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WJR December 2019 Reports

Ron is taking a Holiday Break.  He will return to the air January 6, 2020.  Merry Christmas and Happy New Year to all!  Let's have a great 2020!

December 20, 2019

The late-year melt-up in stock prices continues this morning even though Santa Claus has yet to board his sleigh. This morning we’re getting early Christmas presents from a couple of companies, while others are leaving us with a lump of coal.

And speaking of lumps of coal, with pun intended, yesterday U.S. Steel announced an adjusted quarterly loss of $1.15 per share, which was 53 cents per share worse than expected. They cut their dividend by 80 percent, stopped buying back stock, and could cut as many as 1,500 jobs dur to a plant closure.  U.S. Steel stock is indicated about 8 percent lower this morning.

Also on the naughty list are shares of Carmax.  Sales last quarter were good, but profit of $1.09 per share fell a nickel short and shares have shifted into reverse by about 5 percent.

Flying a bit under the radar, Winnebago stock has more than doubled in price over the past year, and it’s another 4 percent higher pre-market after positive earnings news.

At 8:30 we’ll get the Government’s final say on 3rd quarter Gross Domestic Product.  Expect a 2.1 percent increase.

Asian markets were mixed overnight, but Europe is higher. At this point, adjustedfor fair value, the S&P 500 futures are up by almost 5 points, the Dow futures are now up 50 and the NASDAQ futures are 18 points above fair value.

December 19, 2019

So, as expected, we have an impeached President and, as expected, stock prices don’t seem to care as the futures are modestly on the rise once again this morning.

There’s a little flurry of late-quarter earnings news this morning and as we all prepare for the next Star Wars movie, let’s start with the dark side.  Darden restaurant shares are slipping about 4 percent this morning even though adjusted profit of $1.12 was a nickel better than expected.  A drop in same-store sales gets the blame.

On the brighter side, Conagra’s 63 cents of adjusted profit was a 6-cent beat on better than expected sales and raised guidance.  Conagra shares are looking almost 8 percent higher.

Rocketing about 23 percent higher pre-market are shares of Rite-Aid.  Adjusted profit of 54 cents vaporized the 7-cent expectation.

Accenture and Nike will talk about their earnings later today.

The Bank of England, as expected, held interest rates steady this morning.

The Existing Home Sales report come shortly, along with the Conference Board’s survey of Leading Economic Indicators, which is expected to go positive after a three-month decline.

Most overseas markets are lower, but our futures are not, although off their earlier levels. At this point, adjustedfor fair value, the S&P 500 futures are up a little more than a point, the Dow futures are now up 31 andthe NASDAQ futures are 6 points above fair value.

December 18, 2019

We’ve seen five consecutive days of gains for the Dow, the S&P and the NASDAQ although the trajectory of gains has moderated, and it looks like we’ll see fairly stable prices at the market open this morning.

One stock that won’t be so serene is FedEx.  Last night’s earnings report and guidance did not deliver.  Last quarter’s profit of $2.13 fell far short of the $2.78 expectation.  Moreover, FedEx forecast some rough air ahead, saying that next year will bring about a dollar per share less in profit than analysts had been expecting.  FedEx shares are looking to open about 7½ percent lower.

The famous other hand belongs to General Mills this morning.  Adjusted profit of 95 cents per share came in 7 cents higher than expected ad General Mills reaffirmed guidance. General Milles shares are about 2 percent higher.  We’ll also get reports form Micron and Paychex before the day it out.

There’s not much on the economic calendar today, except for a report on oil inventories.  Of course, there’s the impeachment thing, which will probably move markets less than the oil inventory report.

Overseas markets are mixed. At this point, adjustedfor fair value, the S&P 500 futures are flat, the Dow futures are now up 25 points but the NASDAQ futures are 7 points above fair value.

December 17, 2019

Last night, Boeing confirmed reports that production of the 737 Max would be suspended in January, in order to give the company time to clear inventory of already built but not delivered airplanes.  With flight certification for the 737 Max unlikely before February, production probably won’t start up until March or later. Boeing says that new workers will lose their jobs, but shareholders are losing more value this morning, as Boeing shares are about 5 dollars lower pre-market, after shedding more than 14 dollars per share yesterday.  As the highest price-per-share component of the Dow Jones Industrials, that drop is having a big impact on the overall index.

Earnings reports are on the way from FedEx and Cintas.  So far this morning, Navistar reported GAAP earnings of $1.02 per share, which met expectations.  However, sales were on the light side and guidance wasn’t great.  Navistar shares are looking to decline about 4 percent at the open of trade. Jabil shares are 5 percent higher after just reporting earnings.

Eli Lilly is a bit higher on a dividend hike and positive guidance.  Johnson and Johnson shares are looking a bit higher on a broker upgrade.  Groupon shares are indicated about 2 percent lower on a broker downgrade.

The November Housing Starts report comes at 8:30, with Industrial Production figures coming out at 9:15.

Asia followed our rally higher overnight, but outside of London, Europe is lower.

At this point, adjusted for fair value, the S&P 500 futures are higher by about 3 points, the Dow futures, weighed down by more weakness in Boeing shares are now down only 3 points but the NASDAQ futures are 11 points above fair value.

December 16, 2019

Our stock futures are higher once again this morning, although the Dow futures would be almost 100 points higher than they are if it weren’t for the latest news about Boeing. 

The FAA reportedly advised Boeing that it was being overly optimistic with its estimated return-to-service date for the 737MAX. Word on the street today is that Boeing may further slow or even stop production of the 737MAX  until it is again certified for flight.  Boeing shares are indicated more than 13 dollars per share lower pre-market.

There’s one big merger in the board this Monday.  International Flavors and Fragrances will merge with the Nutritional and Sciences unit of DuPont.  It’s a 26-billion-dollar deal through which Dupont shareholders will get a 55 percent share. Dupont shares are looking about 4 percent higher on the news.

There’s nothing much on the earnings agenda today.  A little later this morning, expect a reading of 54.8 from the December HIS Markit Manufacturing Purchasing Managers survey.  We’ll also hear about manufacturing business in the New York Region.

However, additional details on the trade truce and news on the Boeing situation will likely get more attention from the trading algorithms.

European markets are higher.  London is up by more than 2 percent.  At this point, adjusted for fair value, the S&P 500 futures are high byabout 17 points, the Dow futures are up 78 and the NASDAQ futures are about 50 points above fair value.

December 13, 2019

There are some people who say, “well, the stock market is at an all-time high, so it must be ready to go lower.”  Well, the S&P 500 for the 27th time this year, the S&P 500 is at an all-time high, so it appears that those people have been mistaken 26 times in a row, which is pretty impressive.   At some point, they may be right, but try not to pay any attention to the noise.  Pay attention to your own financial situation.

The situation at Costco is a good news / bad news story.  Earnings last quarter were a little better than expected, buy overall sales missed estimates as the e-commerce business didn’t grow as quickly as expected.  Costco shares are less than one percent lower pre-market.

At 8:30 this morning, the November Retail Sales Report is expected to show improvement from the rather weak October numbers.  Expect overall retail sales to have risen by one half of one percent, with sales outside of autos and gas rising four-tenths of a percent.

We’re still awaiting confirmation that there will be a signed “phase 1” deal with the Chinese, but Asian markets rose overnight on the trade truce possibility.  The FTSE in London was almost 2 percent higher owing to the decisive victory by conservative Boris Johnson, who promises a Brexit by the end of January.

Our stock futures lost most of their earlier gains just in the past half hour. At this point, adjustedfor fair value, the S&P 500 futures are up about 4 points, the Dow futures are higher by 55 and the NASDAQ futures are about 15 points above fair value. 

December 11, 2019

Traders are holding their collective breath as we await any kind of news about the threatened tariffs on Chinese imports that could go into effect on Sunday.  It appears that the odds favor a delay in the tariffs while negotiations continue, but we shall see.

At 8:30 this morning we’ll see what the Government’s official consumer price index tells us about the costs of the things that they think we buy.  Expect the year over year increase in prices to rise a touch to 2 percent, with the core rate at 2.3 percent.

A trio of companies are seeing lower valuations this morning due to lowered sales projections for the next year.  Home Depot shares are off more than one percent on a lowered sales forecast.  Gamestop shares are off about 16 percent pre-market after reporting a 49-cent loss, which was 60 cents worse than expected and Children’s Place shares are off about 14 percent on lowered guidance.

The Fed’s expected “no mas” regarding a change in interest rates comes at 2 o’clock, with the Jerome Powell presser at 2:30.

Asian markets were mostly higher overnight.  Europe isn’t showing a lot of movement in either direction. Our futures have been flopping all around the flat line for hours. At this point, adjustedfor fair value, the S&P 500 futures are higher by about 5½ points, the Dow futures are higher by 5 points and the NASDAQ futures are about 23 points above fair value.

December 10, 2019

The Fed starts a two-day meeting today and for the first time in a while, it seems that nobody really cares.  The short-term interest rate target isn’t expected to change for the foreseeable future. What will change by this coming Sunday are expectations for future Chinese tariffs.  Any news regarding the Sunday deadline for the imposition of tariffs on stuff like toys, laptops and mobile devices will sway markets for the rest of the week.

In the meantime, there are some winners and losers this morning on the corporate earnings front.

On the brighter side, shares of Stitch Fix are indicated about 12 percent higher as a break-even quarter was better than the expected loss.  AutoZone is looking higher as $14.20 per share of adjusted profit came in 60 cents better than expected and Vail Resorts is edging higher after reporting a lesser loss than expected.

The famous other hand belongs to DSW parent Designer Brands.  Blane a seven cent per share miss on the 74-cent estimate. They also estimate that full 2019 fiscal year same store sales will be flat.  Designer Brands shares are looking to open about 14 percent lower.

Overseas markets are lower and we’re headed in that direction as well. Adjustedfor fair value, the S&P 500 futures are lower by about 13 points, the Dow futures are down 102 and the NASDAQ futures are about 48 points below fair value.

December 6, 2019

It’s another positive headline regarding China.  Or maybe it’s just a negotiating ploy.  Or maybe the Chinese really need to import more pork.  Overnight, the Chinese Government announced an unspecified reduction on an unspecified amount of pork and soybeans they import from the United States.  Keep in mind that the tariff on inbound pork has reportedly been assessed as high as 72 percent.

In any event, traders are interpreting it as a promising sign and our stock futures are again on the rise.

A lot will hinge on the November Employment Report that comes out in just over 15 minutes.  The addition of 45,000 General Motors workers returning from the picket line is expected to contribute to a total 190,000 payroll count in November and an unemployment rate of just 3.6 percent, as employers in many industries just can’t find qualified help.

Last night, Ulta Beauty reported an adjusted profit of $2.25, which was 12 cents better than expected on a 3 percent rise in same store sales.  Ulta shares are about 9½ percent higher pre-market.

And a warning if you trade individual stocks based on the very latest news: last night cyber security firm CrowdStrike shares were looking lower by 6 percent after reporting earnings and outlook.  However, there was a typo in the wire service release.  The typo was corrected and CrowdStrike shares are indicated almost 5 percent higher instead of 6 percent lower this morning.

Our futures are off earlier levels but are still pointing higher.  Adjustedfor fair value, the S&P 500 futures are higher by about 6 points, the Dow futures are up 54 and the NASDAQ futures are about 23 points above fair value.

December 5, 2019

There are no glaring headlines about Chinese trade this morning, although the Chinese said overnight that the two sides are in “close contact.” Absent any bad news there, it looks like stock prices will continue to follow yesterday’s upward trend.  Of course, things could change at 9 o’clock with Speaker Pelosi’s statement on the impeachment inquiry.

Last night, collaborative communications software company Slack reported a quarterly loss of 16 cents on a full-accounting basis.  However, on an adjusted basis, the loss was 2 cents per share, much better than the expected 8 cent loss, on a 60 percent year-over-year gain in sales. Slack shares are more than 5 percent higher. Disappointing earnings news is out from Tiffany and Michael’s Stores.

Some depressing news from Sage Therapeutics, shares are about 60 percent lower on word that their anti-depression drug did not show positive results in Phase 3 trials.  Biogen will report later today on the state of the Alzheimer’s disease drug that they’ve been working on.

At 8:30 this morning, we’ll hear the Weekly Jobless Claims Report.  Expect 215,000 new claims.  Of course, the big report of the week comes tomorrow morning with the November Employment Report.

Our futures have lost some altitude over the past hour but are still in the green.  At this point, adjustedfor fair value, the S&P 500 futures are higher by about 7 points, the Dow futures are up 65 and the NASDAQ futures are about 26 points above fair value.

December 4, 2019

Stop me if you’ve heard this before – but a news report about Chinese trade negotiations has stock prices on the move this morning.

Yesterday, President Trump’s musing about delaying any trade deal until after the November election sent stock prices lower in a hurry.  This morning, a news report claimed that negotiators are closer to making a “phase one” deal has stock futures solidly higher. 

Campbell Soup reported 78 cents of adjusted profit this morning, which was 7 cents better than expected.  However, it was substantially lower profit than a year ago and the outlook was lowered a bit.  Campbell shares look to open fractionally lower.

The loser of the morning appears to be G-III Apparel.  Shares are off 6 percent after their earnings report. Slack, Autozone and H&R Block report later today.

There’s a leadership change at Alphabet, as founders Sergey Brin and Larry Page are stepping down. Alphabet shares are about one percent higher pre-market.

The November ISM report on the health of the services sector of the economy comes later this morning.  Expect a reading of about 54½, which is in line with the October reading.  Anything above 50 reflects growth in that sector.

Asian markets followed us lower overnight, but renewed trade optimism has Europe and our futures higher.  Adjustedfor fair value, the S&P 500 futures are higher by about 13 points, the Dow futures are up 144 and the NASDAQ futures are about 47 points above fair value.

December 3, 2019

It looked like we were on the way to recovering some of yesterday’s losses until the wee hours of this morning.  That’s when President Trump, speaking in Europe, said that there is no timeline for a China trade deal and that he was thinking that it might be best if there was no deal until after the 2020 election.  He said that he was just thinking that – and wouldn’t say that – although he said that.  Whatever. The algorithms that drive stock prices said plenty.

Whether a China trade deal is a big economic deal or not, the thought that there’s no “Phase One” deal on the way sent our stock futures deeplyinto the red.

Bucking that trend are shares of Land’s End. They are about 10 percent higher pre-market.  Adjusted profit of 11 cents per share came in 2 cents better than expected, even though overall sales were a bit light due to fewer Land’s End shops in Sears stores.  Still, margins were better and same store sales were about 8 percent higher.

The Bank of Montreal also checked in with slightly better than expected results.

Salesforce and Workday report later on today.

Overseas markets are mixed, but we’ll get off to an ugly start at 9:30.  Adjustedfor fair value, the S&P 500 futures are lower by about 18 points, the Dow futures are down 213 and the NASDAQ futures are about 58 points belowfair value.

December 2, 2019

Welcome to December.  The S&P 500 higher by about 25 percent for the year, which is great.  However, we all remember last December, when the S&P dropped almost 9 percent, turning a modestly good year into the red.

Of course, every year has its own drivers.  Interest rates, which were on the way up 12 months ago have been lowered and are now stable.  Employment remains strong, and earnings growth has been better than expected. Online retail sales are expected to be almost 20 percent higher than a year ago on this cyber Monday. On balance, economic conditions for financial assets are very, very good.

The great unknown this December, which will become more-known two weeks from now when we learn whether tariffs on Chinese goods will go up another 15 percent.

This morning, President Trump tweeted that tariffs of 25 and 15 percent will be re-imposed on Argentina and Brazil steel and aluminum.  That knocked our futures down a bit from earlier highs.

Asian stocks rose overnight on better than expected Purchasing Mangers data on factory output.  Services business activity was reported at an 8-month high.

European markets turned lower on the tariff tweet this morning, but our futures are still in the green. Adjustedfor fair value, the S&P 500 futures are higher by about 7½ points, the Dow futures are up 65 points and the NASDAQ futures are about 15 points above fair value.

WJR January 2020 Reports
WJR November 2019 Reports

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