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WJR December 2019 Reports

Ron will return on Tuesday, December 10th!

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 November 2019 Reports

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