March 29, 2002
The stock market is closed today. We're taking the day off!
March 28, 2001
It's a short day for the bond market, although stocks will trade all day. We'll have a lot of information to chew on, the only question is how many chewers will still be around much after lunch.
In fifteen minutes the final number on 4th quarter Gross Domestic Product is expected to come in at 1.4%. At 9:45 the University of Michigan Consumer Sentiment Index comes out. The consensus estimate going into this week was that the Index would be flat with the last report at 95. But after a strong number from the Conference Board's Index on Tuesday, a flat number will be a bit of a dissapointment.
Only one significant warning yesterday. That one from Juniper Networks. They'll miss their first quarter revenue estimate by about 20%. Japan was flat overnight, but European markets are up on the order of one percent. Adjusted for fair value, S&P futures are up 2, Dow futures are up 24 and the Nasdaq futures are 6 points above fair value.
March 27, 2002
If you're feeling a little depressed --- need a little pick-me-up --- go out today and talk to a consumer. If the Conference Board's Survey is to be believed, consumers are about as optimistic as can be about the future. The Index, was at a level of about 95, and was expected to go to 98. It came in yesterday at 110. So, we may not know when interest rates will move, and we might not know when corporate profits will turn, but it seems pretty clear that consumers will continue to consume at a pretty good clip for the foreseeable future.
Not a lot of announcements on the calendar today. At 10 o'clock, the February new home sales number will be out. It's the UNscheduled announcements that could be interesting. If companies are going to give earnings warnings for the quarter, today and tomorrow would seem to be pretty logical days for that, as trading winds down going into the Holiday weekend.
Japan was up overnight, but European markets have turned lower. Adjusted for fair value, futures on all major indexes are virtually flat.
March 26, 2002
More consolidation in the oil industry this morning. Shell will be buying Pennzoil/Quaker State, for about 3 billion dollars in cash and debt. The price boils down to 22 bucks a share. It you bought some Pennzoil lately, you made a slick deal. Pennzoil closed yesterday at 15 dollars and 49 cents.
Two important economic numbers come out this morning. First up is the February Durable Goods number. Estimates for this number are all over the place, so even a number that surprises some analysts may not surprise others. Perhaps more importantly, the latest Consumer Confidence number will be released at 10 o'clock. That number is expected to rise from 94.1 all the way to 98 - possibly even 100.
After a positive start the rest of yesterday was a pretty ugly story, but it looks like we'll get some back at the open this morning.
Adjusted for fair value, S&P futures are up 4, Dow futures are up 33 and the Nasdaq futures are about 5 points above fair value.
March 25, 2002
It's a short week for the stock and bond markets, but it has the potential to be a real turning point. The market rattled in fear of the Fed last week, as we had the first decline in values after a pretty good six week run. With that fear of a rise in interest rates priced in to stocks, attention should turn to earnings this week.
This week, it's earnings warnings we'll be watching. It's the last week of the quarter. So, any companies that know that they won't hit their numbers may leak the word this week. Short weeks are good for that kind of announcement, as trading volume usually starts to thin about mid-week, If you want to avoid getting sent to the penalty box for slashing estimates, it's good to have as few referees watching as possible.
February existing home sales are expected to slow from the torrid pace of January. That number comes at 10 o'clock.
Japan was down overnight, but European markets are up. Adjusted for fair value, S&P futures are up about a point, Dow futures are up 14 and the Nasdaq futures are about 6 points above fair value.
March 22, 2002
The stock market was a lot like the Indiana basketball team yesterday. It was a lot better in the second half. A big rise in technology stocks yesterday afternoon helped to offset a big decline in capital goods yesterday morning. There may not be much follow through on the rally in the early going today.
We haven't seen many IPOs or many stock splits lately, but after a big IPO yesterday as Nestle spun off Alcon, we get another one today when 21% of Travelers breaks away from Citigroup. Citigroup bought Travelers in 1993. Applied Materials announced that they will split their stock 2 for 1. They say that a recovery in the semiconductor industry is underway.
Palm is up 15% in the pre-market after a good earnings report last night.
The Japanese market was down about a percent and a half overnight. European markets are doing well, but so far, no strong indication for stocks over here. For the second morning in a row, the futures on all major indexes are trading just about even with fair value.
March 21, 2002
Stocks took a significant step backward yesterday. Big market days are usually driven by our old friends, greed or fear. Yesterday it was fear that the Federal Reserve will start hiking rates sooner than later because of economic recovery and fear of inflation. In case you don't remember, it was Federal Reserve rate increases a few years ago that broke the back of a pretty strong economy. Those rate hikes were put in place after only a "hint" that inflation was increasing. Of course, as we know now, inflation ultimately was a no-show.
At 8:30 this morning, we'll find out about the February inflation numbers with the release of the Consumer Price Index. That number, and the February Leading Economic indicators at 10 o'clock should provide the backdrop for what happens today.
The Japanese market was closed overnight. European markets started in the red, but have pretty much recovered that ground at this hour. Our furtueres have been sliding for the past half hour in front of that CPI number at 8:30. Adjusted for fair value futures on all major indexes are just about flat.
March 20, 2002
No report today Ron is "under the weather".
March 19, 2002
It's the beginning of the earnings-warning season, but this morning we have a company guiding analyst estimates HIGHER for the quarter. Accenture is the firm which was formerly the consulting arm of Arthur Andersen, although I don't think that you'll find that mentioned in their latest marketing materials. They're saying that they'll make 2 cents more per share than everybody thought.
Last night General Motors again said that they're not kidding - they're going to make a dollar twenty this quarter and three fifty for the year. The consensus estimate is still at about a dollar and six cents for the quarter.
Alan Greenspan and his Merry Crew announce their plans for interest rates at 2:15 this afternoon. Odds favor no rate increase, but a return to a neutral stance about future rate changes. Oil is up again this morning, the near-term futures now over 25 bucks per barrel.
Overseas markets had a good overnight session, and it looks like a good start is on the way in the U.S. Adjusted for fair value, S&P futures up 4, Dow futures are up 38, and the Nasdaq futures are about 7 points above fair value.
March 18, 2002
Some weeks are just more interesting than others. This is likely to be one of those MORE interesting weeks. First of all, the strange mating ritual of Hewlett-Packard and Compaq will either reach the altar or divorce court this week. If you hold shares of Hewlett or Compaq, your mail carrier has been working overtime the past month delivering a dozen or so proxy solicitations. Hewlett shareholders will vote green or vote white tomorrow. Compaq shares will be voted Wednesday. But it will likely be at least a few weeks until we really find out who won.
The Federal Reserve Open Market Committee gets together for another lively chat tomorrow. No increase in interest rates coming, but most likely a formal declaration that the days of rate cuts are over.
Watch one more thing. We are now officially in the last two weeks of the quarter. That means it's officially earnings warnings season. The longer we can go without major companies warning about missing their estimates, the better stock prices will behave.
Adjusted for fair value, S&P futures up 2, Dow futures are up 24, and the Nasdaq futures are about 19 points above fair value.
March 15, 2002
Happy St. Patrick's Day, everyone! There's no report today -- we're at the party!
March 14, 2002
We've had a steady stream of strong economic data for the last month or so. Until yesterday. That retail sales number released at 8:30 yesterday morning came in at a 3 tenths of a percent increase. The problem is that the market expected 8 tenths of a percent. Stocks sold off early and often in a pretty broad based pullback.
Right now the futures are pointing to a positive opening for stocks, but on it's >
A report on January Business Inventories will be released in ten minutes or so, weekly jobless claims at 8:30 as well, and earnings from Oracle after the close of the market.
Japan was up over 150 points overnight. The London market is down, but the rest of Europe is doing well. Adjusted for fair value, S&P futures are up about 3, Dow futures are up 28, and the Nasdaq futures are about 9 points above fair value.
March 13, 2002
Telecom stocks took a beating yesterday on those warnings from Nokia and Lucent, but the overall market came storming back in the afternoon, with the Dow Jones actually closing up on the day.
TRW this morning rejected Northrop Grumman's takeover bid of $47 per share, which is no big surprise, in that TRW currently trades for about 50 bucks. The Government has reported signaled other big defense contractors not to get involved in the bidding. The Government doesn't want any one company getting too powerful in the defense business. Later today, we'll get a report on retail sales and yet another speech from Alan Greenspan.
Sports Authority and Albertson's both beat estimates this morning. Crude oil is up again, now approaching 25 dollars per barrel. It wasn't long ago that oil was in the high teens.
The futures were weak until about 6:30 this morning, and took a wicked U-turn at that point. At this point we're looking good. Adjusted for fair value, S&P futures are up 3, the Dow futures are up 31 and the Nasdaq futures are about even with fair value.
March 12, 2002
The big economic numbers for the week come out on Friday. Today should be pretty quiet by comparison. There are no big economic reports due, and only a handful of earnings reports on the way.
It you're running out of exciting reading, just can't find another great novel - well you're in luck. If last night's releases from IBM and Cisco Systems are any indication, future corporate reports will be a lot longer than in the past. In response to concerns about full disclosure, it looks like companies with significant off balance sheet activity and insider transactions will be coming clean in future publications. Look for a lot more information, and a lot less need for No-Doze coming soon to an annual report near you.
Two Federal Reserve Governors are out on the rubber chicken circuit today. However, no matter what they say, new lowered guidance from Lucent and Nokia this morning is going to send us lower at the open.
Japan, which has been on a tear lately lost about 2.5% overnight. European markets are lower, generally about 1%. Our futures have slipped steadily ever since the close last night and are pointing to a significantly lower open at 9:30. Adjusted for fair value, S&P futures are down 9, the Dow futures are down 71, and the Nasdaq futures are about 28 points below fair value. So
March 11, 2002
Watch the prices of oil stocks today. Crude oil prices are on the rise this morning on the word that Iraq will not allow weapons inspections. Low gasoline prices have certainly helped the U.S. consumer in the past six months. That may, temporarily at least, be coming to an end.
Last week was a good week for stocks in general, and a great week for the Nasdaq in particular. The Nasdaq Composite was up 7%. At this point, measured from the market bottom, which of course occurred in the wake of the terrorist attacks six months ago, the Dow Jones Industrial Average is up 28%, the S&P 500 is up 21% and the Nasdaq is up 36%. Just another lesson, as if we need another one, of the importance of sticking to a long-term investment plan and not changing your plan because of greed or fear.
Overseas markets are mixed. Asia was up overnight, Europe is lower this morning. Adjusted for fair value, which isn't much of an adjustment this morning, S&P futures are down 2 ½, the Dow futures are down 8 ½, and the Nasdaq futures are about 12 points below fair value.
March 8, 2002
Good news and bad news from Intel last night. In a conference call after the close of trading yesterday, Intel did not lower their earnings estimate, but they did say that there is no sign that business is picking up in the computer chip business, in spite of what Alan Greenspan says.
What Mr. Greenspan did say to the Senate Banking Committee yesterday, is that the recession is over, and happy days are right around the corner. That's great news, but with all due respect to Mr. Greenspan, it would be nice to hear business owners, rather than economists, saying that things are getting a whole lot better.
Things are not better this morning for shares of Biogen. That stock is off about 14% on word that a Swiss competitor Serono will begin selling their anti-MS drug Rebif here in the U.S. Biogen's Avonex drug has had a lock on that market.
In just a few minutes, the February unemployment rate and nonfarm payroll numbers will be out. An unemployment rate of 5.8% is expected.
At this point a rise in stocks is expected at 9:30. Adjusted for fair value, S&P futures are up about 5, the Dow futures are up 39, and the Nasdaq futures are about 6 points above fair value.
March 7, 2002
More good economic news yesterday, and stocks responded. The Fed's Beige Book survey concluded that the economy has bottomed, and a somewhat tepid recovery has begun.
National Steel may participate in that recovery, but they'll be doing it under the protection of Chapter 11. National became the 32nd domestic steel producer to file for protection during the past four years.
At 8:30 this morning we'll find out how productive we were in the fourth quarter of last year and get a report on new Jobless Claims. And Alan Greenspan will once again testify before Congress today. We'll see if he repeats his testimony of a few days ago, or if we'll get something new.
General Motors with something new. GM picked up their third brokerage house upgrade of the week this morning. JC Penney reporting same store sales up 12.5% in February.
Overseas, Tokyo stocks were up 2 ½ percent overnight. Europe is off to a good start. We're looking for a reasonably good start at 9:30. Adjusted for fair value, S&P futures up 3, the Dow futures are up 19, and the Nasdaq futures are about 7 points above fair value.
March 6, 2002
We had a rally going yesterday on a very strong number from the ISM Services Index. But along came some earnings jitters and the news that the government was slapping tariffs on imported steel. If there's one thing that can really give the market the willies, it's the threat of a pending trade war. The European Union this morning is predictably making lots of noise in protesting the new tariffs.
All and all, though, it was only the big blue chips that took the beating. The Nasdaq rose for the third day in a row. But there might be a little role reversal today. Word overnight that Amazon's CFO is leaving and that business in the data storage business is weak is going to pressure the Nasdaq this morning.
The big report of the day comes mid-afternoon when the Federal Reserve releases its Beige Book. That's another survey of sentiment about future business conditions. Some strong optimism in that report could give us a late day boost.
European markets are flat, and at this point, it looks like we'll be off to a mixed start at 9:30. Adjusted for fair value, S&P futures are flat, the Dow futures are up 8, but the Nasdaq futures are about 10 points below fair value.
March 5, 2002
We've had a great two-day run in stocks. Of course the big question remains, is this another headfake, or the start of something big?
The Dow Jones Industrial Index closed up more than 2 ½ percent yesterday, after closing up more than 2% last Friday. According to Birinyi Associates, that's the 16th time since World War Two that the Dow has closed up more than two percent two days in a row. If you look at the past 15 times, on average, three months later that Index was up about 5%, and six months later, the average gain has been almost 14%.
It was the ISM Manufacturing Index that really sparked the market on Friday. Today we get the ISM Services Index. Any reading above 50 is a sign of expansion. A reading of 51 is expected. Last Friday, we expected a 51 on the Manufacturing Index, and it came in at 54. That Services Index will be out at 10 o'clock.
Owe could get some profit taking at 9:30. Adjusted for fair value, S&P futures are down about 3, the Dow futures are down 34, and the Nasdaq futures are about 3 points above fair value.
March 4, 2002
The ISM Index that measures manufacturing activity came in on Friday with a reading of 54. We were expecting a reading of 51. That indicates that 18-months in a row of contraction in manufacturing is over. That came on top of a lot of other good news last week. Fourth quarter GDP was up 1.4%, durable goods orders were up, personal income and spending both up four tenths of a percent, existing home sales way up at over 6 million, construction spending was up.
Given all that, the stock market partied like it's 1999. And overnight, the rest of the world took notice. Japanese stocks were up almost 6%. European stocks are up 1 to 2% this morning and it looks like we'll get off to a good start at 9:30.
A couple of broker upgrades for General Motors overnight. GM sales were up in February over last year. The Chevrolet division actually sold more vehicles than the Ford division last month, and that hasn't happened in a long, long time.
Adjusted for fair value, S&P futures are up about 4 ½ , the Dow futures are up 47, although the Nasdaq futures are only about 8 points above fair value, after a profit warning from Oracle.
March 1, 2002
If you're invested in Nasdaq stocks, and you're really happy that February is over, there's a reason. You've just lived through the second worst February in the Nasdaq's history. But it looks like March may get off to a decent start.
There's a whole lot of economic data on the way this morning. The University of Michigan Consumer Sentiment Index will be out 15 minutes after the market opens. We also get numbers on personal income and consumption in January.
The big number of the day will be the ISM Index. That's a measure of manufacturing activity. Any number above 50 indicates expansion in manufacturing, but we haven't seen that kind of number in 18 months. The January number will be released at 10 o'clock, and it's expected to come in at 51.
Anticipating the good news, the futures are indicating a solid market at 9:30. Adjusted for fair value, S&P futures are up about 5, the Dow futures are up 56, and the Nasdaq futures are about 10 points above fair value.