It’s the last trading day of the month, and it will be a day rich with economic data as traders try to divine the direction of the economy. If yesterday’s ADP Employment Report is any indicator, things are looking up. According to the big payroll processing firm, 237,000 new jobs were created during the month. That exceeded expectations by almost 30 percent. The official word on new jobs comes from the Labor Department tomorrow.
This morning, while the Challenger Job Cut Report told us that layoff announcements rose to almost 34,000 in July, the biggest increase in job losses come in construction. But given the disasters in Texas and Louisiana this past week, those layoffs may get rescinded before they result in actual job losses.
Reports on Personal Income and Spending come at 8:30 and are expected to reveal a four-tenths of a percent jump in personal income and only a one-tenth of a percent jump in prices. We’ll also get the Chicago PMI Report at 9:45.
Dollar General shares are almost 3 percent lower this morning, even after reporting higher than expected second quarter earnings and same-store sales. Campbell’s in in the soup this morning, losing more than 4 percent after missing the 55-cent profit estimate by 3 cents.
Asian markets were mixed overnight, even though a Chinese Purchasing Manager’s survey showed surprising strength. Consumer prices in the Eurozone rose by a fairly hot 1½ percent in August, but that rate is thought to not be sustainable.
Our stock futures are once again in the green this morning, although they’ve weakened somewhat. Adjusted for fair value, the S&P 500 futures are higher by 3½ points, the Dow futures are up 32, and the NASDAQ futures are more than 7 points above fair value.August 29, 2017
As if a hurricane wasn’t enough to deal with, North Korea is once again stirring up a storm by splashing another missile into the Pacific Ocean, but this time flying it over Japan in the process. While Washington and Seoul figure out how to respond, traders responded immediately over night by sending the Dow Jones futures lower by over 100 points.
Outside of the natural-made or the human-made disasters, we’ll have a little tempest of earnings news today.
Best Buy, a company that some had left for dead in the post-Amazon world reported earnings of 69 cents this morning. That beat the estimate by 6 cents on better than expected sales. But there may be a fly in the guidance ointment. Best Buy shares, which are up more than 60 percent over the past year, were about 5 percent higher this morning, but are now lower by one percent or so. Hain Celestial also beat estimates.
The famous other hand goes to retailer Finish Line. Lousy guidance has the shares down 28 percent. And not to be outdone, shares of Acor Therapeutics shares are also down about 29 percent after the Food & Drug Administration gave the thumbs-down to the company’s Parkinson’s treatment.
The Case-Shiller Home Price Index comes at 9 and at 10 the Conference Board’s August Consumer Confidence is expected to sink a little to 120.6 from the July reading of 121.1.
Some prices will be going up, and some prices will be coming down. That’s the story of the morning as far as the U.S. consumer is concerned. First the bad news – there’s no telling how much, but gasoline prices will be heading north over the next couple of weeks, at least. Some estimates put the increase in Midwestern market gasoline prices at 15 or 20 cents per gallon given the oil refinery disruption in Texas.
On the other hand, if you have enough gas in the tank to visit your local Whole Foods, Amazon will celebrate its buyout of Whole Foods by knocking down the prices of salmon, kale, bananas and avocados starting today.
Shareholders of Kite Pharma are celebrating a buyout this morning. Kite shares are higher by almost 30 percent. The firm, which produces a cancer treatment that utilizes the body’s own immune system is being purchased by Gilead.
Most significant economic reports come later in the week. Today we’ll get the Dallas Fed Manufacturing Survey for August, which is expected to dip to a reading of 15.7 from July’s 16.8.
Asian markets are once again mixed. Europe is mainly lower, but generally by less than one half of one percent.
Our futures have perked up a little, just in the past 5 minutes or so. Adjusted for fair value, the S&P 500 futures are higher by 3½ points, the Dow futures are up 32, but the NASDAQ futures are just about 6½ points above fair value.
It’s another mixed bag of earnings reports this morning, and the bag looks saggy if your putting groceries in it, but surprisingly strong if it’s holding discounted goods ------- or maybe diamonds.
The bad news before the good – shares of JM Smucker and Hormel Foods are both lower by about 5 percent after disappointing earnings news.
The famous other hand belongs to Dollar Tree Stores. Same store sales are up 2.4 percent. Dollar Tree raised full year earnings guidance and the shares are up almost 9 percent. Tiffany shares are 2 percent higher on better than expected earnings.
And sometimes, you can be a winner by not being as big a loser as everyone expects. Shares of Abercrombie & Fitch are about 18 percent higher on the news that they lost 16 cents per share last quarter, which was less than half of the 33-cent loss that had been forecast. Before you get to excited about that 18 percent gain, understand that Abercrombie share have fallen about 20 percent this year.
None of today’s economic reports are expected to shake things up in the stock market, with the Weekly Jobless Claims coming at 8:30, the July Existing Home Sales Report at 10 and the Kansas City Fed survey at 11.
Asian markets were mixed, but Europe is moderately higher and we’re looking to get back a big piece of yesterday’s losses right off the get-go this morning. Adjusted for fair value, the S&P 500 futures are higher by almost 3 points, the Dow futures are up 52, but the NASDAQ futures are about 8 points above fair value.
Just a little whiff of a promise of tax cuts can still trigger some animal spirits in the stock market, as we saw in the Dow's almost 200 point gain yesterday. However, today is another day and a handful of companies are going to see their shares in the red early on.
The big worldwide advertising firm WPP cut their revenue forecast and traders have cut about 10 percent off the price of WPP shares.
LazyBoy is sitting rather uncomfortably this morning. They checked in with 24 cents of adjusted earnings, which was a nickel short of expectations. LazyBoy shares are off about 16 percent pre-market. Home improvement retailer Lowe's is 6 percent lower after also missing the earnings bogey by about a nickel per share.
Among the software makers, Intuit reported 33 cents of adjusted profit, which was a penny per share better than expected, and Salesforce touted a big revenue increase, but the shares are about 2 percent lower.
The PMI Serves Flash Report and the July New Home Sales Report both come in by 10 this morning, but neither is expected to show much change.
European markets are lower, with Great Britain faring the worst. We'll give back a chunk of yesterday's gains at the open. Adjusted for fair value, the S&P 500 futures are lower by 7 points, the Dow futures are off by 48 and the NASDAQ futures are 19 points below fair value.
August 21, 2017
Happy eclipse Day, everyone! Stock prices will start the day on the mildly sunny side, but there are some clouds moving in. Just remember to protect yourself and don’t look directly at the stock market, without the protection of proper diversification.
There is a little merger news this morning. Sempra Energy will acquire Oncor for 9½ billion dollars in cash. That bid eclipsed the prior bid from Berkshire Hathaway.
And Fiat Chrysler is now casting a shadow on prior reports that they had been approached with a buyout offer from Chinese automaker. The Jeep brand is the rumored prize to be had there.
Finish Line, Nike and Ulta Beauty have had their morning darkened by broker downgrades. The Container Store lowered its full year earnings guidance
It’s lights out on economic reports today. In fact, most of the meaningful reports are bunched up in the second half of the week.
Chinese stock rose overnight, but Australia and Japan were lower. European markets are narrowly mixed.
Our futures have been fairly steady much of the morning. But the totality of the situation at this point, is that adjusted for fair value, the S&P 500 futures are higher by about 2½ points, the Dow futures are up 28, but the NASDAQ futures are about 5 points above fair value.
Stock prices endured their second worst day of the year yesterday, with the Dow losing 274 points. That’s a loss of about a percent and a quarter. Not to be outdone, the NASDAQ 100 dropped almost 2 percent on the day. Still, stock prices are only about 2 to 3 percent off their all-time highs, so while a day like yesterday will get your attention, and nobody want to suffer a “loss,” it’s usually best to measure your “loss” over a few years, rather than a few weeks. Measuring from the highest value you’ve ever seen can lead to some unfortunate decisions.
If you own shares of FootLocker, you’ll be measuring losses at 9:30 this morning. Adjusted earnings of 62 cents fell 28 cents short of estimates. Same store sales were six percent lower and Foot Locker shares look to open almost 20 percent lower. Shares of Nike and UnderArmour will be under pressure in sympathy, looking now to open 2 to 3 percent lower.
On the upside this morning, shares of the GAP were about 5 percent higher on good earnings and raised guidance. Ross Stores had a similar story, and their shares are about 10 percent higher pre-market. Shares of Calpine are also looking about 10 percent higher. Calpine will be acquired by Energy Capital Partners.
At 10 o’clock, the University of Michigan’s preliminary August Consumer Sentiment report is expected to rise to a reading of 94.
Our futures had hovering around the flat line much of the morning, but perked up a bit over the past hour. At this point, adjusted for fair value, the S&P 500 futures are higher by more almost 4 points, the Dow futures are up 22, but the NASDAQ futures are 18 points above fair value.
Those Federal Reserve minute we talked about yesterday morning helped boost stock prices a bit in the late afternoon yesterday. The implication in that the Open Market Committee is not in any great hurry to raise interest rates unless the economy and inflation really kick into gear.
Shares of Chinese internet firm Alibaba are kicking into gear in a big way this morning, after reporting better sales and earnings than expected. Alibaba shares are almost 6 percent higher pre-market.
A couple of other giants checked in this morning, and their shares are each lower by about 2½ percent. Cisco Systems met earnings expectations but some divisional sales were light. Walmart’s $1.08 per share of profit was a penny better than expected and their e-commerce business is accelerating nicely. However, full year guidance was a bit tepid.
Weekly Jobless claims and the Philly Fed survey come in just about 15 minutes. The Philly Fed is expected to sink to a reading of 17 from July’s 19½.
Asian markets are mixed again, but most European markets have turned lower.
Our futures took a turn for the worse about a half hour ago, and we’ll likely be looking at red arrows at 9:30. At this point, adjusted for fair value, the S&P 500 futures are lower by about 6 points, the Dow futures are down 40, and the NASDAQ futures are 23 points below fair value.
Day-to-day headlines can cause short term ripples in stock prices, but in the long run, it comes down to earnings and interest rates. Second quarter earnings reports were exceptionally strong, with only about 10 percent of the S&P 500 falling short on earnings, and about 70 percent reporting better sales than expected.
The other side of that coin, interest rates, now becomes the gorilla in the room. At 2 o’clock this afternoon, we’ll get a look at the minutes from the last Federal Reserve Open Market Committee meeting. We’ve heard all their hints about raising short term rates and selling off part of the 4 trillion dollars of securities they purchased to hold down long-term rates. Perhaps the minutes of the last meeting will shed some light on their actual game plan.
Speaking of interest rates, the average rate on a 30-year conventional mortgage hit a nine-month low last week at 4.12 percent. The July Housing Starts report comes at 8:30. Expect starts to rise a bit, but permit applications to have dropped a bit from June.
Target and Urban Outfitters both reported better-than-expected earnings and sales this morning. Target shares are more than 5 percent higher pre-market, and Urban Outfitters shares are higher by more than 18 percent.
Asian markets were mixed overnight, but Europe is generally one-half to one percent higher.
Our futures perked up right after midnight and have been in the green all morning long. At this point, adjusted for fair value, the S&P 500 futures are higher by about 5 points, the Dow futures are up 56, and the NASDAQ futures are 10 points above fair value.
To no one’s great surprise, but to everyone’s great relief, North Korea’s President with the bad haircut has put his Guam threat on hold and says he will await the next move from our President with the bad haircut. That has financial markets in rally mode again this morning across the globe, even in places that have good barbers.
A couple of retailers are taking a haircut this morning. Bag-peddler Coach beat the 49 cent profit estimate by a penny per share. Unfortunately, sales were on the light side and Coach shares are about 7 percent lower pre-market. However, that’s just a light trim compared to the buzz-cut that Dick’s Sporting Goods is getting. Earnings missed and liquidation of Gander Mountain inventory is getting the blame. Traders aren’t waiting for a more detailed explanation as Dick’s shares are about 16 percent lower.
Home Depot shares are pretty much unchanged after Reporting $2.25 of adjusted profit. That’s a three-cent beat. Same store sales rose more than 6 percent. Home Depot also raised full-year guidance.
The overall July Retail Sales figures come to us at 8:30. Expect a three-tenths of a percent pick-up, and four-tenths of percent excluding auto sales. That would be a big improvement from June’s two-tenths of a percent decline.
Our futures are off their earlier highs, but are still looking pretty good. Adjusted for fair value, the S&P 500 futures are higher by 5 points, the Dow futures are up 45 points, and the NASDAQ futures are 19 points above fair value.
Over the past few months, people wondered what, if anything, could derail the seemingly perpetual bull market. Well, it looks like the threat of nuclear war might just fit the bill.
Yesterday, the Dow lost over 200 points yesterday, the S&P 500 lost almost a percent and a half and the NASDAQ dropped almost 2 percent. Moreover, surprisingly good earnings reports aren’t likely on the horizon, as next week will bring us reports from another bunch of retailers.
Speaking of which, JC Penney shares are looking to open more than 16 percent lower this morning, at less than 4 dollars per share. A quarterly loss of 9 cents per share was almost twice as large as expected. Penney blamed inventory liquidation for the loss, and at the rate stores have been closing, that’s a lot of unneeded inventory.
Recently IPO’d shares of Snap are 13 percent lower this morning after a disappointing report last night. Declining advertising rates get the blame there.
At 8:30 the July Consumer Price Index is expected to reflect a two-tenths of a percent increase after June showed no movement in composite prices.
All overseas markets are lower, and most by one percent or more. Our futures are in much better shape than earlier this morning. Adjusted for fair value, the S&P 500 futures are lower by 2½ points, the Dow futures are actually up 11 points, and the NASDAQ futures are 15 points below fair value.
Over the next twenty-four hours, we should find out whether the big box retailers are really entering an Amazonian death spiral. So far, news of their death may have been slightly exaggerated.
Kohl’s reported $1.24 of adjusted earnings, a nickel ahead of estimates. Kohl’s shares are higher by about 3 percent pre-market. The news is not so good at retailer Dillard’s. Dillard’s blamed soft shoe sales (which is different than the old soft shoe) for a loss of 58 cents per share. Dillard’s was expected to earn 18 cents per share. Dillard’s shares are up 17 percent this year, but will likely give back almost all of that gain this morning. Macy’s just reported about ten minutes ago, beating the 46 cent estimate by 2 cents on better sales than expected. Macy’s shares are almost 6 percent higher.
Brinker is the parent of Chili’s and Maggiano’s restaurants. Brinker reported $1.09 versus the expected $1.04. Sales were lower than last year, but Brinker raised guidance slightly for the rest of this year and shares are more than 3 percent higher.
Weekly Jobless Claims are expected to hold steady from last week. We’ll also hear about inflation in producer prices, or lack thereof at 8:30.
Overseas markets are lower due to the continuing hissy-fits out of North Korea. Our futures are rather hissy themselves. Adjusted for fair value, the S&P 500 futures are lower by 7 points, the Dow futures are down 39, and the NASDAQ futures are 30 points below fair value.August 9, 2017
The war of words between North Korea and Washington ramped up yesterday, and stock prices around the world took the off ramp overnight, with Japan down 1.3 percent. European markets are also off about one and a third percent on average this morning. You can analyze last quarter’s earnings till the cows come home, but threats of nuclear war put any earnings news on the back burner.
Speaking of which, we have a decidedly mixed bag of earnings news this morning. Wendy’s adjusted earnings of 15 cents came in 2 cents better than expected Wendy’s also raised sales guidance. Wolverine’s 43 cents of profit was 14 cents better than expected.
However, Office Depot missed the 8-cent profit estimate by two cents, and a trio of big stocks are lower on weak guidance as Tripadvisor is off about 7 percent, Priceline is also down about 7 percent and Crocs shares are fractionally lower.
Disney and Netflix are each off 4 and 3 percent respectively after Disney announced that beginning in 2019, they would pull product from Netflix and start its own streaming service.
We’ll get speeches from at least four more Federal Reserve Regional Presidents before week’s end. The first of those comes at one o’clock this afternoon from Chicago Fed Head Charles Evans.
We’ll start the day with red arrows after yesterday’s losses ended the Dow’s nine-day record run. Adjusted for fair value, the S&P 500 futures are lower by 10 points, the Dow futures are down 51, and the NASDAQ futures are a rather significant 49 points below fair value.
The slow-motion stock market rally continued yesterday, with the S&P 500 tacking on another 4 points, closing at yet another record high, although it looks like the going will get a little tougher at 9:30 this morning.
There’s good news for shares of cloud-communications company Twilio. An adjusted loss of five cents per share was less than half as much as expected. Twilio shares are almost 14% higher pre-market after gaining about 4½ percent yesterday.
Valeant Pharmaceuticals lost 11 cents per share last quarter, much better than the 88 cent expected loss. Shares are looking about 7 percent higher. Drug-maker of the morning, however, is Fibrogen. Shares are about 57 percent higher on positive drug testing results.
Time Inc., CVS Health, Ralph Lauren and Norwegian Cruise Lines all checked in with positive earnings results. The famous other hand belongs to Dean Foods. 21 cents of profit was a dime short and the shares were off about 13 percent. However, announcement of a cost-cutting program has helped the shares recover almost all of that decline.
The Labor Department’s Job Opportunities and Labor Turnover Report comes at 10 o’clock.
Asian markets were mixed overnight. Europe is mostly lower. Our stock futures took a turn for the worse over the past hour. Adjusted for fair value, the S&P 500 futures are lower by 4 points, the Dow futures are down 19, and the NASDAQ futures are just about 6 points below fair value.
Everyone is all a-twitter about the Dow Jones Industrials topping 22,000 as we head to the start of trading today. But, as we’ve discussed before, the Dow Jones Industrials gets confused with the overall “market” far more often than is justified. Two weeks ago, it was Boeing. Last week it was Apple and 3M that pretty much singlehandedly shot the price-weighted Dow Index higher.
The S&P 500, although it is comprised of solely large-cap stocks is much more representative of the overall market. That index hasn’t moved more than three-tenths of a percent in either direction over the past twelve trading sessions, and that’s the longest such streak of non-movement in history. So, prices may not be as hot as the general media may have you believe.
We’ll get earnings reports today from broadcaster CBS, as well as Marriott International. Earlier, Tyson Foods reported $1.28 per share, 9 cents better than expected. They also raised full year guidance. Horizon Pharmaceuticals shares are 19 percent higher on a great report.
Toshiba shares are about 6 percent higher on word that a difference of opinion with their auditors has been resolved.
Oil is down a bit more than one percent this morning.
Major Asian markets rose overnight. European markets are mixed are a little lower after some disappointing news on German industrial output. Markets in Canada and Scotland are closed for holidays today. Maybe we should take the day off as well. The S&P futures are flat, Dow futures are up 7 and the NASDAQ futures are about 5 points above fair value.
The first Friday of the month has rolled around once again. That means that at 8:30 we’ll be hearing the monthly Employment Report from the Labor Department. Most expect that 180,000 new jobs were added in July, with the unemployment rate dropping to 4.3 percent. The average hourly wage is expected to have gone up three-tenths of a percent, bringing the year-over-year increase to 2 ½ percent. One of the many curiosities of the current economy is the stubbornly low rate of wage increases, even though we are very near to full employment. Once that wage number starts to increase, many fear that the resulting increase in inflation will encourage the Fed to accelerate interest rate hikes. Should rates start to increase rapidly, the current bull market in stocks, and particularly bonds, will be in for rough sledding.
Shares of Viacom are in for a rough ride of their own this morning, down more than 9 percent after issuing weaker earnings guidance. Also showing red arrows are shares of GrubHub and L Brands on weakness at Victoria’s Secret.
On the plus side this morning, Yelp is 20 percent higher after announcing sale of the Eat24 division to GrubHub, Cigna beat earnings estimates and raised full-year guidance. That has the stock up about 3 percent and Wellcare Health is also out with rather healthy earnings.
ADP shares are almost 3 percent higher as activist firm Pershing Capital is looking to gain Board of Directors seats.
Asia was mixed, but most European markets are a little higher. Adjusted for fair value, the S&P 500 futures are higher 6½ points, the Dow futures are up 61, and the NASDAQ futures are 9½ points above fair value.
It will be a busy morning for economic reports, with the Weekly Jobless Claims expected to hold steady and The July ISM and PMI reports on the services sectors of the economy expected to weaken a slight bit. At 10 o’clock, the June factory Orders are expected to jump 2.7 percent.
As we begin to end the big rush of second quarter corporate earnings reports, there are a bunch reporting today, and most of the reports are good ones.
Tesla shares are almost 6 percent higher after reporting a lower loss than expected. The loss of $1.33 per share was almost 50 less than expected. Down about 6 percent are shares of Cheesecake Factory, exacerbating a three-month slide in the stock.
Shares of video game maker Take Two Interactive are more than 11 percent higher on a good earnings report, while Teva Pharmaceuticals are off about 12 percent.
However, the list of companies beating estimates is a long one and includes Chesapeake, Siemens, AIG, Regeneron, YUM Brands and Aetna.
To no one’s surprise, the Bank of England held interest rates steady this morning.
Asian markets were lower overnight. European markets are mixed and little changed. Our futures have been hovering around unchanged much of the morning. At this point, adjusted for fair value, the S&P 500 futures are lower by almost 2 points, the Dow futures are down 6, but the NASDAQ futures are about 7 points above fair value.