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WJR March 2004 Reports

 

March 26-31, 2004  Sorry, no reports. We're off for the rest of the month!

March 25, 2004

 
It’s not just factory jobs in danger.  Human Genome Sciences, the big biotechnology firm is cutting back on many drug programs, and will reduce its workforce by 20%. So if you see someone in the unemployment line in a white lab coat with a Petri dish, you’ll know what happened.  Speaking of jobs, the weekly unemployment claims number comes out in fifteen minutes.
 
The job market may stink, but people evidently still care about how they smell.  Avon Products raising their earnings guidance by 40% for the quarter this morning.  They’re looking at a 19% sales increase.
 
The final revision to 1st quarter Gross Domestic Product will be announced in about fifteen minutes.  It is expected to not be revised at all from the latest estimate of 4.1%.  Those new home sale numbers surprised to the upside yesterday, showing an increase in new home sales.  We’ll get the reading on existing home sales at 10 o’clock.  They are expected to rise to a level of 6.1 million homes.
 

Adjusted for fair value, S&P futures are up 7 points, Dow futures are up 59, and the Nasdaq futures are 9 ½  points above fair value. 

March 24, 2004

 
In a very anti-climactic press conference this morning, Mario Monti, the head of Europe’s anti-trust regulators, announced that Microsoft will be fined 613 million dollars and forced to share some technical information with erstwhile competitors.
This one should be tied up in European courts for anywhere between 2 and 7 years.  Keep in mind that the fine of 613 million constitutes less than 2 ½ weeks of cash flow for Microsoft.  They have more than 50 billion bucks saved for a rainy day.
 
At 8:30 this morning, we’ll get our first economic news of the week.  The February Report on Sales of Durable Goods is expected to increase by a percent and a half.  At 10 o’clock, the report on February New Home Sales is expected to show just a tiny decline from the January level of one point eleven million.
 
Micron Technology reports earnings later today.
 

The futures took a turn for the better about 15 minutes ago after being down all morning.   Adjusted for fair value, they’re still down, but not by much. S&P futures are down less than a point, Dow futures are down 9, and the Nasdaq futures are just a fraction above fair value. 

March 23, 2004

 
You can sum up yesterday’s stock market action fairly simply.  It was ugly.  Down volume trumped up volume by a ratio of 10 to 1 and there were really no sectors to run to.  Even the basic material makers which have been in rally mode took a step backward.
 
Today we’re still on pins and needles waiting for the next shoe to drop in Afghanistan, Pakistan, Taiwan or Israel.  Kind of makes you wish that earnings season would hurry up and get here.
 
Speaking of earnings, no big warnings yesterday.  In fact, The Limited raised their guidance for the quarter and Cisco System got a brokerage firm upgrade this morning based on valuation.
 
The overseers of the Social Security System report today on just when their chain letter will run out of links.  That should give the politicos something to talk about the rest of the week.
 

In Taiwan, stocks were down another 3 percent overnight.  Japanese stocks started the session in a big hole, but then rallied to close down only a bit.  European stocks picked up on that rally and are currently up about a half percent.  Our futures are promising a pretty good start for stock prices at 9:30 this morning.  Right now, adjusted for fair value, the S&P futures are up 4 ½ points, Dow futures are up almost 40, and the Nasdaq futures are about 8 points above fair value. 

 

March 22, 2004

 
Spring has sprung and apparently, the stock market has sprung a leak. European markets are down 1 ½ to 2 ½ percent as the world financial markets continue to bow to terrorism, killings and political protest.  Stocks in Taiwan were down almost 8 percent overnight in the midst of that country’s political crisis.
 
If that wasn’t enough, here we are, smack dab in the last two weeks of the calendar quarter.  That means that companies have a pretty good idea whether they’re going to meet their sales and profit targets.  Those that will miss significantly should start letting us know within the next ten days. 
 
There’s not much on the economic calendar until Wednesday this week, so those overseas events are really in focus. Glimpses of good news today include a slight decline in the price of oil, as OPEC appears to be backing off its threatened April 1st production cutback. And Walmart again reporting that weekly same store sales were up at the high end of their estimated range of 4 to 6 percent.
 

The futures are not at their worst levels of the morning, but they’re pretty darned close.  Right now, adjusted for fair value, the S&P futures are down more than 10, Dow futures are down 88, and the Nasdaq futures are about 18 points below fair value. 

March 19, 2004

 

You know, you get out of school and you figure you know just how the world works.  You’ve got it all under control.  Then the longer you live, the more you realize how little control you really have.

 

Who’s in control of the stock market today?  Well, look no further than the Pakistani military.  Stock prices bounced like a yo-yo on a pogo yesterday afternoon on news that the Pakistanis were closing in on al Qaeda.  Look for any news out of Pakistan to whip us around again today.

 

Not that we really need any whipping around. Today is quadruple witching day, when stock options and futures and options on futures all expire.

 

Nike and Paychex with good news this morning.  Nike blew past already increased estimates on a 20% increase in revenue and a 60% increase in profit.

 

European markets are up a tad. Our futures took a little zip to the upside about a half hour ago.  Right now, adjusted for fair value, the S&P futures are up almost 3, Dow futures are up 25, and the Nasdaq futures are about 6 points above fair value. 

 

March 18, 2004

 
The financial news of the morning comes from Europe, where there’s no regulation like over-regulation.  Mario Monti, Europe’s head trust-buster, announced this morning that Microsoft hasn’t ponied up enough in concessions to suit him, and that anti-trust penalties will be proposed next week.  Microsoft is trading lower in Europe and the news is putting pressure on our futures – which weren’t exactly in great shape to begin with.
 
Jabil Circuit, one of the darlings of the late 90’s, beat estimates by 10% last night and raised guidance for the rest of the year. 
 
Don’t look now, but Kmart is making money!  Same store sales are still down from last year, and I don’t think Walmart is scared enough to fold up its tent and go away, but Kmart made 276 million dollars in their fourth quarter.  That’s $2.78 per share.  That quarter, of course, included the Holidays.
 
At 10 o’clock this morning, the February Leading Economic Indicators will be announced.  Expect the tiniest of increases, one-tenth of one percent.
 

Asian markets were mixed.  European markets are pretty much down across the board.  Our green arrows from St. Patrick’s Day will turn the color of bloodshot eyes this morning. Adjusted for fair value, the S&P futures are down 3, Dow futures are down 33, and the Nasdaq futures are about 8 ½  points below fair value. 

 

March 16, 2004

 

The day before St. Patrick’s Day is usually a good one for stock prices, and we will indeed be looking at green arrows when trading opens in New York.  Of course, after the open, anything could happen, especially given that Alan Greenspan and that wild band of leprechauns will meet this morning, issue their statement at 2:15, and will no doubt head straight for the local pub thereafter to celebrate the fact that they again got paid for doing absolutely nothing.   At least for doing nothing with interest rates.  Watch out for THAT party if you're out on the roads.

 

Eliot Spitzer has been busy again.  Yesterday Bank of America and FleetBoston Financial agreed to fork over 675 million bucks due to shenanigans in their mutual fund business.  Of course no one admitted or denied wrongdoing. But in addition, these fine firms agreed to cut their fund management fees by 80 million dollars each over the next five years.  You may ask, if they can afford to cut them, why were they charging them in the first place?  But, you can probably figure that one out for yourself.

 

3M will have a good morning of trade after raising their guidance this morning.

 

European markets are up a bit.  Our futures have been on the rise all morning long.  Right now, adjusted for fair value, the S&P futures are up more than 7, Dow futures are up 66, and the Nasdaq futures are about 13 points above fair value. 

March 15, 2004

 

It looks like we’ll get off to a rough start this morning.  The Spanish government hit the canvas quicker than Sonny Liston after last week’s sucker punch.  Not that a change in government in Spain is all that important to the world economy.  But if you are a terrorist, yesterday’s vote is a great indication of how effective mass murder can be.

 

Two earnings misses this morning;  Imclone, a stock Martha Stewart wishes she’d never heard of, and Entertainment 4 Kids, the makers of Pokemon and Yu-Gi-Oh, both missed earnings estimates.

 

Of the bright side, Walmart’s weekly same-store sales came in at the high end of their estimated 4 to 6% increase. 

 

Japanese stocks rallied overnight, but European markets are off about ½ to 1 ½ percent – Spain is off 3 percent at this hour.  Our futures are off their lows of the morning, but area far from a pretty picture at this hour. Adjusted for fair value, S&P futures are down 3 ½ , the Dow futures are down 49 and the Nasdaq futures are about 9 points below fair value. 

 

March 12, 2004

 

You will recall that for more than a year after the September 11th attacks, the stock market zigged and zagged over every national security or terrorism story our there.  During the past year or so, jobs, jobs, jobs, has been the focus of the market.  Maybe yesterday’s train bombing in Spain will thankfully shift the national focus back to national security. It’s inevitable that an improving economy will produce more jobs.   But as we know, a terrorist campaign can stop that improving economy in its tracks.  Of course, it’s an election year, so don’t expect a lot of rational thought.

 

Aetna with the good news of the morning. They have raised their 1st quarter and annual guidance.  Oracle met estimates last night, but is guiding slightly lower for the current quarter.  Oracle and Dell each receiving brokerage firm upgrades this morning.

 

The preliminary March Consumer Sentiment number will be announced by The University of Michigan at 9:45 this morning.

 

At this point, we may see a little recovery in stock prices at the open.  Adjusted for fair value, S&P futures are up 3, the Dow futures are up 16 and the Nasdaq futures are about 7 points above fair value.

March 11, 2004

 

We’ll get a good dose of economic news in ten minutes, and I’ll tell you, it had better be good economic news, or we’re in for some trouble at the open of trading.

 

The February Retail Sales number is expected to rise about six tenths of one percent after falling last month.  Obviously, the higher the number the better there.  A number where higher is definitely not better is the Weekly Jobless Claims number.  That also rolls at 8:30.

 

If you were sitting on the edge of your chair to listen to Alan Greenspan’s Congressional testimony yesterday…….well…….sorry, about that.  It’s actually scheduled for today, along with the new 10 year note auction.

 

Our sour market yesterday led to a sell off in Asia overnight.  The train bombing in Spain has Europe in a deep hole at this hour.

 

Our futures are not the disaster they were a couple of hours ago, but unless we get some great news at 8:30, we’ll take another hit at 9:30.  Adjusted for fair value, S&P futures are down 11, the Dow futures are down 77 and the Nasdaq futures are about 14 points below fair value. 

March 10, 2004

 

Remember the peak of the stock market bubble?  It was four years ago today.  Happy Anniversary.

 

The happy news of the morning comes courtesy of Procter & Gamble.  P&G raised its earnings estimates for the quarter and the full year, is splitting its stock 2 for 1 and is raising its dividend by about 13 percent. Look for the pre-split shares to rise about 2 percent when they open for trading.  Good news as well yesterday from Nike.  Here’s a stock that’s up over 60 percent in the last year.  Their sales will be up over 20% this year and they are raising guidance. 

 

Alan Greenspan testifies before a House Committee today, and you never know what old uncle Al has on his mind, and how the markets will react.

 

Watching the bond market today may, for a change, be a little more interesting than watching the snow melt.  The ten year bond has been on a tear since Friday and today, the Treasury goes back to the well later with a bunch of new supply.  We’ll see how that goes.

 

The futures are showing more weakness in the Nasdaq, but the Procter & Gamble report is definitely giving the Dow a lift. Adjusted for fair value, S&P futures are flat, the Dow futures are up 12 and the Nasdaq futures are about a 2 ½ points below fair value. 

March 9, 2004

 

On the heels of Intel’s warning that sales were a little softer than hoped, Texas Instuments said last night that sales of their chips and equipment are just fine, thank you.  TI says that their first quarter profit will hit the upper end of their previous estimates.  Prices are rising in the chip sector, and TI says that most of that pricing power will show up in their 2nd quarter results.

 

Homebuilder D.R. Horton isn’t slowing down either.  They raised their guidance for the year, as new home orders are showing no sign of slowing appreciably.

 

Volkswagen warned today that that the first quarter of this year has been pretty miserable and that profits for the year may be flat.  VW shares are down 3 percent in Europe this morning. 

 

We’re looking for lower stock prices at the open. The stock futures this morning are kind of like that person down at the other end of the bar that you fall in love with at 1:30 in the morning.  They may look good to you know, but they’re not as pretty as you think.  After you adjust for fair value, S&P futures are actually down 4, the Dow futures are down 21 and the Nasdaq futures are about 6 points below fair value. 

March 8, 2004

 

Martha Stewart says she’s going to appeal.  Think she’s telling the truth THIS time?  It was a wild ride for Martha Stewart Living Omnimedia stock Friday, as the stock soared to around 17 bucks per share, and then fell to around 10 after the verdict was read.

 

One document that was widely read over the weekend was the annual letter to shareholders of Berkshire Hathaway, written by Warren Buffett.  It is highly recommended reading.  You can only wish that all annual reports were this well written, this understandable and made this much sense.  If you are a high-priced corporate tax adviser, a Congressman who has helped make the Internal Revenue Code the mess that it is, or a mutual fund director or manager who has not been faithful to you’re shareholders, you probably won’t be offended by the letter.  But perhaps you should be.  Or at least be shamed by it. Check it out a www.berkshirehathaway.com.

 

Asian markets were mixed overnight.  Most European markets are up less than one half of one percent.

 

Our futures are off their highs of the morning, but are still pointing to higher prices at 9:30.  At this point, adjusted for fair value, S&P futures are up about 2 points, Dow futures are up 15, and the Nasdaq futures are about 3 points above fair value.

March 5, 2004

 

You can sum up today’s market action as well as today’s hot political debate is five little words…………………….jobs, jobs, jobs, jobs, jobs.

 

The outsourcing debate rages on.  One group says that if you outsource all available work, no one in America will have jobs, and therefore won’t be able to but all those inexpensive products and services.  The other group says if you bring all the work to be done here at American level wages, no one will be able to afford the stuff that’s produced, no matter how good their job is.  The truth probably is, as usual, somewhere in the middle.

 

But in ten minutes we’ll find out how many new jobs were created in the old U.S. of A. last month.  If the number is 120,000 or less it will be a disappointment to the downside.  Anything over 200,000 may spark inflationary worries.  Either way, at unemployment rate is expected to tick up to 5.7%.

 

Intel narrowed and slightly lowered their revenue projection for the first quarter last night.  The stock is just slightly lower in the pre-market.

 

In front of the jobs number, we’re looking for a lower open for stocks.  At this point, adjusted for fair value, S&P futures are down less than a point, Dow futures are down 6, and the Nasdaq futures are about 6 points below fair value.

March 4, 2004

 

Michael Eisner survived another institutional shareholder revolt yesterday.  Although over 40% of Disney shareholders withheld support for Eisner, he remains the CEO this morning.  They’ve rearranged the chairs in the Board Room a bit, but it appears that the management of the Disney company won’t be changing any time soon.

 

The futures are indicating a wait-and-see market this morning.  What we’re waiting to see is tomorrow’s monthly employment report.  With month after month of steady growth in business indicators, we know that job growth will kick in at some point.  The question is – when?

 

Ironically, in about six minutes, we’ll get both the weekly report of claims for unemployment benefits, and the final reading on 4th quarter productivity.  The huge increase in productivity of late is at least in part to blame for the sluggish employment growth.

 

Walmart reported a 6.2% rise in same store sales for February.  That’s way above forecasts.  They have raised expectations for March by 1 percent.

 

Those Walmart numbers perked up the futures a bit.  At this point, adjusted for fair value, S&P futures are up a point, Dow futures are up 7, and the Nasdaq futures are about a little more than a point above fair value.

March 3, 2004

 

You can’t spell DISSENT without DISNEY, and if you did, the only letter left over would be a question. “Y”, you ask?  The “why” is Michael Eisner, whose reelection to the Board and re-nomination as CEO is being challenged by quite a few of Disney’s institutional shareholders.  But, Mr. Eisner has a history of surviving shareholder challenges, most recently about 5 or 6 years ago.  So, it’ll be and interesting tale of Mouse and men at the annual shareholders meeting today.

 

Costco beat earnings estimates by a penny per share in their 4th quarter.  The big supermarket strike in California, which has since been settled, helped Costco, which was not involved.

 

Speaking of big retailers, WalMart evidently has a little extra cash on hand.  They’re raising their dividend by 44%.  Don’t get too excited – the yield is still under 1 percent.  But even growth companies like WalMart are paying more and more in the form of dividends in light of last year’s tax cuts.

 

Stocks in Hong Kong and Malaysia were off over 2 percent overnight.  European markets are down a half percent or so. We’re heading for a lower open at this point.  Adjusted for fair value, S&P futures are down 4, Dow futures are down 25, but the Nasdaq futures are 4 ½  points below fair value.

 

March 2, 2004

 

Sometimes good news is just the absence of really bad news.  Yesterday’s ISM Index and personal income and spending numbers were nothing to write home about.  But, they weren’t any worse than most people expected, and showed continuing economic expansion.  Stock prices were off to the races.

 

While we wait for Friday’s unemployment report, today’s big number doesn’t come from the government, but it is job related.  At 10 o’clock, the outplacement firm Challenger, Gray and Christmas will announce the results of their corporate layoff survey for February.

 

Beating earnings estimates this morning, Men’s Wearhouse, Henry Schein, Marvel Enterprises, BJ’s Wholesale and PETsMART.  Fairchild Semiconductor is raising estimates for the current quarter.

 

Japan’s Nikkei Index up was about 8/10 of a percent overnight.  European markets are flat to up a half percent at this hour.  Our futures have improved from a couple hours ago, but we’re looking for a pretty subdued open for stocks. Adjusted for fair value, S&P and Nasdaq futures are flat and the Dow futures are about 3 points below fair value.

March 1, 2004

 

It’s not often that Monday brings us a sizable chunk of important economic data, but today’s one of those days.  In about ten minutes we’ll hear about personal income and spending during the month of January. Granted, it’s March now, but better late than never.  Expect word that our income rose 6 tenths of a percent and that spending rose 4 tenths of a percent.  As far as stocks are concerned, the higher the better with both numbers.

 

Same goes for the January Construction and February ISM numbers at 10 o’clock.  Both of those numbers are expected to be down slightly from the month before.  The ISM Index, which represents relative strength in the manufacturing sector of the economy, is expected to come in at 62.  Anything over 50 signals expansion.

 

The pattern of the last two weeks has been strength at the open of trading that fades as the day unfolds.  We’ll see if the strength we see in the futures this morning can hold up all day.  At this point, adjusted for fair value, S&P futures are up 4 points, Dow futures are up 37 and the Nasdaq futures are about 3 points above fair value.

WJR April 2004 Reports
WJR February 2004 Reports

Daily Reports @ WJR

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