Last month, the Chicago Purchasing Managers Index actually reflected economic contraction in the Midwest Region for the first month in three. At quarter to ten this morning, the June number is expected to climb back into expansionary territory â€“ but just barely â€“ at a reading of 50.5.
Ahead of that weâ€™ll get the weekly Unemployment Claims number, which is expected to tick up to 266,000. The monthly Employment Report from the Labor Department will NOT be available on the first Friday of the month (which is tomorrow) apparently because the Labor Department has granted themselves a long Holiday Weekend. Just kidding about that â€“ kind of.
Darden Restaurants beat estimates by a penny and is hiking its dividend by 12 percent. A lot of big banks have been given the go-ahead by the Government to use excess cash. Citigroup, in response, is buying back more shares and more than tripling its dividend.
Oil futures are about one percent lower. Our stock index futures are shrugging off that weakness and pointing higher, although theyâ€™re a lot weaker than they were a couple of hours ago, and weakened considerable just in the past half hour. Adjusted for fair value, S&P 500 futures are higher by just a point, Dow futures are higher by 15, and the NASDAQ futures are now about even fair value.
The bounce back from the Brexit bombshell appears set to continue this morning as more people question whether the Brits will actually file for divorce from the European Union. After seeing the pound crater in value, many in the U.K. may be re-thinking their positions. While a re-vote is still unlikely, itâ€™s not out of the question. The pounding of the pound, by the way, has stalled, as the pound is almost one percent higher this morning.
Sony is out with mid-term guidance, affirming fiscal 2017 and 2018 targets on the strength of video game sales. The weak link appears to be image-sensor sales due to a slowdown in demand for Appleâ€™s iphone.
At 8:30 weâ€™ll find out how much we earned and spent in May. Expect that income went up three-tenths of a percent and spending went up four-tenths of a percent as Americans continue their outstanding work at outspending their income.
General Mills just reported 66 cents per share of operating income. That was 6 cents better than expected. Nike also beat the earnings bogey, but guidance was weak, and Nike shares are off about one percent this morning.
Asian markets rose about 1Â˝ percent overnight. Europe is higher by two percent.
Adjusted for fair value, S&P 500 futures are higher by 13 points, Dow futures are higher by 99, and the NASDAQ futures are about 28 points above fair value.
In case you saw something odd in the sky over the last two trading days, it could have been the roughly 3 trillion dollars that magically floated up to â€śmoney heavenâ€ť since the Brexit vote in England. That â€śBrexit refluxâ€ť may or may not be over, but we are getting a little bounce back in stock prices this morning.
And while not exactly 3 trillion dollars, 15 billion dollars is not chump change. But nearly 15 billion dollars is the amount that Volkswagen will reportedly have to pay in fines, diesel owner compensation and car buybacks in connection with their diesel emission fraud scandal.
Dow Chemical is restructuring the Dow Corning operations, with projected savings of 500 million dollars, but at the cost of 2,500 jobs.
Our Government will take their third and final guess at first quarter Gross Domestic Product at 8:30. Itâ€™s expected that the economy grew by only one percent in the first quarter, but that would be a revision higher from the last estimate of eight-tenths of a percent.
Data on Home prices and Consumer Confidence are also due this morning.
Japanese stocks were higher again overnight. European markets are higher by anywhere from 2 to 5 percent this morning. Our stock futures are in the green at this hour, but itâ€™s a much lighter shade of green than earlier this morning. Adjusted for fair value, S&P 500 futures are higher by about 14 points, Dow futures are higher by 142 points, and the NASDAQ futures are about 32 points above fair value.
Weâ€™re into the last week of the calendar quarter, with readings on the way this morning that include the PMI Flash Services Index and the Dallas Fedâ€™s Manufacturing Survey. But make no mistake, tradersâ€™ focus is clearly on Europe and the U.K.
If youâ€™re looking for good news in the Brexit fallout, youâ€™re next European vacation just got a lot more affordable. This morning, the Euro is valued at less than $1.10 and the British pound is down to $1.32 and heading lower. But, if youâ€™re a saver or a stock investor, the news is not so good. The yield on the 10 year U.S. Treasury bond is at 1.47 percent this morning and stock futures are on another wild ride.
Earnings and interest rates are fundamental to stock values, but if thereâ€™s one thing that hurts stock prices, itâ€™s uncertainty. We have uncertainty in spades in the wake of last Thursdayâ€™s Brexit vote. Shares of Barclays Bank and Royal Bank of Scotland are ANOTHER 20 percent lower in Europe this morning. The Dow Industrials futures were more than 150 points lower last night, then actually turned positive around 2 oâ€™clock this morning. However, that rally ended there and at this point weâ€™re looking for more red numbers when the market opens at 9:30.
European markets are about two percent lower. Adjusted for fair value, S&P 500 futures are lower by 24 points, Dow futures are down right around 173 points, and the NASDAQ futures are about 49 points below fair value.
The European Union was conceived 59 years ago, but yesterdayâ€™s vote in the U.K. may mark the beginning of the end of that grand experiment. It will take some time for England to leave. First, theyâ€™ll need a new Prime Minister, secondly, that Prime Minister will have to invoke Article 50 of the Treaty of Lisbon, which will start a 24 month clock running. In the meantime, a lot of treaties, tariffs and immigration policies will change. Perhaps the biggest fear for the European bureaucrats is that several more countries may hold exit votes in the coming years.
Thereâ€™s no question that breaking the Union will hinder trade in the short, and maybe long term. Itâ€™s interesting to note the willingness of the British people to risk massive economic change in order to get more control over immigration policy. We have an election coming up in November, if you havenâ€™t noticed.
In any event, the Brexit approval sent stocks around the world plummeting overnight. Japan was down 8 percent. European markets are understandably having their worse day in almost 40 years. Italy is down more than 10 percent. Spain lower by more than 12 percent. Germany is down 7 percent and U.K. stocks are down about 4Â˝ percent.
The May Durable Goods Report and the University of Michiganâ€™s final reading on June Consumer Sentiment come this morning, but nobody cares. Oil futures are down about 4Â˝ percent. Futures on the Dow Jones Industrials were down about 750 points at one point this morning. Keep in mind that the Dow rose 230 points yesterday and note that the big pullback has continued to moderate this morning. But at this point, adjusted for fair value, S&P 500 futures are lower by 72 points, Dow futures are down right around 500 points, and the NASDAQ futures are about 155 points below fair value.
Itâ€™s no big secret that stock prices worldwide will rise and fall today along with the stability of the European Union. We wonâ€™t get the final results from the British secession vote until about 3 oâ€™clock tomorrow morning. However, the latest polling indicates that the U.K. will stay, and that has stock prices on a bit of a tear this morning. Keep in mind, though that a lot of that may be short covering, rather than impetus for a new leg higher in prices. And of course, the latest polls could have it wrong, given that even the most pro-â€śstayâ€ť polling estimates that the â€śstayâ€ť vote will win by only 5 percentage points.
Sometimes, even breaking even is a â€świn.â€ť Thatâ€™s the way it is for Blackberry this morning. Operating results broke even last quarter which was much better than expected. Accentureâ€™s $1.41 of profit matched the average analyst estimate.
Focusing on our economy for a minute, weâ€™ll get the Weekly Unemployment data, the PMI Manufacturing Flash Report, the May New Home Sales Report and the Leading Economic Indicators all by 10 this morning.
Oil futures and European markets are both up about a percent and a half. Our futures are off earlier highs, but are still indicating that itâ€™ll be rally time at 9:30.
Right now, adjusted for fair value, S&P 500 futures are higher by 17 points, Dow futures are up 147, and the NASDAQ futures are about 35 points above fair value.
Janet Yellen is back up to Capitol Hill this morning, just to make sure that members of the House Financial Services committee that werenâ€™t paying attention to her testimony to the Senate Banking committee yesterday might get the message today. That message, by the way, seems to be that the Fed is in no big-time hurry to raise interest rates, and that if the Brexit vote in the U.K. passes, there are some rough waters ahead.
Speaking of rough waters, shares of Tesla are about 11 percent lower this morning after last nightâ€™s news of a 2.8 billion dollar offer to buy Solar City. Itâ€™s not cash, mind you â€“ itâ€™s in shares of Tesla. For its part, Solar City shares, which were over 60 bucks apiece less than a year ago, and closed at about 21 dollars last night, are about 13 percent higher pre-market.
Winnebago shares are 6 percent higher this morning on an earnings beat, and although FedEx reported better than expected earnings and sales, shares are lower owing to rising pension costs.
Overseas markets are mixed, but mostly a little higher. Our futures are also little higher, but are weaker than they were an hour or two ago. Itâ€™s hard to believe that weâ€™ll get a lot of movement today, unless predictions on tomorrowâ€™s vote in the United Kingdom become more definitive. At this point, adjusted for fair value, S&P 500 futures are higher by a point and a half, Dow futures are up 19, and the NASDAQ futures are about 3 points above fair value.
Weâ€™re entering the last two weeks of the quarter. That means that first quarter earnings news thins, although we could get warnings about the quarterly reports to come. As this week begins, economic reports are also few and far between. That leaves traders little to ponder outside of Thursdayâ€™s pending vote in the U.K. which could result in England leaving the European Union. Worries about a â€śBrexitâ€ť are as serious as the day is long, and itâ€™ll be a long time before we see a day longer than today.
A new poll over the weekend indicates that British voters are now favoring no â€śBrexitâ€ť and that sentiment may have been strengthened by the murder of British lawmaker Jo Cox last week by a â€śBrexitâ€ť supporter. The prospect of Britain staying in the EU has lit a bit of a fire under stock futures this morning.
Minneapolis Federal Reserve President Neel Kashkari will present a speech at 12:15 this afternoon. Janet Yellen will chat it up tomorrow and Wednesday. Facebook holds its annual shareholder meeting today.
Overseas markets are sharply higher this morning. European markets are generally higher by 3 to 5 percent.
At this point, adjusted for fair value, S&P 500 futures are higher by nearly 24 points, Dow futures are up 198, and the NASDAQ futures are about 51 points above fair value.
June 17, 2016
As traders wring their collective hands over next weekâ€™s vote on the possible British exit from the European Union, another Federal Reserve Governor is doing his best to keep us as confused as ever regarding the future of short term interest rates. Until recently, St. Louis Federal Reserve Bank President James Bullard was all in favor of interest rate increases. But in a statement released this morning, Bullard sees the need for only ONE more 25 basis point increase between now and the end of 2018. In case youâ€™re keeping score at home, the end of 2018 is more than 2Â˝ years from now.
Of course, a lot can change over two and a half years. Just 31 months ago, Lumber Liquidators shares were flying high, at almost 120 dollars per share. Then came questions about the safety of its Chinese-made product, which almost made it cheaper to cover your kitchen floor with shares of the stock than laminate flooring. Yesterday those shares traded as low as $12.67 per share. But this morning, Lumber Liquidators shares are indicated about 13 percent higher after last nightâ€™s announcement that it will stop sales of Chinese-made wood.
West Texas Intermediate crude oil futures are about 2 percent higher. Our stock futures are almost back to even, after earlier lows. The weekend weather forecast for New York is beautiful, so expect trading volume to tail off quite a bit this afternoon, if you catch my drift.
At this point, adjusted for fair value, S&P 500 futures are lower by about a point, Dow futures are down 2 points and the NASDAQ futures are about 2Â˝ points below fair value.
Well, the Fed meeting has come and gone, and so apparently is any hope that your money market account will actually earn any significant income any time in the foreseeable future. Janet Yellen and company have scaled back the likelihood of near-term interest rate increases, blaming an uncertain job market, sluggish economic growth, the possible fragmentation of the European Union and the chance of thunderstorms this afternoon. Okay, she didnâ€™t blame the weather. Suffice it to say that forecasting the weather six months out is probably easier than forecasting what Fed policy will be.
The Central Banks of Japan and England both announced no change in their interest rate policies today.
Jabil Circuit is a big supplier to Apple and Jabil is forecasting a drop in sales this quarter â€“ and itâ€™s not the first such warning theyâ€™ve given us.
Weekly Jobless claims and the May Consumer Price index come at 8:30. Expect a headline inflation increase of two-tenths of a percent. The Philly Fed Survey and the National Association of Home Builders Report are also on the agenda.
Markets overseas are pretty much all in the red this morning. Oil futures are more than one percent lower and the stock futures have been losing ground steadily over the past couple of hours. Right now, adjusted for fair value, S&P 500 futures are lower by about 9 points, Dow futures are down 62 and the NASDAQ futures are about 19 points below fair value.
Itâ€™s another Fed decision day, but the only decision that appears to be pending is how Janet Yellen and company will craft the 2 oâ€™clock statement explaining that there will be no change in short term interest rate policy. Yellen will hold a presser at 2:30 to put a little meat on the bones of that statement, and sheâ€™s not expected to be quite as dovish as in the past. While everybody knows that we canâ€™t stay at these low rates forever, most bond traders arenâ€™t expecting any real move in rates until September at the earliest.
The supposedly data-dependent Fed will get the latest Producer Price inflation data and the Philadelphia Fed survey today. Well, okay, they probably already have it, but WEâ€™LL get that data this morning.
Celgeneâ€™s board evidently thinks their stock is a bargain. They announced another 3 billion dollar buyback this morning.
Chinese stocks rose about a percent and a half overnight. European markets are generally higher about one percent.
Stock index futures turned positive just after midnight and although they were higher earlier, theyâ€™re still indicting higher prices at 9:30. Right now, adjusted for fair value, S&P 500 futures are higher by about 4 points, Dow futures are up 46 and the NASDAQ futures are almost 11 points above fair value.
The Fedâ€™s Open Market Committee starts their latest two-day meeting today, and just to give them something to talk about, the yield on the 10 year German Government Bond sank into negative territory this morning for the first time â€“ well -- EVER. Much of the globe is now experimenting with the concept of negative interest rates, even though it has yet to become evident that negative rates are helping economic growth in sufficiently greater measure than the potential dangers involved.
In just about 15 minutes weâ€™ll learn about the level of May Retail Sales. After a one percent jump in April, expect about a three-tenths of a percent increase in the May number.
Chinese internet play Baidu shares are indicated about 5 percent lower this morning, after cutting their quarterly forecast. Oracle reports earnings later on today.
The price of a barrel of oil, which seemed to be on a steady march to 60 bucks just a week ago, is down by one percent and a half percent again this morning, and the recent link between oil and stock s appears to be holding true.
Asian markets are mixed, but mostly lower. Europe is down about one percent. Right now, adjusted for fair value, S&P 500 futures are lower by about 6 points, Dow futures are down 24 and the NASDAQ futures are about 9 points below fair value.
Asian markets followed up Fridayâ€™s selloff in the U.S. this morning, with the Japanese market off about 3Â˝ percent and the Shanghai in China down 3 percent.
Scarier than fear of the known is the fear of the unknown. Itâ€™s pretty well known that our Federal Reserve will come up will a lot of words but no action on Wednesday. However the fear of a European Union without Great Britain is suddenly being perceived as a real possibility, based on some recent polling in the U.K. While a Brexit wouldnâ€™t be the end of the EU, it may well signal the beginning of the end of that grand experiment. Odds still favor unity, but the chances of a Brexit are reportedly increasing.
It IS the end of the pending IPO for Blue Coat. Symantec will buy Blue Coat for 4.65 billion dollars to beef up its Cyber-security capabilities
Thereâ€™s nothing much on the economic calendar for today. Oil futures are more than one percent lower. And, as usual, that indicates a lower open for our stock market, although the stock index futures are off their earlier lows.
Right now, adjusted for fair value, S&P 500 futures are lower by about 5 points, Dow futures are down 38 and the NASDAQ futures are about 15 points below fair value.
Stock prices almost recovered early losses yesterday, and theyâ€™ll have to stage another late-day rally to end the week on a positive note.
Last night, Urban Outfitters told us that same store sales will likely drop by the mid-single-digits this year. Shares of Urban Outfitters are looking to open lower by high-single-digits, right now down about 8 percent.
H&R Block reported $3.16 per share in profit. That was a penny better than expected. Block also raised their dividend by 10 percent and promised additional expense control this year. Shares are indicated about 3 percent higher.
The University of Michiganâ€™s first look at June Consumer Confidence comes this morning and is expected to dip just a bit to a reading of 94.5.
Traders in Shanghai and Shenzen got the day off for the Dragon Boat Holiday today.
Traders that are working in other markets appear to be hitting the â€śsellâ€ť button in front of next weekâ€™s Fed meeting and the Brexit vote coming the following week. European markets are about 2 percent lower.
Right now, adjusted for fair value, S&P 500 futures are lower by about 14 points, Dow futures are down 93 and the NASDAQ futures are about 32 points below fair value.
The Dow Industrials closed above the 18,000 level for the first time in a while yesterday, but weâ€™re going to surrender that level in the early going today as the futures are suggesting about t 50 point pullback.
Restoration Hardware shares traded around 106 dollars apiece as recently as last November. Theyâ€™ll be in need of some restoration themselves this morning, and look to open trade at around 29 dollars. Thatâ€™s about a 20 percent drop from yesterdayâ€™s close. A surprise loss of five cents per share was the mirror image of the five cent per share gain that was expected. Full year earnings expectations were lowered as well.
At 8:30, Weekly Jobless Claims should hang right around the 267,000 figure reported last week.
No Federal Reserve officials will give speeches today â€“ theyâ€™re in a â€śblackoutâ€ť period in front of next weekâ€™s Open Market Committee meeting. Maybe someday theyâ€™ll help us out by extending the blackout period to about seven weeks in length, at least for everyone but the Chairwoman.
South Korean stocks traded higher overnight after a surprise cut in interest rates there. Pretty much all other overseas markets are lower, with European markets lower by about three-quarters of one percent.
Oil futures are one percent lower this morning. Adjusted for fair value, S&P 500 futures are lower by about 8 points, Dow futures are down 55 and the NASDAQ futures are about 15 points below fair value.
In spite of an upcoming Fed meeting, arguably rich stock valuations and election year nerves (or maybe thatâ€™s just despair) stock prices look to grind a little higher once again in the early going today.
Going hand in hand with rising stock prices, or perhaps leading them by the nose are rising oil prices. Weâ€™ll get more information on oil inventories at 10:30 this morning, but in the meantime, West Texas Intermediate futures are over 51 dollars per barrel, with Brent crude over 52 bucks this morning.
Lululemon shares have been all over the place this morning. Quarterly earnings of 30 cents were a penny short of estimates and guidance was a little weak. Nevertheless, Lulu shares are more than three percent higher pre-market after being more than 3 percent lower earlier today. Dave & Bustersâ€™ stock is about 5 percent higher pre-market on a good earnings report.
Mortgage applications bounced back with a vengeance last week. Overall, they were up more than 9 percent, with purchase mortgages up 12 percent as the average rate on the 30 year conforming mortgage is now at 3.83 percent.
Asian markets were mixed overnight, but European markets are mostly a little lower, although that hasnâ€™t seemed to bother the futures on U.S. stocks.
Adjusted for fair value, S&P 500 futures are higher by about 3 points, Dow futures are up 39 and the NASDAQ futures are about 10 points above fair value.June 6, 2016
The next meeting of the Federal Reserve Open Market Committee comes around next week, which gives traders another eight trading days to obsess about the future of short term interest rates. And in the absence of any significant economic reports today, thatâ€™s exactly where the obsession is likely to be.
After last Fridayâ€™s absolutely dismal Employment Report, bond traders put the odds of a rate hike next week at only about 4 percent. Nevertheless, Janet Yellen will make two appearances today in Philadelphia that will draw attention. A 12:30 speech will be followed by a roundtable appearance at 2 oâ€™clock. Expect more dovish commentary from Yellen, even though Boston Fed head Rosengren said in Finland this morning that he expects a hike in rates soon.
Oil prices are about one percent higher this morning on production problems in Nigeria and Canada. Notwithstanding that, Hercules Offshore went back into bankruptcy court this morning after failing to find a buyer and will begin shutting down.
Overseas markets are mixed, with European markets, on the whole, pretty much unchanged at this hour. Our futures have been on the rise during the past hour. Adjusted for fair value, S&P 500 futures are higher by almost 5 points, Dow futures are up 57 and the NASDAQ futures are about 11 points above fair value.
The pattern of the week seems to be weaker stock prices in the early going, followed by a steady late-day rally. However, the pattern of the year continues. That is, the stock market and the oil market moving pretty much in tandem.
This morning, there is little movement in either as we await the Labor Departmentâ€™s May Jobs Report at 8:30. Expect that only 158,000 new non-farm jobs came into being last month. A much stronger level of new jobs will lead to speculation that the Federal Reserve will pull the trigger on higher interest rates this month. A much weaker number, which is bad news for the economy, might be good news for stock prices. (UPDATE at 8:35: Sometimes a number is SO BAD, it's not good news for stocks. This morning's announcement of ONLY 38,000 new jobs in May and significant downward revisions for March and April have sent the futures lower (at least for now) as traders appear to be in shock that the labor Department's numbers could have been so misleading.)
The good news for the stock price of retailer GAP is that customer traffic improved near Memorial Day. That has the stock up about 3 percent pre-market. The bad news is that May same store sales were down about 6 percent.
Broadcom shares look to open almost 8 percent higher, as $2.53 in quarterly profit came in 15 cents ahead of the average estimate.
Just about all markets overseas were higher overnight and this morning. Our direction will be determined at 8:30 with the Jobs Report. At this point, adjusted for fair value, S&P 500 futures are higher by a little more than a point, Dow futures are up 18 and the NASDAQ futures are a little less than a point above fair value.
Itâ€™s a big week for economic reports, but for all the reports we suffered through yesterday, stock prices finished the day pretty much unchanged after a pretty weak start. Today appears to be no exception, with news on jobs leading the way.
Earlier this morning, the May Challenger Report on announced layoffs reported only 30,000 layoffs in May, which is less than half the number announced in April. Energy industry layoffs again led the way, accounting for one out of every four.
In a couple of minutes, the ADP report is expected to estimate that 175,000 new non-farm jobs came into being in May. The Labor Departmentâ€™s official number comes tomorrow. Weekly Jobless Claims at 8:30 today are expected to come in at 267,000.
Costcoâ€™s sales were 3 percent higher in May, mainly because of an extra selling day due to the timing of Memorial Day. Same store sales were flat, but up 4 percent if you strip out the impact of gasoline prices and currency fluctuation.
Three Fed Heads are out trying to call attention to themselves today. The European Central Bank held monetary policy steady this morning, with their head honcho, Mario Draghi, set to talk all about it starting at 8:30 this morning.
European markets are flat to slightly higher. Our futures were pretty much flat most of the morning, but just took a minor turn for the worse at the top of the hour. Adjusted for fair value, S&P 500 futures are lower by 3 points, Dow futures are off 18 and the NASDAQ futures are almost 4 points below fair value.
We managed to exit the month of May with minor gains for all the major stock indexes, but yesterdayâ€™s weakness looks to continue in the early going today. Overnight, disappointing Chinese manufacturing data didnâ€™t help. The May Chinese Purchasing Managers Index read 49.2, reflecting more contraction in manufacturing than had been expected.
Our PMI data comes later this morning. Then, at 2 oâ€™clock this afternoon, weâ€™ll learn more about the overall health of the domestic economy when the Federal Reserve releases its Beige Book survey of regional economic conditions.
In the meantime, the merger train keeps on chugging. Salesforce is buying a company called Demandware at about a 55 percent premium to yesterdayâ€™s close.
98 cents per share in earnings from Michael Kors beat the estimate by 2 cents, and Kors shares are about 8 percent higher on word of a one billion dollar share buyback.
Under Armour and Nike shares are both about 3 percent lower premarket. Under Armour is taking a charge due to the Sports Authority bankruptcy. Nike took an analyst downgrade this morning.