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WJR April 2017 Reports


 

April 28, 2017

A bunch of amazing earnings reports came from the technology sector last night. But, first things first – General Motors shares are almost 2 percent higher pre-market this morning as GM delivered their eighth consecutive quarter of better-than-expected profits. $1.72 of operating profit was 24 cents better than expected. Sales also exceeded estimates as trucks and high-end vehicles keep rolling off the lots.

Apparently, a lot of them are rolling on Goodyear Tires. Goodyear beat the 63-cent estimate by 11 cents per share. ExxonMobil also beat estimates.

Last night, Amazon – remember them? The company that NEVER showed a profit? Anyway, Amazon reported $1.48 of profit, which was 36 cents better than expected as Amazon Cloud Services continues to drive sales. Not to be outdone, Alphabet (the company formerly known as Google) reported an increase in profit of almost 30 percent. $7.73 of profit handily beat the $7.38 cent estimate. Shares of both Amazon and Alphabet are about 4 percent higher this morning.

Sales at Microsoft, Starbucks and Intel came in short of expectations last night. Qualcomm shares are down about 4% this morning as their battle with Apple over intellectual property continues. Apple is now withholding royalties.

Overseas markets are mixed and not much moved at this hour.

Adjusted for fair value, the S&P futures are higher by about 2½ points, and the Dow futures are lower by about 3 points, and NASDAQ futures, on the back of all those earnings beats from the technology giants, are about 21 points above fair value.

April 27, 2017

Well, we finally have a national income tax proposal for discussion, and what a vitriolic discussion it’s likely to be. At least it will take the focus off who is getting roughed up on certain airplanes.

Now that the drama of the one-page tax proposal is over, traders are again focusing on corporate earnings. And once again today, the bulk of the news is good.

Ford Motor Company shares are more than 2 percent higher pre-market on 39 cents of adjusted quarterly profit. That was four cents better than expected on much better than expected revenue. Also checking in with better than expected earnings this morning are Comcast, UPS, Bristol Myers Squibb, Samsung Electronics, Johnson Controls International, Marathon Petroleum and Abbvie.

Paypal shares are about 5 percent higher on a good report. Under Armour reported a loss of a penny per share, but that was better than the expected loss of 4 cents, and shares are about 9 percent higher.

Less than wonderful numbers are out from Dow Chemical and Southwest Airlines.

The March Durable Good Report comes in 17 minutes. Expect 1.1 percent increase but only about four-tenths of a percent absent transportation orders.

Asia was narrowly mixed last night. Europe is mostly a bit lower. Our futures improved over the past hour or so on the backs of those good earnings reports. Adjusted for fair value, the S&P futures are higher by about 3 points, and the Dow futures are up 30, and NASDAQ futures are about 9 points above fair value.

April 26, 2017

It’s another big day for corporate earnings, but even after a huge two-day rally, the main event of the day for Wall Street may well be the unveiling of a new proposed corporate tax regime from the White House.

But in the meantime, we have the following companies with better than expected earnings and sales: United Technologies, Norfolk Southern, Pepsico and Waste Management.

With better than expected earnings, but lower sales than expected we have: Boeing, General Dynamics, Hershey and Procter & Gamble.

Fiat Chrysler checked in with 41 cents of operating profit, exactly as expected. AT&T’s 74 cents per share also matched the estimate, but sales were a little light. 

The big surprise of the morning is the report from Twitter. Eleven cents of profit beat the estimate by a dime. Twitter reports 328 million active users and Twitter shares are higher by more than 10 percent pre-market.

Asian markets were higher across the board. European markets are flat. In spite of all the good earnings news this morning, it appears that traders are playing wait-and-see until we get the details of President Trump’s tax cut proposal. Our stock futures have slipped from earlier levels. Adjusted for fair value, the S&P futures are lower by less than a point, but the Dow futures are up 9, and NASDAQ futures are about 3 points above fair value.

April 25, 2017

In every earnings reporting season, there are a couple of mornings with so many companies reporting, it would take all morning to cover them all. Today is one of those days. So far today, the earnings news gives us no reason to believe that yesterday’s big rally will reverse.

Among the firms reporting better-than-expected adjusted earnings are DuPont, Eli Lilly, Caterpillar, Auto Nation, McDonald’s, Corning and 3M.

Even publisher Gannett is out with good news, doubling the earnings estimate of seven cents with a profit of 14 cents. Gannett stock it about 7 percent higher pre-market.

Slightly missing the mark were Coca-Cola and Lockheed Martin.

The March New Home sales report comes at 10 o’clock. Expect a little dip to an annualized run rate of 588,000 units, with the average New Home sales price dropping just a bit due to builders offering additional buying incentives.

The Conference Board’s April Consumer Confidence Index is also expected to backtrack a little from the March number.

Other than mainland China, overseas markets are in the green after our rally yesterday, and it looks like we’ll rally again at the open today. Adjusted for fair value, the S&P futures are higher by almost 5½ points, Dow futures are up 162, and NASDAQ futures are about 12 points above fair value.

April 24, 2017

If you thought stock traders weren’t paying attention to yesterday’s French election, think again. With Emmanuel Macron’s win in yesterday’s French run-off vote, France is unlikely to follow up Britain’s “Brexit” with a “Frexit.” Keeping the European Union together, at least for now, is a good thing for economic stability. It’s certainly good for French stocks today, with the CAC higher by about 4½ percent.

Also higher by more than 4 percent are shares of toy-maker Hasbro. On a GAAP basis, Hasbro lost 4 cents per share last quarter, compared with a loss of $2.81 a year ago. On an operating basis, it was a 4-cent profit, a penny ahead of estimates.

Perhaps the winner of the morning is Medical Supply company C.R. Bard. Becton Dickinson has offered to buy Bard at $317 per share. Bard shares are 20% higher, at about $303 per share on the news.

Halliburton shares are higher on an earnings beat. The miss of the morning may well be Kimberly Clark, missing the expected $1.55 by two cents. However, Kimberly Clark share are little changed pre-market.

Almost 40 percent of the S&P 500 will report earnings this week.

In front of all that news, stock prices will head higher. Adjusted for fair value, the S&P futures are higher by almost 31 points, Dow futures are up 238, and NASDAQ futures are about 61 points above fair value.

April 21, 2017

Corporate earnings are important and yes, geopolitical events are important, but nothing can spark a stock market rally nowadays like some positive comments regarding the prospects for tax reform. It’s no secret that U.S. companies suffer under the highest marginal tax rate in the free world. Yesterday, comments from Treasury Secretary Mnuchin gave hope to lowering that rate by year’s end, and that, more than anything, sparked a pretty nice rally in stock prices.

This morning, earnings reports will tend to support the rally. General Electric’s 21 cents of adjusted profit was 4 cents better than expected. Honeywell also had a 4 cent beat on $1.66 of profit. Stanley Black and Decker reported a ten-cent beat. Sun Trust Bank earned 87 cents versus the 84 cent estimate.

Shares of oil firm Schlumberger are lower by about a half-percent pre-market. They matched the earnings bogey, but sales were a little light. The loser of the morning may be toy maker Mattel. Last night they reported a larger loss than expected and Mattel shares are off about 7 percent pre-market.

The preliminary Purchasing Managers Index report for April, called the “flash” PMI comes at 9:45, just 15 minutes before the monthly report on existing home sales.

Asia was mostly higher overnight. Major European markets are also up, in spite of yesterday’s terror attack and this coming Sunday’s French election. Adjusted for fair value, the S&P futures are higher by more than 3 points, Dow futures are up 29, and NASDAQ futures are almost 10 points above fair value.

April 20, 2017

Many people believe that the Dow Jones Industrial Average represents the broad stock market, because, well, that’s the index that most often quoted in the media. But the last two days have demonstrated how misleading a price-weighted index like the Dow can be. More than half of the loss in the Dow Tuesday was attributable to a decline in Goldman Sachs. Yesterday it was IBM took the blame for more than half of the 118-point decline. The broader market fared much less worse, and the NASDAQ Index was 14 points higher yesterday.

But, today is another day, and although stock prices overall are trending higher, it might not be such a great day for shareholders of Philip Morris International. 98 cents of profit fell a nickel short of estimates and shares are more than one percent lower pre-market. Likewise, insurer Travelers missed the mark by 19 cents, earning $2.16. A lot of late-in-the-quarter storm losses get the blame there, but revenue was better than expected and Travelers shares are also just about one percent lower. Verizon shares are off almost 2 percent after missing the 96-cent estimate by a penny. American Express is the good news story of the morning, up more than 2 percent.

The March Leading Economic Indicators Report comes at 10 o’clock and is expected to rise only two-tenths of a percent, after having risen six tenths of a percent in each of the last three reports.

Most Asian markets were higher overnight. European markets have now turned higher as well. Our futures are off their highs of the morning, but are still in the green. Adjusted for fair value, the S&P futures are higher by almost 6 points, Dow futures are up 31, and NASDAQ futures are almost 20 points above fair value.

April 19, 2017

The bad news is that the Dow Jones Industrial Average lost 113 points yesterday. Tempering that news is the fact that about 70 points of that loss was attributable to the decline in the price in shares of Goldman Sachs on an earnings miss.

This morning, there is a fresh batch of earnings news, and most of it is pretty good. Morgan Stanley reported a dollar of operating profit, which was a 12 cent beat and shares are about 2 percent higher. Blackrock’s revenues are a little light, but $5.25 per share of earnings compared nicely to the $4.89 estimate. Abbott Labs reported 48 cents, which beat the bogey by a nickel per share.

The famous other hand belongs, once again, to IBM. Profit of $2.38 came in as expected, but year-over-year revenue declined for the 20thquarter in a row and IBM shares are lower by about 5 percent this morning.

On the merger front, we have another bricks and mortar retailer gaining more online heft as Petsmart is buying Chewy.com.

We’ll get some light reading at 2 o’clock with the release of the Fed’s Beige Book.

Asian markets were mixed overnight, but Europe has turned higher.

We should make up some lost ground from yesterday at the open of trading, even with IBM lower by more than 8 dollars pre-market. At this point, adjusted for fair value, the S&P futures are higher by about 6½ points, Dow futures are up 12, and NASDAQ futures are 19 points above fair value.

April 18, 2017

Happy Tax Day everybody! April 15thfell on a Saturday and yesterday was a holiday in Washington D.C. (also known as the land of perpetual holidays.) That gives all individuals until today to file their 2016 income tax returns, or get an automatic 6-month extension. Of course, that’s an extension to FILE, not and extension of time to PAY.

And once you’ve paid, it’s time to make that money back. Shareholders in United Health are well on their way to that today. United Health reported better than expected profits and raised guidance, and the shares are about 2 percent higher this morning.

Also reporting better than expected earnings this morning are Bank of America, United Airlines and Johnson and Johnson, although sales at J&J fell short. Harley Davidson shares are lower on sales that fell short of estimates. The big drag on the major indexes this morning is Goldman Sachs. In a big surprise, Goldman missed on profits and sales. They increased their share buyback plan and raised the dividend by a dime per share, but Goldman Sachs shares are off almost 3½ percent pre-market.

European markets are generally about one percent lower as Britain announced that a snap election will be held June 8th. It looks like we’ll give up a chuck of yesterday’s gains in the early going today. Adjusted for fair value, the S&P futures are lower by about 5 points, Dow futures are down 57, and NASDAQ futures are 11 points below fair value.

April 13, 2017

So far, we’re five-for-five with quarterly earnings reports. Not a big surprise, given the chronic low-balling of estimates that goes on – but we’ll take it.

Yesterday, Delta Airlines had a good report. This morning, JP Morgan Chase reported $1.65 per share of quarterly profit. That was 13 cents better than expected on better revenue than expected. Similarly, PNC Bank reported a 13 cent beat on higher than expected revenue, with a profit of $1.96 per share. Citigroup’s $1.35 was an 11-cent beat. Wells Fargo’s one dollar beat the 97-cent estimate, although revenue was a little light and Wells shares are a little lower pre-market.

The Weekly Jobless Claims come at 8:30, along with the Report on Producer Prices. It’s expected that last month there was no overall increase in inflation, but if you ignore food and energy, prices rose by two-tenths of a percent, or 1.8 percent year-over-year.

Shares of Hanesbrands are 6 percent higher premarket on a positive forecast and Adobe Systems received a broker upgrade this morning.

The Bond market closes early at 2 o’clock today. Tomorrow is Good Friday, so you might say that “there’ll be no trading in the temple” as the stock market will be closed. The banks will be open, however.

Asian markets were once again mixed overnight, but major European markets are trading lower. Our futures have cut their losses in half since the banks started reporting this morning, but they are still indicating lower prices for most stocks at 9:30. At this point, adjusted for fair value, the S&P futures are lower by about 4 points, Dow futures are down 29, and NASDAQ futures are 10 points below fair value.

April 12, 2017

We’ve seen interesting markets for the past couple of weeks, with stock prices on most days starting calmly, then dipping severely before mounting a late-day charge to finish relatively unchanged. Lots of mid-day churn, but it’s still a wait-and-see market as the first quarter earnings season starts today.

The unofficial start of earnings season used to be the report from Alcoa, but now that Alcoa has split into two companies, that’s no longer the case. Delta Airlines is now first on the runway and Delta reported 77 cents of operating earnings this morning, which was 2 cents better than expected. Revenue was a little light, but Delta shares are about 2 percent higher pre-market.

Syngenta shares are higher by about 3 percent on word that Chinese regulators will allow a Chinese company to buy Syngenta.

We’ll get earnings from a bunch of big banks tomorrow as well as pile of economic data, in front of the Good Friday Holiday on Friday, when markets will be closed.

Mortgage applications perked up a little last week – three percent for home purchases and 1½ percent on refinancings.

Asian markets were mixed overnight. European markets are mainly a little higher, but not be a whole lot. Our stock futures are doing the same thing they’ve been doing in the pre-market for the last week or so.  That is, a whole lot of not very much.  At this point, adjusted for fair value, the S&P futures are lower by about 2 points, Dow futures are down 5, and NASDAQ futures are about 3 points below fair value.

April 11, 2017

I only mention this little factoid because of all the head-scratching it causes, but less than a week after passing Ford Motor as the American car company with the larger market capitalization, Tesla passed General Motors yesterday, to become the biggest. Short interest in Tesla is over 25% of the shares outstanding, over the past 14 months, with TESLA shares more than doubling in price, those shorts have suffered rather significantly.

Shares of United Airlines are lower by more than three percent this morning. Yesterday, United introduced the flying public to the word “re-accommodating” which has nothing do to with dating or accommodations. The term has so far been defined by numerous videos posted on the internet. But, for companies not suffering from a public relations nightmare this morning, stock prices look to open without a lot of movement.

The Small Business Optimism survey from the NFIB dipped a little in March, for the second month in a row, but still reflects a lot of optimism regarding business conditions. 

Toll Brothers was awarded a broker upgrade this morning. Overseas markets are once again mixed, but little changed this morning.

Our futures have been treading water all morning as we await earnings reports that will start to roll out tomorrow. At this point, adjusted for fair value, the S&P futures are lower by 2½ points, Dow futures are down 2 and NASDAQ futures are 2 points below fair value.

April 10, 2017

The stock market’s post-election rally shifted into neutral in late-February, just about the time that the fourth quarter earnings season wrapped up. This morning, the S&P 500 trades at about 25 times, which is not extreme – but is significantly higher than the average. So, a good first quarter earnings season would certainly help if stock prices are to climb from here.

Those earnings start to roll in in the back half of this week, with Delta Airlines on the runway for a Wednesday take off and no fewer than 5 major banks set to report on Thursday. Good Friday, of course will be a market Holiday.

There’s a big merger among truckers this morning. Swift Transportation and Knight Transportation are merging. Shares of both are a little higher.

Fed head Janet Yellen visits Ann Arbor today to speak at the University of Michigan, although those comments won’t come until after the market closes at 4 o’clock.

Oil prices are higher by another one percent plus this morning on continued reaction to last week’s missile attack in Syria. Overseas markets are mixed, but really not much changed at this hour.

Our futures turned from red to green right around 6:30 this morning and have been climbing slowly ever since. Adjusted for fair value, the S&P futures are higher by about 3½ points, Dow futures are up 17 and NASDAQ futures are about 7 points above of fair value.

 
April 6, 2017

The minutes from the last Federal Reserve Open Market Committee shot down a pretty significant rally in stock prices yesterday. Discussion about unwinding the Fed’s bloated balance sheet put traders in the “sell” mode and sent the major indexes down between two-tenths and six-tenths of a percent yesterday.

One stock with a Detroit history had a great day yesterday. Plug Power, which was born 20 years ago as a joint venture of DTE Energy, and whose stock traded as high at $1,365 per share back in 2000, ended Tuesday at $1.25 per share and ended yesterday at $2.25, for a gain of 80 percent. Plug has a deal to provide its power services technology to Amazon, and Amazon is gaining warrants to purchase a whole lot of Plug stock in the future. Plug Power stock is indicated higher again this morning by another 7 percent or so.

Constellation Brands shares are looking a little higher on a good earnings report. Operating profit of $2.26 easily beat the estimate of $1.48. Bed, Bath and Beyond shares are also higher on good earnings and sales.

And Medtronic shares are higher as they are reportedly near a deal to sell their Medical Supply business to Cardinal Health.

Overseas market are mixed. Our stock futures were in the red early on, gained strength for a couple of hours, but are now slipped back toward the flat line. Right now, the S&P, Dow and NASDAQ futures are all within a couple of points of fair value.

April 5, 2017

Have you ever gone into a Panera Restaurant for a nice healthy meal? You know, soup and sandwich, or maybe a nice salad? But what you’re really longing for is a couple Krispy Kreme donuts? Well a European firm called JAB may be about to make the deal of your dreams.

JAB, a company which already owns Krispy Kreme and Keurig Green Mountain among other consumer names, will pay over 7 billion dollars to acquire Panera. That’s a 20% premium to where Panera traded at the end of last week, before word of the pending deal leaked out. Panera shares are 13 percent higher pre-market.

Not such good news over at Payless Shoes. They are the latest bricks and mortar retailer high tailing it to Bankruptcy Court. Payless will close about 400 stores nationwide as they try to restructure.

The minutes from the latest Federal Reserve Open Market Committee meeting come at 2 this afternoon. Before that, we’ll get the Jobless Claims estimate from payroll firm ADP. Expect that report in about 5 minutes to tell us about 170,000 new claims. 

Chinese stocks were about a percent and a half higher today, but most other markets overseas are little changed.

Our stock futures are going nowhere fast. But, they’ve been going up slowly over the past hour. Right now, adjusted for fair value, the S&P 500 futures are up a little less than 2 points, the Dow futures are up 32, and the NASDAQ futures are about 3½ points above fair value.

April 4, 2017

We’re getting the calm before a storm of earnings and economic news. First quarter corporate earnings reports start to roll out next week and the monthly Jobs Report comes Friday. But in front of that, scheduled news flow is quiet. Maybe too quiet.

One of the loudest stocks of 2016 was computer graphics chip maker Nvidia. Nvidia shares tripled in value last year. However, they are only up a little over one percent in 2017, while other chip stocks have rallied. This morning, a broker downgrade has Nvidia shares about 3 percent lower pre-market.

Heading in the opposite direction is automotive newcomer Tesla. After gaining more than 7 percent yesterday, Tesla’s market capitalization is now larger than that of the Ford Motor Company.

Not to be outdone, shares of Israel-based Wix.com soared 10 percent yesterday.   That stock has also tripled within the past year. Wix.com uses artificial intelligence to build websites, which apparently works better than the real thing.

February Factory Orders come at 10 this morning. A 1 percent increase will be lower than January’s 1.2 percent and is expected to be driven mainly by civilian aircraft orders, rather than by capital goods orders, as businesses continue to sit on their wallets awaiting possible tax code incentives.

 One Federal Reserve Governor speaks today, but that speech will come after the market closes.

In the meantime, stock prices will head lower. At this point, adjusted for fair value, the S&P 500 futures are lower by almost 9 points, the Dow futures are down 65, and the NASDAQ futures are about 23 points below fair value.

April 3, 2017

The month of March ended on a down note, with the S&P 500 and the Dow losing a little ground for the month, although the NASDAQ stocks chalked up another month of gains. Overall the first quarter of the year gave us rising stock prices, although the pace of that rise has slowed somewhat.

It’s great to have a big company fall in love with your product. It’s not so good when they love it too much, especially if they account for a large portion of your sales. A British company called Imagination Technologies provides graphics technology of a rather large company called Apple. At least they do now. Apple announced that they will take that work in-house within two years. Imagination Technology shares are lower by more than 63 percent pre-market on that news.

News regarding March Car Sales will be rolling out as the day unfolds. Expect an overall 2 percent increase in car sales. One automaker jumped the gun a bit. Over the weekend, Tesla announced first quarter sales of 25,000 units. That’s a 69% increase from a year ago and more than analysts had expected. Tesla shares are higher yet again this morning, rising about 3 percent. Drug maker Mylan is lower by almost 2 percent on word of an expansion of an Epipen recall.

Asian markets were higher across the board overnight. Europe is more of a mixed picture, and our futures are well off their earlier highs. At this point, adjusted for fair value, the S&P 500 futures are higher by a fraction of a point, the Dow futures are up about 10 points, and the NASDAQ futures are about 5½ points above fair value.

WJR May 2017 Reports
WJR March 2017 Reports

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