August 30, 2001More trouble in tech-land this morning. Yesterday, after the market closed, Sun Microsystems warned that the, y will not be making a money this quarter. Weak demand for servers and the slowdown in Europe are spelling trouble. In fact, European Central Bank may finally be ready to admit that things are slowing down. The ECB cut interest rates a quarter of a percent about a half hour ago. Speaking of Europe, just when Microsoft looked to be out of the regulatory woods, the European Commission --- remember them from the breakup of the GE / Honeywell deal? The European Commission is expanding their investigation of possibly anti-competitive business practices by Microsoft. That news is not likely to help Microsoft stock today.
July Personal Income and Consumption numbers coming out in 10 minutes, but unless we get a big surprise, it looks like another lower opening this morning.
Adjusted for fair value, S&P futures are flat, Dow futures up a few but the Nasdaq futures are 12 points below fair value.
August 29, 2001They say that no news is good news. For the stock market yesterday, very little news made for a mess. The market was mixed until the Consumer Confidence number was released at 10 o'clock. Consumers are evidently not as confident about the current economy, but their confidence i, s rising about the future. Now on the sur>
Today's big news? Again, it's more of a "what happened" number rather than a "what's coming" number. The revised 2nd quarter Gross Domestic Product number is expected to show zero growth for the second quarter. That number will be released in 10 minutes and may well set the tone for the rest of the day.
Gateway announced details of their restructuring. 5,000 folks, or 25% of Gateway's workforce will be looking for work somewhere else.
Adjusted for fair value, futures are lower at this hour, S&P futures down 2, Dow futures are down 13 and Nasdaq futures 8 points below fair value.
August 28, 2, 001The market hovered modestly higher all day yesterday until the last half hour of trading, then sold off a little, but all and all, it wasn't a bad day after the big run-up on Friday. Yesterday was the fourth lightest trading day of the year on the New York Stock Exchange.
Only one economic indicator coming today. At 10 o'clock the reading on Consumer Confidence is expected to tick up slightly from last month.
After the bell yesterday office furniture maker Herman Miller warned that their current quarter is heading for the circular file. Less spending by businesses and heck, less businesses out there buying furniture, Herman Miller now expects earnings for the quarter of 2 to 7 cents. Analysts were expecting 21 cents. Herman Miller stock off over 13% last night after that announcement.
Sun Microsystems downgraded by a major brokerage house this morning. Asia off a little, Europe flat this morning. That futures have barely moved all morning but are pointing toward a mixed opening. Adjusted for fair value, S&P futures down 1, Dow futures are up 6 and Nasdaq , futures 8 points below fair value.
August 27, 2001Friday's gains were the biggest in six weeks. The Dow shot up 2% and the Nasdaq was up over 4%. Is this the start of something big? Well, don't bet the farm. Summer Fridays are always a little suspect, because of light trading volume. And according to Connecticut Research firm Birinyi and Associates, over the past 10 years there have been 23 weeks with trading patterns similar to last week's. The most likely result for the following Monday? 61% of the time, the Monday market finished only slightly positive, with less than a half-percent gain.
The message in Friday's rally? It was triggered when Cisco Systems said it saw signs that business was "stabilizing." Imagine what the market will do when two or three big companies actually see business "improving."
More job cuts in the news. Toshiba and Hitachi reportedly set to let 40,000 workers go. JP Morgan Chase will have a third round of layoffs and Manpower says that 4th quarter hiring in the U.S. will be the weakest since the last recession ten years ago.
Asia and Europe up about 1%. Futures have been slipping most of the morning, but are still positive. Adjusted for fair value, S&P futures are up 1, Dow futures are up 25. Nasdaq futures are 2 po, ints above fair value.
August 24, 2001After the market closed Cisco Systems announced that while they can't predict the future - which is interesting because a year and a half ago everybody thought they could - Cisco said that orders during the first few weeks of the current quarter were in line with projections. And then they muttered the four magic words - "our business is stabilizing." Look for those words at a business near you during the next few months. Cisco is up about 80 cents in premarket trading.
Kmart reported a loss of 4 cents yesterday. That was in line with estimates, but same store sales were only up about 1%. So, the stores sure look a lot better, but the earnings turnaround everybody's been waiting for is could still be a little ways off.
At 8:30 we get the July Durable Goods report, New Home Sales at 10 o'clock. But outside of that, a lot of traders may head for the beach a little early today.
Japan was up a little overnight, Europe is in rally mode. W, e , should rally at the open on the Cisco announcement. Adjusted for fair value, S&P futures are up 5 1/2, Dow futures are up 47 and Nasdaq futures are 28 points above fair value.
August 23, 2001This is one of my favorite days of the quarter. We get earnings reports from Krispy Crème AND the World Wrestling Federation. No real connection there. It's just fun to talk about companies where what you see is what you get. Krispy Crème, which contains some natural ingredients (unlike the World Wrestling Federation) once again beat expectations, making ten cents per share, versus a 9 cent estimate. They say that they will continue to expand in 2002, opening 40 new stores, with projected profits of 42 cents per share.
If you own a Gateway computer, the computer may still work, but if you own a Gateway bond, it's now junk. Standard and Poors has downgraded Gateway's debt to junk status.
Yesterday was a day for the semiconductor stocks. On news of that improved book to bill ratio, semiconductor stocks shot up over 3 and a quarter percent yesterday. Overall we tacked a hundred points on the Dow and a perc, ent and a half on the Nasdaq. But, you know the market this year - if we're up one day - well, you know the rest of the story.
Japan was down overnight, Europe is mixed. Adjusted for fair value S&P, Dow and Nasdaq futures are all solidly under fair value. It looks like a weaker open for the market at 9:30.
August 22, 2001The Fed said that the slowdown's not dead. The market saw red. As expected, the Fed cut short-term interest rates a quarter percent yesterday, but investors keyed on what the Fed said. In a statement that was virtually identical to their June statement, they said that economy is NOT yet showing great signs of strength, and the door is still open to further rate cuts.
As we mentioned yesterday, General Motors stock has taken a beating since Ford Motor warned about earnings for the rest of the year. Well last night, after the market closed, GM said - hey - enough is enough - we're not Ford, our third quarter earnings will come in better than expected - so get off our case. Not surprisingly,, GM traded up over a buck in the after-hours trading last night.
A glimmer of hope for semiconductor stocks - the July book to bill ratio is reported at .67. That's up from .54 in June. So, chip-makers are still getting less in orders than they are shipping out, but the ratio is getting better.
Don't look now - but the Nasdaq is in another bear market. Last night's close left it down over 20% in the last three months, but it looks like all the major averages will get off the mat at 9:30 this morning. Adjusted for fair value S&P futures are up a point 5 1/2, the Dow futures are up 48, and the Nasdaq futures are about 18 points above fair value.
August 21, 2001The Dow Jones Industrial Average gained nearly 80 points yesterday, on a day that saw Dow component General Motors lose about 3 and a half bucks. That GM loss is worth about 20 points on the Dow, so overall, a pretty good day.
Since the market closed yesterday, two big earnings reports: Agilent Technologies lost less money than expected last quarter, but warned that the rest of the year won't be as good as expected, they're c, utting 4,000 jobs. Staples met expectations, but said they aren't seeing a lot of near term upside and as a result, they're cutting back expansion plans.
Don't expect anything dramatic in front of the Federal Reserve announcement at 2:15 this afternoon. Absolutely everyone this side of the international space station is expecting a quarter-point reduction in interest rates. So, the most important part of the Fed announcement won't be the cut, it will be what the statement regarding what the Fed expects the future to hold.
Looks like we're going to drift a bit ahead of that announcement. Adjusted for fair value S&P futures are up a point, the Dow futures are up 16, and the Nasdaq futures are about 3 points below fair value.
August 20, 2001We had a bunch of encouraging economic news last week. But a depreciating dollar, the earning warning from Dell Computer and all the news from Ford Motor were just too much to overcome. One brokerage firm this morning is questioning how long Ford can maintain its current dividend - keep an eye on that one.It's Alan Greenspan front and center tomorrow. We should get another ¼ percent cut in short term interest rates. But, just as is the case with corporate earnings reports, market reaction may focus less on what the Fed does, and more on what it , says about the future. That announcement comes at 2:15 tomorrow afternoon.
Lowe's beat estimates by a penny this morning. They made 42 cents for the 2nd quarter, versus 36 cents last year. Yes, there are some businesses that ARE making more money than they did last year.
Japan's losing streak hit four overnight, the Nikkei was of over 1 ½ percent. Europe also down this hour. Our futures started to rally at about 6:30 this morning. Adjusted for fair value S&P futures are down just a smidgen, but the Nasdaq futures are about 2 points above fair value.
August 17, 2001If you are a salaried employee at the Ford Motor Company, you may not have to wait until Christmas to get your next "package." Ford will cut up to 5,000 white collar jobs through a "Voluntary Separation Program." Ford also says it now sees 2001 earnings at 70 cents per share. The consensus estimate was $1.20. Over and above that 50 cent shortfall, they will take another 50 cents in charges by year end in connection with that early retirement program.
Analog Devices met estimates this morning, but said they will be cutting jobs by year, end. Boeing also announced 600 job cuts this morning.
Hewlett Packard beat estimates, and said that things may be getting better. Dell Computer, on the other hand, met estimates, but warned about the rest of the year. So far this morning, the market looks to believe Dell more than HP. Adjusted for fair value, the futures aren't as bad as they look at first glance, but they're still not a pretty picture. S&P futures are down 7 1/2, Dow futures are down 42, and the Nasdaq futures are about 25 points below fair value.
August 16, 2001In fifteen minutes, the government will release two bits of economic information that may come to the aid of a pretty listless stock market. The July Housing Starts are thought to have declined very slightly from the June level. Housing demand has held up very well through the downtown of the past 18 months, so that number is an important one.
And of course, one of the most important factors in interest rate policy is the inflation rate. The July Consumer Price Index will also be released at 8:30. Look for a tenth of a percent decrease overall and a two tenths of a percent increase in the core rate. The Federal Reserve Open Market Com,, mittee meets next week for what will almost certainly be another cut in short-term interest rates.
Yesterday the major indexes took another drubbing, but it really wasn't THAT bad a day, as the advance/decline line held up pretty well. The big hurt of the day was laid on the Nasdaq, which lost over 45 points. Later today, earnings from Kmart, Dell, Ciena and Hewlett-Packard.
Futures have improved a bit during the last two hours but are still a bit negative. Adjusted for fair value, S&P futures are down 4, Dow futures are down 16, and the Nasdaq futures are about 14 points.
August 15, 2001The itty bitty rally we started with yesterday petered out as the day dragged along. Last night a few big companies reported earnings. BEA Systems beat estimates by a penny, but warned about the remainder of the year. Applied Materials also beat estimates, Network Appliance matched expectations. AOL/Time Warner was hit with a rumor about an earnings shortfall and impending layoffs yesterday. AOL lost about $3 to $40 on the day
Later today, we'll hear about our Industrial Production and Capacity U, tilization. Expect declines in both.
Don't forget to file your tax return! If you took an automatic extension of time to file of April 15, today's the deadline to file, unless you formally request an additional two-month extension.
European markets are quiet day in fact a lot of overseas markets are closed for Assumption day. And the U.S. futures have been pretty quiet this morning. Adjusted for fair value, S&P futures are up 3, Dow futures are up 18, and the Nasdaq futures are about 4 points.
August 14, 2001At 8:30 this morning, the report on July retail sales. A decrease of 2/10 of a percent overall and, excluding autos, a rise of 1/10 of a percent is expected. Speaking of retail sales, Walmart met estimates on 37 cents pre share this last quarter. Home Depot made 39 cents. That beat estimates by 2 cents. And speaking of auto sales, this may get a little tougher for the domestics car makers. The Bank of Japan overnight announced a surprise easing of monetary policy. Interest rates, of course, are already virtually zero in Japan. Now the Japanese Central Bank is planning to flo, od the system with yen, making it even cheaper for Japanese consumers to consume and Japanese exporters to profit. The Japanese stock market was up almo, st 4% overnight.
Tyco cutting 11,000 jobs, that's 6% of their payroll. Citigroup cutting about 1 ½ percent of their workforce, that's 3,500 jobs.
Europe is up across the board this hour, and barring a disaster in the retail sales number we'll start the day with an itty bitty rally on Wall Street. Adjusted for fair value, S&P futures are up 3, Dow futures are up 9, and the Nasdaq futures are about 9 points above fair value.
August 13, 2001Another call from a major investment firm this morning may give us a little boost at 9:30. Just past 7 this morning, Goldman Sachs upgraded its outlook for certain semiconductor and telecommunication stocks. That turned a negative futures market around pretty nicely, especially for the Nasdaq.
Mark this day on your calendar, the first Bridgestone/Firestone lawsuit gets going today. Could be a lot time before that story goes away. One legal dispute settled this morning, as Ford has settled a Californina lawsuit over allegedly defective ignition switches. Nationwide, that could mean the recall of 5 million vehicles.
A lot of big names report earning, s later this week, and of course, we're a week away from another Fed meeting. Japan's Nikkei is at another 16 year low, falling so fast it's actually closing in on the Dow Jones. The Nikkei now under 11,500. Europe is up a little this hour. Adjusted for fair value, futures are mixed. S&P futures are up 1, Dow futures just turned down about 10, and the Nasdaq futures are about 11 points above fair value.
August 10, 2001The stock market was a lot like a duck in the lake yesterday, paddling furiously below the sur>
The big number of the day will be the Producer Price Index at 8:30 this morning. Economists are expecting a decrease of 4 tenths of a percent overall and and rise of 1 tenth of a percent in the core rate. The lower these numbers are, of course, the more room the Federal Reserve has to continue lowering interest ra, , tes. At this point the Fed Futures contracts are pricing in an 80% probability of another ½ percent interest rate cut by November.
That three billion dollar judgement against Philip Morris in California was cut to $100 million by a judge in California yesterday. Phillip Morris still plans to appeal to get its reduced even further.
Europe is up 1 to 2 percent today. Adjusted for fair value, futures are slightly positive. S&P futures are up 2 1/2, Dow futures are up 10 and the Nasdaq futures are about 3 points above fair value.
August 9, 2001Yesterday was a day we really could have done without, as far as stocks were concerned. The Federal Reserve's Beige Book was released. It reported that the weakness in manufacturing has started to spread to other businesses, like office space, trucking and shipping. Now, if you live in an area that has no office buildings, maybe you haven't seen scores of "For Rent" signs lately. But, for anyone who has been looking around a bit, this Beige Book revelation should not be big news. Unfortunately, the market did not react well, as we lost 3% on the Nasdaq and 165 points on the Dow.
If you're looking for some good news today --- Solectron, the world's biggest electronics contract manufacturer , is buying C-Mac, a Canadian company, for about 2.7 billion U.S. dollars. Why is this good news? Well everybody is waiting for companies to come out and tell us that things are getting better. Sometimes it's a good idea to ignore what they say and watch what they do. If we get some pickup in merger activity, it is likely a good sign for the future.
Japan was a mess overnight, Europe is down 1 to 2 percent. Adjusted for fair value, futures are mixed. S&P futures are down 3 1/2, Dow futures are up 6 and the Nasdaq futures are about 8 points below fair value.
August 8, 2001A nice surprise yesterday morning - an uptick in U.S. worker productivity helped the Dow Jones to a 57 point gain. But we may be giving it all back at the open this morning.
Last night, after the general market closed, Cisco Systems matched estimates of 2 cents per share in earnings. Cisco stock bubbled up when the number was released to about $19.60 per share. But when the company started talking about expectations for the future, things took an ugly turn. About ten minutes past 5 yesterday afternoon, the stock took some lumps as the company suggested that the internet equipment business has not bottomed, a, nd may not bottom for another 3 to 6 months. Cisco trading this morning at about $18.40 per share.
Good news for Boeing - a $2 billion order from China for 737s. Later today, earnings from Waste Management and Clorox.
The Cisco news and a negative outlook from Emulex will get us off on the wrong foot this morning. Adjusted for fair value, S&P futures are down 7, Dow futures are down 55 and the Nasdaq futures are about 13 points below fair market value.
August 7, 2001The story on Intel's projected price cuts yesterday morning set the stock market off on the wrong foot, and it never really got any better. Unfortunately, we have more of the same this morning. A brokerage firm downgrade of just about the entire semiconductor industry has the futures pointing to a lower opening.
Quarterly productivity numbers, one of Alan Greenspan's favorite economic indicators, will be released later today.
Procter & Gamble out with earnings; they beat estimates by a penny. After the market closes tonight, the big report of the day - Cisco Systems reports earnings. Two cents per share is expected, but the issue for investors will not be what the earnings have been. We'll be listening for any guidance a, bout the future.
Asia down, Europe down, and futures are a little weak this morning. Adjusted for fair value, S&P futures are down 4 and the Nasdaq futures are about 20 points below fair value.
August 6,2001There's some potentially good news if your planning to buy a computer for Christmas, but it may not be such great news if you own stock in Intel or Advanced Micro Devices. There's a research report out this morning saying that Intel will slash prices on their microprocessors a few weeks from now. Some of those cuts could be as much as 50%. Intel is down over a buck in premarket trading.
A few weeks ago General Motors told EchoStar Communications to forget it - go away - GM was not interested in selling Hughes Electronics to them. They would talk exclusively to News Corp. Well, they're back. EchoStar this morning is offering over 30 billion dollars in stock for GMH. That's about an 18% premium. Don't hold your breath on this one, though. Remember - it's an all-stock offer. GM presumably is looking for cash out of any sale of Hughes.
No big earnings or economic reports expected today, it should be another light day for volume.
The futures, are a little weak this morning. Adjusted for fair value, S&P futures are down 2 1/2, Dow futures are flat, but the Nasdaq futures, on that Intel report, are about 16 points below fair value.
August 3, 2001The stock of the morning is Sensormatic. This morning, news that conglomerate Tyco is offering 24 bucks a share for Sensormatic, that's a 2.3 billion dollar deal. Sensormatic closed below $15 last night, but is trading in the premarket at about $23.
Two major earnings reports this morning. Disney beat lowered estimates as did Ethan Allen.
The big news of this day hits at 8:30 this morning, when the government reports the July unemployment rate and the increase or decrease in non-farm jobs. The consensus estimate of economists is a decline of 50,000 jobs and a rise in the unemployment rate to 4.6%. But, there is an unusually large variation in the range of estimates. Yesterday's unemployment claims data seemed to suggest that the jobs market was getting better, but a lot of economists are calling for a decline in payrolls of 100,000 or more. If that indeed is true, you can bet on more interest rate cuts to come.
The futures are taking a wait and see attitude in front of those numbers, Adjusted for fair value, S&P an, d Nasdaq futures are down only a point or so, the Dow futures are about 20 points below fair value.
August 2, 2001A lot of stuff going on this morning. About an hour ago, the Bank of England unexpectedly cut interest rates a quarter percent, citing weaker economic conditions. But apparently everything across the channel is just fine -- the European Central Bank held rates unchanged.
Overnight, shares of PMC Sierra surged over 10%. Why? That stock is being added to the S&P 500 to replace Quaker Oats, which was up over 13% yesterday. Why? As we discussed yesterday morning, the FTC did give Pepsi the OK to buy Quaker.
In fifteen minutes, last week's jobless claims number will be released. Look for an increase of about 20,000 claims. That number is always a little squirrelly this time of year because of auto factory changeover.
Europe generally higher this morning, Japan up 3.7% and Taiwan way up over night, on the strength of the semiconductor stocks that did so well here in the U.S. yesterday.
Unless we get a big surprise from the jobless claims at 8:30, we're going up at the market open. Adjusted for fair value, S&P futures are up 12, Dow futures up 93 and the Nasdaq futures 28 points ab, ove fair value.
August 1, 2001It's summer, a lot of traders are on vacation, trading volumes are light. So, you can't read too much into a couple good days for stocks. Still -we'll take it. The futures are indicating a solid opening and they've been gaining strength since 5 o'clock this morning.
One of the reasons is likely a blanket upgrade of the semiconductor chip stocks be a major brokerage firm. It was a similar downgrade last fall that really seemed to tip off the big market decline. So, watch those Nasdaq stocks today.
Earnings reports continue to trickle in. Only one miss this morning; Cigna, the big insurance company missed estimates by 4 cents.
Later today, the Federal Trade Commission may rule on the Pepsi/Quaker Oats merger. The National Association Purchasing Managers Index for July comes out at 10 o'clock. That index measures the health of our manufacturers. It's no secret that the manufacturing sector is contracting - the question is whether the rate of that contraction has stabilized. The expected level for the Index is 44.5.
Adjusted for fair value, S&P futures are up 4, Dow futures up 12 and the N, asdaq futures 30 points above fair value.
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