December 22, 2017
It should be a relatively quiet day of trade as a lot of folks may try to stretch their Holiday weekend by a half day or so.
Nevertheless, some companiesâ€™ shares could see some interesting action. Trading in the shares of a small company called Agile Therapeutics were halted pre-market for news pending. The company develops contraceptive products. The news is now out, as the FDA has told the company that their contraceptive patch canâ€™t be brought to market in its current form.
Drug makers Merck and Pfizer received good news from the FDA regarding their new diabetes fighting drug.
If youâ€™re wondering how nutty all this bitcoin related stuff has gotten, look no further than a little beverage company called the Long Island Iced Tea company. We all understand what a Long Island Iced Tea is. Block-chain technology? Well maybe not so well understood. But yesterday, Long Island Iced Tea company announced that they will now focus on blockchain technology. Shares in the company rose over 180 percent yesterday on that news alone. Of course, the share are about 30 percent lower this morning.
Bitcoin, by the way, which went for more than $19,500 dollars early this week, touched $12,500 earlier this morning. Careful out there, folks.
Asia mainly higher, Europe mainly lower. We are not quite sure. Right now, adjusted for fair value, S&P 500 futures are higher by 2Â˝ points, the Dow futures are down 4 points, but the NASDAQ futures are about 2 points above fair value. Merry Christmas to all, and hereâ€™s to another great financial year in 2018!December 21, 2017
Thereâ€™s a little flurry of year-ending earnings news this morning and itâ€™s a mixed bag of results. Bed Bath & Beyond beat on the bottom line, but a look behind the curtain revealed heavy discounting during the quarter gone by and that has Bed Bath & Beyond shares lower by more than 5 percent in the pre-market. Also looking weaker are shares of Carmax. Profit of 98 cents was far better than the 81 cent estimate, but same store used car sales were only up 1 percent and shares are about 2Â˝ percent.
Finish Line lost a lot less than expected, Conagra beat the 52-cent estimate by 2 cents and shares are higher. Nike reports in tonight.
Weekly Jobless Claims come at 8:30 and at 10 oâ€™clock weâ€™ll get Novemberâ€™s Leading Economic Indicators. But also at 8:30, expect the Government to affirm its preliminary estimate that Gross Domestic Product in the third quarter of the year rose to 3.3 percent.
Markets overseas didnâ€™t move in any given direction and didnâ€™t move a whole lot overnight. We should start the day with little green arrows. Right now, adjusted for fair value, S&P 500 futures are higher by nearly 5 points, the Dow futures are up 32 points, and the NASDAQ futures are about 5 points above fair value.
The Senate passed the new tax bill last night, and the House of Representatives will get a re-do today, after itâ€™s yesterdayâ€™s pass was ruled incomplete due to illegal procedure. However, itâ€™s first and goal today and it looks like theyâ€™re going to score.
You may remember Blackberry as a phone company, but now itâ€™s a cybersecurity firm that loses a lot of money on a GAAP basis. However, in spite of losing 52 cents per share for the quarter, adjusted earnings, which doesnâ€™t count the stuff you donâ€™t want to count, showed a 3-cent profit and Blackberry shares are up about 8 percent pre-market.
Micron is up about 7 percent after beating the $2.20 estimate by a quarter. General Mills earnings missed, but sales beat and they raised guidance. Winnebago beat last yearâ€™s quarter by fifteen cents and beat the 52-cent estimate by a nickel.
Yesterdayâ€™s report on Housing Starts came in at an annualized rate of almost 1.3 million unit, a good bit better than expected. However, this morning the Mortgage Bankerâ€™s Association reported a 3 percent drop in mortgage applications last week as people were gathered around their computers doing their Holiday shopping. That despite the average interest rate on a conventional mortgage dropped 4 basis points to 4.16 percent.
Asian markets followed us a little lower overnight, but Europe is fairly flat and weâ€™re headed higher at the open. At this point, adjusted for fair value, S&P 500 futures are higher by nearly 9 points, the Dow futures are up 105 points, and the NASDAQ futures are about 28 points above fair value.
All major domestic stock indexes closed at all-time highs yesterday. The Dow Jones Industrials are now more than 5,000 points higher in 2017 and the index has closed at record levels 70 times, which is, in itself, an all-time record. Some people say itâ€™s tough to invest at these levels. However, those who have been siting on a pile of cash (maybe since 2009) are getting an up-close and personal lesson on the foolishness of trying to time the market.
McDermott and Chicago Bridge and Iron have decided that itâ€™s a good time to merge. Thatâ€™s a 6-billion-dollar deal. And Jack in the Box may have gotten tired of competing with Chipotle. Whatever the reason, theyâ€™re selling Qdoba to a private equity group for 305 million dollars.
Speaking of casual dining, Darden Restaurants reported 73 cents of quarterly profit today. That was 3 cents better than expected and shares are about 2 percent higher pre-market.
Yesterdayâ€™s Housing Market Index came in hot. At 8:30 weâ€™ll hear about November Housing Starts. Theyâ€™re expected to rise at an annualized rate of about one-and-a-quarter-million units.
Asian markets were mainly higher, although Japan was very slightly negative overnight, but Europe is essentially flat. At this point, adjusted for fair value, S&P 500 futures are higher by 5Â˝ points, the Dow futures are up 79, and the NASDAQ futures, in spite of a rare broker downgrade of Apple, are almost 5 points above fair value.
Itâ€™s almost certain now that by weekâ€™s end we see the most significant change in the tax law since the current code was written in 1986. It seems the everyone has a strong opinion on the bill whether or not theyâ€™ve read any of the 508 pages of it. Thatâ€™s really the short version if youâ€™re really trying to educate your self â€“ the Conference Committee Report is much longer.
Weâ€™re getting a Merger Monday in spades this morning, and two of them could provide tasty surprises. Campbellâ€™s is buying Snyderâ€™s-Lance for 50 dollars per share â€“ so lookout for tomato soup flavored pretzels. If thatâ€™s not tempting enough, Hersheyâ€™s will buy Amplify Snacks, so you may soon see chocolate flavored Skinny Pop. At 12 bucks per share, thatâ€™s about a 70 premium to Fridayâ€™s closing price.
Humana is reportedly buying Kindred Healthcare and in the gaming space, Penn National is buying Pinnacle Entertainment for 2.8 billion dollars (or a little more than 144,000 bitcoin at this morningâ€™s prices.) Just kidding about that â€“ theyâ€™re not really paying in bitcoin â€“ yet.
The big economic reports of the week will come on Thursday and Friday. Today a seniment survey on the housing market is expected to be little changed from the November survey.
Overseas market are higher, with Europe up almost one percent. We should be off to the races once again at 8:30. At this point, adjusted for fair value, S&P 500 futures are higher by 14 points, the Dow futures are up 172, and the NASDAQ futures are about 46 points above fair value.
An early rally went into reverse yesterday, as stocks fell rather markedly, in part because of Marco Rubioâ€™s reported opposition to the proposed tax bill. It seems that everyone has a strong opinion about the tax plan, even though precious few people outside of some Republicans in Congress know whatâ€™s in it. Never let the facts cloud a strong opinion, you know. Anyway, we should learn exactly whatâ€™s in our tax future today, which gives everyone less than two weeks to adjust their tax-related lives.
Weâ€™ve seen almost nine years of investor behavior known as â€śbuying the dip.â€ť Every decline in stock prices brings a fresh wave of cash. This year, there have been precious few â€śdipsâ€ť to buy. Well, yesterday may have been the most recent, as our futures are firmly higher again this morning.
Asia was mixed overnight, Europe is lower, but weâ€™ll likely head higher at 9:30. At this point, adjusted for fair value, S&P 500 futures are higher by almost 10 points, the Dow futures are up 114, and the NASDAQ futures are about 19 points above fair value.
Wow. Has the media world changed a little over then past 50 years or what? It used to be that broadcast media meant AM Radio and Channels 2, 3, 7 and sometimes 9. The modern world of media is being shaken again as Disney is buying the film and broadcast businesses of Fox, as Rupert Murdoch is suddenly a seller, rather than a buyer.
Fox shareholders will get a little more than a quarter of a share of Disney stock, and Disney will assume about 13 billion of Fox debt in the 52 billion dollar deal. After the deal closes, Fox will also spin off to shareholders the Fox Broadcasting Network and stations, Fox News, Fox Business, Fox Sports 1 and 2 and the Big Ten Network. Given the Justice Departmentâ€™s rather surprising opposition to the AT&T Time Warner hook-up, weâ€™ll see what they have to see what they say about this deal, which appears to create many more competitive challenges.
Speaking of challenges, weâ€™ll see tomorrow just what kind of sausage the Congressional Conference Committee stuffed into what they call tax reform.
In contrast to our Central Bankâ€™s decision raising interest rates yesterday, the European Central Bank and the Bank of England held short-term rates steady today. Thatâ€™s likely to keep a lid on our longer-term rates and flatten the yield curve even more.
Weekly Jobless Claims and the Retail Sales Report come at 8:30.
As we approach the open, the rally that just wonâ€™t die lives to see another day. At this point, adjusted for fair value, S&P 500 futures are higher by about 5 points, the Dow futures are up 64, and the NASDAQ futures are about 10 points above fair value.
The Dow and the S&P once again rose to record levels yesterday, owing to weakness in smaller stocks and NASDAQ stocks, your portfolio may not have benefitted, and may even have lost a little ground. Of course, today is another day, and itâ€™s a big day for inflation and interest rate news.
At 8:30 the November Consumer Price Index is expected to tell us that consumer inflation rose four-tenths of a percent. That would bring the trailing 12-month rate to 2.2 percent, just north of the Federal Reserveâ€™s 2 percent target. If the Fed was looking for cover for a decision to raise interest rates â€“ well, there you go.
Get ready for a quarter-point hike in short term interest rates at 2 oâ€™clock today, with the promise of more hikes to come in 2018. Keep an eye on longer-term rates which are set not by the Fed, but by the market. Theoretically, those should rise as well. However, if the yield curve flattens next year, or possible inverts, it could mark economic trouble ahead.
Honeywell and Lilly both reaffirmed and slightly raised their outlooks for 2018.
Asian markets were mixed overnight, but Europe is a little lower at this hour. Our futures are off their earlier highs, but are still in the green. At this point, adjusted for fair value, S&P 500 futures are higher by about 2Â˝ points, the Dow futures are up 47, and the NASDAQ futures are about 8 points above fair value.
Itâ€™s interest rate decision time for the Federal Reserve. The Open Market Committee starts another two-day confab today. At 2 oâ€™clock tomorrow, just about everybody is expecting short term interest rates will be hiked by another one quarter of one percent.
The biotech darling of the morning is a company named Proteostasis Therapeutics. Shares of the company have almost doubled in price pre-market on word of positive Phase 2 trials of their anti-cystic fibrosis drug.
Boeing is raising its dividend by 20 percent and launching a new 18-billion-dollar stock buyback.
In less than 20 minutes, weâ€™ll hear about inflation in Producer Prices last month. Expect only a three-tenths of a percent following up Octoberâ€™s four-tenths of a percent.
Word from the Congressional joint tax reform committee is that a final bill will be bought up for a vote by next week.
Overseas markets are mixed. Once again, the morningâ€™s futures markets are telling us that the cash market will move higher at the open. At this point, adjusted for fair value, S&P 500 futures are higher by about 6 points, the Dow futures are up 85, and the NASDAQ futures are about 7 points above fair value.
There should be some relief for long-suffering money market investors on the way this week. The federal Reserve Open Market Committee will meet Tuesday and Wednesday and they have pretty well telegraphed a quarter-point short-term interest rate increase.
One thing thatâ€™s moving much faster than interest rates is the price of bitcoin. If you think bitcoin will fade away soon, you may want to think again. Futures on the price of bitcoin started trading last night, and those futures have been anywhere between $14,500 and $18,000 this morning. Currently, theyâ€™re at about $16,500 per coin.
Appleâ€™s ecosystem could be getting a little broader today. Shazam is a British company that makes the phone app that recognizes songs and television shows after hearing just a snippet of them. This morning, Apple is reportedly close to buying Shazam for 400 million dollars. Thatâ€™s less than half the valuation of Shazam during the last round of funding.
Our futures are off their highs of the morning, owing mainly to news of an explosion in New York City, but are still telling us that there are likely more buyers than sellers out there as we approach 9:30. Adjusted for fair value, S&P 500 futures are higher by about 3 points, the Dow futures are up 37, and the NASDAQ futures are about 9 points above fair value.
The Labor Departmentâ€™s Monthly Employment report, which usually comes to us on the first Friday of the month, shows up for work a week late at 8:30 this morning. It will be the first report weâ€™ve read in a while that wonâ€™t be jerked around by the impact of one or more hurricanes. Expect that 195,000 new jobs came into being in November. That would be roughly in line with the ADP estimate we heard about on Wednesday, but way lower than the 261,000 from last month.
The popular parlor game called â€śfollow the bouncing bitcoinâ€ť continues today. After rising several thousand dollars earlier this week, and being briefly quoted over $19,000 a piece yesterday, bitcoin in going for about $14,650 this morning.
So, if youâ€™re depressed about your short-term bitcoin losses from yesterdayâ€™s price, perhaps an investment in Sage Therapeutics might help. Sage reported great results for its proposed anti-depression drug last night, and Sage shares rallied more than 70 percent. Theyâ€™re another 2 percent higher this morning on a broker upgrade.
The University of Michiganâ€™s first look at December Consumer Sentiment comes at 10 this morning. Expect a tick higher to 98.8
Overseas markets are higher across the board and weâ€™re seeing green lights as well.
Adjusted for fair value, S&P 500 futures are higher by almost 12 points, the Dow futures are up 96, but the NASDAQ futures are about 43 points above fair value.
These are strange days, indeed. Those in the foolhardy business of trying to predict the next downturn in stock prices can argue all day long, but those with a real penchant for getting rich quick are all abuzz about bitcoin.
Bitcoin is higher by more than a thousand dollars this morning alone, and earlier was briefly trading above $15,000. That up almost 20 percent in the past two days and u five fold since mid-summer. Careful, out there folks â€“ this one is a mania that could crumble with a great regulatory move from nations around the world â€“ and someday, those nations (including ours) will start paying attention.
The restructuring of General Electric is getting underway. They will cut 12,000 jobs in their power unit, with most of those cuts coming outside of the U.S.
Broadcom reported better than expected earnings and sales and they raised full year guidance this morning. Broadcom shares are about 5 percent higher pre-market.
Overseas markets are mixed, and our futures are going nowhere fast. Adjusted for fair value, S&P 500 futures are down by about a single point, the Dow futures are down 13, but the NASDAQ futures are about 8 points above fair value.
The House of Representative has named eight of their members to confer with the Senate on the tax reform bill. One of those conferees is Sander Levin. Once the Senate names their team, they can start filling the proverbial smoke-filled room with smoke, (theyâ€™ll probably bring in some mirrors, too) as conferees will try to hammer out a deal by Friday the 22nd. That of course will give the hoi polio about three business days to do their 2018 tax planning under the new rules, but donâ€™t call your Congressman. Theyâ€™ll be off on vacation by then.
No vacation today for the folks at payroll processor ADP. They announced just minutes ago their estimate that 190,000 new jobs were created in November. Of course, the Labor Departmentâ€™s official number comes Friday, which will be the last big Labor data point before the Fedâ€™s Open Market Committee meets to raise interest rates next week.
Mortgage rates dropped by only one basis point last week, but mortgage applications rose by 4.7 percent, on the strength of a 9 percent increase in refi loans.
Brown-Forman just reported earnings that beat estimates for last quarter. Evidently Jack Daniels is still popular around Thanksgiving time. Home Depot is buying back another 15 billion dollars of its own stock.
Overseas stocks are lower, and the parlor game known as Bitcoin is more than $1,000 higher today alone. But for investors, rather than speculators, weâ€™ll likely have weaker stock prices when the bell rings this morning. Adjusted for fair value, S&P 500 futures are lower by about 3Â˝ points, the Dow futures are down 43, and the NASDAQ futures are about 15 points below fair value.
Yesterdayâ€™s big tax-cut-fueled rally faded into moderate losses for the overall market. Yes, the Dow Jones finished higher. But again, thatâ€™s a small group of mega->
Heading higher by about 6 percent this morning are shares of apparel company GIII apparel. Thatâ€™s the company that snapped up the Donna Karan brand last year. $1.67 of profit was 17 cents better than expected last quarter. GIII also raised full-year guidance by about 20 cents per share.
The Australian Central Bank held interest rates steady overnight. Keep in mind that weâ€™re now only a week away from the December Federal Reserve Meeting, which is the widely-telegraphed opportunity for interest rates in the U.S. to step a quarter of a percent higher.
The November PMI and ISM surveys of the Services side of the economy will be announced by 10 this morning, with little change expected from October.
Overseas markets are mostly lower. Our futures are indicating that yesterday afternoonâ€™s trends will continue on into this morning, with the big industrial shooting higher with a lot more momentum than the smallcaps and tech stocks. Adjusted for fair value, S&P 500 futures are higher by 4 points, the Dow futures are up 81, and the NASDAQ futures, which just turned positive, are about 1Â˝ points above fair value.
Some folks have speculated that stock prices had already â€śpriced-inâ€ť the passage of corporate tax cuts. Maybe not, if you look at the futures this morning. In their first chance to recognize Senate passage of the tax bill, futures on the Dow Jones Industrials are higher by more than 250 points this morning, after tacking on about 700 points last week.
Even before this morningâ€™s rally, the Dow Index was more than 10 percent above itâ€™s 200 day moving average, as most of the market gains have been bestowed upon the biggest of firms out there. Where it all ends, nobody knows, but shorting this market at this point is akin to playing Russian Roulette with a fully loaded chamber.
The merger of this Monday is no big secret, but now is official. CVS Health is buying Aetna in a 69-billion-dollar deal. Weâ€™ll get the Factory Orders Report at 10 oâ€™clock, but most of the big economic reports come later in the week.
Asian markets were once again mixed overnight, but European markets are anywhere between one-half and one-and-a-half percent higher. Adjusted for fair value, S&P 500 futures are higher by 16 points, the Dow futures are up 256, and the NASDAQ futures are about 30 points above fair value.
Itâ€™s the first day a new month, and that means weâ€™ll be serenaded by the major automobile manufacturers all day long as they report November Sales totals. Itâ€™s expected that the annualized rate of sales cooled a bit from last monthâ€™s 18.1 million units to about 17.5 million. Still, thatâ€™s a pretty healthy rate, historically speaking.
The Labor Department, which usually gives us the Monthly Employment Report on the First Friday of the month is going to need another week to count everything up. Perhaps they need to hire a few more counters.
Yesterdayâ€™s big 26 percent pop in shares of Sears completely disappeared by the end of the trading day as traders read through the details of Searsâ€™ report. This morning, Searsâ€™ stock price target is being lowered from 4 dollars to 3 dollars at investment firm Susquehana. Sears shares have slipped below 4 bucks in the pre-market.
Asian markets were mixed, but major European markets are lower. Our futures turned decidedly lower on word of a parliamentary malfunction in the Senate that will delay a vote on tax reform. Those futures have recovered a lot of that ground but are still pointing to a lower open at 9:30. Count on stock prices to zig and zag every time a Senator sneezes with regard to tax reform.
Adjusted for fair value, S&P 500 futures are lower by 6Â˝ points, the Dow futures are down 37, and the NASDAQ futures are about 36 points below fair value.