points in March, which is no great surprise to many small business owners in the current environment.
Asian markets were mostly higher. European markets are solidly higher. We’ve now had 14 straight sessions of alternating gains and losses, but we’re bucking that trend so far
Our futures look pretty much the same as they did 24 hours ago. Adjusted for fair value, futures on the S&P are higher by about 4 points, the Dow futures are up 25 and the NASDAQ futures are about 9 points above fair value.
April 8, 2013
It has been written: To every season, earn, earn earn
It’s earning season once again as Alcoa is up to bat after the market close at 4 o’clock. Alcoa hasn’t impressed in a long time and this time around is no exception. Lagging prices for aluminum are expected to push Alcoa’s quarterly earnings down to 8 cents per share. That’s down from a dime last year.
The stock of the morning will be Lufkin Industries. Lufkin, which is in the oil drilling business, is being purchased by General Electric for 88 dollars per share. Lufkin shares have been bid up to almost that level pre-market, which is more than 35% higher than Friday’s close.
Ben Bernanke will deliver the keynote tonight at the Atlanta Fed’s financial markets conference.
Stocks in Japan jumped again overnight, up about 3 percent as traders there continue to salivate about the Japanese Government’s plan to buy every fixed income asset in sight. Well, okay, it’s not that bad – but it’s heading in that direction. Other than Japan, Asia was mostly lower. Europe is mostly higher.
If we continue our one-day-up-next-day-down pattern, we’re due for an up day today. And so far, that looks like where we’re headed. Adjusted for fair value, futures on the S&P are higher by about 4 points, the Dow futures are up 25 and the NASDAQ futures are about 7½ points above fair value.
For twelve consecutive sessions, the major averages have alternated between up days and down days. Yesterday was an “up” day. You know what that means – it means that today is another day and we’ll see how it all unfolds.
However, we may not have to go much further than the Labor Department’s Employment Report at 8:30 to find our sense of direction. Expect that the economy produced 200,000 new non-farm jobs in March (all in the private-sector, by the way.) That follows a surprisingly strong February report of 236,000 new jobs. However, we hit a soft spot for new jobs last Spring, and other recent indicators have been on the soft side.
Samsung reported preliminary profit numbers overnight that were better than expected. And the Japanese stock rally continued overnight on the heels of the Bank of Japan’s decision to turn the monetary spigot wide-open.
And low and behold, it’s reported that we’ll finally get a budget proposal out of the White House next week that may include some restraints on the growth in Social Security and Medicare spending, as well as a 28% cap on tax deduction benefits for the wealthiest Americans.
Japan’s Nikkei was a percent and a half higher overnight, but European markets are about a percent and a half lower. Our futures have been in the red all morning long. Adjusted for fair value, futures on the S&P are down about 9 points, the Dow futures are lower by 79 and the NASDAQ futures are about 21 points below fair value.
April 4, 2013
Banks around the world spent the morning announcing their target levels for short term interest rates. The Bank of England held at one-half of one percent. The European Central Bank held at three-quarters of a percent, although there will be a press conference 16 minutes from now and speculation is that some colorful details about future policy may come out. Nobody was more colorful than the Japanese overnight. The Bank of Japan will embark on a whole new program of quantitative easing as they again successfully drove down the value of the yen, in an attempt to make their exports more attractive to the world.
Stateside, we’ll get the weekly Jobless Claims number at 8:30. Earlier this morning, the Challenger Layoff survey reported a 30% year-over-year increase in March Job-cut announcements. Almost 50,000 people could be on the way to the unemployment line, most of them in the banking and retail professions.
Japanese stocks rose more than 2 percent in response to the Bank of Japan’s new easing program. Our futures are indicating a nice recovery from yesterday’s downdraft. Adjusted for fair value, futures on the S&P are up about 4½ points, the Dow futures are higher by 48 and the NASDAQ futures are about 5 points above fair value.April 3, 2013
The shares of electric auto maker Tesla will be an interesting watch today. Tesla announced a new leasing program yesterday which will make their expensive cars a bit more affordable. Tesla shares are up over 20 percent over the last 7 trading days.
ConAgra announced a quarterly profit of 55 cents this morning. That missed the consensus estimate by a penny. However, full-year guidance was in line. Monsanto checks in a little later.
In about a minute from now, ADP’s monthly payroll survey is expected to report the creation of 194,000 new non-farm jobs in March. Of course, the Labor Department’s monthly report comes this Friday.
And the Mortgage Bankers Association reports that the big refinancing boom may have seen its best days. As interest rates are crept higher, last week’s drop in mortgage refinancings more than offset the rise in new-purchase mortgages.
Asian markets were mixed overnight. Europe is mostly lower.
Our futures were higher a couple of hours ago, but have back-tracked a bit since then. Adjusted for fair value, futures on the S&P are up about 2½ points, the Dow futures are higher by 9 and the NASDAQ futures are about 3 points above fair value.
April 2, 2013
March Auto Sales figures will be rolling out all morning from the major automakers. General Motors sales are expected to be more than 17 percent higher than a year ago. Ford sales are expected to have risen a bit more than 5 percent. Chrysler is also expected to check in with a 5 percent rise.
Stocks in the United Kingdom are higher after a purchasing managers’ index reflected contraction in the manufacturing sector in March, but not as much contraction as expected. One British stock getting a lot of attention this morning is Vodaphone, which is trading about 5 percent higher. A report on a Financial Times blog, quoting “usually reliable people” says that Verizon and AT&T are planning a bid to buy and carve up Vodaphone assets. The rumored buy out price is a 40% premium to Vodaphone’s current price.
Factory Orders at 10 o’clock are expected to be up almost 3 percent after January’s 2 percent decline.
Japan was down a bit overnight, but most other overseas markets that are open are higher. We’ve been alternating between up and down days for almost two weeks now, and true to form, our futures are higher after yesterday’s modest losses. At this point, adjusted for fair value, futures on the S&P are up 5, the Dow futures are higher by 34 points and the NASDAQ futures are about 13 points above fair value.
April 1, 2013
We'll start the second quarter with record closing highs on the Dow Industrials and the S&P 500 after impressive 1st quarter gains. Notably, the Dow Transportation Average had its best 1st quarter since before the last time Michigan was in the Final Four. In fact, the Feb Five were juniors in HIGH SCHOOL the last time the transports had it this good.
In just over 15 minutes, the March ISM Index, which measures manufacturing activity in the U.S., is expected to rise to a reading of 54.2. Anything above 50 indicates expansion. We?ll get the report on February Construction spending at 10 o'clock.
Tesla Motors is out with better than expected sales, and they say that they'll actually show a profit in the first quarter.
Asian markets were mixed overnight, with Japan lower by more than one percent on a disappointing Tankan sentiment survey, but China and India trading higher. All European markets are enjoying the day off in observance of Easter Monday. Our futures are acting like we?re taking the day off, as well. At this point, adjusted for fair value, futures on the S&P are flat, the Dow futures are up 3 points and the NASDAQ futures are about 2 points above fair value.
Daily Reports @ WJR
For an explanation of "fair value" please click here.