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WJR May 2019 Reports

May 20, 2019 - Ron's away today.  He'll return tomorrow!

May 17, 2019

We’re looking at a fairly significant pullback after yesterday’s rather significant rally as traders try to figure out what the rest of the year will bring.

It’s not looking to bring good things for companies that supply stuff to Chinese telecom firm Huawei after the U.S. effectively blacklisted Huawei yesterday.

A rather murky outlook for server semiconductor chips has shares of Nvidia slightly lower this morning even after a better than expected earnings report. 

The famous other hand belongs to shares of Pinterest.  Pinterest shares have only publicly traded for about a month, but those shares are indicated about 16 percent lower pre-market.  Although revenue was higher than expected, a quarterly adjusted loss of 32 cents per share was almost three times larger than the expected loss.

Luckin Coffee, the Chinese answer to Starbucks, comes public today at 17 bucks per share. And, the University of Michigan’s first look at May Consumer Sentiment is expected to rise to 97.5 from April’s 97.2. That announcement comes at 10 o’clock.

Cryptocurrencies are having a rough morning after their recent gains, and speaking of rough mornings, the major index futures have been slip sliding most of the morning. At this point, adjusted for fair value, the S&P futures are lower by about 22 points, the Dow futures are downabout 197, and the NASDAQ futures are about 71 points belowfair value.

May 16, 2019

Word of a six-month delay in threatened European auto tariffs pull the market out of a ditch yesterday and sparked stock prices to hit the accelerator.  That momentum looks to continue this morning, further boosted by results from Cisco Systems and Walmart.

Last night, Cisco bettered the earnings estimate and raised full year guidance.  That has Cisco shares about 3 ½ percent higher pre-market.  Earlier this morning, Walmart told us about adjusted earnings of $1.13 per share last quarter, which was 11 cents better than expected.  Sales were a little light, but comparable store sales rose for the 19th consecutive quarter, up 3.4 percent last quarter alone. Walmart shares are looking to open a little more than one percent higher.

Earnings are also on the way form Pinterest, Nvidia and Applied Materials.

At 8:30, the April Housing Starts report is expected to improve to 1,200,000 or more.

Overseas markets are mixed at this hour, and our futures are off earlier highs. Right now, adjusted for fair value, the S&P futures are higher by about 10 points, the Dow futures are up almost 101, and the NASDAQ futures are about 24 points abovefair value.

May 15, 2019

Stock prices rebounded a bit yesterday after Monday’s trade-inspired pounding.  And with the bulk of quarterly earnings reports in the rear-view mirror, trade news and economic indicators will likely pave the road ahead.

This morning’s economic data appears to slow some significant slowing in the Chinese economy. Industrial Output and Retail Sales both grew less than expected last month.  However, if you can believe the numbers, both are still marching along, with Industrial Output growing 5.4 percent and Retail Sales up 7.2 percent. The retail sales increase in China was the slowest in 16 years.

Retail Sales numbers here in the U.S. are due out at 8:30. Expect an increase of two-tenths of one percent.

Macy’s just reported 44 cents per share in adjusted quarterly profit, well ahead of the 33-cent estimate.  Macy’s shares are looking to open about 7 percent higher. Same store sales were a strong seven-tenths of a percent higher. Walmart reports tomorrow.

A couple of cannabis companies reported yesterday. Good news from Tilray and not so much from Aurora Cannabis.

Asian markets rose a bit overnight, but Europe is mostly lower. Right now and adjusted for fair value, the S&P futures are lower by about 8 points, the Dow 4futures are down 58, and the NASDAQ futures are about 20 points belowfair value.

May 14, 2019

Maybe traders were a little overconfident that the China trade issue would just go away, and it may, but not before a lot more gamesmanship takes place.  Yesterday, that gamesmanship cost the Dow Jones Industrials over 600 points as China imposed tariffs on most everything they import from the U.S.

Speaking of which, at 8:30 the report on April Import Prices is expected to report that prices rose seven-tenths of a percent after rising six-tenths of a percent in March.

Share in Roundup weed-killer maker Bayer are withering by another 2 percent this morning.  Bayer lost another lawsuit that alleged that Roundup caused cancer in a customer.  It was a California court that decided the guilt and the damages. It’s the third such loss for Bayer.  The first two awards were in the 80-million-dollar range.  This time, the award is over 2 billion dollars.  Boy, that Monsanto purchase might have not been such a good idea.

Walmart announced a next-day delivery service that they’ll start rolling out Phoenix and Las Vegas.  Walmart will spend 800 million dollars to develop the service and eventually offer it over 75 percent of the country.

Asian markets were a little lower after our selloff yesterday.  Europe is a little higher at this hour.  Adjusted for fair value, the S&P futures are higher by about 15 points, the Dow futures are up 137, and the NASDAQ futures are about 53 points abovefair value.

May 13, 2019

The S&P 500 lost about 2 percent last week as the Chinese trade drama continued. That brings he year-to-date gain down to just a shade under 16 percent.

Any gain would have been welcomed for shareholders of Uber on Friday.  Unfortunately, they were Uber-disappointed with a post IPO loss of 8 percent.  Uber shares are looking to open another 6 percent lower this morning.

Impossible Foods, the plant-based meat company that seems to have attracted the interest of Burger King, isn’t going public yet. However, word is that they did raise another 300 million dollars in private funding while they await the right time to offer shares to the public.

Oil services firm Weatherford has apparently run out of time.  The Irish-based company will file for Chapter 11 bankruptcy protection.  Shares are about sixty percent lower pre-market at about 15 cents apiece.

Chinese car sales declined in April, which makes it ten consecutive months of decline.  The stock market was closed in Hong Kong overnight in honor of Buddha’s birthday.  Happy Birthday, Buddha.

The overseas markets that are open are trading lower and our futures have been a mess all morning, and they’re getting messier.  Adjusted for fair value, the S&P futures are lower by about 49 points, the Dow futures are down 442,and the NASDAQ futures are about 169 points below fair value.

May 10, 2019

As expected, no Chinese trade deal was reached yesterday, and increased tariffs on certain Chinese goods went into effect for goods shipping out of China effective today.  Although traders don’t appear to be happy with the tariffs and the anticipated Chinese retaliation, stocks in China rose between 3 and 4 percent overnight.

One stock on the rise this morning is Zillow.  Shares are looking to open 17 percent higher after their earnings announcement.  The famous other hand belongs to security software firm Symantec.  Those shares are looking to open 15 percent lower after lowered earnings guidance and the resignation of the firm’s CEO.

Marriott shares are a about 3 percent lower on a revenue miss and Booking Holdings, the old Priceline company missed on earnings, but shares are about 3 percent higher on revenue growth.

You latest chance to buy a piece of another ride sharing company that is hemorrhaging cash comes today.   Uber shares will be available for purchase and will price near the low end of the expected range at 45 dollars per share.

For those that are still keeping an eye on consumer inflation, the April CPI comes at 8:30 this morning.  Expect a four-tenths of a percent increase.

Our futures have been slowly sinking over the past hour or two. Adjusted for fair value, the S&P futures are lower by about 17 points, the Dow futures are down 124, and the NASDAQ futures are about 47 points below fair value.

May 9, 2019

Traders are hitting the “sell” button again this morning as we look toward the Chinese tariff increase which is slated to kick in less than 16 hours from now.  According to reports, Chinese negotiators reneged on prior elements of a proposed deal.  That in itself isn’t surprising to many.  The idea that they reneged before the deal was signed is rather unexpected timing.

Unexpected earnings guidance from Stamps.com has the price of the shares almost cut in half this morning.  Expected full year earnings are now about $4.10. Prior guidance was $5.65 and the Street expected $5.43.  Shares of Stamps.com are about 47 percent lower and shareholders are licking their wounds.

Shares of Tapesty (you may know the company as Coach and Kate Spade) were 32 percent lower over the past year.  However, it looks like shares will recover half of that decline at 9:30 this morning as earnings of 42 cents per share came in a penny ahead of estimates.

Disney and Cardinal Health are also out with better than expected results, and Disney’s numbers didn’t even include the impact of the Avengers Endgame blockbuster.

At 8:30, the April Producer Price Index is expected to have risen only two-tenths of one percent as inflation continues its disappearing act.

Overseas markets are lower as are our futures as we await word on the Chinese negotiations. Adjusted for fair value, the S&P futures are lower by about 13 points, the Dow futures are down 114, and the NASDAQ futures are about 52 points below fair value.

May 8, 2019

Just a few days ago, many people expected that this week’s visit from China’s Vice Premier would signal that a trade deal was in the offing. That was then and this is now, when we’re one day closer to tomorrow night’s midnight trigger for increasing the tariffs on Chinese goods, and traders aren’t expecting that we’ll get any trade agreement anytime soon.

In the meantime, last night’s earnings report from Electronic Arts has the shares about 7 percent higher pre-market. Apex Legends is selling apparently well, as EA raised full year revenue guidance. Wendy’s and Toyota also posted better than expected results.  Disney reports after 4 o’clock today.

Last night’s numbers from the newly-IPO’ed company Lyft were certainly interesting. Lyft reported an overall loss of over a billion dollars, due mainly to stock-based compensation triggered by the IPO.  The adjusted loss was $9.02 per share but didn’t count the new shares issued.  Lyft left out overall revenue from its report, but said that losses should peak this year, and there is a “path to profitability.” Could be a long path at this rate. Lyft shares are lower by about 2½ percent.

Asian markets were lower overnight. European markets are narrowly mixed. Our futures have recently improved but are still pointing lower. Adjusted for fair value, the S&P futures are lower by about 8½ points, the Dow futures are down 68, and the NASDAQ futures are about 22 points below fair value.

May 7, 2019

Uncertainty over the Chinese trade talks continues to wreak havoc with stock prices pre-market, although the market came back a long way from yesterday’s open that early on had the Dow Jones Industrials lower over by 500 points.

The relief came on news that Chinese Vice Chairman Liu He WILL attend trade talks in Washington starting Thursday.  Whether he’s coming or not, the Trump administration says that increased tariffs on Chinese goods will go into effect just after midnight on Thursday evening.  Ah, negotiations – aren’t they fun to watch?

On the earnings front, we have AIG moving higher this morning after reporting an earnings beat last night.  Shares are about 5 percent higher pre-market.  Auto maker Ferrari is about 4 percent higher in European trade after reporting a 22 percent increase in profit and a 13 percent revenue gain, due mainly to increased sales in China.

Drug maker Allergan reported better than expected earnings and sales and raised guidance. In spite of that, shares are fractionally lower this morning.

Japanese stocks traded overnight after a six-session holiday, and they traded lower.

Our futures took a turn for the worse within the past half hour.  At this point, adjusted for fair value, the S&P futures are lower by about 22 points, the Dow futures are down 176, and the NASDAQ futures are about 71 points below fair value.

May 6, 2019

As you may know, the S&P 500 has seen it’s best start of any year since 1987, with an 18 percent gain.  For those of us who were AROUND in 1987, we well remember that things WERE going swimmingly until October 19th. That’s not to say that a market crash is coming this fall.  The point is that stock prices, like life, do not follow a linear curve and the stuff that hurts is stuff that you never saw coming.

Yesterday, President Trump used his twitter account to threaten the Chinese with dramatically increased tariffs.  That comes after a series of administration comments suggesting that the Chinese talks were heading toward an agreement.

So, this may be last minute negotiating pressure, or it could be signs that a full-blown trade war is in the offing.  It’s likely the former, but stock traders are selling first and asking questions later, with the Chinese market dropping 6 percent.  Our futures dropped 500 points right after yesterday’s tweet and haven’t moved much since.

Tyson Foods just reported $1.20 per share in profit, 6 cents better than expected.  Occidental and food firm Sysco report in today as well.

Mainland Europe is lower, but only by about one or two percent. At this point, adjusted for fair value, the S&P futures are lower by about 47 points, the Dow futures are down 462, and the NASDAQ futures are about 152 points below fair value.

May 3, 2019

We know that there are algorithms that drive the machines that do most of the daily stock trading.  While we don’t know what those algorithms are being fed, it’s apparently something that is plant-based.

Yesterday, shares of Beyond Meat, a plant-based food company went public at 25 dollars per share.  By the end of the trading day yesterday, the shares were priced at $65.75 per share.  That’s the equivalent of 44 times sales.  This morning, shares are higher by an additional 9 percent.  Yes, their sales are growing quickly, but unless we’re all on our way to vegetarianism, there may be some bubbles in the broth there.

Shake Shack, Adidas and WW (the company formerly known as Weight Watchers) all have stock prices on the rise this morning due to positive guidance.

At 8:30, the April Employment Report from the Labor Department may sway prices at 9:30. Expect that 190,000 new non-farm jobs came into being in April, with the Unemployment Rate holding at 3.8 percent and the average hourly wage increasing by three-tenths of a percent.

At this point, adjusted for fair value, the S&P futures are higher by about 9 points, the Dow futures are up 77, and the NASDAQ futures are about 48 points above fair value.

May 1, 2019

The “Forrest Gump portfolio” is rising rapidly in value this morning.  Remember the stock that Captain Dan bought for Forrest in the movie?  That “fruit” company?

Shares of Apple are about 5½ percent higher pre-market after telling us that iphone sales fell 17 percent last quarter.  However, services revenue rose 16 percent.  Apple beat estimates on the top and bottom lines and will spend 75 billion on buying back their own shares.

Not to be outdone, shares of Advanced Micro Devices are about 6 percent higher, as are shares of health company CVS.  Estee Lauder shares are rising about 4 percent on a good report.

Missing estimates this morning are MolsonCoors and Clorox.

At 2 o’clock, the Federal Reserve Open Market Committee will wrap up another 2-day meeting with their announcement on short term interest rates.  You wonder if it takes them a whole day just to review President Trumps latest tweets urging another rate cut. Chairman Powell will have his say at 2:30.

April Car Sales number will roll out later today along with the April ISM Manufacturing Index. Expect a reading of 55.

Australia was higher overnight, London is flat and most other overseas markets are closed for May Day. At this point, adjusted for fair value, the S&P futures are higher by about 10 points, the Dow futures are up 103 of which about 80 are attributable to Apple, andthe NASDAQ futures are about 56 points abovefair value.

WJR April 2019 Reports

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