August 30, 2019
It looks like we may finish August with another upswing in stock prices, although the futures are off their early morning highs.
Later this morning, the Bureau of Economic Analysis will report the June figures on personal income and spending in these consumer-driven United States. Expect that income rose by three-tenths of a percent, but (true to form) spending rose one-half of one percent.
On the earnings from, Dell Technologies reported higher desktop computer sales on an earnings beat. Shares of Dell are about 9 percent higher. Big Lots shares are higher by about 18 percent as sales were better than expected and adjusted profit of 53 cents was a 13-cent beat. Campbell Soup reported 49 cents versus the expected 41 cents and Tesla shares are about 4 percent higher as China announced that it will exempt 16 models from Chinese auto import tax. AI video company Ambarella shares are about 20 percent higher on earnings.
Marvell Technologies issued downbeat forecast due to absence of sales to Huawei and Ulta Beauty shares are on a 25 percent off sale on a revenue miss and a lowered full year forecast.
Overseas markets are almost all higher at this hour. Adjusted for fair value, the S&P 500 futures are higher by about 19, the Dow futures are up 163 points, and the NASDAQ futures are about 50 points above fair value.
August 29, 2019
It’s the end of the last week of August, with one day of trading left before the day before a three-day weekend. Suffice it to say that trading volumes are likely to be on the very light side today and tomorrow as traders head for the beach. Light volume days can result in a lot of price volatility given the right news.
This morning, that news came from the Chinese Commerce Ministry. They announced that China will not respond immediately to President Trumps recent tariff hikes and said that escalation helps no one. That immediately shot our stock futures much higher. Of course, you never know what the next tweet will bring.
A couple of retailers reported earnings this morning with opposite impact on their respective stock prices. Dollar General’s $1.74 of adjusted quarterly profit beat expectations by 17 cents, and the shares about 8 percent higher.
The famous other hand belongs to Best Buy. Earnings of $1.08 were 9 cents better than expected, but sales missed the mark, even though online sales were 17 percent higher. Still comparable store sales rose only 1.6 percent, lower than the 2.2 percent estimate. Best Buy shares are looking to open more than 5 percent lower.
Asian markets were mixed overnight, but Europe is solidly higher, with the London market higher by almost 2 percent. At this point. adjusted for fair value, the S&P 500 futures are higher by about 30 points, the Dow futures are up 284 points, and the NASDAQ futures are about 99 points above fair value.
August 27, 2019
Earnings reports are on the way from Hewlett-Packard Enterprise, Veeva Systems and the Bank of Montreal today. So far, the only significant report hasn’t been a sweet one.
J.M Smucker reported quarterly earnings of $1.58 per share, well short of the expected $1.74. They also lowered their profit forecast and shares are almost 6 percent lower pre-market.
Papa John’s shares are a couple percent higher this morning. They reaffirmed 2019 earnings forecasts and named former Arby’s President as their new Chief Operating Officer.
The Conference Board issues its August Consumer Confidence Report this morning. Expected a reading around 130, slipping a bit from July’s 135.7. We’ll also get the Case-Shiller home price report for June. Expect to hear about slowing gains in home prices, perhaps around 3 percent on a year-over-year basis.
The President’s Twitter feed has been quiet this morning, which is giving stock prices a chance to quietly continue yesterday’s partial recovery from Friday’s tariff fallout.
Asian markets mostly followed us higher overnight. Interestingly, Costco opened a store in Shanghai overnight, but had to close early due to the crush of potential shoppers trying to get in.
Adjusted for fair value, the S&P 500 futures are higher by almost 10 points, the Dow futures are up 88, and the NASDAQ futures are about 31 points above fair value.
August 26, 2019
It’s not been a banner month for stock prices. However, for all the seeing and sawing we’ve seen this month, the S&P 500 is off only about 4½ percent, which qualifies as a pretty garden-variety pullback.
Of course, if you’re in that garden, trying to figure out whether it’s time to plant or to reap, you may be best served in the long run by sitting back and watching the grass grow.
Celgene and Bristol Myers shares are growing in value this morning on word that Celgene is selling a psoriasis drug to Amgen for almost 13½ billion dollars.
Shares of Disney and Target are both higher on word that Target will begin establishing “Disney Stores” within some existing locations.
Asian markets dropped about one to two percent or so overnight, but mainland Europe has turned higher.
Overnight, the Dow futures were about 300 points lower, until President Trump indicated that Chinese officials had “called twice” this weekend in an effort to make a deal. The futures immediately rallied about 600 points. Later this morning, the “called twice” language was walked back after Chinese officials denied making any such calls. Nevertheless, the prospect of continuing talks has the stock trading algorithms in a good mood.
Adjusted for fair value, the S&P 500 futures are higher by about 21 points, the Dow futures are up 212, and the NASDAQ futures are about 74 points abovefair value.
August 23, 2019
The next Federal Reserve Open Market Committee meeting is almost three weeks away. However, this morning at 10 o’clock, Fed Chairman Powell will deliver a speech at the Kansas City Fed’s annual Jackson Hole conference. Expect a lot of stock price fluctuation between 19 and 11 as every word he speaks will be fed to the algorithms that control about 80 percent of stock trading volume.
Yesterday, two Fed officials indicated that it would be just swell if the Fed does NOT decide to cut rates at the September meeting. However, this morning, the St. Louis Fed head supported a rate cut. Stock prices have already priced in a quarter-point cut, so any affirmation of the no-cut point of view from Powell will send stock prices lower.
Already heading lower this morning are shares of Foot Locker. Earnings of 66 cents per share missed the consensus target by a penny on same store sales that also disappointed and Foot Locker shares are on an 11 percent off-sale.
Last night, business software firm Salesforce beat the 47-cent profit estimate by 19 cents and shares are indicated about 7 percent higher pre-market.
Overseas markets are mostly higher. Comments from St. Louis Fed head Bullard had boosted our futures over the past hour, but word that China will levy tariffs on 75 billion dollars of U.S. goods sent us decidedly lower within the past 15 minutes. Adjusted for fair value, the S&P 500 futures are lower by about 10points, the Dow futures are down 110, and the NASDAQ futures are about 29 points belowfair value.
August 22, 2019
Tomorrow’s speech from Jay Powell at the Jackson Hole Fed confab is easily the big market story of the week. Let’s hope that some clarity on the Fed’s direction calms some of the “inverted yield curve” hysteria that’s been getting so much media attention. Minutes from the latest European Central Bank meeting suggest that more monetary loosening may be on the way
The week’s second most interesting development appears to be the revenge of the traditional retailer. Better than expected results from Nordstrom yesterday is boosting those shares by about 10 percent this morning. Not to be outdone, Dick’s Sporting Goods shares are about 13 percent higher pre-market. Dick’s reported $1.26 of profit, which was a nickel better than expected on a 3.2 percent increase in same store sales. That’s the best in three years. Dick’s also raised full year profit estimates, even considering the potential hit from anticipated tariffs.
The Conference Board’s July Leading Economic Indicators are expected to have risen about three-tenths of a percent.
Overseas markets are mixed at this hour, while our futures broke into the green about an hour ago. Adjusted for fair value, the S&P 500 futures are higher by about 8½ points, the Dow futures are up 75, and the NASDAQ futures are about 18 points above fair value.
August 21, 2019
Volatility in stock prices has risen like the summer heat and humidity. Worries about an “inverted yield curve,” which inverted for just a day or two a couple of weeks ago, have thankfully dropped from the headlines. The trade war with China, which may be exasperating a manufacturing slowdown worldwide, is still an issue. However, when it comes to the domestic consumer, it’s still full steam ahead.
This morning, Target reported $1.82 of adjusted quarterly profit. That was 20 cents better than expected and Target raised its full-year guidance. Target shares are indicated about 15 percent higher pre-market. More good earnings news came from home-supply retailer Lowe’s beat the $2.01 estimate by 14 cents per share. Lowe’s shares are looking to open about 12 percent higher.
Later this morning, we’ll hear about July New Home sales, and at 2 o’clock, the Federal Reserve’s latest meeting minutes could provide some clues as to the future of monetary policy.
Asian markets were mixed overnight, but Europe is solidly higher.
Stock prices dropped quickly into last night’s close, but at this point, it looks like yesterday’s market losses will be nothing more than a bad memory when the market opens today. Adjusted for fair value, the S&P 500 futures are higher by about 17 points, the Dow futures are up 137, and the NASDAQ futures are about 52 points above fair value.
August 15, 2019
Trying to predict daily stock price movements lately has become a lot like herding overly caffeinated cats.
Earlier this morning the Dow futures went from triples digits highs to triple digits lows on an announcement of tariff retaliation from China. Within the past hour, China reportedly stated that they are hoping for a compromise on the new tariffs. The futures immediately bounced back in to the green.
Solidly in the green this morning this morning are shares of Walmart. $1.27 in quarterly profit came in a nickel ahead of estimates on better than expected sales and 37 percent growth in their online business. In spite of the Chinese trade uncertainly, Walmart raised full-year guidance and shares are more than 6 percent higher pre-market. In China, Alibaba also reported better than expected results.
Over in marijuana world, Canopy Growth missed the sales mark and shares are about 15 percent lower. That’s after Tilray shares lost 15 percent yesterday.
By the way, for yield curve fans out there, the 2 versus 10-year curve is no longer inverted this morning. A small inversion set off warnings of gloom from many financial reporters yesterday. The 30-year yield, however, is below 2 percent.
Jobless Claims, July Retail Sales and Business Productivity Reports come later this morning. In the meantime, the cats have decided to claw their way higher.
At this point, adjusted for fair value, the S&P 500 futures are higher by about 12 points, the Dow futures are up 124, and the NASDAQ futures, in spite of downbeat guidance from Cisco Systems,are about 19 points above fair value.
August 14, 2019
Lately, each day has been a different market. Today, each hour has seemed like a different market, and at this point, it’s a market that’s headed lower.
The main factor that has the trading algorithms freaking out this morning is the inversion of the Treasury yield curve. In simple terms, longer-dated bonds should provide a yield that’s higher than short term bonds. When that relationship flips, investors have an incentive to hold on to their cash, not spend or invest for the future, and possibly throw the economy into recession.
An inverted 2 to 10-year curve, which we see this morning, is not an infallible indicator of recession, and it usually takes a year to two to happen if it does. However, this morning’s less than 1.6 percent yield on the 10 year is not a good sign. While the Federal Reserve could ride to the rescue with a sharp short-term rate cut, their next regularly scheduled meeting in more than a month from now.
Piling on to the bad news is word that Chinese industrial growth and retail sales were below expectations in July. In Germany, the economy actually contracted in the 2nd quarter. And in earnings news, Macy’s shares are 12 percent lower on a big earnings miss announced just minutes ago.
Add it all up, and we’re in for a rough ride at 9:30.
At this point, adjusted for fair value, the S&P 500 futures are lower by about 38 points, the Dow futures are down 322, and the NASDAQ futures are about 118 points below fair value.
August 13, 2019
There are multiple areas of economic concern around the world that have the trading algorithms on edge this morning. Here’s a quick review – there’s a political crisis building in Italy, weak economic data in Germany, another day of protests in Hong Kong, bond yields approaching all time lows and no apparent progress in the Chinese trade talks. Take your pick, but there’s precious little good news to be found.
Speaking of which, Advance Auto Parts reported adjusted quarterly earnings of two bucks per share, 22 cents short of estimates and lowered full-year guidance. Advance shares are about 8 percent lower pre-market.
Earnings are on the way later today from JD.com and cannabis firm Tilray.
We’ll also get find out if declining interest rates are awakening an inflation rate that has been over-sleeping for years. Expect the year-over-year headline rate to be up only 1.8 percent, with the core July rate rising 2.1 percent.
European stocks are lower after the ZEW economic sentiment survey in Germany came in at a negative 44.1, 16 points worse than expected. That’s the worst reading in almost 8 years.
Japanese stocks returned from yesterday’s holiday by finishing about one percent lower.
Our futures dipped lower over the past hour. At this point, adjusted for fair value, the S&P 500 futures are lower by about 10 points, the Dow futures are down 83, and the NASDAQ futures are about 28 points below fair value.
August 12, 2019
As if a slowdown in manufacturing and the Chinese trade war weren’t enough to be nervous about, tensions in Hong Kong escalated over the weekend. That has shut down the Hong Kong International Airport and is leading to worries about China’s next in a series of moves designed to chip away at Hong Kong’s social and economic way of life.
It will be a big week of earnings reports for companies with a January 31st fiscal year end, and that encompasses all the major retailers, including Walmart and Macy’s.
Speaking of retail, liquidation sales at 26 soon-to-be closed Sears stores begin this week, including Michigan locations in Postage and Saginaw.
In what looks like the first step in a diversification of its business, investment firm Blackrock, a huge provider of index funds and ETFs is reportedly taking a controlling stake in Authentic Brands, which is the parent of Nine West, Aeropostale and Sports Illustrated.
The Nikkei in Japan was closed for a holiday overnight. Stocks in Hong Kong fell, but mainland China was higher.
Our futures are well off earlier lows, but it’s still looking like a rough open for Wall Street. At this point, adjusted for fair value, the S&P 500 futures are lower by about 15 points, the Dow futures are down 142, and the NASDAQ futures are about 43 points below fair value.
August 8, 2019
Yesterday gave us another wild ride in the market, with the Dow Jones Industrials at one point lower by almost 600 points, only to rally into the close to finish at very little change.
This morning, the 10-year Treasury bond yield has apparently stabilized at a slightly higher level of 1.727 percent. Overnight, the Chinese Central Bank set the yuan peg at just over 7 to the dollar, which is the lowest since 2008, but will hopefully hold for a while.
IAC may not be holding onto subsidiaries Match and Angie’s List much longer, as they investigate spinoff possibilities.
Reporting better than expected results since last night were Viacom, Norwegian Cruise Lines, Cardinal Health, Cronos, Lyft and Roku. Lyft shares are about 8 percent higher pre-market, and Roku is about 17 percent higher.
Shares of Symantec are about 13 percent higher on a report that Broadcom is close to buying their Enterprise division.
Weekly Jobless Claims come at 8:30.
Most overseas markets are a bit higher this morning, after yesterday’s drama. Our futures have been bouncing around quite a bit. As we head toward 9:30, adjusted for fair value, the S&P 500 futures are higher by about 6 points, the Dow futures are up 64, and the NASDAQ futures are about 29 points abovefair value.
August 7, 2019
As investors here ponder the future of domestic interest rate policy, three more central banks, namely New Zealand, India and Thailand cut their short-term rate targets overnight. Our yield curve is getting very close to inverting once again, as the yield on the 10-year Treasury is at 1.625 percent this morning, that’s a three-year low, sharply lower than just yesterday and just barely more than the two-year note. Those diving rates have put a shiver into stock futures during the past hour.
There’s a little flood of earnings news to consider. Last night, Disney’s earnings fell well short of expectations. They blamed the cost of integrating the Fox acquisition. Disney shares are about 4 percent lower this morning.
Better than expected results came from CVS, Wendy’s, Cyberark Software, Ionis Pharmaceuticals, Hertz and Teva Pharmaceuticals.
Shares of Walgreen’s Boots Alliance are a little higher after announcing a store closing plan. Match shares are about 18 percent higher on second quarter results and strong third quarter sales.
The miss of the morning may be Lumber Liquidators, with shares lower by almost 10 percent.
Our stock futures have reversed early gains and are currently suggesting a lower open at 9:30. Adjusted for fair value, the S&P 500 futures are lower by 18 points, the Dow futures are down 202, butthe NASDAQ futures are about 45 points below fair value.
August 6, 2019
Here’s always something interesting going on with stock prices. It’s just that some days are more interesting than others. Yesterday’s apparent use of currency manipulation as a negotiating tool by the Chinese Government sent worldwide stock prices lower. Overnight, after the United States moved to label China as a “currency manipulator” the yuan magically bounced well above the 7 to 1 level against the dollar. This morning, the Chinese Central Bank stated that the yuan will NOT keep falling and our stock futures are indicating a partial bounce-back in the early going.
Not bouncing back this morning is privately owned high-end fashion shop Barneys. The company filed for Chapter 11 protection yesterday and will close more than half of its locations.
Shares of Shake Shack are more than 4 percent higher on an earnings beat and raised guidance. Discovery is more than 7 percent higher after reporting.
Later this morning, the Bureau of Labor Statistics will issue its July JOLTS report. Expect to hear about 7.3 million job openings in the U.S. at the end of June. That would be unchanged from the end of May number.
Asian markets fell overnight on the trade worries, but Europe has bounced back this morning.
Adjusted for fair value, the S&P 500 futures are higher by about 12 points, the Dow futures are up 137, and the NASDAQ futures are about 47 points above fair value.
August 5, 2019
We’re coming off the worst week of the year for the Standard & Poor’s 500 Index, as President Trump’s latest Chinese tariff threat reminded traders that the trade skirmish is likely a long, long way from resolution.
Overnight, the Chinese yuan dipped below 7 to 1 against the dollar, an apparent sign that the Chinese Government is looking to use currency devaluation as a tool to offset increasing tariffs. It’s a slippery slope we’re on and without any apparent sign of détente. That move in the yuan has overseas markets sharply lower.
Put all that together with civil unrest in Hong Kong and today should be an interesting day.
Earnings news is on the way today from Marriott, Tyson Foods and Take Two Interactive.
It’s an ugly picture for cinema operator IPic Entertainment. Shares are lower by at least 40 percent pre-market after a bankruptcy filing.
We’ll get the Institute for Supply Managements non-manufacturing index for July. Expect that the services industries continued to do well, with a reading of 55.5, up from June’s 55.1.
Our futures have improved a little bit, but that doesn’t mean they’re good. Adjusted for fair value, S&P futures are lower by about 39, Dow futures are down 328 and the NASDAQ futures are about 139 points below fair value.
August 1, 2019
The Federal Reserve did exactly what everyone expected yesterday, and Chairman Powell explained their action is a realistic way. Unfortunately, calling the quarter-point rate cut a “mid-cycle adjustment” rather than the first of a series of cuts put trading algorithms in “sell” mode, from which we’ll only partially recover in the early going this morning.
Some individual stocks will NOT be in recovery mode. It’s been a tough week for shares of Beyond Meat, the company whose shares have risen beyond belief since coming public. Beyond’s recently announced secondary offering will price at 160 dollars per share, and another 9 percent drop in today’s pre-market has the already public shares 25 percent lower since Monday.
Fitbit shares are about 17 percent lower this morning on lousy results and lowered guidance. Royal Dutch Shell and Qualcomm are both lower by about 5 or 6 percent. Gaining ground pre-market are shares of Verizon, Archer Daniels Midland and Shopify. General Motors shares are about 1½ percent higher after reporting $1.64 of quarterly profit, 20 cents better than expected. Full year guidance, however, was not changed.
The July Manufacturing PMI report is due at 9:45 this morning and is expected to show slight expansion.
Asia followed us lower overnight, but Europe is slightly in the green.
Adjusted for fair value, the S&P 500 futures are higher by about 2 points, the Dow futures are up 47, and the NASDAQ futures are about 12 points above fair value.