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WJR December 2018 Reports

Ron is taking a few days off and will return December 13th.  See you then!

December 7, 2018

At one point yesterday, the Dow Industrial Average looked as if it would match Tuesday’s nearly 800-point decline.  However, a late day rally, on hopes that the Fed will hold off on interest rate increases, left the Dow with only a 79-point loss.

Asian markets picked up on that rally and finished today slightly higher. Europe is also mainly in the green. Nevertheless, the selling looks like it will continue here at least in the early going.

There’s big selling in shares of Big Lots this morning, with the share off 14 percent.  Big Lots lost 16 cents per share last quarter, which was 15 cents worse than expected.

There’s better news from Lululemon and Broadcom.  Both had better than expected results, and Broadcom is raising its dividend.

And confirming the hot pot rumor of the week, Altria is buying a 45% stake in marijuana firm Cronos for 1.8 billion dollars. Cronos shares are about 22 percent higher pre-market.

At 8:30, the Labor Department is expected to report the creation of 198,000 new non-farm jobs in November, a 3.7 percent unemployment rate and a three-tenths of a percent increase in the average hourly wage. Any numbers hotter than that would bolster the argument for another interest rate increase this month.

Adjusted for fair value, the S&P futures are lower by about 18 points, the Dow futures are down 165 points and the NASDAQ futures are about 51 points below fair value.

December 6, 2018

As that great philosopher Roseanne Rosannadanna use to say, “It’s always something.”  There’s a lot of “somethin’” going on this morning.

Lots of big blue-chip stocks are looking two percent or more lower this morning.

One Monday, voices in the U.S. Administration trumpeted great hope of a China trade deal.  On Tuesday, traders noticed that there was radio silence from Chinese authorities on the issue.  Not a good sign.

Early yesterday, things looked better as the Chinese Finance chief DID have some encouraging words regarding trade.  But last night, word broke that Canadian authorities had arrested the CFO of Chinese company Huawei, supposedly at the behest of the U.S. in order to get her to testify regarding her company’s trade with Iran.

But it all together, and traders are hitting the sell button this morning, in fear of deteriorating American – Chinese relations.

Oil is also about 3½ percent lower, on the rumor that OPEC’s rumored output cut will be smaller than expected.

The ADP November Employment Report is due out in a minute or so.  Expect word of 190,000 new private sector jobs.

Markets oversea are generally off 2 percent or so. Adjusted for fair value, the S&P futures are lower by about 39 points, the Dow futures are down 402 and the NASDAQ futures are about 121 points below fair value.

December 5, 2018 - The market is closed in honor of President H.W. Bush.  Ron will return tomorrow!

December 4, 2018

Stock traders in the United States will get a mid-week vacation day tomorrow as the New York Stock Exchange and the NASDAQ will close in honor of President George H.W. Bush.  But stocks will trade today and at the open we’ll likely give back a fair chunk of yesterday’s gains.

Earlier this morning, home builder Toll Brothers reported quarterly profit of $2.08 per share, which easily beat the $1.83 estimate on better than expected sales. Profit in the year-ago quarter was only $1.17.  However, Toll Brothers says that rising mortgage interest rates are starting to slow business in the current quarter ad the shares are indicated about 5½ percent lower. Speaking of interest rates, the yield curve between 2-year Treasuries and 5-year Treasuries inverted this morning. Every time is different, but inverted yield curves have a nasty reputation of foretelling recessions a year or two in the future.

Apparently, some companies just can’t quit smoking.  Word is that Altria is in talks to make an investment in pot-producer Cronos, although no agreement of any type has been announced. Still, Cronos shares are looking to open about 10 percent higher.

Outside of China, Hong Kong and Indonesia overseas markets are seeing red numbers. Our futures are off earlier lows but are still pointing lower.

 

Adjusted for fair value, the S&P futures are lower by about 9 points, the Dow futures are down100 points and the NASDAQ futures are about 42 points below fair value.

December 3, 2018

If you thought that the threat of a trade war with China was weighing on stock prices, you were apparently right on the money.

The 90 day “truce” that Presidents Trump and Xi signaled over the weekend is leading to a sizable rally in stock prices this morning.  Of course, it’s just a truce, not a resolution, so curb your enthusiasm a bit.  However, automotive stocks are 2 to 4 percent higher this morning on a Presidential tweet indicating that China will lower its 40 percent tariff on imported vehicles.

There’s lot of enthusiasm for shareholders of biopharmaceutical company Tesaro this morning.  Glaxo SmithKine will buy Tesaro for 75 bucks per share.  That’s a 62 percent premium to Friday’s closing price.  Shares of Tribune Media are about 10 percent higher premarket on reports that Tribute will be acquired by Nexstar Media Group.

At 10 o’clock the report on October Construction Spending is expected to reflect a four-tenths of a percent rise after flat-lining in September.

Major markets overseas are about one to two-and-a-half percent higher on the Trade Truce.  Our futures have been solidly higher all morning. At this point, adjusted for fair value, the S&P futures are higher by about 39 points, the Dow futures are up 441 points and the NASDAQ futures are about 154 points above fair value.

WJR November 2018 Reports

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