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WJR May 2019 Reports

May 31, 2019

Welcome to the last day of May.  The conventional wisdom is “sell in May and go away.”  It has been very conventional, but not very wise until this year.  In fact, it hasn’t worked well since 2012, but this May is certain to finish with stocks in the red.

There are two factors driving stock prices lower this morning.  The Chinese Purchasing Manager’s Index released overnight showed actual contraction in Chinese manufacturing, which was not expected. 

Also unexpected was another visit from “Tariff Man.”  President Trump threatened a series of increasing tariffs on all Mexican imports, starting at 5 percent if the Mexicans don’t take action to stop illegal immigration to the U.S.

A lot of imports from Mexico are not finished goods – they’re materials used in production here, but a lot of cars are built there too.  Reflecting that, shares of Ford Motor are lower by 4 percent pre-market.  General Motors shares are almost 5 percent lower.

Last night, Uber reported results that confirmed earlier projections that they would lose a billion dollars on 3 billion in sales.  Shares are up 2 percent, but still below the IPO price.  Costco shares looking to open 2 percent lower, even after beating estimates handily on a 7 percent increase in domestic same store sales.  Big Lots shares are 8 percent higher on a positive report.

Asian markets fell on the Chinese data. Europe and the U.S. are headed lower as well.

Adjusted for fair value, the S&P 500 futures are lower by about 31points, the Dow futures are down 268 points, and the NASDAQ futures are about 102 points below fair value.

May 30, 2019

In about 15 minutes, we’ll get the Bureau of Economic Analysis second guess at first quarter Gross Domestic Product.  Expect that the first estimate of 3.2 percent will come down a bit to a flat 3 percent increase.

There a whole basket full of retailers reporting earnings this morning, and it’s a tale of the good, the bad and the ugly.

Dollar General shares are about 5 percent higher as $1.48 of adjusted profit was 9 cent better than expected.  Burlington Stores are off about 1 percent.  They missed on earnings but generally reaffirmed guidance.

Not-so-wonderful news came from Dollar Tree, which lowered guidance and are losing 4 percent pre-market. Tommy Hilfiger retailer PVH shares are down 11 percent, blaming the impact of tariffs, and J. Jill shares are down below 2 dollars each, that’s a 47 percent drop.  Adjusted profit was better than expected, but same store sales fell 3.3 percent.

Uber’s first report as a public company comes after 4 o’clock today

Asia was a little lower overnight. European markets are a little higher. Our futures have lost most of their earlier gains. Adjusted for fair value, the S&P 500 futures are higher by about 3 points, the Dow futures are up 5 points,after being up 60 points earlier this morning and the NASDAQ futures are about 10 points abovefair value.

May 29, 2019

The late-afternoon downdraft in stock prices looks to continue this morning on ……what else……new worries about trade with China or lack thereof.  Tariffs are one thing, but it appears that the blacklisting of Huawei has hit a nerve with the Chinese Government.  The state-run media has become much more aggressive in its condemnation of the United States and this morning, there’s a report that the Chinese may restrict export of rare-earth metals, which are critical to U.S. technology companies.  We get about 80 percent of 17 needed rare-earth metals from China.

Meantime, a handful of retailers reported earnings this morning.  The leader of that pack is Dick’s Sporting Goods.  62 cents of adjusted profit was 4 cents better than expected.  Dick’s raised full-year guidance and traders are lifting the shares by about 5 percent pre-market.

Not-so-sunny guidance coming from Capri Holdings (the company you may know as Michael Kors) and Abercrombie & Fitch.  Lowered full-year guidance has the shares of those companies looking to open down 7 and 18 percent, respectively.

European markets are off by about a percent and a half.  Our futures have been in the red all morning. Adjusted for fair value, the S&P 500 futures are lower by about 16½ points, the Dow futures are down 172, and the NASDAQ futures are about 51 points belowfair value.

May 28, 2019

Fiat Chrysler’s proposed merger with Renault is easily the top local corporate story of the morning, but it could be a while before any deal is done.  The French Government has a 15 percent stake in Renault and Nissan and Renault also own significant stakes in each other’s companies.  And then there’s the Italian Government and the European Labor Unions. The Renault Board will consider the proposal this week, but there appears to be a long and winding road ahead.

One 50/50 deal that is done comes in the electronic payments and software space.  Total System Services and Global Payments will join together in a 21½ billion dollar all stock deal.  Total Systems shares are valued at a 20 percent premium in that deal.

The Conference Board releases its May Consumer Confidence number at 8:30. Expect a small increase in confidence from the April reading of 129.2.

Wageworks and Workday will report earnings later today.

Asia was mainly higher overnight, but outside of London, Europe is mostly lower. Our stock futures were fairly flat until about a half hour ago when they shifted into the green. Adjusted for fair value, the S&P 500 futures are higher by about 4 points, the Dow futures are up 55, and the NASDAQ futures are about 14 points abovefair value.

May 24, 2019

There was a lot of hot rhetoric from the Chinese state-run media yesterday, and it had traders selling first and asking questions later.  This may be a “little squabble,” as President Trump refers to it, but it looks like the tariff battle may get worse before it gets better.  While no one knows how long it will last, consider that we have 529 days until our next election.  The Chinese may have 529 years before theirs.

As we head into the long Holiday weekend, we’re looking at a relatively quiet financial news day.  The April Durable Goods report comes in about 15 minutes.  Expect that new orders rose about 2 percent in April, after March’s 2.8 percent rise. Outside of transportation equipment, expect a three-tenths of a percent increase.

Foot Locker reported some disappointing earnings news this morning, earning $1,53 last quarter, eight cents less than expected.  Comparable store sales and overall revenue also disappointed and Foot Locker shares are looking to open almost 8 percent lower.

Asian markets were mixed overnight.  Europe is a little higher after the announcement of Theresa May’s coming resignation.

We should get some recovery in the early going from yesterday’s swoon although the futures are way off earlier levels. Adjusted for fair value, the S&P 500 futures are higher by about 9 points, the Dow futures are up 96, and the NASDAQ futures are about 17 points abovefair value.

May 23, 2019

We have a bit of a worldwide stock selloff going on this morning, as worries over tariffs, trade and upcoming European elections have traders hitting the sell button.

This is the last significant morning of the week for earnings reports and the news is once again a mixed picture.  One the plus side, Medtronic and Best Buy shares are each about 2 percent higher after positive reports, with Best Buy beating the 86-cent profit estimate by 16 cents.

Shares of Lenovo and Hormel are each indicated about 2 ½ percent lower on weaker guidance.  The African swine flu is sickening the Hormel outlook. It’s not helping Chipotle stock this morning, either which picked up a broker downgrade.

L Brands shares are popping about 12 percent higher as strength in Bed Bath & Bodyworks propelled earnings.  Shares of Avon Products are about 15 percent higher.  Last night’s word of a stock merger with Brazil’s Natura were confirmed this morning.

Four Fed Heads will be running around giving speeches today, which may help sentiment a bit, but absent some good news there we’ll head lower, at least in the early going.

There’s not much of a fair value adjustment this morning, so what you see is what you get with the futures and what you’re getting is not very good. The S&P 500 futures are lower by about 24 points, the Dow futures are down 240, and the NASDAQ futures are about 84points below fair value.

May 22, 2019

The Federal Reserve releases their latest Open Market Committee meeting minutes at 2 o’clock today.  Traders will be looking for any hint that a rate cut might be coming before the end of the year.

In the meantime, we’re checking out another bunch of retailer earnings reports from last night and this morning, and there’s a widely mixed bag in that shopping cart.

First, the positive; Target reported $1.53 in adjusted profit, which is a dime better than expected.  Comparable store sales were 4.8 percent higher and the shares are indicated about 7 percent higher pre-market.  Also with better than expected news, Advance Auto and VF Corp, although VF shares are more than 7 percent lower on soft guidance.

The outright bad news on earnings came from Nordstrom, Lowe’s and Urban Outfitters.  Those shares are indicated about 10, 8 and 6 percent lower respectively. Homebuilder Toll Brothers shares are off 6 percent on a weak sales outlook.

Not to be outdone, shares of Qualcomm are looking to open more than 11 percent lower after a federal judge ruled that Qualcomm violated U.S. anti-trust law.  That could be a very big deal for the company, not only regarding past liability, but also future pricing power.

Our futures dipped into red numbers about an hour and a half ago and have been getting redder and redder since then. At this point, adjusted for fair value, the S&P futures are lower by almost 13 points, the Dow futures are down 99, and the NASDAQ futures are about 52 points belowfair value.

May 21, 2019

A bunch of retailers report earnings today. Comparable store sales at Home Depot were up 2½ percent in the U.S. and 3 percent worldwide.  Profit of $2.27 per share came in 9 cents better than expected on sales that were just slightly better than expected. In spite of all that, Home Depot shares are indicated about one-half percent lower.

A one-half percent loss would sound pretty good to long-suffering shareholders of J C Penney this morning. Penney’s adjusted loss of 46 cents per share was 7 cents bigger than expected and Penney shares are about 11 pennies lower in the pre-market, which is about 10 percent lower than last night’s close. Kohl’s shares are 9 percent lower on a disappointing report.

Outside of retail news, United Continental shares are about one percent higher after reaffirming full-year profit guidance.

A biotech firm named Peloton, which is focused on cancer treatments, was expected to issue shares to the public this week.  Instead Merck is writing a one-billion-dollar check to acquire the company.

Tesla shares are indicated to open below 200 dollars per share this morning on a bunch of less than wonderful broker comments.  Morgan Stanley, for one, says that in their worst-case scenario, Tesla shares may only be worth 10 bucks a piece.

Asian markets were mixed overnight, with China up a bit after the White House temporarily lifted some of the sanctions on doing business with Huawei. At this point, adjusted for fair value, the S&P futures are higher by about 16 points, the Dow futures are upabout 135,and the NASDAQ futures are about 52 points above fair value.

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 June 2019 Reports
WJR April 2019 Reports

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