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WJR December 2003 Reports

 

December 31, 2003

If you’re trying to nail down a capital loss for tax purposes by selling some of those dogs you’ve been hanging onto since 1999, you’ll have until 4 o’clock this afternoon. The stock market will keep regular hours today. The bond market closes at 2 and the New York Mercantile Exchange closes at 1.

Only two economic reports remain for the year. At 8:30 we’ll get the weekly jobless claims number (a day early) and at 10 o’clock, the December ISM Index is expected to come in at a reading of 61, versus almost 63 last month. That would still indicate expansion of the manufacturing sector of the economy – but expansion at a slower rate than last year.

A number of overseas markets did not trade today. In London, trading has already closed for the day. They finished the year up about 13%.

Our futures are pointing toward another quiet open in the U.S. S&P, Dow and Nasdaq futures have been sliding all morning and at this point are all just about even with fair value.

December 30, 2003

It was another day of no news being good news yesterday. We haven’t heard many companies warning about earnings shortfalls. That’s very good news with only two days left in the quarter. One big merger this morning, FedEx is buying Kinko's for a nearly 2 1/2 billion bucks.

The December Consumer Confidence Index from the Conference Board will be announced at 10 o’clock. Expect a reading of 91.4, slightly below the 91.7 reading in November. We’ll also find out how many people sold their homes in November. It’s expected that over 6.3 million homes again changed hands, as low stubbornly interest rates.

In Japan, trading is done for the year. In fact, it’s done until January 5th. The Nikkei finished the year at 10,676, up 24% for the year, and up over 40% over the past eight months. European markets are generally up once again.

Our futures look a little better than they did a couple hours ago, and we’re still looking a flat market at the open of trading. The S&P, Dow and Nasdaq futures are all just about even with fair value.

December 29, 2003

It’s the last week of the month, the quarter and the year. There are no significant earnings reports scheduled this week, so the less we hear about earnings the better. If any companies find it necessary to talk about their quarterly earnings this week – its likely to be a warning that things aren’t going quite so well.

When the mad cow story broke last week, McDonald’s stock took it on the snout, dropping over 5 percent. This morning, a major brokerage house is upgrading McDonald’s to an "overweight" from an "underweight". Keep in mind, however, this is the same broker that rated McDonald’s at "underweight" during the past nine months, as the stock price more than doubled.

There’s not a lot of trading volume overseas, especially in Europe, where all bourses are positive at this hour. Japan wraps up trading for the year tomorrow. The Nikkei closed overnight at the 10,500 level.

It looks like we’ll have a positive open in the U.S. as well. Adjusted for fair value, S&P futures up 3, Dow futures are up 27 and the Nasdaq futures are 5 points above fair value.

December 26, 2003

There are quiet days in the market – and there are REALLY quiet days in the market. Today’s likely to be a REALLY REALLY quiet day for stock trading. Many foreign markets are closed for Boxing Day, our trading closes at 1, and no economic or earnings news is scheduled.

We now know that one mad cow can stop a raging bull. Cattle futures have been strong recently, due to the popularity of the Atkins diet. Wednesday, live cattle futures we down a penny and a half, which is the most they could have dropped under the trading rules. Today, the trading "limit" is being widened to three cents. Because of mad-cow concerns, expect cattle futures to trade down by the limit each trading day for the foreseeable future.

Sharper Image is boosting their earnings guidance for the 4th quarter and for the year. Evidently those wireless remote controlled musical massage chairs with attached nose-hair trimmer were just flying right out of the stores.

Right now, adjusted for fair value, S&P futures up less than a point, Dow futures are flat and the Nasdaq futures are 5 points above fair value.

December 24, 2003

We were worried about terrorism. We were worried about SARS. We were worried that the big guy knew that we’d been more naughty than nice. This mad cow thing wasn’t even on the radar. But here we go.

The discovery of a single case of mad cow disease in Washington state could drop a lump of coal in our stock market stocking today. Japan, South Korea and Singapore banned imports of U.S. beef overnight. McDonald’s stock is called down about 5% in the pre-market this morning  on fears about their beef supply. I’ve always been more concerned about where they get those square fish they put in their sandwiches. But that’s just me.

Evidently it’s still safe to consume computer chips. Micron Technology with a great earnings report last night. They made a tiny profit on a pro-forma basis, versus an expected loss of six cents per share.

November Durable Goods orders are expected to be up 1 percent. The advance number will be announced at 8:30. The stock market closes at 1 o’clock, the bond market at 2.

Right now, adjusted for fair value, S&P futures down 3, Dow futures are down 39 and the Nasdaq futures are 7 points below fair value. Merry Christmas!

December 23, 2003

Stock prices followed a familiar game plan yesterday --- hang around, hang around, hang around, and then rally just before time runs out. Kind of like the Detroit Lions, except for the rally part.

Research in Motion is the company that makes those little Blackberry communication devices that are a must if you absolutely have to be in constant touch with everyone, or if you absolutely need everyone to think you need to be in constant touch with everyone. Anyway, Research in Motion announced last night that sales have doubled, they’re now making a profit, and last quarter that profit was almost twice as big as analysts expected. The stock is up over 15% in premarket trading.

The preliminary 3rd quarter Gross Domestic Product number was announced last month at an extremely strong 8.2%. We’ll find out at 8:30 what the final figure is. Some say it may go even higher. U of M’s sentiment index is expected to come in at 90.6 at 9:45 this morning.

Trading is light and prices are mixed overseas in pre-Holiday trading. Absolutely nothin’ shakin’ with out futures this morning, either. Right now, adjusted for fair value, S&P futures are flat, Dow futures are up 1 and the Nasdaq futures are less than 2 points below fair value.

December 22, 2003

If you own shares of Ann Arbor biotech company Esperion Therapeutics, or if you own shares in a mutual fund that does, you’re a pretty happy camper this morning. That’s because drug giant Pfizer is going to shell out 1.3 billion in cash to buy Esperion. That works out to more than 1½ times Esperion’s closing price last Friday. Esperion has a drug in clinical trials that raises HDL, or "good" cholesterol levels. That would complement Pfizer’s Lipitor, which lowers LDL, or "bad" cholesterol. The idea is – if you love saturated fat, there’s a good chance that Pfizer’s in your future.

Ford Motor raised its earnings guidance for 2003 by about a nickel per share, but they will take a 1.6 billion dollar charge in the fourth quarter as a result of a bunch of things – primarily liabilities for post-retirement health and insurance coverage that Ford will take back from Visteon.

European markets are flat at this hour. Overnight, Asian market were in the green. Our terror alert level is up to orange, and as a result, our stock prices will be in the red at 9:30.

Right now, adjusted for fair value, S&P futures are down 4 points, Dow futures are down 41 and the Nasdaq futures are about 6 points below fair value.

December 19, 2003

The rallies we’ve seen in the stock market lately have been well—more form than substance. But yesterday we had a good old-fashioned Santa-Claus-type rally, with the major indexes up a percent and a half or so. Most major Asian markets followed us right along overnight, and European markets are generally up a half percent or less.

The Janus funds will reportedly pay over 31 million dollars as a result of their less-than-shareholder-friendly trading practices. We still don’t know if they’re planning to put that money into the funds, or if they will attempt to reimburse the shareholders who actually were shortchanged.

Nike reported a 18% rise in profit for the quarter after the market closed last night and raised their 2004 outlook. Red Hat with a good report last night. Solectron, however, lost more money than expected.

Nothing much expected to happen at the open of our markets at 9:30. Maybe just a little consolidation after yesterday’s gains. Right now, adjusted for fair value, S&P futures are down a point, Dow futures are down 2 and the Nasdaq futures are also 4 points below fair value.

December 18, 2003

It’s been a surprising year in many ways, many of them good. One surprise that’s not been so good, unless you’re a major oil producer, has been the persistently high price of oil. The price of oil was "supposed" to slide faster than Saddam could make it down a spider-hole. That, of course, didn't happen.  Today oil touched 34 bucks per barrel. Oil stocks were higher in Europe, and it looks like they’ll get off to a pretty good start in the U.S. as well.

Two important economic reports to watch today: the weekly jobless claims at 8:30 and the November Leading Economic Indicators will be announced at 10 o’clock. The jobless claims are expected to have fallen by 13,000, and the economic indicators are expected to tick up about 3 tenths of a percent, after a 4 tenths of one percent increase last month.

Earnings reports were a mixed bag yesterday. This morning a couple big brokers are raking it in. Goldman Sachs blew away earnings estimates, $1.89 versus the expected buck and a half. Morgan Stanley beat estimates by a nickel per share.

Adjusted for fair value, S&P futures are up 2, Dow futures are up 26 and the Nasdaq futures are 5 points above fair value.

December 17, 2003

 

Back in the late 1990’s, companies were going public faster than you can say “where’dmymoneygo”.  Things slowed down a lot in the IPO market during the past few years, but we’re starting to see some signs of life.  Today, China Life Insurance and Orbitz.com start to trade, and ought to attract a lot of attention.  China Life is a big one, attracting 3 billion dollars.

 

Circuit City reported earnings, or should I say, they reported losses this morning.  Same-store sales were down 1 percent.  Circuit City lost 12 cents per share and the loss was expected to be 7 cents.  FedEx also missed their number, reporting profits of 87 cents versus an expected 89 cents.  On the other hand, broker Bear Stearns reported over $2.19 of profit per share in the last quarter.  That beat estimates of a dollar eighty-one. Not bad on a $74 stock. 

 

Asian stocks slumped overnight, as this season’s first confirmed case of SARS was confirmed in Taiwan.  That may hurt travel-related stocks in the U.S. as well.  The U.K. market is up a half percent at this hour but the rest of Europe is down by a half percent or so.  We’ll probably get off to a slow start at 9:30, although the futures have rallied during the past hour.  Adjusted for fair value, S&P futures are down about a point and a half, Dow futures are down 12 and the Nasdaq futures are 3 points below fair value.

December 16, 2003

The Saddam spike lasted about a half hour yesterday before the sellers moved in. That selling carried over to overseas markets overnight.

We have a mixed bag of news to review this morning. Last night after the market closed, Oracle said that corporate IT spending has started to pick up. Oracle beat lowered estimates by a penny per share and said that demand for their corporate software is picking up. One the other hand, Pier One, Honeywell and Amgen are all out with earnings warnings this morning.

Picking up a new job may be easier next year according to job placement firm Manpower. Their most recent survey of 16,000 employers indicates that 20% of employers will be adding jobs in the first quarter of 2004, while only 13% are planning to cut jobs. The November inflation rate comes out in less than ten minutes. Expect a tenth of a percent at the most.

Our futures have been sliding all morning. At this point, were looking for a mixed open. Adjusted for fair value, S&P futures are flat, Dow futures are up 7 but the Nasdaq futures are 5 points below fair value.

December 15, 2003

Christmas Eve came ten days early for stock market investors. It was hard to sleep last night in anticipation of the sugar-plum prices we’ll see in the early going today. Stocks around the world have been higher by about 1 to 3 percent since they pulled Saddam out of his underground chimney.

Of course, in the long run stock prices are all about earnings and interest rates. Once the Saddam rush is over, which should take an hour or so after trading starts, we’ll have a takeover and some earnings news to consider.

Dial Corporation is being bought by German consumer products company Henkel at an 11% premium to Friday’s closing price. I wonder if they'll call it a "takeover" or a "merger of equals."

Oracle’s stock has been in a world of hurt since they warned about earnings in September. They report earnings today, as does home builder Lennar.

But in front of all that, it’ll be fun to start off today with a good old-fashioned rally. Stock futures are weaker than they were a couple of hours ago, but they’re still pretty good. Adjusted for fair value, S&P futures are up almost 11 points, Dow futures are up 104 and the Nasdaq futures are 24 points above fair value.

December 12, 2003

It’s déjà vu all over again as the Dow Jones closed above 10,000 yesterday. After first closing there in 1999 we’ve been back and forth eighteen times, and we may go over and back yet again. Still, it’s a long and wonderful way from where we were just nine months ago.

The minutes from the October 28 Federal Reserve Open Market Committee meeting were released yesterday. If you pick through them you get two things. First an appreciation for what a rip-roaring good time those meetings must be. And, you learn that the Fed governors are not expecting any problems from inflation for the next YEAR OR MORE. That wording is what really shot the market higher yesterday, as traders convinced themselves that short-term interest rates are indeed likely to unchanged for a very long period of time.

Overseas, stock prices are up across the board in honor of the Dow retaking the 10,000 level. At 9:45, look for preliminary December University of Michigan Consumer Sentiment Index to rise to a level of 96. In front of that, and the Producer Price Index, which comes out at 8:30, it looks like slightly higher prices at the open of trading. Adjusted for fair value, S&P futures are up a point and a half, Dow futures are up 10 and the Nasdaq futures are 2 points above fair value.

December 11, 2003

The New York Attorney General continues his push to right the perceived wrongs of certain mutual fund companies. Spitzer is reportedly close to a deal to get Alliance Capital to lower the fees it charges its investors, in addition to stopping alleged improper trading. According to the Wall Street Journal, of the 25 largest fund companies, AllianceBernstein funds have the highest average expense ratio, at 1.7%. The SEC is reportedly up in arms over this, saying Spitzer is overstepping his bounds. One way or the other, the good news is that it looks like fees will be coming down. Of course, if investors were paying attention to the prospectuses of the funds they were being sold by their broker, the high expense funds might not get all that money to begin with.

Retail sales for November will be reported in ten minutes. Expect a rise of 7 tenths of one percent. Excluding auto sales, a rise of 3 tenths of a percent. Jobless claims for the week will also roll at 8:30. Expect a tiny decline of 6,000 claims.

Asian markets were up nicely overnight. Europe is mixed. Right now, adjusted for fair value, S&P futures are up about 2, Dow futures are up 31 and the Nasdaq futures are a point above fair value.

December 10, 2003

The Federal Reserve Open Market Committee kept its collective heel firmly dug in the sand yesterday. They say that inflation and deflation are in balance, the economy is humming, everything is beautiful in its own way, and if they could just fix the BCS computers, life would be perfect.

Unfortunately, nobody can fix the BCS computers, so the Fed announced that they will be doing absolutely nothing with interest rates for the foreseeable future. The stock market immediately concluded that the Fed has it wrong again, that inflation will rear its ugly head, and down went stock prices in unison. People get so irritable this time of year.

But today, as they say, is a different day. Homebuilder Toll Brothers with a good earnings report this morning, beating estimates by a nickel. Tyco and Unisys each meeting with analysts today.

Japanese stocks were down over 2 percent overnight. European markets are pretty weak, down more than one percent. Our futures have been improving, but it’s still going to be a struggle at the open. Right now, adjusted for fair value, S&P futures are down less than a point, Dow futures are down 19 but the Nasdaq futures are actually a point above fair value.

December 8, 2003

We have a pretty light schedule today. No big economic reports are due and only one significant corporate earnings announcement. Hovnanian Enterprises, the big home builder, is expected to announce earnings up about 60% from last year.

Delphi announced within the hour that it expects the car business to remain "highly competitive" in 2004. Non-GM business is expected to rise 13% next year at Delphi, they reaffirmed earnings estimates for the current quarter, and expect earnings in 2004 to be up. Delphi’s latest estimate for 2004 pro-forma earnings is 71 to 89 cents per share.

Texas Instruments will hold their mid-quarter update later today. In fact, a lot of high tech companies will hold analyst meetings this week.

Asian markets were pretty much a mess overnight. The Nikkei was down over 3 percent. European markets are also down across the board, but by not nearly as much. Right now, adjusted for fair value, S&P futures are down about 2, Dow futures are down 21 and the Nasdaq futures are about 3 points below fair value.

December 5, 2003

The monthly unemployment numbers will be released by the Labor Department in fifteen minutes. Hopefully we’ll get an unemployment rate at or below the 6 percent number reached last month. Non-farm payrolls are expected to have increased by 150,000, and average hourly earnings are expected to be up two tenths of one percent.

If the Dow is going to continue to march along toward the 10,000 level (we’re less than 100 points away now) we’ll have to get distracted from last night’s Intel report. Intel raised the lower end of their revenue forecast for the quarter, but they didn’t raise the top end. That disappointed the after hours traders, not to mention a $600 million dollar write-off Intel announced for an acquisition that would have been better left un-done. Intel stock is down about 3 percent in the pre-market.

Asian markets were down just a little bit. European markets are down just a little bit. Absent any big surprise in the labor report, we are going to open down just a little bit. Adjusted for fair value, S&P futures are down about 3 points, Dow futures are down 26 and the Nasdaq futures are about 10 points below fair value.

December 4, 2003

Like the market as a whole, the auto company stocks are pretty much at their highest prices in a year and a half. Yesterday was a particularly good day for General Motors. GM was up over 5% on the day as an influential analyst issued a statement speculating that GM’s pension plan funding deficit, which was estimated at 20 billion dollars at the end of last year, could be pretty much wiped out by next year. Oh, what a difference a bull market makes!

Alan Greenspan and his band of merry bankers meet next week to talk about interest rates. This morning, the Bank of England and the European Union both decided to leave their interest rates unchanged.

Lots of retailers are out with November sales results this morning. Speaking of Lots, Big Lots sales rose 10% in November. Costco said this morning that November net sales were up 17% over last year. On the other hand, Victoria’s Secret sales were flat. Figure that one out.

The weekly unemployment claims report may well drive opening prices this morning. As of now we’re in pretty good shape. Adjusted for fair value, S&P futures are up about 2 points, Dow futures are up 29 and the Nasdaq futures are about 8 points above fair value.

December 3, 2003

We’ll get the revised number on 3rd quarter productivity in about 10 minutes. Increases in worker productivity over the past decade have provided a big boost to the economy without sparking inflation. The consensus estimate calls for an extremely strong 9.2% increase. That’s up from the original estimate of 8.1%.

Drug-maker Merck revised its 2004 earnings guidance toward the low end of the range of analyst’s estimates this morning. Not exactly a warning, but not exactly a reason to toss your Vioxx in the air and start doing jumping jacks. Still, Merck is being bid a little higher in the pre-market this morning.

We’ll get earnings from a small handful of companies today, but nothing terribly exciting is on the docket.

Asian stock markets were mixed overnight, but European markets are pretty much up across the board at this hour. Our stock futures are pretty much a mirror image of 24 hours ago. Adjusted for fair value, S&P futures are up about 3 points, Dow futures are up 23 and the Nasdaq futures are about 8 points above fair value.

December 2, 2003

That ISM manufacturing index yesterday morning was way stronger than expected and stock prices were a lot of fun to watch the rest of the day.

Today’s focus is right here in Detroit. About midday, the car companies will begin to announce their November sales. It’s expected that annualized November car sales were up about 400,000 units from the weak October level, and that truck sales were up about 200,000.

Pepsi is meeting with analysts last today. Just to make sure everybody gets the word at the same time, Pepsi reaffirmed earnings estimates this morning. However, they’ll be using the restructuring bus to drop off another 750 employees at the unemployment office.

Overseas, stock markets are mixed, but more were up than down overnight. Our futures have been fairly quiet this morning and are indicating a little consolidation after yesterday’s big gains. Right now, adjusted for fair value, S&P futures are about 2 points, Dow futures are down 19 and the Nasdaq futures are about 8 points below fair value.

December 1, 2003

If you haven’t bought a computer lately, someone you know probably has. October semiconductor sales were up almost 7% from September and were up about 23% from a year ago. That news has technology stocks on fire in Japan, with the Nikkei Index up about 3% overnight.

European markets are up about one percent at this hour. Stocks are rising there on multiple reports this morning that President Bush will be dropping steel tariffs put in place last year. Outside of steel company stocks, that’s good news for the market, and consumers and the economy in general.

At 10 o’clock, the November ISM manufacturing index is expected to come in at 58.1. That would be up a point or so from last month. Anything over 50 indicates expansion in the manufacturing sector.

The S&P 500 hasn’t touched the 1060 level since May of 2002, but it looks like we’ll push through that level at 9:30 this morning. Adjusted for fair value, S&P futures are up 5 ½ , Dow futures are up 47 and the Nasdaq futures are about 13 points above fair value.

WJR January 2004 Reports
WJR November 2003 Reports

Daily Reports @ WJR

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