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WJR June 2017 Reports



Have a Great July 4th weekend!  Ron will return July 5th.

June 30, 2017

Stock prices took an end-of-the-quarter trip to the tropics yesterday, with the NASDQ 100 losing about 2 percent. The futures are positive this morning, but as we saw yesterday – it’s not how you start – it’s how you finish.

Shares of Nike are should start almost 6 percent higher today. Nike reported 60 cents of profit for the quarter, which was a dime better than expected. Micron Technology also beat their bogey by a dime, reporting $1.62 of profit. Micron also raised guidance for the rest of the quarter, and their shares are about 3 ½ percent higher.

The 4thof July notwithstanding, fireworks are about to begin at Hain Celestial. And activist investor firm has taken a 9.9 percent stake in the company and will no doubt look to shake things up. Hain shares are looking to open about 8½ percent higher.

At 10 o’clock, we’ll get the University of Michigan’s final verdict on June Consumer Confidence. We’ll see if the preliminary reading of 94.5 holds true.

Asian makers followed us lower overnight, but Europe has turned higher. Adjusted for fair value, the S&P 500 futures are higher by 9 points, the Dow futures are up 71, and the NASDAQ futures are now about 15 points above fair value.

June 29, 2017

The big potential merger of Walgreens and Rite Aid is officially off this morning. Instead, Walgreen’s will buy almost 2,200 Rite-Aid stores. Walgreen’s shares are about 5 percent higher pre-market on the news, Rite Aid shares are about 21 percent lower, and shares of Fred’s Stores, which was in line to acquire a bunch of the Rite Aid stores, is off about 20 percent.

If you’ve owned a lot of Pier One shares over the past three years – well, let’s just call it great estate tax planning. Pier One shares, which are trading at about one third of their value three years ago, are off nearly 10 percent this morning. Last night, Pier One announced a 4 cent per share loss, which was less of a loss than expected. However, same store sales were flat, and that has the machines hitting the “sell” button this morning.

It will likely be a good day if you own financial stocks. Yesterday, the Fed cleared the capital plans for 34 big banks. That means dividends and buybacks will likely rise, and big bank share prices are about 2 or 3 percent higher this morning.

Staples will be taken private by Sycamore Partners and Nike reports earnings tonight.

At 8:30 the Government will pronounce its final verdict on 1stquarter Gross Domestic Product. Expect no change from the second guess which was anemic growth of 1.2 percent.

Asia was mostly higher overnight, but Europe is mostly lower. Adjusted for fair value, the S&P 500 futures are higher by almost 7 points, the Dow futures are up 46, and the NASDAQ futures, which have been hovering around the flat line much of the morning, are now about 5 points below fair value.

June 28, 2017

Blue Apron is a company that provids the fixin’s you need to make dinner tonight. Well, they’ve been fixin’ to deliver shares of the company to the public this week at about 16 bucks per share. Unfortunately, investor appetite appears to be on the wane. Blue Apron now says that the shares will be offered at 10 to 11 bucks per serving. At that price, the company can only hope to raise about 300 million dollars rather than the more than half-billion that they were hoping for.

General Mills shareholders haven’t had a lot of fun over the past twelve months. The shares have lost over 15 percent and sales are lower. However, this morning, at least they’re enjoying a 2 percent increase in General Mills dividend. Earnings of 73 cents per share last quarter were 2 cents better than expected. General Mills shares are almost one percent higher pre-market.

Just minutes ago, Monsanto announced $1.93 of profit, which was better than the $1.76 estimate.

The May Pending home Sales report comes from the realtors at 10 o’clock, and is expected to pick up by a half-percent after a decline in April,

Yesterday’s announcement of a delay in a Senate vote on the latest health-care bill sickened stock prices, but outside of technology, it looks like we’ll bounce back a bit at 9:30.

At this point, adjusted for fair value, the S&P 500 futures are higher by nearly 9 points, the Dow futures are up 59 points, and the NASDAQ futures have recovered earlier losses and are now 4 points above value.

June 27, 2017

On a day when the European Union fined Google parent Alphabet 2.7 billion dollars for anti-competitive business practices, we may have another business colossus being cobbled together on this side of the Atlantic. Sprint shares are about 5 percent higher pre-market on word that Sprint is in merger talks with Charter Communications and Comcast. T-Mobile shares are 3½ percent lower. They were the presumed merger partner for Sprint and look to be the odd-man out.

Darden Restaurants checked in with $1.18 per share in operating profit for the quarter gone by, which was 3 cents better than expected. Darden shares are up about 3 percent pre-market as they are also raising their dividend by 12 ½ percent.

Janet Yellen will speak in London at 1 o’clock local time today. That’s one of three Federal Reserve big-wig speeches on tap today.
 
At 10 o’clock, the Conference Board’s June Consumer Confidence survey is expected to cool a bit to a reading of 116.7. The University of Michigan’s sentiment index comes on Friday.

Asia was mixed overnight, but Europe is mostly lower. Our futures were positive until about midnight but have been in the red ever since.

At this point, adjusted for fair value, the S&P 500 futures are lower by a point and a half, the Dow futures are flat, but the NASDAQ futures, on a decline in technology stocks, are a fairly substantial 20 points below fair value.

June 26, 2017
 
It’s the last week of the 2ndquarter. There’s not much in the way of earnings warnings as of yet, but we have plenty of economic news on the way, with most of it coming later in the week. This morning at 8:30, the May Durable Goods Report is expected to reflect another decline, but only about half the rate of April’s minus eight tenths of a percent. 

There’s an example of addition by subtraction with shares of Pandora Media this morning. Shares are more than 3 percent higher on word that the CEO is preparing to stream his way out of the company. Shares were more than 7 percent higher earlier. It must feel great when the stock market is so eager to celebrate your retirement, don’t you think?

Berkshire Hathaway announced the acquisition of a nearly 10 percent stake in residential real estate firm Store Capital, whose shares are up 11 percent on the news.

Asian markets rose overnight. European stocks are nicely higher this morning on this weekend’s news that Italy is prepared to spend up to 19 billion dollars to resolve two failing regional banks. Italian stocks are almost 1½ percent higher.

Our stock futures have been on the rise all morning. At this point, adjusted for fair value, the S&P 500 futures are higher by almost 8 points, the Dow futures are up 78, and the NASDAQ futures are about 36 points above fair value.

June 23, 2017

A couple of retailers are out with less-than-wonderful reports. Last night, Bed Bath & Beyond reported earnings of 53 cents per share for the quarter gone by.  That was short of the expected 66 cents and well short of the 80 cents earned in last year’s comparable quarter. Bed Bath and Beyond shares, which were lower by more than 12 percent in after-hours trading yesterday have recovered a bit of that per-market today, but are still indicated about 9 percent lower.

Finish Line shares are lower by about 2 percent this morning. Earnings and sales came in as expected, but same-store sales were off 1.1 percent, which was a surprise. The average estimate was an increase of 1.6 percent.

Caterpillar suffered a broker downgrade this morning, and that is weighing on the Dow futures.

We’ll hear from no fewer than four Federal Reserve Regional Presidents today. Also, the May New Home Sales Report at 10 o’clock is expected to recover from April levels to an annualized run rate of 590,000 units.

Asian markets were mostly higher overnight. European markets are mostly lower. Our futures are again painting a mixed picture, and a kind of a mirror image of where they were 24 hours ago. At this point, adjusted for fair value, the S&P 500 futures are higher by 1½ points, the Dow futures are down 23, and the NASDAQ futures are about 2½ points below fair value.

June 22, 2017

If you’re invested in the technology or biotech sectors, you were a pretty happy camper yesterday. If not – well, not so much as the Dow propped about almost 60 points, while the tech-heavy NASDAQ rose almost 46, which is about three-quarters of one percent.

If you’re invested in shares of Oracle or Staples, you’ve found your own little happy place this morning. Oracle’s belated transformation to cloud computing appears to have gained traction and Oracle shares are more than 11 percent higher this morning after a good earnings report last night.

Staples shares have bounced about 7 percent higher this morning on a Reuters report that a private equity firm is interested in a 6-billion-dollar investment in Staples. 

Earlier this morning, Accenture reported earnings and sales in line with expectations. Accenture shares are about one percent higher pre-market.

At 10 o’clock, the May Leading Economic Indicators Report is expected to hold steady at a three-tenths of a percent increase. And, of course, we should hear about the Senate Republicans’ proposal for overhauling healthcare today, which could impact medical, hospital and insurance stocks.

Asian markets were mixed overnight. Europe is lower once again, but our futures have bounced a little higher. At this point, adjusted for fair value, the S&P 500 futures are down a point, the Dow futures are up 17, and the NASDAQ futures are about 6 points above fair value.

June 21, 2017

The broad market can’t seem to find a consistent direction this morning. However, there are a handful of stocks that will be on the move.

Good news on earnings for Adobe has the shares almost 5 percent higher pre-market. Likewise, AMD, Advanced Micro Devices, is indicated about 5 percent higher after announcing a new generation of chips squarely aimed at challenging Intel in the data center server space.

Not to be outdone, open-source tech infrastructure company Red Hat shares are up 10 percent after reporting 56 cents of operating earnings, which was three cents ahead of expectations. Federal Express also issued a positive earnings report last night, although the shares are little changed this morning.

On the famous other hand, worries about sales and margins have shares of Chipotle Mexican Grill about 7 percent lower this morning.

A little later, the May Existing Home Report is expected to be little changed from the April rate. Mortgage applications did rise a bit last week on strength in refinancing loans.

European markets are mostly lower at this hour.  Adjusted for fair value, the S&P 500 futures are higher by almost a point, the Dow futures are up 29, but the NASDAQ futures, although improving, are still 2½ points below fair value.

June 20, 2017

Shares of medical research firm Parexel are almost 4 percent higher at $87.14 this morning. Those shares were in the low 60’s a month ago. Parexel has agreed to be purchased by a private equity firm. Home builder Lennar shares are also about 4 percent higher after reporting earnings this morning.

There are two more speeches on the agenda from Federal Reserve officials today. Yesterday, those speeches started to get interesting again as Chicago Fed head Evans suggested that the Fed may be done raising interest rates this year. That’s the first that we’ve heard of that kind of talk in a while. Another Fed official yesterday opined that the Fed will keep marching forward with at least one more hike this year.

We’ll get the quarterly earnings report from Federal Express after 4 o’clock this afternoon. Expect $3.88 cents in adjusted profit.

Good news is coming at the gas pump as oil prices are lower again by more than 2½ percent this morning at just north of 43 dollars per barrel for West Texas Intermediate. 

Japanese stocks closed at a 22-month high, but other overseas markets are mixed.

Our futures were higher earlier in the morning, but at this point are painting a mixed picture for the market open. Adjusted for fair value, the S&P 500 futures are lower by about 3 points, the Dow futures are down 18, but the NASDAQ futures, after a massive rebound yesterday, are almost 4 points above fair value.

June 19, 2017

European markets are in rally mode after this past weekend’s French elections. Emmanuel Macron’s decisive election promises labor and pension reform, which would be business-positive. However, getting that done in France may make our struggle to fix healthcare in this country look like a walk in the park.

We’re now in the last two weeks of the 2ndtrading quarter of the year. Normally, that’s a time to be on the lookout for earnings warnings. However, such warnings have been fewer and farer between of late as corporate profits have been on the rise.

The drumbeat of rumors regarding the possible bankruptcy of Takata intensified late Friday and they have driven Takata shares about 17 percent lower.

Amazon shares are higher again pre-market in the wake of news of their fascinating acquisition of Whole Foods. Amazon shares are looking to open about one percent higher this morning.

All major markets overseas are in rally mode, as are our futures. Adjusted for fair value, the S&P 500 futures are higher by about 9½ points, the Dow futures are up 82 and the NASDAQ futures, on the rebound from last week’s drubbing are 50 points above fair value.

June 15, 2017

Yesterday’s quarter point interest rate hike from the Federal Reserve didn’t surprise anybody. Neither did their projection for four more hikes over the next 18 months. However, the Fed gave us the details of how they plan to unwind the massive collection of bands on their balance sheet. So, while they still profess flexibility if the economy softens, make no mistake that short term (and very possibly long term) interest rates are likely to be on the rise.

This morning, London’s Central Bank held their short—term rate steady. However, three of the eight decision makers voted to raise rates. That’s the closest they’ve come to hiking rates in ten years.

Today is a day for economic reports. Before the market opens we’ll get the Weekly Jobless Claims, the Philadelphia Fed Survey, the Empire State Manufacturing survey and a report on Industrial Production. 

Oil prices are at a seven-month low at around 44.44 per barrel for West Texas Intermediate.

Bob Evans shares are almost 3 higher pre-market after reporting 61 cents of adjusted profit, which was 13 cents better than expected. Jabil Circuit shares are 2 percent higher on an earnings beat. Goodyear Tire is 2½ percent lower after a downbeat outlook. Another downbeat outlook has Kroger shares are down about 8 percent pre-market.

China was a smidge higher overnight, but just about everybody else overseas is lower. We are certainly headed lower at 9:30. Adjusted for fair value, the S&P 500 futures are lower by about 16 points, the Dow futures are down 84 and the NASDAQ futures are a whopping 62 points below fair value.

June 14, 2017

Shares of H&R Block have been pretty much stuck in the mud for the past 13 years or so, but not so this morning. Last night, Block announced earnings of $3.76 per share. That was 23 cents better than expected and a 19 percent increase from a year ago. H&R Block shares are more than 10 percent higher pre-market.

It happens every seven or eight weeks, and it’s happening again today. It’s Fed decision Day. The Federal Reserve Open Market Committee will issue a statement at 2 o’clock, and Jane Yellen will hold a presser at 2:30 to let you know that short term interest rates are going up.

So, if all goes as expected, the interest rate on any loan you have that is tied to a short-term rate like the 90 day Treasury Index or the three month LIBOR will soon rise by a quarter of a percent per year. Long-term rates may rise as well, but that’s in the hands of the market – not the Fed. It’s no secret that high interest rates are not good news for stock and bond prices. However, history tell us that when rates rise slowly from a very low level, financial assets can do pretty well, as the reason for the rate rise is often an improving economy. 

That history lesson in not lost on the futures market this morning, although the futures are off their highs of the morning.

Right now, adjusted for fair value, the S&P 500 futures are higher by 2½ points, the Dow futures are up 42 and the NASDAQ futures are about 12 points above fair value.

June 13, 2017

Predicting the next stock market crash has become a sort of cottage industry of late. Many so-called market “gurus” have been falling all over themselves with warnings of doom and gloom. Of course, it’s been said that the reason someone called “guru” is that “charlatan” is so hard to spell.

Nevertheless, there’s been an increase in market-crash chatter brought on by the big soon in technology stock prices since Friday. However, if the futures are any indication, the technology laden NASDAQ Index may be in for a bit of a recovery today.

Not only is today the first day of the rest of your life, it’s the first day of the latest Federal Reserve Open Market Committee get together. Tomorrow at 2 pm they will likely announce another one-quarter of one percent hike in short-term interest rates. At this point the quarter-point been so well telegraphed that anything else will been an unpleasant surprise.

This morning’s NFIB small business optimism report held steady at a very high level.

The Nikkei in Japan was basically unchanged overnight. Other major markets overseas are higher. Right now, adjusted for fair value, the S&P 500 futures are higher by about almost 5 points, the Dow futures are up 31 and the NASDAQ futures, looking to recover from a two-day drubbing, are 26 points above fair value.

June 9, 2017

Stock prices made it through all the big events of yesterday relatively unscathed, in spite of the surprising result of the British election.  The most significant result of all yesterday’s news is a 1 ½ percent drop in the value of the pound, which this morning is giving a boost to British companies that sell their products overseas.

Today is a day curiously devoid of any significant earnings reports, economic reports or Congressional testimony, so it may be a good day to book an afternoon tee time.

One curiosity of this day is the imposition of the much-ballyhooed “fiduciary rule” regarding investment advice. Most people think that financial folks have a duty to act in the best interest of their clients. Unfortunately, that only applies to advisors who accept status as a “fiduciary.” The idea of this rule, as originally envisioned, would force your financial advisor to always put your interest ahead of his or her own.

But, no worries – the new rule has been so significantly watered down as to really not change much for individual investors, and the current administration in Washington won’t be enforcing the new rule until at least January, if then. Some things never change.

Overseas markets are also little changed, but our futures are climbing once again. At this point, adjusted for fair value, the S&P 500 futures are higher by about 4 points, the Dow futures are up 46 and the NASDAQ futures are about 5 points above fair value.

June 8, 2017

Every day is interesting in its own way, but concerning potentially market-moving news, today is much more interesting than the norm. However, the hand-wringing of earlier in the week about the potential for a triple play of bad news has calmed quite a bit.

In the first big event of the day, the European Central Bank issued its policy statement less than a half hour ago and will keep its stimulus plans in place as far as the eye can see. No black swan event there, but the ECB press conference is about to start.

Anxiety over the second big event, this morning’s Comey testimony, was largely dispelled with the release of his prepared statement yesterday. The statement appears to contain ammunition for both sides of the political battlefield, without providing a smoking gun that could really disrupt markets.

The third act of today’s play comes after 5 o’clock, with the closing of the polls in Great Britain. The conservatives hold a comfortable lead in most polls, which should again be a non-event at worst for stock prices.

Alibaba shares are 14 percent higher this morning after a conference call in which the company projected a 45 to 49 percent increase in revenue.

Our futures have been positive all morning, but have slipped a little over then past half-hour. At this point, adjusted for fair value, the S&P 500 futures are higher by about a point and a half, the Dow futures are up 3 points and the NASDAQ futures are about 13½ points above fair value.

June 7, 2017

Today will likely be a day of rest for the market averages, and we’ll need time to rest, especially in view of what’s coming tomorrow.

Tomorrow we get British election with its implications for the future of Europe. We get the European Central Bank meeting amid talk of a tightening of their economic stimulus program. And not the least of which we’ll get the congressional testimony from former FBI director Comey about Russians, President Trump and perhaps where to buy great looking big-and-tall suits. A big surprise out of any of those events could de-rail the stock rally, although it appears that the odds are that there’s a lot more smoke there than fire.

There was a little fire lit under mortgage applications last week. A 10 percent surge in home purchase mortgage applications and a 3 percent rise in re-financings computer to an overall 7 percent rise. That’s in contrast to a dip in applications in the week before last.

Advanced Micro Design shares are higher again, by about 1½ percent in the premarket after surging by about 10 percent since Monday.

Asian markets were mixed overnight, but Europe on average has turned slightly positive. At this point, adjusted for fair value, the S&P 500 futures are higher by almost 5 points, the Dow futures are up 32 and the NASDAQ futures are about 14 points above fair value.

June 5, 2017

The three major stock indexes closed at record highs for the second consecutive session on Friday. However, this week may pose its share of challenges, not the least of which is the upcoming Congressional testimony from former FBI director Comey.

Today, the economic calendar features a couple of reports on the health of the services sectors of the economy, the April Factory Orders and the report on domestic productivity and labor costs in 2017’s first quarter. Productivity is expected to slip by two-tenths of a percent.

Small biotech stocks are kind of the Wild, Wild West of the market nowadays. One of those companies, Loxo Oncology reported a positive test of a cancer drug this morning in testing to treat a variety of different cancers among patients with a similar genetic marker. Their tumors shrunk, and Loxo’s share price has swelled over 36 percent pre-market.

Overseas markets are mixed, but mainly a little lower as they are pretty much shrugging off the latest British terror attack.

At this point, adjusted for fair value, the S&P 500 futures are lower by almost 3 points, the Dow futures are down 17 and the NASDAQ futures are about 3 points below fair value.

June 2, 2017

The trading month of June got off to a great start yesterday and so far this morning, the big stock index futures are pointing toward another day of rising prices. 

Yesterday, a very strong ADP Employment estimate lit a fire under stocks. However, last month, the ADP report proved to be overly bullish, compared to the official number from the Labor Department. Labor’s report for the month of May comes this morning at 8:30. Expect 185,000 new jobs, an unemployment rate unchanged at 4.4 percent and an increase in the average hourly wage of two-tenths of a percent.

Rising much faster than that this morning are shares of Lululemon. Last night, Lulu announced a restructuring that will close some of its Ivivva stores and rebrand the rest. Adjusted for those restructuring costs, earnings of 33 cents were a nickel better than expected. Lululemon shares are indicated about 15 percent higher pre-market.

Five Below shares are also higher this morning on good earnings, a rosy forecast and plans for more store openings.

Most Asian markets were higher overnight. European markets are higher by about one percent at this hour. And speaking of higher, adjusted for fair value, the S&P 500 futures are higher by 6 points, the Dow futures are up 67 points and the NASDAQ futures are about 22 points above fair value.

June 1, 2017

Shares of another apparel retailer are having a little fire sale of their own this morning. Express shares are taking the express lower by more than 23 percent after reporting a quarterly loss of six cents per share which was three times larger than expected. The full year profit estimate of 45 cents is fully 21 cents lower than Wall Street had expected.

The Challenger Layoff Report took a big jump higher last month, to its highest level since May of 2016. More than 51,000 layoffs were announced, versus 36,000 in April and the main driver of that increase was the layoff announcement at Ford. Of course, those are just announced layoffs which haven’t happened as of yet. 

ADP just issued its May Employment Report, reporting of 253,000 new May payrolls, versus the expected number of 170,000, but take it with a grain of salt. Last month’s ADP report turned out to be way rosier than the official Labor Department number. That May number comes from Labor tomorrow.

Stocks prices have been meandering around even this week as we await evidence that the economy is improving. Today we’ll get the PMI and ISM manufacturing surveys, as well as May Car Sales Reports. Perhaps something there will get things moving again.

Asia was mixed overnight, but Europe has turned a little higher. At this point, adjusted for fair value, the S&P 500 futures are higher by about 2 points, the Dow futures are up 5 points and the NASDAQ futures are about 11½ points above fair value.

 
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