June 30, 2015
It’s the last day of the second quarter and the first half of the year and it’s also deadline day for two sets of negotiations that appear to have limited hope of a successful conclusion. This as we come off the worst day that our stock market has suffered in over a year.
The Greek Government has announced that they will not make their scheduled payment to the International Monetary Fund today, after showing up at the debt negotiation poker game without any cards.
Over in Iran, it’s deadline day for the nuclear power program negotiations, which are making the Greek talks look like a piece of cake. July should get off to an interesting start.
Speaking of cake and food of all sorts, ConAgra Foods reported in-line profits of 59 cents per share and their shares are almost 3 percent higher this morning on word that they will scale back their private-label products and focus on direct-to-consumer products, where margins are presumably better.
Asian markets were higher overnight. The Shanghai Index in China was more than 6 percent higher on more government stimulus as well as a plan to have pension funds invest in stocks. Europe is mixed, but pretty much unchanged.
We’re looking at what would be considered a big rally, if it weren’t for yesterday’s huge downdraft. Adjusted for fair value, the S&P 500 futures are higher by about 17 points, the Dow futures are up about 127 and the NASDAQ futures are about 34 points above fair value.
June 26, 2015
In case you thought that our beloved Congress was the very best at “kicking the can down the road,” there’s a new challenger for that title. This morning, European lenders are reportedly raising the possibility of a five month extension of the latest deadline for Greece to repay debt. All that soccer over there has apparently sharpened their kicking skills, and has given a whole new meaning to the term “deadline.”
Nike reported 98 cents of operating profit last night for the quarter gone by. That was 15 cents better than expected and Nike shares are indicated more than 3 percent higher pre-market.
Animal health care firm Zoetis, which was spun off from Pfizer about two years ago, appears to be in play. Valeant Pharmaceuticals has reportedly approached Zoetis and that news pushed Zoetis shares more than 11 percent higher yesterday.
The Shanghai Index in China was off more than 7 percent overnight. European markets are still lower, but have improved after the possibility of a Greek bailout extension was reported.
Our futures have also improved, and are indicating a higher open. Adjusted for fair value, the S&P 500 futures are higher by about 4 points, the Dow futures are up about 54 and the NASDAQ futures are about 7 points above fair value.
June 25, 2015
Only four trading days remain in this year's second quarter and stock prices should be volatile as everyone watches the accelerating Greek debt default train come careening down the tracks. The track ends next Tuesday, although if there is to be an agreement, it will likely be reached by Sunday.
Tracking higher this morning are shares of Disney. The Mouse House announced a 15% hike in their dividend, and will henceforth pay that dividend twice per year.
Winnebago shares are driving about 3 percent higher this morning on an earnings beat. Herman Miller also beat estimates, but last night Bed Bath and Beyond checked in a penny per share short. Weekly Jobless Claims at 8:30 are expected to come in at 273,000, which would be a slight increase. We'll also get word on personal income, spending, inflation and the health of the Services Sector before the morning is over.
Netflix and Amazon.com suffered broker downgrades this morning.
Asian stocks were lower over night but Europe is trending higher.
Our future are off their highs, but are still indicating some recovery from yesterday's losses. Adjusted for fair value, S&P 500 futures are up 7, Dow 30 futures are up 83 and the NASDAQ futures are about 18 points above fair value.
June 24, 2015
Greek and European leaders are still talking, but neither side seems to be saying the right things to the other this morning. Monday’s Greek proposal has been rejected by creditors and the next few days will be devoted to emergency meetings aimed at avoiding default. While markets appear to be holding out hope for a deal, even the latest Greek proposal, which was rejected by lenders, wasn’t very popular in Greece either, where an age 55 retirement is evidently considered a birthright.
On to happier subjects, Ford Motor shares are looking about one and a half percent higher this morning after an analyst upgrade. Shares of home builder Lennar are almost 4 percent higher after reporting better than expected sales and earnings. Sales were nearly 20 percent higher than a year ago.
Netflix shares are trading almost 3 percent higher this morning on last night’s announcement that the stock will split 7 for 1.
The Government’s final estimate of first quarter Gross Domestic Product comes at 8:30 and is not expected to be highly inspiring. Expect a decline of two tenths of a percent.
Japanese stocks traded at an 18 year high overnight. In fact, most of Asia was higher overnight, but Europe is predictably lower on the drama regarding a possible Greek tragedy.
Our gains from yesterday will likely be a fond memory at 9:30. Adjusted for fair value, the S&P 500 futures are lower by almost 4½ points, the Dow futures are down 54 and the NASDAQ futures are almost 9 points below fair value.
June 23, 2015
Traders continue to hold out hope that everybody in the Greco-European games will play nice this weekend and that by Tuesday, there will be a deal that keeps Greece from a debt default. This morning, the Greek Prime Minister is getting some blowback from his own backers, warning hum against too many concessions. Nevertheless hope springs eternal, at least for another week.
Hopes for Blackberry are running high this morning, with the shares up about 8 percent. Earnings and sales were less than expected last quarter. But, profit margins were higher as were certain licensing revenues.
Also higher are shares of Darden. That’s the Bahama Breeze, Longhorn Steakhouse and Olive Garden parent. They are taking a page out of the Sears Holdings playbook and recognizing that maybe their real estate is the most valuable part of their business. Darden will spin off some real estate into the real estate investment trust before years’ end. Traders like the news, pushing the shares up about 6 percent.
The May Durable Goods Report at 8:30 is expected to decline about a half percent on weakness in aircraft orders.
Chinese stocks were down 5% early on, but recovered to finish 2% higher. Absent any bad news out of Europe should head higher at 9:30 as well. Adjusted for fair value, the S&P 500 futures are higher by almost 5 points, the Dow futures are up 40 and the NASDAQ futures are about 11 points above fair value.
June 22, 2015
If you pay a lot of attention to the daily swings in stock prices, well, you really need a new hobby, especially given the fact that what swings stock prices often has very little to do with what the underlying companies are worth.
Once again this morning, some conciliatory words from the Greek Government about reforming their public pension system raised hope that some sort of bailout agreement will be reached with European creditors before the June 30thdeadline. Of course, later in the morning, some European officials threw some cold water on those warm hopes. Nevertheless, global stock prices are on the rise as hope once again trumps experience.
Energy Transfer Equity would like to experience a merger with Williams Companies, but Williams says “thanks, but no thanks.” That offer in the natural gas pipeline industry would value Williams at 64 dollars per share. Those shares closed at about 48 dollars a piece on Friday. We’ll see what happens next.
Expect the May Existing Home Sales Report at 10 to estimate an annual run rate of 5.25 million units, which would be a nice increase from April.
The European markets that are open are surging higher. The Greek market is up about 6 percent. Our futures are off their highs, but are still indicating a quick recovery from Friday’s losses.
Adjusted for fair value, the S&P 500 futures are higher by about 12 points, the Dow futures are up 108 and the NASDAQ futures are nearly 30 points above fair value.
June 18, 2015
We made it through another fairly benign Fed meeting yesterday and we know just about as much about interest rates as we did before. Short term rates are still basically zero, a rate hike is coming, maybe two before the end of the year – but now maybe just one. And maybe –just maybe – we shouldn’t worry about when rates will rise but how much they will rise over the next 12months.
A couple of stocks that will NOT be rising this morning are Oracle and Rite Aid. Last night, Oracle issued a disappointing earnings report, and even though their “cloud” business is picking up, it’s not picking up fast enough. Oracle shares are more than 6 percent lower pre-market. Rite Aid’s same store sales slipped, they lowered earnings guidance, and the shares are more than 4 percent lower this morning.
The IPO of the day is Fitbit, and it should be a hot one. Pricing at 20 bucks per share, well above its expected range of 17 to 19, Fitbit shares should run uphill pretty fast, even if those wearing the product are standing still, or simply using a mirror rather than a gadget to tell themselves that they’re somewhat out of shape.
Markets overseas are mainly in the red, but at this point, our futures are in just about the same shape as they were 24 hours ago, and that shape is modestly higher. Adjusted for fair value, the S&P 500 futures are higher by almost 4 points, the Dow futures are up 39 and the NASDAQ futures are about 8 points above fair value.
June 17, 2015
As we tend to do every six or seven weeks, we will anxiously await a 2 o’clock announcement from the Federal Reserve. And, for the 52ndtime in a row, we are expecting no change in the Fed’s target for short term interest rates. Most expect that the increase is coming in either September or December. That means we’ll probably go to 53 in a row when the Fed meets again in late July.
This time around we’ll also get a 2:30 press conference from Fed head Janet Yellen. There’s no telling, of course – but lately, stock prices have rallied when Yellen’s been a’tellin’.
Last night, Adobe was a’tellin us that last quarter was good, but the rest of the year maybe not so much. Adobe shares are off about one percent pre-market as are shares in FedEx, which missed the $2.68 profit estimate by 2 cents.
There are yet two more health-care related mergers this morning. Hill-Rom is buying Welch Allyn and Allergan is picking up Kythera Pharmaceuticals. Both are 2.1 billion dollar deals. And NCR may be is play as a couple of private equity firms are reportedly putting a bid together.
Most of Asia was higher overnight. Most European markets are lower, but not by a lot. At this point, adjusted for fair value, the S&P 500 futures are higher by 3 points, the Dow futures are up 35 and the NASDAQ futures are about 6 points above fair value.
June 16, 2015
Gap shares are a fraction of a percent higher after a curiously worded press release yesterday. GAP announced that over the next few years they will close a quarter of their GAP stores to “better reflect how customers shop.” One might guess it’s more of a reflection of where former customers shop. They also added they will eliminate 250 corporate jobs to “speed decision making and responsiveness.” You wonder if they had gotten rid of those 250 people long ago, the stores would already be closed. Whatever.
The Federal Reserve Open Market Committee starts a two day meeting today. They have not changed short term interest rate targets for 51 straight meetings at this point, and the betting is that they’ll make it 52 tomorrow, especially in light of the current European turmoil.
At 8:30 the May Housing Starts will be announced and after a very strong April report, are expected to back off a little to an annualized rate of 1.09 million units.
Earnings reports come from La-Z-Boy and Adobe later today. Shares of Coty are more than 15 percent higher this morning. They may be buying some businesses from Procter & Gamble.
In the meantime, we’re looking at more red arrows for our stock market, although the futures are in much better shape than they were a couple of hours ago. At this point, adjusted for fair value, the S&P 500 futures are lower by 7 points, the Dow futures are down 41 and the NASDAQ futures are about 14 points below fair value.
June 15, 2015
If you’re in the habit of stopping at CVS to pick up a prescription after making a quick stop at Target – you’ll be able to enjoy one-stop shopping pretty soon. In a 1.9 billion dollar deal, CVS will acquire the Pharmacy and clinic businesses of Target. That’s almost 1700 pharmacies and 80 clinics nationwide. Target will trim down their stock buyback program to make the purchase, which should hurt profits this year, but will be accretive starting in 2016.
The Industrial Production Report comes at 9:15 and the Housing Market Index Index at 10, but the Federal Reserve Open Market Committee Statement on Wednesday headlines the reports of the week.
No news is sometimes good news, but no talking between Greece and its creditors is not good news for stock prices this morning as the June 30thdebt-repayment deadline is one day closer. A meeting between Greek and Eurozone representatives lasted only about 45 minutes and markets in Europe are getting roughed up as a result. But, if you like to live life on the edge, the yield on the 2 year Greek bond is about 28 percent this morning. So, if a return ON your money is more important to you than a return OF your money – have at it.
Stocks in India rose overnight, but that’s about the only market in the green. Greek stocks are more than 5 percent lower and Europe overall is off about 2 percent. Our futures continue to slide.
At this point, adjusted for fair value, the S&P 500 futures are lower by almost 13 points, the Dow futures are down 101 and the NASDAQ futures are about 25 points below fair value.
June 12, 2015
Another restaurant chain is coming public, and it’s being served up hot. A Dallas-based eatery called Wingstop is coming public and has announced that the shares will come public at 19 bucks per share, which is about 50% higher than the projected price of 12 to 14 dollars. But this is America, so we go to Chipotle, Shake Sack, Buffalo Wild Wings and Wingstop. Wonder why no one starts a company called “Salad Central.”
Traders’ collective fixation on the ongoing Greek drama has stock prices looking more like tragedy than comedy this morning. The Greek market, which rose about 8 percent yesterday while bailout talks continued, dropped more than 4 percent today, on news that the IMF negotiating team went home for what could be a very long weekend last night.
Producer Prices come at 8:30 and the University of Michigan’s first look at June Consumer Sentiment comes at 10. Expect PPI to be up to four-tenths of a percent and sentiment to rise to 91.2
Asia was mostly higher overnight, following on to our gains yesterday, but Europe is sliding. Our traders will likely take back yesterday’s profits in the early going. At this point, adjusted for fair value, the S&P 500 futures are lower by about 6 points, the Dow futures are down 44 and the NASDAQ futures are about 17 points below fair value.
June 11, 2015
Stocks in Greece are higher by more than 7 percent at this hour. Negotiations continue, and the Germans appear to have blinked ever so slightly, giving hope to those who think that all will be well in the European Union. June 30this the latest deadline for something definitive to happen.
Lululemon founder Chip Wilson is making a definitive move. He has filed to sell all 20 million of his shares in Lulu. That represents about 14 percent of outstanding shares and the news has the price Lululemon shares off about 3½ percent.
The Weekly Jobless Claims report comes at 8:30, but perhaps more importantly, the May Retail Sales Report is expected to perk up by 1.3 percent which would be a great improvement from a disappointing April Report.
Men’s Wearhouse shares are over 7 percent higher premarket on a good earnings report and word that soon you’ll be able to rent a Men’s Wearhouse tuxedo at your local Macy’s store.
Harley Davison gets a downgrade this morning, but domestic stocks in general should trade higher, even after a big rally yesterday.
At this point, adjusted for fair value, the S&P 500 futures are higher by about 4 points, the Dow futures are up 43 and the NASDAQ futures are about 12 points above fair value.
June 10, 2015
Yes, interest rates appear to be headed higher, and long term rates will move ahead of short term rates and prospective home buyers appear to be paying attention. New mortgage applications rose 8 percent last week, according to the Mortgage Bankers Association, as people have apparently decided to lock in while the lockin’ is good.
Good news today for shareholders of Sanofi and Regeneron, as well as for people with high cholesterol whose statin treatments aren’t going so well. A new anti-cholesterol drug called Praulent has gotten FDA approval. Just coincidentally, we’ll get an earnings report from Krispy Kreme later today.
Recently IPO’d shares of Shake Shack are about 7 percent lower premarket after a soft earnings report, and cloud-storage firm Box reported a wider than expected loss last night.
Retailer Target announced a nearly 8 percent hike in its dividend this morning, and will boost its share buyback program to 10 billion dollars. Insurer Prudential also thinks its stock is undervalued. They’ll buy back an additional 1 billion dollars in stock.
A story with some potential local impact – Johnson Controls is reportedly looking at “options” for its automotive business. Johnson Controls are higher by more than 6 percent pre-market on the news.
Don’t look now, but we could have an early rally on our hands. At this point, adjusted for fair value, the S&P 500 futures are higher by almost 9 points, the Dow futures are up 64 and the NASDAQ futures are about 19 points above fair value.
June 9, 2015
The formerly beleaguered Lululemon, which gave a whole new meaning to the term “transparency” has been on the rebound this year and its shares are more than 3 percent high this morning. Earnings last quarter of 13 cents per share were a penny better than expected on a 6 percent rise in comp store sales. Full year guidance was also raised by a penny. Dave and Busters is also about 3 percent higher on an earnings beat.
On the merger front, AOL has found a buyer. Verizon is that buyer, and 4.4 billion is the price tag.
The National Federation of Independent Businesses released their survey results this morning that show that small business owners are more optimistic than they have been at any time during the past five months.
In case you haven’t noticed, The Dow Jones Industrial Average is now down for 2015. The S&P 500 is still higher than it was December 31st, but only by 4 points.
Overseas markets are lower across the board this morning.
U.S. stock prices have suffered a case of the late-day fades recently. Today, we should start off a bit lower as well. The Dow futures were off almost 50 points earlier this morning, and although they’re still negative, they’re in better shape than that. At this point, adjusted for fair value, the S&P 500 futures are down 3 points, the Dow futures are down about 12 points and the NASDAQ futures are 12 points below fair value.
June 8, 2015
It should be a relatively quiet week of trading, as we’re right in between earnings season and another Federal Reserve meeting. Perhaps the big report of the week will come Thursday with the retail sales report as we find out just how much consumers have been willing to spend.
This morning comes word that wherever consumers are spending, they continue to spend less at Sears and Kmart. Same store sales at Sears are off 14 percent, Kmart same store sales are off 7 percent. Losses last quarter were $2.85 per share. However, the shares of Sears Holdings, which owns all those stores, are 24 percent higher this year, and are one percent higher pre-market, mainly due to the rumored sale leaseback of 235 Sears and Kmart stores to a real estate investment trust. That may all come into being later this week.
At 10 o’clock, the May Labor Market Conditions Report is expected to show a turnaround from April’s negative report. Expect a 2.3 percent improvement.
Outside of China and Greece, major markets overseas are lower.
It’s been a very quiet morning in the futures market and it remains so. At this point, the S&P 500 futures are flat, the Dow futures are higher by 7 points and the NASDAQ futures are 4 points above fair value.
June 4, 2015
As we await the Monthly Jobs Report that is due for release tomorrow, we’ll get the weekly Claims number at 8:30 this morning. Expect a decline to 276,000 new claims, which would be a 6,000 claim improvement from last week.
Placement firm Challenger reported that Layoff Announcements in May will cut only 41,000 jobs. That’s down 23 percent from last year, with the new cuts mainly coming from state governments trying to balance their budgets and a 5,000 person cut at JP Morgan Chase, which is trying to make more money.
Worldwide, there was no improvement in May same-store sales at Costco, although sales in the U.S. were about two percent higher.
Smucker’s is out with an earnings warning this morning. If the best part of waking up is really Folger’s in your cup, we may need to wake more people up as Smucker’s blames weak sales of Folger’s for lower projected full year earnings. The new target is about $5.72 per share. Analysts expected something more like $5.84.
Our futures are off their worst levels of the morning, but that doesn’t mean they’re good. At this point, adjusted for fair value, S&P 500 futures are lower by 8 points, Dow futures are down 61, and the NASDAQ futures are about 25 points below fair value.
June 3, 2015
The car sales reports yesterday were terrific. That Monthly Jobs data comes the day after tomorrow. But make no mistake, the focus is still on the European Union and Greece as they look for an answer to the age-old question – “How can you borrow a bunch of money from someone, refuse to pay them back, and still stay best friends?” Traders appear to believe that there IS an answer over there, as the Greek stock market is higher by 4 percent this morning.
For its part, the ECB held short-term interest rates steady this morning. ECB head poobah Mario Draghi holds a press conference in just about 15 minutes. What he says may impact how our stock market opens an hour later.
Shares of Wendy’s will open higher. They’re up almost 6 percent pre-market, after the company announced a 1.4 billion dollar stock buy-back program. United Health is raising their dividend by 33 percent and Brown Forman’s 66 cents in quarterly profit met expectations, although sales were stronger than expected.
Shares of Vera Bradley are halted, pending news this morning. That news could be their earnings report, was is expected to be almost 90 percent lower than a year ago.
Asia mostly lower. Europe is higher by about one percent. Right now, adjusted for fair value, S&P 500 futures are higher by 9 points, Dow futures are up 93, and the NASDAQ futures are about 27 points above fair value.
June 2, 2015
As the creditors prepare their “final” offer, the bankrupt lender appears to be standing firm as the Greek drama heads for its latest crossroad which comes Friday. Who blinks first is anybody’s guess. But whatever happens, this story appears to be a long way from over.
Our only economic report of the day is the April Factory Orders, which are expected to be pulled into negative territory on a downdraft in aircraft orders.
There are a couple of positive earnings reports are out. Dollar General reported 84 cents in quarterly profit, 3 cents ahead of estimates, although sales were a bit short. Nevertheless DG shares are almost 3 percent higher pre-market. Medtronic shares are about 1½ percent higher, on a 5 cent per share beat in profits, although guidance was lowered a bit. Retailer Guess reports a little later on.
If you were looking forward to subscribing to Apple TV service, you can put down the remote for a while. Due to ongoing negotiations with content providers, Apple reportedly may delay Apple TV service until next year.
China was up again overnight, Europe is mostly lower as it struggles to get the Greek situation resolved.
Our futures just to a step lower. Right now, adjusted for fair value, S&P 500 futures are lower by 7 points, Dow futures are down 42, and the NASDAQ futures are about 13 points below fair value.
June 1, 2015
Welcome to June. Concerning stock prices, it’s a month that’s gained a lousy reputation over the past ten years. Over that time, financial stocks have been hurt the most, but if you measure stock performance by the S&P 500, the last ten Junes have averaged a 1.3 percent decline.
Declining this morning is the value of the euro in dollar terms.
Yesterday, Greece missed a self-imposed deadline to come up with another bailout deal with its neighbors to the northwest. Greece has a 300 million euro payment due this coming Friday, the cash for which does not appear to be there. But that’s not the end of it. Another 300 billion euros is due by the end of next week, and 900 billion euros are due the week after that. Not to mention the 6.7 billion euros due by the end of the summer.
We’ll supposedly find out about our Monday Merger later today as Intel is expected to announce the acquisition of chip-maker Altera. Citigroup shares are higher on a broker upgrade. Disney shares also looking higher on a positive article in Barron’s magazine over the weekend.
Chinese stocks bounced back by almost 5 percent overnight. European markets are mixed, but it looks like we’ll see some early morning recovery from Friday’s weakness.
At this point, adjusted for fair value, the S&P 500 futures are higher by about 7½ points, Dow futures are up 89, and the NASDAQ futures are about 27 points above fair value.