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WJR June 2018 Reports




 
June 29, 2018

It’s the last trading day of the second calendar quarter of the year. While stock futures are indicating a strong start for stock prices, a lot of the gain in the large-cap indexes this morning come thanks to Nike’s earnings report from late yesterday.

Nike checked in with a 69 cent per share profit, 5 cents better than expected. They also announced a 15 billion dollar share buyback program which they expected to complete by the end of next year. Nike shares are indicated more than 10 percent higher on the news. Novartis shares are also higher after announcing a stock buyback and a spin-off of their Alcon eyecare business.

The famous other hand belongs to Constellation Brands. $2.20 of profit missed expectations by 24 cents and Constellation shares are looking almost 5 percent weaker.

Yesterday’s GDP inflation number came in a little hot, at a 2.2 percent rise. At 8:30 this morning, we’ll get the Fed’s favorite inflation number, the Core PCE index. It’s expected to show a year-over-year rise in personal consumption expenses of 1.9 percent.

Asian markets followed us higher and Europe is sharply higher on an EU agreement on a new immigration policy. Over this way. adjusted for fair value, S&P 500 futures 6are higher by about 14 points, the Dow futures are up 148, and the NASDAQ futures are just about 42 points above fair value.

June 28, 2018

If you think that the Tigers have been blowing some big leads lately, they’ve got nothing on yesterday’s stock market. The Dow dropped about 450 points from its high point of the day and the S&P fell about 1.7 percent from its apex.

Today, of course is another day, and while the futures were pointing higher, they also have come way off of earlier levels.

Speaking of the Dow Jones Industrial Average, Walgreens-Boots Alliance just joined that index this week and this morning reported earnings and sales that beat estimates. Walgreen’s also announced a 10-billion-dollar stock buyback and a 10% hike in its dividend to 44 cents. In spite of all that good news, Walgreens is indicated slightly lower pre-market.

Not faring that well are shares of Bed Bath & Beyond. Earnings last quarter were fine, but same store sales not so much, and the shares are about 5 percent lower this morning. Accenture just reported better than expected numbers.

The Government’s final verdict on first quarter GDP comes at 8:30. Most expect an unrevised 2.2 percent increase, although for some reason Treasury Secretary Mnuchin seem more optimistic than that.

Most overseas markets followed us lower overnight.

Our futures were looking great an hour or two ago but have lost some steam since. Adjusted for fair value, S&P 500 futures are now up only a point, the Dow futures are now down 19 points, and the NASDAQ futures are just about 2 points above fair value.

June 27, 2018

Tough talk out of China overnight about the prospects for a full-blown trade war with the United States sent Chinese stocks lower along with our stock futures. But an announcement out of Washington less than a half hour ago appears to have reversed the selling. Word is that the U.S. will handle Chinese trading policy through CFIUS. That’s the Committee on Foreign Investment in the United States. While the impact is not clear, the change may signal a more targeted approach to trade relations as opposed to the tit-for -tat tariff announcements we’ve suffered through lately.

Two big food companies are merging and shares of both are suffering some indigestion pre-market. Conagra Brands is buying Pinnacle Foods for 68 bucks in cash and stock. Conagra shares are looking to open about 8 percent lower. Pinnacle shares are 4 ½ percent lower.

Sonic shares are about 8 percent weaker after reporting disappointing sales last night, which they’re blaming on bad weather, even though profit was better than expected.

At 8:30 we’ll hear about the May Durable Goods orders, which are expected to be off about a half of a percent. The April orders were down 1.7 percent.

Asian markets were lower overnight, but on average, Europe is little changed. Adjusted for fair value, S&P 500 futures are now up 5 points, the Dow futures are up more than 40, and the NASDAQ futures are about 10 points above fair value.

June 26, 2018

Since yesterday afternoon, a couple of White House officials have tried to mop up the damage done in the stock market yesterday. Through television interviews and tweets from trade strategist Navarro and Treasury Secretary Mnuchin, we’re now being told that the latest reports of trade war escalation with China amount to a “big misunderstanding.” So far this morning, markets are calmer, but are not yet showing a big recovery.

General Electric shares are showing about a 6 percent recovery pre-market. In its ongoing efforts to become a much smaller conglomerate, GE announced that it will spin off its health care unit and eventually divest the 65 percent interest it recently acquired in oil services firm Baker Hughes. Incidentally, General Electric is getting bumped out of the Dow Jones Industrial Average today, in favor of Walgreen-Boots Alliance.

Home builder Lennar blew away the 45-cent profit estimate by reporting $1.58 of adjusted earnings. Lennar shares are looking to open about 8 percent higher.

Asian markets were mixed overnight, but Europe has turned a bit higher.

It appears our market is still in wait-and-see mode after yesterday’s sell-off. Adjusted for fair value, S&P 500 futures and the Dow futures are flat, but the NASDAQ futures are about 20 points above with fair value.

June 25, 2018

Welcome to the last trading week of the quarter. Traditionally, if companies have some bad news to shares about their quarterly performance, now the time to announce it. However, with corporate profits running hot, earnings warnings have been few and far between.

Unfortunately, many and close together have been threatened and announced tariffs both here and abroad. This morning Harley Davidson announced that in response to an increased tariff the European Union announced on motorcycles, Harley will not raise prices. Instead they will gradually move motorcycle production out of the United States. Harley stock is indicated almost 2 percent lower pre-market.

European auto stocks are seeing red this morning after President Trump’s threat on Friday of 20 percent tariffs on imported cars.

Campbell Soup shares are almost six percent higher this morning. Kraft-Heinz reportedly thinks that an acquisition would be mm-mm good.

The May New Home Sales Report comes at 10. In the meantime, European markets are lower by about one percent.

Our futures have improved a bit but are still in fairly sad shape as we head toward 9:30. Adjusted for fair value, S&P 500 futures are lower by about 11 points, 1the Dow futures are down 146, and the NASDAQ futures are about 57 points below with fair value.

June 22, 2018

It’s been more than 40 years since the Dow Jones Industrial Average declined for nine consecutive sessions. As we start today, the Dow is working on an eight-day losing streak. However, if we follow the cue of most overseas markets, that losing streak will stop at eight.

One stock losing ground this morning is RedHat. The provider of the Linux software system issued second quarter guidance that was weaker than expected, blaming a strong dollar. Strong dollar or no, RedHat shares are looking to open about 17 percent lower this morning.

Blackberry and Carmax both announced better than expected earnings this morning, with Carmax beating the $1.13 estimate by 9 cents per share.

It’s the first Friday of summer, which should mean that trading will tail off this afternoon. The only economic report due comes at 9:45 with the PMI Flash report. That’s an early estimate of the monthly Purchasing Managers Index and it’s expected to improve a bit from the last report.

The eurozone paved the way for the Greek bailout plan to end this summer. Of course, they did so by kicking the proverbial can down the road by extending the due date of a bunch of debt. Nevertheless, European markets are higher.

Right now, adjusted for fair value, S&P 500 futures are higher by about 14 points, 1the Dow futures are up 137, and the NASDAQ futures are about 26 points above with fair value.

June 21, 2018

We could be looking at the eighth consecutive down day for the Dow Jones Industrial Average. That being said, in all likelihood, your portfolio isn’t suffering nearly as much. Due to worries about trade wars, the 30 stocks in the Dow have been under pressure lately, but the majority of stocks out there are not major exporters and have been relatively unaffected.

Doing better than fine this morning are shares of restaurant conglomerate Darden, grocer Kroger and chip maker (that’s computer, not potato) Micron.

Last night Micron reported slightly better than expected earnings and raised full year guidance. Micron shares are indicated about 5 percent higher. This morning, Kroger also raised guidance on a revenue beat. Kroger shares are about 10 percent higher pre-market. Darden shares are also about 10 percent higher after reporting $1.39 of adjusted profit versus the expected $1.35. Darden also raised its dividend by 19 percent.

At 10 o’clock the May Leading Economic Indicators are expected to have risen three-tenths of a percent. The Bank of England left their short term interest rates unchanged this morning.

Overseas markets are generally a little lower. Right now, adjusted for fair value, S&P 500 futures are flat, the Dow futures are down 51, but, continuing recent strength, the NASDAQ futures are about 12 points above with fair value.
 
June 19, 2018

We have a global sell-off on our hands this morning, likely in response to more shots fired in what could turn into a trade war between the U.S. and well, most everybody else. If that war breaks out, it will likely crimp global growth. If, however, we’re seeing nothing more than some rather bare-knuckled negotiations, we could be looking at a buying opportunity.

Yesterday’s survey results from the National Association of Home Builders did not reflect the optimism that many expected. In less than 20 minutes we’ll find out just what actually happened to Housing starts in May. The consensus expectation is an increase of 1.8 percent after starts declined 3.7 percent in April.

Dr. Pepper Snapple suffered a broker downgrade this morning, while Intuit received an upgrade.

Overseas markets are lower. Japan was off almost 2 percent, the Hang Seng fell about 3 percent, in mainland China, indexes fell around 4 percent. Europe is generally down one to one and a half percent.

The last few sessions have given us a significant selloff and significant recovery in prices as the trading day rolled on. Well, we’ll need another significant recovery today to avoid some damage in stock prices. Although the futures have recovered somewhat over the past hour, adjusted for fair value, S&P 500 futures are lower by about 26 points, the Dow futures are down 309, and the NASDAQ futures are 89 points below with fair value.

June 18, 2018

It could all be a grand game of chicken, or it could be the opening shot of a trade war with China and the EU. This morning, traders are hoping for the former, but protecting against the latter as stock prices are lower around the world.

There’s bad news and good for shareholders of Disney today. A research group downgraded Disney stock on fears that a bidding war with Comcast to acquire the Fox assets will be more expensive than the prize is worth. On the bright side, the debut of Incredibles 2 over the weekend brought in 180 million dollars, giving the Pixar film the best opening of any animated film in history by far and the best weekend opening for a PG-rated film in history.

At 10 o’clock, the National Association of Home Builders will release the results of their June home builder sentiment index, and home builders are expected to be in a good mood, with a reading of 78 versus the May reading of 70.

Rent-A-Center shares are currently halted for news pending.

No trading in Chinese markets overnight for a holiday. Other overseas markets are lower, generally by about one percent or so.

Speaking of being down sharply, our futures have been dropping all morning long. Adjusted for fair value, S&P 500 futures are lower by about 19 points, the Dow futures are down 213, and the NASDAQ futures are 62 points below with fair value.

June 14, 2018

It’s been a news-heavy week, and today’s news includes the latest policy announcement from the European Central Bank. After yesterday’s somewhat hawkish talk and quarter point interest rate hike from our Central Bank, the ECB announced just about a half hour ago their plan to hold rates steady, but that they’re planning the beginning of the end of their quantitative easing program in September. They’ll still be easing, mind you – but at a tapered rate.

Overnight, the People’s Bank of China also decided to hold interest rates steady. The Bank of Japan reports tomorrow.

You may know them as Joseph A. Bank or Men’s Wearhouse, but the stock is known as Tailored Brands and those shares are featuring a nearly 20 percent off sale this morning. Earnings were a couple cents per share better than expected, but guidance didn’t excite and it looks like a rough day ahead.

All M&A eyes now turn to Disney, after Comcast’s 65-billion-dollar cash offer to buy Fox. We’ll see if Disney pays up to trump that bid or simply walk away from Fox’s content.

Overseas markets followed us lower overnight. But our futures have recovered from lower levels and at this point, we should get some of yesterday’s late sell-off back in the early going. Adjusted for fair value, S&P 500 futures are up 5½ points, the Dow futures are up 48, and the NASDAQ futures are 16 points above with fair value.

June 13, 2018

A judge decided yesterday that AT&T’s two-year-old proposal to acquire Time Warner does not violate anti-trust rules. That news has AT&T shares about 4½ percent lower this morning and Time Warner about 3½ percent higher. The ruling also opens the door to other vertical media mergers. On that news Comcast is widely expected to overbid Disney in a bid to acquire 21st Century Fox. Expect a lot of price swings in all those stocks near term. Fox shares, for instance are 8 percent higher pre-market.

One stock swinging decidedly lower this morning is H&R Block. Last quarter’s earnings were fine, but full year revenue guidance was very weak and H&R Block is looking to open about 18 percent lower.

We’ll hear from the Federal Reserve at 2 o’clock this afternoon and just about everybody expecting another quarter-percent hike in short term interest rates.

Before that, at 8:30, inflation news in the form of the May Producer Price Index will be announced. Expect three-tenths of a percent hike overall, and two tenths of a percent ignoring food and energy.

Most of Asia was lower overnight, although Japan gained ground. Europe is mostly higher. We should tick a little higher early on as well. Adjusted for fair value, S&P 500 futures are now higher by a bit more than 2 points, the Dow futures are up 17, and the NASDAQ futures are 9 points above fair value.

June 12, 2018

The first big event of the week is now in the books, and traders seem unfazed by the results – or lack of results – from the Singapore summit. The focus now turns to the AT&T/Time Warner ruling coming later today. It’s not just those two companies that will be impacted, but an adverse ruling could put a chill on future corporate mergers.

The Fed’s Open market committee starts another meeting today. We’ll hear from them tomorrow afternoon on what’s expected to be another one-quarter of one percent short term interest rate increase.

Land’s End shares are popping almost 7 percent higher this morning, as an adjusted 8 cent per share loss was much narrower than the 17-cent loss that was expected. And shares of RH (you may recognize them as the parent of Restoration Hardware) are more than 20 percent higher this morning after their earnings report last night. More than a third of RH’s float is shorted, and those shorts appear to be getting squeezed after better than expected earnings and raised guidance.

Eli Lilly and Astra Zeneca had some bad news this morning. They’ve discontinues testing two prospective treatments that were hoped to be useful in treating Alzheimer’s disease.

Chinese and Japanese stocks rose overnight. European markets are mixed. Our futures are struggling to climb out of negative territory and are now fairly flat. Adjusted for fair value, S&P 500 futures are now higher by 2 points, the Dow futures are up 8, and the NASDAQ futures are just about even with fair value.

June 11, 2018

There will be no shortage of headline events to consider this week. The North Korean summit, and the AT&T/Time Warner decision on Tuesday, Central Bank meetings in the U.S., Japan and Europe, inflation data and more are all on the way.

And, of course, it is Monday. So, there must be a deal out there. Shares of Envision Healthcare have lost more than 20 percent of their value over the past year, and apparently the price became right for buy-out firm KKR. It’s a cash deal at 46 dollars per share, which is about 5 percent higher than Envision’s closing price on Friday of $43.46.

Last week’s market action was a breath of fresh air in a fairly stagnant 2018. The Dow Jones Industrials gained 2.8 percent last week, which brings the year-to-date gain to just 3½ percent. Of course, this is another week, and it should be an interesting one.

The economic calendar is strangely empty today but is jam-packed the rest of the week.

Asian markets were mixed overnight. Europe is mostly a bit higher, led by a 2 percent rise in Italian stocks.

Our futures were higher earlier this morning but have sprung a slow leak since then. Adjusted for fair value, S&P 500 futures are now lower by 2 points, the Dow futures are down 13, and NASDAQ futures are about 15 points below fair value.

June 8, 2018

Stock traders are focusing on world trade this morning, as the G7 confab in Quebec looms large. With President Trump agreeing to attend, but also planning to leave early, the threat of international trade wars has the futures in a funk.

If you’re one of those people who has to start the day with a caffeine injection at Starbucks, your wallet may be a little lighter starting this week. The price of a 12- ounce cup of joe now costs $1.95 to $2.15 at most Starbucks stores. Starbucks blames rising costs for the 10 to 20 cent price increase.

Docusign, which just came public in April, reported an adjusted profit of a penny per share last night. That compares with an expected loss of seven cents, and Docusign shares are about 10 percent higher pre-market. Docusign’s price target was also raised by a major broker this morning.

Verizon’s chief technology officer, who joined the company a year ago, will become Verizon’s next CEO. Verizon shares are almost one percent lower pre-market.

Overseas markets are off on the order on one-half to one percent as tariff talk is turning arrows red. Our futures are in better shape than they were in a couple of hours ago, but are still pointing toward lower stock prices. At this point, adjusted for fair value, S&P 500 futures are lower by about 6 points, the Dow futures are down 54, the NASDAQ futures are about 47 points below fair value. 
June 6, 2018

A little later this morning we’ll get a couple of revised data points on future inflation. The first quarter labor productivity advance of seven-tenths of a percent is expected to remain there. Unit labor costs, an early indicator of future inflation in a tight labor market, are expected to be revised upward from 2.7 percent to 2.8 percent.

Shares of Signet Jewelers are on the rise by about 7 percent pre-market. Earnings of 10 cents per share surprised, as the average analyst estimate called for a loss of nine cents per share. Ambarella is 12 percent lower on a weak forecast.

The biotech darling of the morning is Axovant. Shares are about 50 percent higher on word of a licensing deals for their gene therapy drug designed to combat Parkinson’s disease. A 50 percent rise sounds great. However, through yesterday, Axovant shares have lost 68 percent year-to-date. Run the numbers and you realize that if you lose 68 percent, it takes more than a 200 percent gain to get back to even.

Mortgage applications reversed a recent slide and increased 4 percent last week, as the average interest rate on a conventional 30-year loan with 20 percent down dropped to four and three-quarters percent.

Overseas markets are little moved, but on average are a little higher. Our futures have been strongly higher all morning and are getting stronger. Adjusted for fair value, S&P 500 futures are higher by almost 8 points, the Dow futures are up 140, and the NASDAQ futures are about 18 points above fair value.

June 5, 2018

G-III apparel is the stock story of the morning. The parent of the Donna Karan line reported earnings of 22 cents surprised analysts who on average were looking for a 5-cent loss. G-III raised full-year guidance and the shares are almost 20 percent higher pre-market.

Twitter shares are about 5 percent high on word that Twitter will replace Monsanto in the Standard & Poor’s 500 Index. Monsanto, of course, is being acquired by Germany’s Bayer.

Starbucks shares are about one percent lower after Executive Chairman Howard Schultz announced that he will be stepping down. Schultz is making noises that sound a lot like he may be planning a future in politics.

Two readings on the services sector of the economy come by 10 this morning, Both the May results from PMI and ISM are expected to show improvement from
the April numbers. The Labor Department’s JOLTS report on Job Openings and Labor Turnover comes at 10 o’clock as well.

Most overseas markets are a little higher, as are our futures. Adjusted for fair value, S&P 500 futures are higher by almost 1½ points, the Dow futures are up 9, and the with the NASDAQ starting the day at a record high, the NASDAQ futures are about 17 points above fair value.

June 4, 2018Well, what should we worry about this week?  Tariffs, Italy, North Korea, rising short-term interest rates?  Falling long-term interest rates? Facebook privacy?  Take your pick, but in spite of all the noise, equity prices should head higher once again early on.One of those rising equities will be shares of Merck.  They announced positive results for their melanoma fighting drug Keytruda.  Merck shares are up about 2 percent so far on that news.Shares of Dell Technologies are about 3 percent higher.  Sales for last quarter were reported well above estimates. Sales and profits beat expectations at Palo Alto Networks.Macy’s shares are up 1½ percent on a broker upgrade. Amazon shares also received another broker upgrade this morning, as if they need it.The April report on Factory Orders is expected to slip four-tenths of a percent from the March print, due in large part to a decline is aircraft orders.  That news will come at 10 o’clock this morning.Overseas markets are generally higher after our Jobs Report of last Friday. Our futures are off earlier highs but are still in the green. Adjusted for fair value, S&P 500 futures are higher by about 6½ points, the Dow futures are up 111, and the NASDAQ futures are almost 15 points above fair value.June 7, 2018

We’re looking at a mixed bag of earnings reports this morning.

On the happy side of estimates we have Five Below, Vail resorts and furniture retailer Conn. Conn shares are about 20 percent higher pre-market as 40 cents of quarterly operating profit blew away the 27-cent estimate. Five Below shares are looking to open about 15 percent higher.

On the dark side of earnings news this morning, J.M. Smucker says peanut butter sales were, well, a bit sticky. They reported $1.93, which was 26 cents short of expectations. Smucker also guided lower for the full year. Shares look to open about 8 percent lower. Shares of Thor Industries are off about 7 percent, as earnings fell a nickel per share short.

Twitter joins the S&P 500 Index today. At 8:30, the Weekly Jobless Claims report is expected to tick a little higher to a total of 225,000 new claims for Unemployment Benefits.

Chinese stocks were a bit lower overnight, but most other major overseas markets followed us higher, and we should climb higher still at 9:30. At this point, adjusted for fair value, S&P 500 futures are higher by about 3½ points, the Dow futures are up 62, although the NASDAQ futures are only about 2 points above fair value.



   

 

 

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