January 30, 2015
Yesterday gave up another day of big swings in stock prices and another swath of interesting earnings reports.
Amazon boasted a 53% rise in Amazon Prime membership, and reported an operating profit of 45 cents per share for the quarter gone by. That was well more than double the 19 cent estimate. Amazon shares are looking to open more than 10 percent higher.
Google gave us the miss of the evening, but not by much. $6.88 per share fell just short of the $7.12 estimate. Among companies guiding estimates higher yesterday were Harman, Cardinal Health, Quest Diagnostics and Northrup Grumman. Guiding lower, among others, were Baxter, JDS Uniphase, Callaway Golf and EMC.
The Government’s first guess at the country’s economic output in the fourth quarter of last year comes at 8:30. After the relatively hot 5% growth in the third quarter, most expect an increase of about 3 to 3½ percent in fourth quarter GDP.
The Chicago PMI and the University of Michigan’s final verdict on Consumer Sentiment come by 10 o’clock. Expect that sentiment held at the preliminary estimate of 98.2.
Most major markets overseas are lower. On their >January 29, 2015
It’s always fun to try to figure out what moves the price of a particular company’s stock. But to generalize, it’s about one part “what have to done for me lately” and about five parts “what will you do for me next?”
Case in point this morning: shares of Chinese Internet retailer Alibaba. 49 percent revenue grown last quarter, 50 % growth in “Singles Day” sales, 58% margins last quarter. All tremendous numbers, right? Alibaba share are lower by about 6 percent this morning on concerns that they are about to get a lot more scrutiny from the Chinese Government, among other potential headwinds.
Ford Motor shares are looking to add about 2 percent this morning on a good earnings report, in spite of some troubles in Venezuela. Coach share are up handsomely on a good report and a good outlook. Dow Chemical and Blackstone also out with good numbers. On the famous other hand, ConocoPhillips and Hershey’s missed the mark on profits. Qualcomm is sharply lower on the loss of a key customer.
Weekly Jobless Claims, which have been trending higher of late, are expected to come in at 300,000 at 8:30. The December Pending Home Sales Report is also on the way. Expect a nine-tenths of a percent increase.
If the market were to open now, it would likely open a little lower. Adjusted for fair value, S&P 500 futures are lower by about 3 points, the Dow futures are up 12, helped by McDonald’s, which announced the retirement of their struggling CEO. The NASDAQ futures are now about 12 points below fair value.
January 28, 2015
Looking back to yesterday, I guess you can say that it could have been worse. In fact, it WAS worse with the Dow Industrials off nearly 400 points mid-day. The Dow closed off about 290 points, and it looks like a bit of a bounce-back will arrive at 9:30, in spite of another rise in the dollar this morning versus the euro.
The Federal Reserve Open Market Committee pronouncement that will mark the end of their latest two-day meeting. No change in short term rates is expected until at least June, and it will be interesting if the Fed comments about the sudden strength in the U.S. dollar. However, most expect a statement pretty much unchanged from what we’ve heard in the past. Not exactly as boring as a Marshawn Lynch interview, but nothing to get excited about.
Boeing is out will better than expected results and last night Apple absolutely blew away estimates, selling 74½ million iphones last quarter and making over 18 billion dollars in quarterly profit. That’s a record. Apple now has over 170 billion of cash on hand.
AT&T’s quarterly loss was less than expected. Electronic Arts sales were better than expected.
Greek bank stocks are down over 20 percent this morning, as the new Government has started to unwind the reforms put in place as part of the Eurozone bailout. Stock in Greece overall are down about 8 percent.
We should head back in the other direction at 9:30. Right now, adjusted for fair value, S&P 500 futures are higher by almost 15 points, the Dow futures are up 97 and the NASDAQ futures are now about 65 points above fair value.
January 27, 2015
The good news from Wall Street this morning is that it didn’t snow in Manhattan as much as everyone expected. Unfortunately, that’s about all the good news of the morning.
It’s been a long time since corporate earnings reports disappointed. However, we may be at an inflection point, and you can blame the strength of the U.S. dollar. That’s not the only reason for punk earnings, but if a company sells its stuff overseas, a stronger dollar is a significant headwind.
Look no further than this morning’s report from Caterpillar. Slower business in China and the falling price of oil hurt as well, but Caterpillar reported $1.35 in quarterly profit which was a full 20 cents short of expectations. They also guided 2015 earnings significantly lower, perhaps by as much as a third. The stock is about 7½ percent lower pre-market. Procter& Gamble also missed the earnings mark this morning, blaming the stronger dollar.
3M did beat the $1.80 estimate by a penny and Pfizer beat on both the top and the bottom line. Last night, Microsoft matched estimate, but the stock is about 7½ percent lower pre-market. Apple will report later on today. Expect $2.59 in adjusted earnings.
The Conference Board’s survey on January Consumer Confidence comes at 10 o’clock, but everyone should be confident that stocks will go lower in the early going today as the Fed begins a two-day meeting.
Right now, adjusted for fair value, S&P 500 futures are lower by about 17 points, the Dow futures are down 230 points, although just 4 companies account for about 90 of those points, and the NASDAQ futures are now about 51 points below fair value.
January 26, 2015
The latest chapter in the Greek fiscal tragedy played out exactly as expected yesterday as the far-left Greek opposition party won the election and quickly formed a ruling coalition. If the campaign rhetoric is to be believed, Greece will now demand that half of their debt be forgiven, interest rates lowered, and many of the painful tax hikes and pension reductions they were forced to put in place be reversed. What’s not to like about that? Unless, of course, you’re the one Greece owes money to.
It is nominally a full week of trading, but trading will likely be choppy mid-week. It’s going to be tough to get to work in Manhattan the next few days, given the impending east-coast storm.
A couple of packing companies, Meadwestvaco and Rock Tenn are merging. Post Holdings is buying Mom Brands.
Home builder D.R. Horton reported 39 cents of quarterly profit, which was a full 5 cents above estimates. Sales were nearly 10 percent higher than expected.
And, remember this day. The first U.S. based bitcoin exchange, named Coinbase, gets going today. Bitcoin may seem a bit of a pipedream at this point, but it certainly has the potential to disrupt and system that could use some disruption.
Futures were markedly lower earlier in response to the Greek election, but have improved a bit. Right now, adjusted for fair value, S&P 500 futures are lower less than 4 points, the Dow futures are down 43, and the NASDAQ futures are now about 3 points below fair value.
The European Central Bank’s expected monetary policy announcement yesterday poured a little fuel on a smoldering rally. That rally accelerated into the close and its remnants persist this morning, even in the >
General Electric did beat the 55 cent profit estimate by a penny per share, but revenue was a bit light on a decline in oil-related business. Bank of New York Mellon became the latest big bank to disappoint, missing the 59 cent estimate by a penny. And just about 15 minutes ago McDonalds reported $1.13 per share in earnings, which was 9 cents short or estimates. McDonalds’ global same store sales were lower by nearly one percent.
At 10 o’clock this morning, expect the announcement that December Existing Home Sales ran at just over the 5 million units annualized rate and that the December Leading Economic Indicators increased just four-tenths of a percent, which is two-tenths lower than in November.
Just about all markets overseas are high on the heels of the ECB announcement yesterday. The star of the show is Greece, with stocks up about 6 percent. Right now, adjusted for fair value, S&P 500 futures are higher by 3 points, the Dow futures are up 28, and the NASDAQ futures are now a about 7 points above fair value.
The European Central Bank announced no change in their benchmark interest rates this morning. Of course, the big announcement from the ECB comes in just about 15 minutes. The widely rumored amount of bond buying the ECB will undertake is $58 billion euros per month for at least a year. Apparently, they’re ready to start in Europe what our central bank started more than six years ago and is now winding down. The objective is to “kick start” a struggling economy by creating money out of thin air, hopefully mitigating the threat of deflation. So, print the money and hope for the best.
About 4,000 American Express Employees will have their paychecks deflated to zero soon. That job cut announcement from American Express accompanied announcement of $1.39 of quarterly operating profit, which was a penny ahead of estimates. Also beating the earnings bogey by a penny last night was Ebay, at 90 cents per share. Also beating estimates are Travelers, BB&T, Key Corp, SanDisk and Johnson Controls
The Royal Bank of Canada is buying City National Bank at a 26 percent premium. Kinder Morgan is buying Hiland Partners.
Expect 300,000 new Jobless Claims at 8:30. Germany and Switzerland are a bit lower, but most every other overseas market is higher. Our futures are pointing higher as well, at least until the ECB announcement at 8:30.
Right now, adjusted for fair value, S&P 500 futures are higher by 11 points, the Dow futures are up 91, and the NASDAQ futures are now about 12 points above fair value.
January 21, 2015
We’re one day away from the highly anticipated monetary policy announcement from the European Central Bank. While everybody expects something big, nobody seems to agree on just WHAT to expect. For their part, the Bank of Japan reiterated their pump-priming policy overnight.
In the meantime, there are plenty of earnings reports to mull over. The star of the morning may well be Netflix. Yesterday, Netflix reported quarterly earnings of 72 cents per share, which was a full 60 percent higher than the average analyst estimate. Netflix also said that they expect more new subscribers are on the way than expected. Traders are bidding Netflix shares almost 18 percent higher pre-market.
IBM, which has been struggling to make the transition to a cloud computing company, beat expectations on the bottom line, earning $5.81 versus the expected $5.41. However, sales were lower than expected and the shares are about 2½ percent lower this morning.
Mortgage applications are higher again this week, this time by 14 percent, fueled by a 22 percent rise in refinancings.
Asia, outside of the Nikkei in Japan was higher overnight. Europe is mostly lower. We’ll likely step a little lower at 9:30. At this point, adjusted for fair value, S&P 500 futures are down 5 points, the Dow futures are lower by about 69, and the NASDAQ futures are now about 11 points below fair value.
There’s no shortage of big stuff going on this week. The European Central Bank’s expected quantitative easing game plan comes Thursday. How they stickhandle around the upcoming Greek election adds a lot of intrigue.
Tonight, of course, we not only get a State of the Union Address from the President, but also a State of the State message from Governor Snyder. Both promise strategies to help the downtrodden, albeit through dramatically different means. Of course, any State of the Union speech over the past few years just wouldn’t be recognizable without a proposal for a big income tax increase. Oh, and in case you’re in a hurry, the IRS will start accepting 2014 tax returns today.
In the meantime, earnings reports continue to roll. Oil services firm Halliburton surprised to the upside this morning. $1.19 of quarterly income was nine cants ahead of estimates, even though revenue missed by just a tiny bit.
Morgan Stanley made it five-for-five as far as big banks missing the mark this quarter. Analysts had a big range of estimates for Morgan Stanley, but the reported 47 cents was lower than even the more pessimistic estimate of 48 cents. Johnson & Johnson reported $1.27 which was a penny above estimates. They also guided higher for the entire year.
West Texas Intermediate oil is almost 3 percent lower, natural gas is lower by more than 5 percent.
Chinese stocks recovered almost 2 percent overnight after tumbling more than 7 percent yesterday after a change in margin borrowing rules. Europe is higher. At this point, adjusted for fair value, S&P 500 futures are higher by 11 points, the Dow futures are up 73, and the NASDAQ futures are now about 28 points above fair value.
January 16, 2015
Yesterday’s move by the Swiss Central Bank continues to reverberate through markets across the globe. That’s kind of what happens when a Central Bank that’s been rigging the game decides to un-rig things all of a sudden. That’s one down, many to go.
There are a couple of better than expected earnings reports out this morning that are being met with less-than-utter-enthusiasm. Last night Intel announced earnings and sales that were better than expected. Problem is that this quarter’s guidance wasn’t quite up to snuff, and Intel shares are indicated almost one percent lower. Shares of investment giant Goldman Sachs are about one and one-half percent lower. Goldman also beat estimates, reporting $4.38 in operating profit, which was 6 cents better than expected.
Oil services firm Schlumberger is cutting 9,000 jobs, which is not a big surprise, given the collapsing price of oil.
At 8:30 we’re expecting to hear that the Consumer Price Index fell four-tenths of a percent last month overall, but may have risen one-tenth of a percent if you ignore food costs and declining energy costs. Those declining gas prices are expected to have contributed to the good mood of Consumers this month. We’ll find out what the University of Michigan says about that just before 10.
China was higher overnight, but most everybody else in lower. At this point, adjusted for fair value, S&P 500 futures are lower by 8 points, the Dow futures are down 59, and the NASDAQ futures are now about 24 points below fair value.
January 15, 2015
Some days, there’s not much to talk about. Days like this, I could go on for a long, long time. About 4 hours ago, the Dow futures were higher by about 150 points. Then, without warning, the Swiss Central Bank threw the currency markets for a loop, by dissolving their longstanding cap on the value of the Swiss franc against the euro. That sent the value of the franc soaring, the value of the euro crashing not only against the franc but also the U.S. dollar, now at $1.17 per euro. The Dow futures responded to the news by dropping about 150 points, then rebounding to go positive, and are now slightly lower. The Swiss stock market is lower by almost 10 percent at this hour. All of this happening in anticipation of expected economic stimulus to be announced by the European Central Bank next week.
Meantime, Bank of America and Citigroup are each out with a disappointing earnings report, Home builder Lennar beat estimates, money manager Blackrock also beat estimates and raised its dividend by 13 percent. Adobe announced a 2 billion dollar share buyback. Blackberry shares are giving up yesterday’s gains after denying that Samsung is trying to buy them. Best Buy shares are about 9 percent lower on a big drop in international sales. And, it looks as though RadioShack may finally be preparing for a Chapter 11 filing.
Producer prices, the Empire and Philadelphia Fed surveys and the weekly jobs data are all coming within the next two hours.
We’re having one of the most volatile mornings in memory for stock futures, so there is no telling where they’ll be at 9:30, but at this point, adjusted for fair value, S&P 500 futures are up a half point, the Dow futures are higher by 11 points, but the NASDAQ futures are now about 2 points below fair value.
January 14, 2015
If the first two weeks of trading are any indication, we’re in for a different kind of stock market in 2015, with volatility being the order of the day. The market was higher by almost one and a half percent yesterday before taking a deep dive lower, and then closing at only moderately lower prices.
Those lower prices will again rule in the early going today, helped in part by a less-than-wonderful earnings report from JP Morgan Chase. Profit was almost 7 percent lower, and quarterly earnings of $1.19 were 12 cents per share lower than expected. Nearly a billion dollars of legal expenses get the blame. Funny how many of the big banks continue to find plenty of work for their own lawyers.
Another big bank, Wells Fargo, just reported $1.02 per share for the quarter, right in line with expectations.
At 8:30, the December Retail Sales report is expected to be only one-tenth of a percent higher, although collapsing gasoline prices may have a big impact there.
Mary Barra announced this morning that General Motors is forecasting modest improvement in earnings and margins in 2015, and are on-target for 2016 goals as well as profitability in Europe by then.
Overseas markets are a mess and so are our futures. At this point, adjusted for fair value, S&P 500 futures are lower by about 13 points, the Dow futures are down 119, and the NASDAQ futures are now about 23 points below fair value.
January 13, 2015
Alcoa unofficially waved the starting flag on quarterly earnings season last night with a report that beat estimates for sales and earnings, swinging the company to a profit. Alcoa credited strength in sales to auto makers and said that the rest of 2015 looks pretty good as well, with good order flow from the auto and aerospace industries.
Earnings reports start to flow in volume on Thursday of this week, but later today we’ll hear from Kinder Morgan and CSX, among others.
Chinese Exports rebounded in December, up almost 10 percent year over year. That’s a lot better than the November report, but still not so strong as to rule out additional monetary stimulus. And disinflation in the U.K. appears to be the order of the day. The 2014 inflation rate came in at one-half of one percent. Disinflation isn’t bad, of course. It’s Deflation that gets economists all up in a lather.
Crude oil slipping again this morning. WTI is down another 3 percent, now under 45 dollars per barrel.
European markets are solidly higher, and our stock futures are again higher this morning, but unlike yesterday, they have not been losing ground as we head toward 9:30.
At this point, adjusted for fair value, S&P 500 futures are higher by about 9½ points, the Dow futures are up 86, and the NASDAQ futures are now about 24 points above fair value.
January 12, 2015
Here comes the Auto Show to Detroit and here come the earnings reports from Wall Street. Alcoa unofficially kicks off the quarterly earnings season after the close of trading today.
In front of that, a couple bits of revised guidance are out. Lululemon revised their quarterly earnings guidance higher. The new estimate of 72 cents per share is four cents higher than the current estimate. On the famous other hand, Tiffany is losing some sparkle, along with about six percent of its stock value after saying that their annual earnings may fall about 16 cents per share short.
The big mergers in big pharma continue. Roche is buying a controlling interest in Foundation Medical at twice last Friday’s valuation. Shire is buying NPS Pharmaceuticals for 5.2 billion dollars in cash.
West Texas Intermediate Crude Oil is under 47 dollars per barrel.
Japanese stocks did not trade overnight. Other markets on that side of the Pacific were mixed, but while somewhat mixed, Europe is mostly higher. Our futures are well off their highs of the morning, but are still indicating a bit of a recovery in the early going from Friday’s swoon. At this point, adjusted for fair value, S&P 500 futures are higher by about 5 points, the Dow futures are up 43, and the NASDAQ futures are now about 8 points above fair value.
January 9, 2015
It’s the first Friday of the month, which means that at 8:30, the Labor Department will tell us about the Employment situation in our country last month. It’s expected that 290,000 new non-farm jobs came into being, which is right in line with the four-week moving average. Perhaps a little more interesting this time around will be the reported average increase in the hourly wage. With a short-term interest rate hike more likely this year than not, traders may start being more sensitive to factors that might impact the rate of inflation.
We’ve had a little flurry of reports from a bunch of retailers over the past 18 hours, and a lot of them are not so hot.
Macy’s announced the closing of 14 of their stores, including their property at Northland Mall. That will send 22,000 Macy’s employees out looking for new jobs.
Retailers Bed, Bath & Beyond, The Container Store and Five Below aren’t what used to be called “five and ten” stores. However, in the pre-market this morning, their shares are lower by 5, 10 and 15 percent respectively. Bed Bath and Beyond’s same store sales fell short, The Container Store lowered earnings guidance, and Five Below warned that the quarter gone by was a bit of a mess.
Asia mostly higher overnight, Europe is mostly lower. We’ll see if the Jobs Report changes anything at 8:30, but at this point, adjusted for fair value, S&P 500 futures are lower by about 7 points, the Dow futures are down 71, and the NASDAQ futures are now about 9 points below fair value.
January 8, 2015
The first week of the month is always packed with Jobs data. The big one comes tomorrow with the December Employment Report. But today’s tidbit is the Challenger Job Cut report. Only 33,000 job cuts were announced in December. That makes 2014’s total announced job cuts the lowest number in 7 years. Weekly Jobless Claims come at 8:30 and are expected to total around 290,000.
Fourth quarter corporate earnings news doesn’t start to flow in volume until next week, although we should hear from a handful of companies today, including Ruby Tuesday, Bed Bath & Beyond and Constellation Brands.
Biogen Idec shares are about two percent higher pre-market, on word of promising results from a multiple sclerosis drug that they’ve been developing.
If you like to buy Izod brand clothes, fire up the old computer, because all Izod retail stores will be closing. That after the announcement yesterday that two-thirds of Wet Seal retail outlets will be let out.
The Bank of England held interest rates steady at one-half of one percent this morning.
Chinese stocks were about 2 percent lower overnight, but most other overseas markets are higher and out futures this morning are even stronger than they were 24 hours ago. Adjusted for fair value, S&P 500 futures are higher by about 18 points, the Dow futures are up 167, and the NASDAQ futures are now almost 37 points above fair value.
January 7, 2015
Our five day losing streak may hit a positive bump in the road today, at least in the early going. Keep in mind that a 10 percent pullback in stock prices used to occur a couple times per year with fair regularity. As swiftly as prices have fallen over the past five days, the S&P 500 Index is only down a little over 4 percent.
Mortgage applications took another nosedive around the Christmas Holidays, in spite of lower rates. Year-over-year, mortgage applications for home purchases are down about 8 percent. That’s not particularly encouraging if you’re hoping for a dramatic rise in home prices.
The ADP Employment Report comes in about a minute. Expect a report of 235,000 new jobs last month.
The Federal Reserve will release the minutes of their latest confab at 2 o’clock. That was the meeting the Fed defied expectations and kept the “considerable time” language in the statement regarding when they might raise interest rates. That should be an interesting read.
And you may have heard that so-called bond King Bill Gross says that the good times are over for financial asset returns and that the upcoming year will be a tough one. Of course, that’s roughly the same prediction he made about 2013 and 2014 as well.
Overseas markets are mixed, but mainly a little higher. Our futures have been rising most of the morning. Right now, adjusted for fair value, S&P 500 futures are higher by about 17 points, the Dow futures are up 155, and the NASDAQ futures are now almost 31 points above fair value.
January 6, 2015
Just in case the cold weather didn’t get your attention yesterday, your stock portfolio got slapped with a cold fish in the >
You can blame the nearly two percent loss in stock prices on a lot of things. But foremost in traders’ minds seemed to be the next potential threat to the Eurozone. Trying to reassure markets, German officials stated that Greece would always be in the ‘zone.’ However, there’s a Greek election in a couple of weeks, and some of the new potential leaders there might not have the same view. Since most Greek debt is held by other European entities, any threat of default will send shivers through stock prices.
We’ll get a couple of information points regarding our economy this morning. The ISM non-manufacturing index is expected to reflect a little slowdown in the expansion of services in the U.S. That comes at 8:30. Then at 10, the November Factory Orders are expected to have slid six-tenths of a percent.
Tell me if you’ve heard this one before, but oil prices are lower by more than two percent this morning.
Japanese stocks fell by three percent. Europe has now turned mildly positive, and although our futures are off their highs if the morning, we should still see a little bounce-back at 9:30. Adjusted for fair value, S&P 500 futures are higher by about 4 points, the Dow futures are up 39, and the NASDAQ futures are now almost 9 points above fair value.
January 5, 2015
It’s back to work this week, just when a European vacation is beginning to look affordable. A single Euro, which would have cost you $1.35 a year ago, is going for $1.19 this morning. That’s a nearly nine-year low. And with and ECB meeting and a Greek election coming up later this month, $1.19 is not likely to be the bottom. Some are suggesting perhaps $1.07 per euro by the end of this year.
We’ll hear about December Car Sales as the day rolls on, and some are saying that this could be the best December in a decade. The adjusted annual rate of auto sales could approach 17 million units. Chrysler’s December sales were up 20 percent, GM could register also register a double-digit increase. Ford sales are expected to have risen by 4 percent.
New shipping rates kick in today from UPS and Federal Express. The average rate increase is nearly five percent. But perhaps the biggest change is a policy to charge not only be weight, but by package >
Chinese stocks had a pretty good session today, but most other overseas markets are lower, as our futures have been all morning long. The Russian stock market will not trade all week.
Adjusted for fair value, S&P 500 futures are lower by about 9 points, the Dow futures are down 64, and the NASDAQ futures are now about 17 points below fair value.
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