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WJR May 2018 Reports




 
May 31, 2018

Big news from General Motors this morning. A GM investment of over a billion dollars and a 2¼ billion-dollar investment from Softbank Vision Fund will fund GM subsidiary GM Cruise Holdings as they plan to bring autonomous vehicles to market by 2019 – which is like, next year. Softbank gets ownership of just a little less than 20 percent of GM Cruise Holdings. General Motors shares are more than 10 percent higher pre-market.

Just as the Italian political crisis seems to be easing, all eyes will be on the White House today for the likely imposition of steel and aluminum tariffs. The problem is that tariffs we impose will likely lead to complementary tariffs out of the European Union among others. Yes, it’s all part of a grand negotiation, but until the negotiations are settled, traders will remain unsettled.

The famous other hand belongs to Dollar General. Shares are more than 6 percent lower on an earnings report that fell short of expectations. Dollar Tree almost 8 percent lower on similar news.

In bio-techs, Crisper Therapeutics shares are off 16 percent as the FDA has but the brakes on their gene-altering treatment testing.

Jobless Claims, April Income and Spending figures and the Chicago PMI reports are on the way, but at this point, the futures are bouncing around just north of the flat line.

Adjusted for fair value, S&P 500 futures are higher by 3 points, the Dow futures are up 19, and the NASDAQ futures are 14 points above fair value.

May 30, 2018

Nothing like a good old-fashioned European crisis to knock stock prices for a loop, and stock prices were plenty loopy yesterday. Thing is, the Italian political crisis, which showed some signs of cooling off this morning, is a political crisis at this point, and not an economic one – yet. Still, borrowing more than you produce can’t go on forever.

This morning, the bargain hunters are out, and they have several good earnings reports to help the cause.

Last night, salesforce.com reported earnings that were better than expected and raised their full year guidance. Shares are about 5 percent higher this morning. And earlier today Dick’s Sporting Goods checked in with operating earnings of 54 cents per share, 9 cents better than the average estimate. Dick’s Sporting Goods shares are more than 17 percent higher pre-market.

Movado and DSW also reported better than expected results, but DSW shares are lower after keeping full year guidance unchanged.

The Government’s second guess at first quarter Gross Domestic Product comes in just about 15 minutes. Expected the number to come in at 2.2 percent. The Fed’s quarterly Beige Book will be released at 2 o’clock

Asia was significantly lower overnight, but European markets are positive this morning. Our futures are almost exactly as much higher this morning as they were lower 24 hours ago. Adjusted for fair value, S&P 500 futures are higher by about 16 points, the Dow futures are up 175, and the NASDAQ futures are 39 points above fair value.

May 29, 2018

It’s been a while since we’ve had a good old-fashioned European economic crisis to worry about. But it appears there may be one on the way. The anti-Eurozone parties in Italy may force a surprise election as early as September in another attempt to oppose the EU-imposed austerity that might actually lead to repayment of Italy’s debts. While you might say, well it’s an Italian issue – it’s another possible fracturing of the European Union. There are political issues in Spain as well, and the uncertainly that breeds is not a positive for equities across the globe.

All that has the dollar surging against the euro once again, which is good news for the affordability of your European summer vacation. Not so much if you’re selling stuff overseas.

Word is that Nissan will cut North American production by 20 percent, yet they say that no workers will lose their jobs.

Earnings reports are on the way from HP Inc. and salesforce.com. At 10 o’clock, we’ll hear the Consumer Confidence Report form the Conference Board and at 10:30 comes the Dallas Fed survey.

In the meantime, it’s all about Europe as far as traders are concerned.

Asian markets were lower on the order of about one half of one percent. European markets are about 1½ percent lower, although Italy is down more than 3 percent. Our futures have regained a little ground from earlier levels, but there’s still a long way to go. Adjusted for fair value, S&P 500 futures are lower by about 20 points, the Dow futures are down 179, and the NASDAQ futures are 44 points below fair value.

May 25, 2018

We may not see another day of the massive swings in stock prices today. It now seems clear that the North Koreans are in no hurry to give up their only bargaining chip, so we’re back to square one there. Washington’s trade tariff message has been more mixed than menacing, and we’re not likely to get new direction thee today. Add to that the fact that a lot of traders will probably call it a day well before 4 o’clock in the >
Shareholders of Foot Locker are pretty excited this morning. Adjusted profit of $1.45 came in 20 cents better than expected and same store sales not as bad as expected. Foot Locker shares are about 15 percent higher pre-market.

Not such a happy picture over at the GAP. First quarter earnings and same store sales were both weaker than expected and the shares are gapping about 8 percent lower.

The loser of the morning is Zoe’s Kitchen. Shares are more than 25 percent lower on lousy earnings and outlook.

At 8:30, the April Durable Goods Report is expected to show a 1.2 percent decrease, and the University of Michigan’s final verdict on May Consumer Sentiment comes at 10.

Meanwhile, stock prices should head nowhere fast at 9:30. Adjusted for fair value, S&P 500 futures are lower by about 5 points, the Dow futures are down 32, but the NASDAQ futures are 2 points above fair value.
May 24, 2018

The battle of press releases, speeches and tweets continues between Washington and North Korea this morning and every new bluff seems to swing stock prices in one direction or other. It’s all very entertaining, but in the long run, paying attention to the boring stuff like earnings and interest rates is probably more profitable.

This morning, Best Buy reported quarterly operating earnings of 82 cents, which was 8 cents better than expected. More impressively, same store sales were more than 7 percent higher. Best Buy shares were more than 2 percent higher earlier on the news, but have now given that up and are about 2 percent lower pre-market.

Not to be outdone, Williams Sonoma shares are 11 percent higher on a great earnings report and raised profit outlook.

Shares of L Brands, the parent of Victoria’s Secret are sagging by about 5 percent this morning. Earnings for the quarter were okay, but profit margins were squeezed by discounting in apparel pricing.

We’ll get Weekly Jobless Claims, April Existing Home Sales and the Kansas City Fed Survey later this morning. Not much change is expected in the first two, but the Kansas City Fed Report is expected to be a little weaker, down from a reading of 26 to 22.

Overseas markets are mixed. Adjusted for fair value, S&P 500 futures are lower by about 6 points, the Dow futures are down 62 and the NASDAQ futures are 5½ points below fair value.

May 23, 2018

All it took was word out of President Trump’s mouth yesterday regarding the possible talks with North Korea. That killed an early rally in stock prices and that mood continues this morning in overseas market and the U.S. futures.

Compounding the weakness, earnings reports from a couple of major retailers left a lot to be desired. Home improvement shop Lowe’s reported $119 per share, which was 3 cents short of estimates. A bigger problem was same store sales, up six-tenths of a percent versus the expected 3.2 percent. Lousy spring weather gets the blame from Lowe’s officials, although Lowe’s shares have recovered earlier losses and are now up 2 percent.

Lousy spring weather is also taking the heat from Target. $1.32 missed the bullseye by 7 cents on disappointing sales. Target reaffirmed full-year guidance, but the shares are about 6 percent lower.

On the famous other hand is retailer Tiffany. Spending is evidently healthy at the higher end of the consumer market. $1.18 of quarterly profit was 42 percent higher than expected, and Tiffany shares are about 13 percent higher pre-market.

Red Robin shares are not particularly yummy this morning. They are down 16 percent on a disappointing report.

Outside of Indonesia and South Korea, foreign markets are in the dumps and adjusted for fair value, S&P 500 futures are lower by about 15 points, the Dow futures are down 168 and the NASDAQ futures are now 58 points below fair value.

May 22, 2018

Are traders worried about a possible trade war? The answer appears to be an emphatic “yes.” Over the weekend that China and the United States have reached an agreement to suspend a trade war that hadn’t really started, and traders responded by apparently re-starting a bull market that never really stopped. Today, China is cutting tariffs on automotive components.

There was another helpful event yesterday. Neel Kashkari, the Federal Reserve President in Minneapolis, went searching for a place to give a speech where they still might have snow on the ground, and wound up in Escanaba. Kashkari warned his VOTING colleagues on the Open Market Committee (of which he is not one) to take their time in raising interest rates. Equities have a history of performing well when rates rise SLOWLY from low levels. When rates rise rapidly – well – not so much.

Toll Brothers reported earnings that were 4 cents short of the 76-cent estimate. Toll Brothers shares are more than 4 percent lower pre-market. The famous other hand belongs to retailer Kohl’s. Profit of 64 cents per share were well ahead of the 50-cent estimate. Kohl’s also raised full year guidance and shares are looking to open five percent higher. Macy’s is looking two percent higher on a broker upgrade.

Sony will become the world’s largest music publisher after their 2.1-billion-dollar deal to acquire EMI.

Asian markets were mixed overnight. Europe is slightly higher. Our rally should continue in the early going. Adjusted for fair value, S&P 500 futures are higher by about 5½ points, the Dow futures are up 53 and the NASDAQ futures are now 28 points above fair value.

May 17, 2018

Even though the bulk of quarterly earnings news is old news at this point, when Walmart talks, people listen. The talk we heard this morning put smiley >
Not such a happy >A couple of data points are worth mentioning this morning. Oil prices continue to surge, as Brent crude touched 80 dollars per barrel earlier today. And, everybody’s favorite villain for stock market declines, the 10-year Treasury Bond rate, is above 3.1 this morning.

Weekly Jobless Claims, the Philly Fed Index and the April Leading Economic Indicators are on the way this morning. Leading Indicators are expected to rise four-tenths of a percent, up from three-tenths in the last report.

Asian markets were lower overnight, but Europe is higher. Our futures have been in the red all morning.

At this point, adjusted for fair value, S&P 500 futures are lower by about 4½ points, the Dow futures are down 33 and the NASDAQ futures are 25 points below fair value.

May 16, 2018

The Dow Jones Industrials’ eight-day winning streak struck out swinging yesterday and it looks like we have more red arrows on the way this morning.

That’s not stopping big companies from getting bigger. The purchase of the morning has Zoetis buying veterinary diagnostics business Abaxis in a deal that will cost about 2 billion dollars. Abaxis shares are higher by about 15 percent pre-market.

The numbers on April Housing starts come at 8:30. Mortgage applications dipped again last week. Refinancing loans are now at a nearly 10-year low, as interest rates have risen and tax laws have changed.

Macy’s just reported operating earnings of 48 cents per share. That compares with the 36-cent expectation. They also raised full-year guidance and Macy’s shares are spiking about 12 percent higher

Earning come and earnings go, but North Korean saber rattling never seems to stop, and this morning, North Korea’s threat to pull out of the Trump Summit next month is not sitting well with stock traders and the computer algorithms they use.

At this point, adjusted for fair value, S&P 500 futures are lower by about 3 points and a half, the Dow futures are down 42 and the NASDAQ futures are 4½ points below fair value.

May 15, 2018

The futures are pointing lower this morning, after an eight-session win streak for the Dow Industrials. A good bit of blame for those red arrows wear orange aprons. Home Depot shares are more than 2 percent lower this morning. Operating earnings of $2.08 beat the consensus estimate by 3 cents. No problem there. However, revenue and same store sales were on the light side. Bad weather gets the blame, but Home Depot shares are suffering about a 4½ point loss pre-market.

Life sciences firm Agilent shares are also off about 4 bucks per share, which is a more than 6 percent loss. Earnings for last quarter were fine, but Agilent’s forecast for the current quarter was less than wonderful.

At 8:30, we’ll hear about April Retail Sales. Expect that the overall sales rose three-tenths of a percent, but about a half percent higher if you exclude auto sales.

Don’t look now, but the ten-year Treasury Bond yield is back above three percent this morning and that likely has something to do with the red arrows in the futures.

Outside of China, Asian markets were lower overnight, Europe is little changed, but in general a little higher. At this point, adjusted for fair value, S&P 500 futures are lower by almost 6½ points, the Dow futures are down 68 and the NASDAQ futures are 22 points below fair value.

May 14, 2018

Now that the flood of earnings reports is pretty much behind us, we’re looking forward to a rather quiet day in the markets. In fact, the cupboard of economic reports is absolutely bare today.

Over the weekend, there were some encouraging words out of the White House regarding negotiations with the Chinese, specifically with regard to Chinese telecommunications giant ZTE, which was slapped with crippling sanctions by the U.S. last month. The President has ordered the Commerce Department to reach an agreement that saves ZTE, while getting assurance that they will agree to stop violating the terms of an earlier agreement to stop doing business with Iran.

St. Louis Federal Reserve President Bullard will give a speech that starts shortly after the bell rings this morning, and a television interview following that. Earlier this morning in Paris, in a bit of 20-20 foresight, Cleveland Fed-head Loretta Mester said that the Fed may well push short term rates north of 3 percent, but probably not until the year 2020.

When the market does open this morning, it will be riding a seven-day winning streak.

Asian markets were mixed overnight. Europe is mainly lower. Our futures have lost some steam but are still pointing higher. At this point, adjusted for fair value, S&P 500 futures are higher by 6 points, the Dow futures are up 71, and the NASDAQ futures are 16 points above fair value. 

May 11, 2018

Detroit auto heavyweights go to Washington today to have a little chit-chat with the President. Fuel economy standards will likely be a big part of the conversation, and we’ll see if there’s any relief on the way regarding the ever-increasing regulatory requirements.

Speaking of Washington policy, watch shares of the big pharmaceutical companies today, as a new proposal to make drugs prices more affordable is expected from the White House.

Verizon shares are almost 2 percent higher on a broker upgrade. The loser of the morning may well be security software firm Symantec. Shares are almost 27 percent lower this morning on a downbeat full year revenue and profit forecast an word of an internal investigation regarding possible accounting irregularities.

The University of Michigan’s first look at May Consumer Sentiment comes a 10 o’clock this morning. Expect that consumers’ collective mood rose a bit to a reading of 99.

Asian markets were mostly higher overnight, but Europe is still very much a mixed picture. Our futures are still holding on to slight gains. At this point, adjusted for fair value, S&P 500 futures are higher by 2½ points, the Dow futures are up 35, and the NASDAQ futures are 6 points above fair value.

May 10, 2018

Another apparent step forward in relations with North Korea has traders in an optimistic mood this morning.

We’ll see if the optimism continues at 8:30 this morning. the April Consumer Price Index is expected to have risen about three-tenths of a percent. That would bring the year-over-year increase to 2½ percent. Not much attention has been paid to the CPI for a long time now. However, with the Federal Reserve’s future interest rate policy dependent at least partially on a targeted 2 percent inflation rate, CPI watching is again coming into vogue.

Great Britain doesn’t appear worried about inflation, as the Bank of England again held short term interest rates steady this morning.

Shopping for companies in biotech continues this morning, as Eli Lilly is buying ARMO Biosciences for 1.6 billion dollars.

Qualcomm shares are higher, on word of a big share buyback. Roku is higher on earnings.

Our futures have cooled a bit since the top of the hour, but are still positive.  At this point, adjusted for fair value, S&P 500 futures are up 4 point, Dow Industrials futures are up 14 and the NASDAQ futures are 9 points above fair value.

May 9, 2018

Five big companies reported better than expected earnings since last night. Disney, $1.84 per share was 14 cents ahead. ADT’s 34 cents beat by a dime. Those shares are up over 6 percent this morning. Trip Advisor is the big gainer of the pre-market, with shares higher by more than 18 percent after their earnings report yesterday afternoon.

Anheuser-Busch and Electronic Arts are both out with better than expected earnings, although EA’s forecast looks a little light.

Walmart is taking another big step into the online world, and perhaps a bigger step into gaining access to the Indian market. In its biggest acquisition ever, Walmart will spend 16 billion dollars to buy a 77 percent stake in Indian ecommerce company Flipkart.

The biotech disaster du jour appears to be shares of a company named Lipocine. Those shares are down by over 35 percent on word that the FDA has given thumbs down to Lipocine’s testosterone replacement drug.

Oil prices and oil stocks are on the rise after yesterday’s news on the Iranian sanctions. The yield on the 10-year Treasury is higher, and is sitting right at that psychologically important 3 percent level.

Our futures are off their earlier highs. At this point, adjusted for fair value, S&P 500 futures are higher by 10 points, the Dow futures are up 104, and the NASDAQ futures are 24 points above fair value.

May 8, 2018

The nation’s small business people were in a slightly better mood in April, with the NFIB survey index rising slightly to a level of 104.8. Earnings were reported at a 45-year high, which is a pretty good reason to be in a good mood, I would think. The biggest problem independent businesses say they are facing is a shortage of qualified workers.

There was evidently a shortage of qualified car renters last quarter at Hertz. A loss of $1.58 per share was 32 cents per share worse than expected and shares are being hit where it hurts, pun intended, down more than 8 percent.

Dish Network shares are also on the fritz this morning. Although profit matched expectations, revenue was light and DISH actually lost subscribers during the quarter. Shares are almost 2 percent lower pre-market.

Expect all >
Asia was mixed overnight, but European markets are trading a bit lower.

At this point, adjusted for fair value, S&P 500 futures are lower by almost 8
points, the Dow futures are down 60, and the NASDAQ futures are 20 points below fair value.

 
May 7, 2018

It wasn’t too many years ago we were worried about the price of gasoline reaching four dollars per gallon. Well, don’t look now, but the average price for a gallon of gas nationally is just under three dollars, and the price of West Texas Intermediate oil regained the 70-dollar level this morning. That’s the highest level in 3½ years. But, if the United States decides to take a hard line on the Iran nuclear deal later this week, we could see prices shoot higher still, just in time for the summer driving season.

Also shooting higher are shares of Grammercy Property Trust, up about 15 percent on word that Blackstone is buying the company.

Not shooting higher this morning are shares of Tyson Foods. Operating earnings of $1.27 per share fell three cents below estimates. Sales were also on the light side and the shares are about 6 percent lower pre-market, although full-year guidance remains within the range of analyst estimates.

Federal Reserve Bank Presidents from Richmond, Chicago and Dallas will offer speeches during trading hours today, but the big economic reports come later in the week.

Most of Asia and most European markets are higher (London was closed for a holiday) and it looks like we’ll continue Friday’s momentum when things get going at 9:30. At this point, adjusted for fair value, S&P 500 futures are higher by more than 10 points, the Dow futures are up 99, and the NASDAQ futures are 39 points above fair value.

May 4, 2018

The bulk of first quarter earnings reports are in, and it looks like we’ve just had the best earnings season in over almost 25 years. Yet, stock prices have been stuck in the mud since the beginning of the year and have actually declined quite a bit from a fantastic January performance.

Some blame the threat of tariffs, which may be true. But keep in mind that traders don’t focus on last quarter nearly as much as what they think things might look like six months out. At this point, the only certainties six months out are that interest rates will be higher, the stimulus of the tax cuts will be wearing off and we’ll be having a Congressional election which could change all the ground rules. Yes, profits have been great, but projecting on a linear curve is always dangerous.

Earning news this morning is good news for another handful of companies. Ionis Pharmaceuticals shares are higher by 3 percent, Celgene is up 4 percent, Weight Watchers is watching more waistlines than ever and the shares are up 8 percent, and maybe that’s because Shake Shack also reported better than expected results. Shake Shack shares are also 8 percent higher.

The monthly Employment Report comes at 8:30. Asia was lower, Europe is mostly higher. Adjusted for fair value, S&P 500 futures are lower by a point or so, the Dow futures are down 17, but the NASDAQ futures are just 2 points below fair value.

May 2, 2018

The old stock market saying is “sell in May and go away.” Never mind that over the past 50 years, stocks have, on average, GAINED ground in the month of May. Suffice it to say that there are “bull markets” and then there is “bull-oney.”

In any event, the month started with a sharp sell-off that, except for some big Dow components like McDonalds and Boeing, reversed itself by the end of the trading day.

It’s a crowded calendar today with a 2 o’clock report from the Federal Reserve leading the way, although no further increase in short term rates is expected until next month. Tesla and Spotify report earnings tonight.

Meantime, Apple shares are higher this morning after a surprisingly good earnings report last night, a dividend increase and the announcement of a 100-billion-dollar stock buyback. Shutterfly shares are 10 percent higher on better than expected results. CVS Health, Juniper Networks, YUM Brands, Chesapeake Energy and Clorox also beat estimates.

Drug maker Gilead is lower, as are shares of MolsonCoors on disappointing results. Snap shares are down double digits, as are online dating companies, after the 800-pound gorilla called Facebook announced that they will unveil an online dating feature soon.

Asia was mixed, but Europe is higher. Our futures have lost some early gains as the yield on the 10-year Treasury approaches 3 percent again. Adjusted for fair value, S&P 500 futures are flat, the Dow futures are up 27, and the NASDAQ futures are 26 points above fair value.

May 1, 2018

The May 1st“line in the sand” for steel and aluminum tariffs on Canada, Mexico and the European Union was redrawn late yesterday – now pushed off for another month. But between tariff worries and Iran worries and worries about the Tigers’ bullpen, earnings took a back seat yesterday, as an early rally faded into the red.

Today, as the Federal Reserve Open Market Committee starts a two-day meeting, corporate earnings reports continue to impress. Although sales fell a little short, both drug makers Merck and Pfizer reported better than expected profit. Nevertheless, Pfizer shares have lost earlier gains and are now about one percent lower pre-market.

There’s a little hope for shares of beleaguered apparel maker Under Armour, whose shares are almost 2 percent higher. A break-even quarter there was better than the expected loss of a nickel per share. Apple reports after 4 o’clock.

April car sales reports will roll out as the day unfolds from everybody except General Motors. GM now reports sales only once per quarter.

The loser of the morning may well be shares of Tapestry.  The company, formerly known as Coach reported weakness in sale of its Stuart Weitzman show line.  Shares are off about 11 percent.

Asian market closed a bit higher. Most of Europe is closed for May Day. If our market opened right now, prices would likely be slightly lower. Adjusted for fair value, the  S&P futures are off 2 points, Dow futures are off 24 and the NASDAQ futures are 7 points below fair value.

WJR June 2018 Reports
WJR April 2018 Reports

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