July 31, 2018
Overnight, the Bank of Japan decided that no major changes were necessary in their super-low-interest rate policy, as they continue to try to stoke some semblance of price inflation.
Tomorrow, we’ll find out what the chieftains of our Federal Reserve say. There will be no presser after the decision is announced tomorrow, and the Fed usually moves rates only at meetings that include a post-announcement press conference. Accordingly, the smart money says “no move tomorrow, but the September meeting looks like a lock for higher rates. The Bank of England will chime in on Thursday.
A couple of big earnings announcements are having little impact on their respective stock prices pre-market. Pfizer reported 81 cents per share in profit, seven cents better than expected. They raised earnings but lowered the sales outlook. Procter& Gamble’s 94 cents of profit was a 4 cent beat, but sales missed. Pfizer is about one percent lower pre-market and P&G is off about 2 percent.
Archer Daniel Midland shares are looking almost 4 percent higher after a great earnings report late yesterday. Apple reports after the close of regular trading this afternoon.
Asian markets were mixed overnight, but Europe is generally a little higher.
Adjusted for fair value, the S&P futures are higher by 7½ points, the Dow futures are up 29, andthe NASDAQ could bounce back from yesterday’s drubbing. NASDAQ futures are about 23points abovefair value.
July 30, 2018
It should be an interesting week, with another Federal Reserve meeting on the way and earnings reports from a couple of bellwether companies.
So far this morning, Caterpillar checked in with earnings that exceeded the $2.73 estimate by 24 cents. They also raised earnings guidance for the full year and shares are about 3 percent higher pre-market.
Lowering guidance and blaming uncertain trade policy is Tyson Foods. Previously, Tyson looked to earn about $6.65 per share this year. They’ve now lowered forecast to about $5.85. Traders are slicing about 6 percent off the stock’s price this morning.
Beverage maker Heineken’s outlook is nothing to raise a glass to today. They cut their forecast for profit margins this morning and the shares are off about 5 percent in Europe.
Don’t look now, but the 10-year Treasury rate is just barely under the 3 percent level this morning. At 10 o’clock, we’ll learn about the June Pending Home Sales figures.
Most Asian markets fell overnight, following our losses on Friday. Most of Europe is also lower. Our stock futures have been on a slow rise out of negative territory this morning, and they’ve largely gotten there. At this point, adjusted for fair value, the S&P futures are higher 2½ points, the Dow futures are higher by 28 points, but the NASDAQ futures are about 12 points below fair value.
The death of Sergio Marchionne is certainly casting a shadow over the auto industry this morning, as well as the shares of Fiat Chrysler. In fact, if your portfolio carries significant exposure to automotive stocks, you’re probably going to see its value shift into reverse today.
Compounding the sad news about its former CEO, Fiat Chrysler shares are bid about 7½ percent lower pre-market after the company lowered full-year guidance blaming rising commodity costs. Likewise, General Motors guided lower for the full year, blaming commodity costs and currency fluctuations even though last quarter’s $1.81 per share of adjusted profit beat estimates by 3 cents. GM shares are looking to open about 5 percent lower. Ford Motor reports in after 4 o’clock this afternoon, but Ford shares are off about 2½ percent in sympathy.
Coca-Cola, General Dynamics, GlaxoSmithKline and Boeing all reported higher profit than expected, but Boeing warned of a 426-million-dollar charge before year’s end and Boeing shares are about 3 percent lower pre-market.
The miss of the morning is Tupperware. That stock has had a rough go of it this year and shares are looking about 5½ percent lower this morning, which is better than the 9 percent drop indicated earlier today, on weaker full-year guidance.
Overseas markets are mixed, but little changed. Adjusted for fair value, the S&P futures are lower by about 4½ points, the Dow futures are down 109 and the NASDAQ futures are about6points belowfair value.
July 24, 2018
We are smack-dab in the heart of earnings reporting season, with a third of the S&P 500 reporting this week, and today is about as busy as is gets.
Last night, Google far surpassed expectations with earnings, if you ignore the $5 billion dollar fine levied by the European Union topped expectations by more than 2 dollars per share. Alphabet shares are almost 4 percent higher this morning on that news.
Bid about 5 percent higher are shares of Harley Davidson. They reported $1.45 per share, 11 cents better than expected.
Also beating their bogey this time around are 3M, United Technologies, Eli Lilly, Verizon, Lockheed Martin and brokerage firm UBS.
Sherwin-Williams had good profits but lowered their full year outlook. Those shares are looking to shed about 2 percent at the open. And Whirlpool may well be the miss of the morning. A GAAP loss of over 9 dollars per share was a surprise, and adjusted earnings of $3.20 missed the mark by 49 cents. Whirlpool also cut full year guidance and shares are indicated about 10 percent lower.
Overseas markets are higher and we’re headed in that direction as well. Adjusted for fair value, the S&P futures are higher by about 13½ points, the Dow futures are up 136, and the NASDAQ futures are about74points abovefair value.
The very sad news regarding the health of Sergio Marchionne and his removal as CEO of Fiat Chrysler has shares of the company indicated about 3 percent lower pre-market. That’s a little bit better than its level in Italian trade earlier this morning. The Fiat Chrysler quarterly earnings report comes this Wednesday.
Heading in the other direction price-wise are shares of toy-maker Hasbro. The stock suffered with the recent closing of Toys ‘R Us, but this morning Hasbro announced a profit of 48 cents per share, well ahead of the expected 29 cents on better than expected sales. Shares could rise 5 percent or so at the open.
Haliburton matched estimated earnings and Cal-Maine Foods beat the $1.47 estimate by a penny per share. Sales, however, were on the light side.
The most highly anticipated earnings news today will come after 4 o’clock when Google parent Alphabet reports. Expect adjusted earnings of $9.59 per share. Other FAANG stocks Amazon and Facebook will report later this week.
In general economic news, the May Existing Home Sales report comes at 10 this morning. Sales are expected to dip four-tenths of a percent from the April number and 3 percent from a year ago.
Asian markets were mixed overnight, although Japan fell more than one percent. Major European markets are a little lower, as are our futures.
Adjusted for fair value, the S&P futures are down less than 2points, the Dow futures are lower by only about 9 points, but the NASDAQ futuresare about20 points belowfair value.
July 20, 2018
Stock prices continue the push and pull between great corporate earnings and worries over possible trade wars. So far this morning, it appears that trade fears have the upper hand once again, in spite of some good earnings news.
Microsoft reported adjusted earnings of $1.13 per share, which was a nickel better than expected. Growth in cloud computing is getting much of the credit as Microsoft shares are up more than 20 percent this year to date and are indicted about 3 percent higher pre-market.
Not faring so well year-to-date on trade fears is Honeywell. However, Honeywell beat the $2.01 cent estimate for last quarter by 11 cents per share and raised full-year guidance. Shares also look to open about 3 percent higher.
Even beleaguered General Electric is getting in on the earnings parade. 19 cents beat the 18-cent estimate and shares are slightly higher. Sketchers appears to be the miss of the morning, after missing the 41-cent estimate by a nickel per share.
Japan was a little lower overnight, but Chinese stock rose a couple percent. Europe is mostly lower.
Earlier this morning, the futures indicated a triple digit loss for the Dow this morning but have been rallying back ever since.
July 19, 2018
An upbeat assessment on the economy from Federal Reserve Chairman Powell and another string of good earnings reports helped to rally stock prices again yesterday. You may recall that when reported profits rose about 26 percent in the first quarter. Well, so far profits are up about 25 percent in the second quarter, even though many thought a slowdown was imminent. While that kind of increase can’t go on forever, it’s apparently not over yet.
Last night, IBM reported their third consecutive quarter of revenue growth. That’s comes after six consecutive years of declines. IBM shares are about 2 ½ percent higher pre-market. Cisco Systems shares are higher after Amazon reportedly put the kibosh on rumors that Amazon was planning to build their own competing hardware.
Philip Morris shares looking lower on disappointing guidance. Domino’s is looking to open about 4 percent lower. Earnings were fine last quarter, but sales fell short of expectations. Shares of insurer Travelers a off a couple percent. Earnings were hurt by weather-related claims payments.
At 10 o’clock, the June Leading Economic Indicators are expected to rise a fairly strong four-tenths of a percent.
Most overseas markets are lower, and that’s the way we’ll likely start at 9:30. At this point, adjusted for fair value, the S&P futures are down about 10points, the Dow futures are lower by 104and the NASDAQ futures are about 31points below fair value.
July 18, 2018
The quarterly earnings parade continues to march down Wall Street this morning, and much of it is good. CSX beat the consensus earnings estimate and raised full-year guidance. CSX shares are looking to open about four percent higher. Shares of Morgan Stanley are bid more than 3 percent higher pre-market after reporting $1.30 in quarterly profit, which was 19 cents per share better than expected. Morgan Stanley also raised their dividend by 20 percent.
Abbott Labs beat the 71-cent estimate by two cents. Alphabet shares are slightly lower on word that the European Union will fine Google 5 billion dollars for illegal market domination. That brings Google total on EU fines to about 8 billion, with more on the way as the Eurozone continues to extract money from big American technology companies. Not bad work if you can get it.
Texas Instruments’ CEO is stepping down after 2 months on the job due to a reported “violation of the firm’s Code of Conduct.” The former CEO will return to the role.
We’ll get Housing Start data at 8:30. Mortgage applications fell last week, even though applications for refi loans rose 2 percent.
Asian markets were mixed overnight, but the major European markets are higher.
July 17, 2018
It’s no secret that certain stock indexes have shown better performance than your average stock this year. Because of the way various indexes are constructed, the out>
This morning, maybe not so much. Last night, Netflix revealed that second quarter new subscriber growth fell about a million short of what analysts expected. Netflix shares are looking to open more than 12 percent lower this morning. Compounding the issue, yesterday’s website glitches at Amazon have those shares indicated slightly lower pre-market.
Johnson & Johnson beat the $2.07 profit estimate by three cents and although they did not raise full year guidance, J&J shares are up about a half percent. Goldman Sachs blew away the $4.66 estimate with $5.98 in profit on strength in investment banking. Even so, Goldman shares look about one-half percent lower, after announcing the David Solomon will become CEO on October 1st.
United Health also beat estimates and raised full year guidance.
Overseas markets are mixed, but we should start the day a bit lower.
At this point, adjusted for fair value, the S&P futures are down 6 points, the Dow futures are lower by 16and the NASDAQ futures, reflecting the weakness in Netflix, are about 49points belowfair value.
July 16, 2018
Positive results from a couple of big financial firms haven’t really had much of an impact on the stock futures so far this morning.
Asset management firm Blackrock reported profit that beat the $6.55 estimate by 11 cents. Bank of America had better revenue than expected last quarter and reported a 63 cent per share profit, which was 6 cents better than expected and a third higher than a year ago.
The recent stock rocket ship Netflix will report earnings after 4 o’clock this afternoon.
Cisco Systems lost over 4 percent on Friday on a report that Amazon may be getting into the router business. Amazon looks to open slightly higher again this morning.
And speaking of which, expect the internet usage at your home and office to surge this afternoon as Amazon Prime Day kicks off at 3 o’clock.
Overseas markets are mixed, but on average a little bit lower. Our futures have lost most of their overnight gains and have been hovering around the flatline for the past couple of hours. At this point, adjusted for fair value, the S&P futures are down less than a point, the Dow futures are higher by 14 points and the NASDAQ futures are about 5 points above fair value.
July 13, 2018
On Wednesday, the Trump administration threatened tariffs on 200 billion dollars’ worth of Chinese imports. Stocks went down. Yesterday, China said – well – pretty much nothing. That apparent lack of reflex response gave rise to the hope that compromise might eventually take the place of confrontation. Stocks rose.
This morning, the futures are in wait-and-see mode and may actually get a chance to react to corporate earnings rather than international intrigue.
Front and center are the big national banks. JP Morgan Chase reported $2.29 cents in net profit. That was 7 cents better than expected and shares are indicated about a half-percent higher. PNC’s profit of $2.72 per share was 14 cents better than expected and shares look to open about one and a half percent higher. Citigroup’s $1.63 was 7 cents better than expected, although revenue came up a bit short.
Wells Fargo appear to be the banking miss of the morning. 98 cents fell 12 cents short of analyst estimates. At 10, the University of Michigan’s preliminary reading on the July mood of the Consumer is expected to rise a bit to 98.4.
Overseas markets are generally higher. At this point, with the stock futures, there’s absolutely nothing going on, S&P, Dow and NASDAQ futures are all within a couple of points of fair value.
July 12, 2018
Trade tensions with China and NATO tensions with Europe resulted in a bit of stock market “rally interrupus” yesterday. However, yesterday’s losses could be largely recovered in the early going today after some apparently good news out of the NATO summit.
One company releasing some very good news this morning is biotech firm Zogenix. Positive results in a late-stage trial for a potential treatment for a severe form of epilepsy has Zogenix stock more than 20 percent higher pre-market.
Delta Airlines shares are gaining some altitude after announcing $1.77 per share in adjusted earnings. That was a nickel better than expected, although profits are lower than a year ago due to rising fuel costs. Delta is raising its dividend by 15 percent and the shares are indicated about one percent higher.
CA Technologies, the old Computer Associates, is being bought by Broadcom at a 20 percent premium.
After yesterday’s relatively hot number regarding producer prices, at 8:30 we’ll find out how much consumer prices rose in June. Expected a two-tenths of a percent increase, which would bring the year-over-year inflation rate to 2.9 percent.
Stock indexes in China rose more than two percent overnight. Most other major markets overseas are higher as well.
At this point, adjusted for fair value, S&P 500 futures are higher by about 12 points, the Dow futures are up 185, and the NASDAQ futures are just about 30 points above fair value.
July 11, 2018
Major Asian markets were lower by one to two percent overnight and European markets are trading lower this morning after the Trump Administration proposed tariffs on an additional 200 billion dollars’ worth of Chinese imports. Nothing is immediate, in that there will be a two-month comment period. The shock and awe of the proposal is the amount. 200 billion far exceeds the TOTAL amount of goods that China imports from the United States. China has promised to respond in-kind, which presumably means that they’ll have to get creative with any retaliatory measures. Just what those measures might be – only time will tell.
It’s almost time for the big banks to unofficially open up the second quarter corporate earnings season. A bunch of them will report on Friday of this week.
This morning, industrial construction supplies wholesaler Fastenal reported 74 cents per share in net profit. That was 8 cents better than expected and 22 cents better than last year’s second quarter. Fastenal shares are looking to surge about 7 percent at the open. Shares of WD-40 are indicated about 2 percent lower on a weak forecast.
After a four-day winning streak for stock prices and eight days of the last nine, our futures took an immediate turn for the worse after yesterday’s Chinese tariff announcement and haven’t recovered very much since. At this point, adjusted for fair value, S&P 500 futures are lower by about 16 points, the Dow futures are down 168, and the NASDAQ futures are just about 51 points below fair value.
July 5, 2018
It’s already Thursday and we’ve only had one and a half days of stock trading this week. That doesn’t mean that things have been dull.
Our strong start on Tuesday turned sour by the one o’clock close of trading. However, it looks like Tuesday’s losses could be recovered in the very early going today. Looking forward to the rest of the week, we’ll get the June Employment Report tomorrow as well as possible tariff imposition by the United States and China.
This afternoon, the minutes of the recent Federal Reserve Open Market Committee meeting come at 2 o’clock, and before that, the PMI and ISM reports on the health of the services industries at 9:45 and 10 o’clock, respectively.
The biotech disaster du jour appears to be the shares of a company named Zynerba. They were testing a cannabis skin patch for treatment of neuropsychiatric disorders. Bummer, man, even the early-stage trials turned out to be a downer and the shares are off about 21 percent pre-market.
Asian markets were mixed, but mostly lower. Europe has turned higher on the possible avoidance of increased automobile tariffs. But that thought is still more hope than reality. Still General Motors shares look to open about two percent higher.
At this point, adjusted for fair value, S&P 500 futures are higher by about 19 points, the Dow futures are up 193, and the NASDAQ futures are just about 53 points above fair value.
July 3, 2018
We started yesterday with an almost 200-point dive for the Dow Jones Industrials. However, by the end of that first trading day of July, its reputation of being a good day for stock prices was intact. The major indexes rose about one half of one percent. Oil was higher by more than one percent yesterday and is almost one and a quarter percent higher this morning, after word of supply issues on Libya.
We’ll get the word on monthly automobile sales from the major automakers starting in the 9 o’clock hour. Expect that sales to have maintained an annual pace north of 17 million units. GM will report for the first time in three months. After quite a good rise though June 15th, GM shares have fallen more than 12 percent on fears of increasing tariffs.
A 10 o’clock, the report on May Factory Orders is expected to show no change from April’s number.
The Hang Seng Index in Hong Kong missed yesterday’s slide in Asian stock prices due to a holiday, but made up for it today, dropping almost one and one-half percent. Mainland China recovered a bit today, rising four tenths of a percent. Europe is trading significantly higher.
It will be a shortened trading day in the U.S. with a one o’clock close in anticipation of tomorrow’s Independence Day Holiday. If early indications hold, we’ll go into the Holiday with some fireworks. Adjusted for fair value, S&P 500 futures are higher by about 12 points, the Dow futures are up 142, and the NASDAQ futures are just about 44 points above fair value.
July 2, 2018
The first trading day of July has historically been one of the best, if not the best day for stock prices. So far, however, markets around the world appear to be more worried about future tariffs than past performance.
Canadian tariffs on 12.6 billion dollars of American goods kicked in yesterday. The European Union is now threatening tariffs on almost 300 billion dollars worth of U.S. exports. That’s in response to President Trump’s threatened tariffs on European-produced vehicles. Conventional wisdom holds that all of this is a giant game of chicken. However, it looks like some of those chickens are coming home to roost.
By 10 this morning, we’ll get the June manufacturing sector reports from ISM and PMI. Both are expected to be a bit weaker than the April numbers, as is the report on May Construction Spending that will be announced at 10.
Japanese stocks were lower by more than 2 percent overnight. Mainland China was off 2½ percent and European markets are generally about one percent lower.
Our futures are almost a mirror image of this time last Friday and that’s not a good thing. Adjusted for fair value, S&P 500 futures are lower by about 13 points, the Dow futures are down 135, and the NASDAQ futures are just about 44 points below fair value.