March 30, 2012
It’s the last day of a first quarter that has been one of the best in a long time. It’s the best in the Dow Jones Industrial average in 14 years. The S&P 500 is higher by almost 12 percent and the NASDAQ, with a gain of nearly 19% is seeing its best first quarter in more than 20 years. Apple is at the core of that number, but it is an impressive number nonetheless.
Blackberry-maker Research in Motion missed the estimated earnings mark last night and uttered those fateful words – they are “reviewing their strategic options.” IN English that usually means that they have lost their way in a dark closet and a lot of employees will be searching the “help wanted” ads soon.
GAP gets an upgrade this morning and Finish Line beat the 80 cent profit estimate by a penny
Income and Spending data come at 8:30. At 9:45 the Chicago PMI is expected to drop a point to a reading of 63 and just before 10, the University of Michigan’s final reading on March consumer sentiment is expected to rise just a touch, to 74.7 from 74.3.
Asian market painted a mixed picture overnight, but Europe is firmly in the green and our futures are pointing north as well, although we’re off the highs of the morning. At this point, adjusted for fair value, the S&P futures are higher by 6½ points, the Dow futures are up 54, and the NASDAQ futures are now just about 12 points above fair value.
Blame a lousy Durable Goods Report for yesterday’s stock market swoon and the follow-up drop in foreign markets overnight.
Today’s news deals not with what’s happening now, but what happened last year. The Government’s final reading on fourth quarter Gross Domestic Product is likely to be unchanged from the last reading of 3 percent. That’s also likely to be a good bit higher than what we’re experiencing now.
Last night, Applied Materials warned that quarterly profit expectations need to come down a bit. However, with only two days left in the fiscal quarter, such warnings have been few and far between. Best Buy just reported $2.47 in operating profit which was 31 cents better than expected, but revenue missed by a mile. Nevertheless, Best Buy stock is higher pre-market.
Hope that you’re not traveling to Spain today. There’s a big union-led strike in the country protesting the government austerity that’s been proposed to help cure Spain’s dire fiscal situation. People evidently don’t like it, but at least no one’s threatening to burn the country down.
Spanish stocks are down almost one percent, but that’s pretty much in line with the rest of Europe. Major Asian markets were lower overnight as well. We’re pointing lower, but not by much.
Adjusted for fair value, the S&P futures are down about 4 points, the Dow futures are down 37, and the NASDAQ futures are now about 6 points below fair value.
This morning’s headline news regarding housing doesn’t tell the whole story. The headline says that mortgage applications fell almost 3 percent last week. However, the silver lining here is that mortgage apps to PURCHASE a home actually rose 3 percent. Rising interest rate hurt the refinancing market by 4.6 percent. So, overall applications were lower, but perhaps, just perhaps, home sales are on the way back.
Way back in 2004, Google came public at 85 dollars per share. Today, of course it’s around 650 and Citigroup is out with a prediction of 750 dollars on Google this morning. They also upgraded Direct TV. Credit Suisse upgraded Progressive and said some nice things about Weight Watchers, as well.
At 8:30, the February Durable Goods Report is expected to show a 3 percent improvement after January’s 3.7 percent drop.
Chinese stocks were in the red by over three percent. Major European markets are lower, but not by much.
Our futures are happier, but without conviction this morning. Kind of like those Hutaree folks. Adjusted for fair value, the S&P futures are higher by less than a point, the Dow futures are up 14, and the NASDAQ futures are now about 1½ points above fair value.
Ben Bernanke seems to be saving his most provocative comments for speeches, rather than Congressional testimony. Maybe it’s his revenge for having to listen to speeches rather than respond to intelligent questions. But, whatever the reason, Bernanke’s comments yesterday sent stocks off on another tear. Bernanke said yes, the job market is improving. But the overall economy is still struggling. That hinted, in many minds, of more Federal Reserve stimulus to come, and off and running we went.
Bernanke is out on the stump again today with a lecture to college students, while Fed President William Dudley will keep the House Committee of Financial Services off the golf course.
At 10 this morning, the Conference Board’s reading on Consumer Confidence should be interesting. It has risen sharply since last October, to a level of 70.8. It’s expected to come in relatively unchanged for March, but rising gasoline prices often weigh on this report. We’ll see how much $4 gas has started to hurt.
Walgreen reported better than expected profit this morning, but declining year-over-year same store sales. Japan was up 2 percent, China was lower overnight. Our futures have lost most of their steam from an hour ago.
Right now, they’re still pointing slightly higher. Adjusted for fair value, the S&P futures are higher by almost 3 points, the Dow futures are up 19, and the NASDAQ futures are now just 1½ points above fair value.
March 26, 2012
Cal-Maine Foods, which is a big egg producer, reported $1.09 in earnings this morning, which was 7 cents better than expected. But remember, it’s the last week of the quarter, so before it’s over we may be hearing about some companies lowering profit expectations.
Vivus got some good news in Europe this morning as the continue the march to approval for their new erectile dysfunction drug. This drug has been through extensive testing and reportedly works in just 15 minutes. Just in case you’re in a hurry.
Speaking of pharmaceuticals, Roche has extended its 44 dollar offer to acquire Illumina. The market expects more however, as Illumina shares continue to trade around 50 bucks
Pending Home Sales are expected to have risen 2 percent in February, which would double the January rate. That news comes at 10 o’clock.
European stocks are about a half-percent higher. Our futures have been rising most of the morning and we should see some pretty significant gains at the open. Right now, adjusted for fair value, the S&P futures are higher by 11½ points, the Dow futures are up 103, and the NASDAQ futures are about 23 points above fair value.
We’ve made it through the week without a whole heck of a lot of earnings warnings, which COULD be a POSITIVE sign for first quarter earnings reports next month. There's a NEGATIVE sign if you’re a lobster, especially a Red Lobster just trying to not get eaten. This morning, Darden Restaurants reported $1.25 of operating profit for last quarter, which was a penny better than expected on slightly higher sales than expected.
The sole economic report on the agenda is the February New Home sales report at 10 o’clock. Expect an annualized rate of 325,000 new units.
Hey, big news! The Senate has passed a bill and sent it to President Obama. It’s called the “Stop Trading on Congressional Knowledge Act.” That's STOCK, for short. Clever, no?
Now whether you believe there is ANY knowledge in Congress or not, this bill (which is a watered down version of the February proposal) will supposedly stop members of Congress from trading on insider stock tips. In other words, at least in one regard, members of Congress will now have to observe at least some of the rules the rest of us have always had to live by.
Overseas markets are mainly lower, and our futures have been slipping throughout the morning. Right now, adjusted for fair value, the S&P futures are down a fraction, the Dow futures are down 3 points, although the NASDAQ futures are almost 4 points above fair value.
It’s weekly Jobless Claims Thursday and we have a little flurry of good earnings news. However, the futures are taking their cue from economic data out of China and Europe, and that’s not so good.
Slumping global demand AND slowing domestic demand get the blame for a reading of 48.1 in the Chinese manufacturing PMI Index. That indicates contraction, as did numbers out of Europe this morning.
Earnings news on this side of the swamp has been pretty good this morning. The seemingly unstoppable lululemon athletica reported 51 cents of operating earnings. That was a two cent beat. Dollar General beat the 82 cent estimate by a nickel. Not to be outdone, FedEx reported $1.55 in profit. That exceeded the $1.35 estimate on strong performance by FedEx ground, as people seem to be gravitating to less-expensive delivery. As a result, FedEx revenue was less than expected, and the stock is under a little pressure this morning pre-market.
Jobless Claims at 8:30 are projected to check in at 352,000. The lower, the better of course.
The futures aren’t as bad as they appear on their >
March 21, 2012
Yesterday the markets fussed and fretted once again that Chinese economic growth might be slowing a bit. Of course, people seem to forget that a slight slowing in China was exactly what everyone was hoping for a year ago. Of course, that was then and this is now, and in any event, traders took it as a profit-taking opportunity.
Last quarter was evidently a profit-making opportunity for Oracle. Adjusted earnings of 62 cents blew by the estimate of 56 cents and was 15% higher than a year ago. Oracle also raised guidance for the full year. Cintas is also guiding earnings estimate higher for the quarter ended February 29thand for the full fiscal year.
Vaguely reminiscent of Rogers and Astaire, the dynamic duo of Bernanke and Geithner will dance before a House of Representatives oversight committee today, talking about European financial matters.
General Mills reported slightly lower than expected performance than the Street had expected this morning. Sales were up 13%, owing mainly to last year’s acquisition of Yoplait. However, and this may be the most important comment of the morning - General Mills says that input costs were much higher. In fact, their commodity cost increases rose at a faster pace than any year since the early 80’s.
We might recover the bulk of yesterday’s losses in the early going today although the futures have been slipping a bit over the past 15 minutes or so. Right now, adjusted for fair value, the S&P futures are higher by almost 3 points, the Dow futures are up 27, and the NASDAQ futures are about 5 points above fair value.
Lowering guidance yesterday was software giant Adobe Systems. Although earnings were in line, that negative guidance has Adobe stock stuck in the mud, about 5 percent lower.
In about fifteen minutes, we’ll find out if Housing Starts rebounded at all in February. The consensus says – well, not really. Expect an annualized rate of 700,000 new starts, following a 699,000 rate in January.
It’s what they call a “risk-off” morning around the world at this hour. Major European markets are one to one and a half percent lower. Gold is down almost 1½ percent.
Our futures are pointing lower as well, by a little more than a half-percent. Right now, adjusted for fair value, the S&P futures are lower by 9½ points, the Dow futures are down 80, and the NASDAQ futures are about 16 points below fair value.
There are exactly two weeks to go in the first calendar quarter. That makes today the start of the mythical “earnings warning season.” If a company know that traders are expecting an earnings number next month that is just not gonna’ happen, it may make some sense to leak that news before the quarter is over, on the theory that “nobody likes surprises – especially bad ones.”
Adobe Systems reports their first quarter earnings number today. Expect 57 cents in operating earnings, which would be a penny below the quarterly number from a year ago.
Perhaps the most intriguing story of the day will come from our old friends at Apple. Apple will hold a conference call today to let everybody know just exactly what they plan to do with the spare cash they have laying around. That cash, which totals over 100 billion dollars, could be used to pay a dividend, or perhaps purchase three medium >
European markets are lower. Our futures are pointing a little lower as well. Right now, adjusted for fair value, the S&P futures are lower by nearly 2 points, the Dow futures are down 16, but shares of Apple are indicated about 2½ percent higher pre-market, and that pretty much single-handedly has the NASDAQ futures are about 7 points above fair value.
March 16, 2012 - No report today - Ron's at the St. Patrick's Day Party!
March 15, 2012
It’s been a light week for economic data, but today’s as good as it gets. At 8:30, we’ll hear about manufacturing growth in the New York region with the release of the Empire Index. Expect a reading of 17½, which would actually be a little worse than the February report. We’ll also get the weekly jobless claims number, expected in at 355,000 and the February Producer Price Index is expected to spike up to one-half of one percent overall on rising gas prices, but remain at a relatively tame two-tenths of percent for the core rate.
The Philadelphia Fed Survey will be released at 10 o’clock.
The latest in the parade of cloud-computing IPOs is on tap today as Demandware comes public. The underwriters priced it at about 13.50 per share. It will be offered at 16 bucks and you can bet that it will trade higher, at least in the short term, as has been the case with stocks of that ilk this year.
Credit Suisse upgraded shares of Public Storage and downgraded eBay this morning and shares of Apple are indicated just a dollar or two shy of $600 per share pre-market.
Overseas markets are narrowly mixed at this hour. The Ides of March don’t appear to be bothering our stock futures this morning, as it looks like stock prices will head nicely higher at 9:30, unless we get stabbed by some bad news at 8:30.
Right now, adjusted for fair value, the S&P futures are up about 4 points, the Dow futures are up 37, but the NASDAQ futures are almost 8 points above fair value.
Dow 13,000 proved to be quite the resistance level throughout February. Yesterday’s rally, which was the best of the year so far, has taken the Dow well clear of 13,100. We’ll see if prices can continue to rise now that that psychological barrier has been breached.
Shares of Citigroup are looking about 4 percent lower this morning. The Federal Reserve released the results of their latest bank “stress-test” last night (two days ahead of schedule.) Of 19 big financial institutions, 4 did not measure up. Joining Citigroup in the back corner of the classroom were Ally Bank (that’s the old GMAC,) SunTrust Bank and MetLife. All four institutions are out with their own specific excuses this morning for not passing the test. You know….. we didn’t have time to study….the dog ate my homework….I overslept…that kind of thing. But suffice it to say that the good news is that 15 out of 19 appear to be strong enough to handle a big future shock in the financial system.
Italy floated a 3 year bond offering this morning at nicely lower interest rates. 2.76 percent was almost a half-percent lower than the last auction
There’s nothing big on the economic calendar today. Stocks in China and Portugal are lower, but just about everybody else overseas is higher. Gold is lower by more than 40 dollars an ounce this morning, but our stock futures are hovering right around the flat line.
Right now, adjusted for fair value, the S&P futures are up a half-point, the Dow futures are up 8, but the NASDAQ futures are just about even with fair value.
When the Federal Reserve Open Market Committee meets, people still listen. But maybe with their ipod headphone in the other ear. We have not seen the Fed change the short term interest rate target for 25 straight meetings, and you can bet that today’s result will be number 26. Any comments about additional monetary accommodation will be sought, but likely not found as the economy appears to be growing, albeit at the pace of a limping snail.
In just 10 minutes we’ll get the verdict on February Retail Sales. Expect an increase of 1.1 percent, which would be more than double the rate of the January increase.
In Germany, the ZEW survey of February investor sentiment checked in at 22.3 this morning. January’s number was 5.4 and was only expected to hit 10 for February. Domestically, the National Federation of Small Business Survey inch a little higher, as small business owners are more optimistic about future sales, but are more worried about regulations, gas prices and overall business conditions.
Overseas it’s a sea of green arrows this morning and we’ll get off to a good start as well, although our futures are well off their earlier highs. Right now, adjusted for fair value, the S&P futures are higher by nearly 9 points, the Dow futures are up 71, and the NASDAQ futures are 18 points above fair value.
The week got off to a bit of a bumpy start in Asia overnight. Although the Japanese market started out well, some new trade data out of China pulled most of Asia lower. China’s trade deficit now stands at its highest level in 12 years. Shrinking demand for Chinese exports represents another drag on the Chinese economy, where the estimated growth rate was lowered just last week.
And, lest we not mention the basket case of world-wide economies, post-default Greek Government bonds traded this morning at staggering yields. Thirty year bonds traded at a 14% yield, while shorter-term bonds were actually yielding 19% representing in a decided vote of no-confidence in the Greek Government’s ability of stay solvent in the future.
Pepsico shares are looking higher pre-market on news of a global management re-structuring and Volkswagen reported a 20 billion dollar profit for 2011, which is an all-time record
Not much on the economic calendar today, or the week for that matter, although the Federal Reserve Open Market Committee does meet tomorrow.
Most overseas markets are a little lower. Our futures turned lower about 10 minutes ago. Adjusted for fair value, the S&P futures are down a point, the Dow futures are down 4, and the NASDAQ futures also about 4 points below fair value.
Our focus is squarely on the monthly Jobs Report, which rolls out in about 8 minutes or so. Expect that the unemployment rate will remain stuck at 8.3 percent, and that only 204,000 new non-farm jobs were created in February. The January number was 243,000.
Today, by the way, marks the third anniversary of the most recent major bottom for the stock market. March 9th of 2009 seems a long time ago, yet a fresh memory all the same. Since the bottom the Dow and the S&P 500 have each more than doubled. The NASDAQ is higher by more than 130 percent.
Aeropostale said earnings will fall about 25% short of estimates this quarter. Navistar guided to $4.75 for the fiscal year ending in October from the prior estimate of $5.40. Texas Instruments guided lower for both the quarter and the full year.
Greek stocks are almost 3% higher. Most other markets overseas are a bit higher. We’ll wait until the 8:30 Jobs Report to pick a direction. Adjusted for fair value, the S&P futures are up almost a point, the Dow futures are up 17, but the NASDAQ futures are just about a half-point below fair value.
We made up a chunk of Tuesday’s losses yesterday and it looks like we have a decent shot at getting back the rest in the early going today.
All signs point to a successful Greek bond swap, the deadline for which is later today. Also, way out east, both the Bank of England and the European Central Bank held interest rates steady, which was no great surprise. In a mild surprise, shares Renault benefitted from a broker upgrade this morning. On this side of the Atlantic, Goldman Sachs upgraded American Eagle shares. Smithfield Foods and Williams-Sonoma are both out with better-than-expected earnings today.
With Greece apparently off the radar, at least for the rest of the week, the market will focus on Jobs today and tomorrow. Weekly claims at 8:30 this morning are expected to check in at 351,000 once again. And in case, you’ve just been laid off and don’t know why, an hour ago the February Challenger Layoff Report told us that layoff announcements were 3% lower on a monthly basis, but 18% higher than a year ago, as companies continue to cut costs.
Navistar just cuts its earnings guidance for 2012. And McDonald’s domestic sales were more than 11 percent higher in February. That was 3 percent better than expected.
Asia higher, Europe high and were heading higher as well. Adjusted for fair value, the S&P futures are higher by 11½ points, the Dow futures are up by 91, and the NASDAQ futures are almost 18½ points above fair value.
The latest act in our ongoing Greek drama closes tomorrow, which is the deadline for Greek creditors to accept the terms of a bond swap offer. If they do, the drama continues. If they don’t, the Greek rescue plan will flame out faster than a slab of Kasseri cheese. This morning, it looks like the deal will go through at about a 53% haircut. However, someone may have to use the word “default,” which would trigger payments under some credit default swap contracts.
The most critically watched economic report of the week on this side of the Atlantic will be Friday’s Employment Report. However, the preview of the Labor Department Report is the monthly ADP survey. Those numbers rolled out at 8:15 and reflected creation of 216,000 new non-farm jobs created in February. That number was suspiciously identical with the estimate. Perhaps the fix is in.
Merck, Dick’s Sporting Goods and General Electric have reaffirmed estimates for the quarter. GE is expecting double digit revenue growth. Last night, warning that things aren’t so good, were Pandora and Cypress Semiconductor.
And of course, for the tech geeks in the crowd, the new Ipad, reportedly named Ipad HD, will be introduced a one o’clock this afternoon. The new units would reportedly go on sale late next week, so you may want to get in line tonight.
Asia mostly lower, Europe mostly higher. Adjusted for fair value, the S&P futures are higher by nearly 5 points, the Dow futures are up 47, and the NASDAQ futures are almost 13 points above fair value.
Asian markets are lower for the second day in a row. That’s the first time that’s happened this year and its part of the reason that our futures are pretty deeply in the red this morning.
Of course, no set of worries would be complete without some worries about Greece. Remember, it’s not a default unless you call it a default. Bondholders have until Thursday to agree to terms of the default-which-shall-not-be-named in Greece which includes a 53½ percent haircut from >
The name of their game is losing weight. True to their cause, shares of Nutrisystem have lost about 12 percent of their body weight in pre-market trade. Nutrisystem said that they’ll lose somewhere between a nickel and a dime this quarter versus the expected 10 cent profit. For the full year, they see fifty cents in profit versus the expected 88 cents. The blame goes to higher marketing costs. As Terry Bradshaw would say “it ain’t purdy.”
Europe is lower by about a percent and a half at this hour. Our futures are off their lows, but as we look toward 9:30, well, “it ain’t purdy.” Adjusted for fair value, the S&P futures are lower by about 10 points, the Dow futures are down 83, and the NASDAQ futures are 18 points below fair value.
Overnight, the Chinese government lowered their estimate for growth in the Chinese economy to about 7 percent. Now it wasn’t too long ago that traders were wringing their hands in worry about the Chinese economy growing TOO fast. So although overseas markets are lower this morning, don’t be surprised if the silver lining shows up as the day rolls on. Slower growth means less restrictive Chinese monetary policy, which you would think to be a positive for financial assets like stocks and bonds.
At 10 o’clock this morning, the January Factory Orders are expected to have slipped 1½ percent. The ISM report on the non-manufacturing sector of the economy is also due out at 10 and is expected to slip to 56 from last month’s 56.8.
BP agreed to settle with Deepwater Horizon claimants for a total of just under 8 billion dollars, and BP stock is looking a little higher as that bit of uncertainty is apparently resolved
And just in case you were counting, the Apple store reportedly passed the 25 billion app download mark this morning, which is pretty impressive, even if you think that your own kids have downloaded at least half of that number.
That Chinese growth estimate has just about all of the markets overseas lower. Our futures are lower, but have recovered a good bit from earlier levels. At this point, adjusted for fair value, the S&P futures are lower by about 3 points, the Dow futures are down 18, and the NASDAQ futures are now just 3 points below fair value.
It’s the first Friday of the month, so you would expect that we’d be getting the Monthly Jobs Report at 8:30. However, the Labor Department hasn’t quite gotten it together just yet, so we’ll have to wait another week. Maybe they need to hire a few more people at Labor to get the work done. I’d better not give them any ideas.
Anyway, without the Job numbers, the cupboard is bare of economic reports today.
However, the latest of the internet wonder-companies is going public today. Yelp shares will go to friends and family at 15 dollars per share. That’s higher that the 12 to 14 dollars suggested by the underwriters. So, you can infer that demand is expected to be strong, and the price of Yelp shares may head north out of the gate today. Buyer beware, however. A lot of hot initial public offerings trade significantly lower within the first year.
Oil prices, which in case you haven’t noticed, have been on a tear, briefly crossed $110 per barrel this morning on rumors of a Saudi oil pipeline explosion. Things have settled down since then. Oil is currently down about 80 cents, just north of $108 per barrel. Gold is lower by another 10 bucks.
Chinese stocks rose about two percent overnight. In fact most Asian markets rose, but most of Europe is a bit lower. We’re likely to give up some of yesterday’s gains at the open as well. Adjusted for fair value, the S&P futures are lower by 2 points, the Dow futures are down 21, and the NASDAQ futures are about 6½ points below fair value.
As the sun sets on earnings season, you’d have to say that while it wasn’t as strong as prior quarters, it was still decent with about 60% of the S&P 500 companies doing better than expected. Today, we’ll turn to a basket full of economic data – and a lot of it comes in just 10 minutes or so.
The weekly Jobless Claims Report is expected to reflect 355,000 new unemployment claims. We’ll also find out about January Personal Income and Consumption. Expect a half-percent and a four-tenths of a percent increase, respectively.
At 10 o’clock the January Construction Spending and February ISM Reports roll out, with ISM, a measure of health in domestic manufacturing, expected to rise to 54½ from 54.1. Overnight, Chinese manufacturing surveys showed some improvement, but not quite as much as expected. There are actually two manufacturing surveys in China, one reported slight expansion and one a slight contraction. So, let’s call it a draw. The manufacturing numbers out of Europe reflected continued contraction, but not as much as last month. That has European markets and our futures on the rise
February car sales reports are expected to be up 10 percent from last year and 20% from January. Those reports will be rolling in as the day rolls on. So far Chrysler checked in with a 40 percent sales increase which is about 7 percent better than expected.
The cash and the futures are pretty close this morning – there’s not much in the way of a fair value adjustment. But if we were to open now, we’d open with nicely higher stock prices. The S&P futures are higher by nearly 4½ points, the Dow futures are up 37, and the NASDAQ futures are about 11 points above fair value.
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