November 30, 2012
Our stock futures are higher once again this morning. Of course, that’s all subject to whatever bluffing comes out of Washington D.C. later on. Yesterday, an early rally evaporated on Speaker Boehner’s comments but recovered later in the day.
Another bunch of companies announced “special” dividends this morning, among them are Whole Foods and Tellabs. Tellabs, a $3 stock, declared a $1 special dividend this morning, and the stock is bid more than 15% higher. But remember our discussion of yesterday – special dividends are not a free lunch, may cause a company to over-leverage and may just be a sign of a company that doesn’t have anything better to do with its cash. Not necessarily the case here, but I’m just sayin.’ No matter what the resolution of Washington’s big game of chicken, everyone seems convinced that tax rates on dividend are headed higher, maybe much, much higher after December 31st.
Zynga has inked a new deal with Facebook, under which is will lose its position as the sole game provider for Facebook. An 11% drop in stock price will now be referred to as a “Zynga,” because that’s what’s happening pre-market.
At 9:45, the Chicago PMI is expected to rise to a reading of 51.
Overseas stocks are mostly higher. Adjusted for fair value, the S&P futures are higher by 2 points, the Dow futures are up 27, and the NASDAQ futures are about 5 points above fair value.
Markets rose yesterday and overnight due to positive comments on the “fiscal cliff” negotiations from the White House and at least one of the hand-picked group of CEOs who visited the White House yesterday. Of course talk is cheap and tax hikes are expensive, as we await action rather than talk.
And that idea of buying the winning Powerball ticket to balance the federal budget is now presumably off the table.
The action at retailer Tiffany was less than sterling last quarter. Tiffany reported 49 cents in profit, which was a 14 cent miss. Revenue came up short and full year guidance was lowered. Tiffany shares are on clearance this morning, down about 9 percent pre-market.
Weekly jobless claims come at 8:30. But perhaps more interesting will be the Government’s second guess at third quarter Gross Domestic Product. Some encouraging data over the past few weeks has led to speculation that the GDP estimate may actually be raised to somewhere around 3 percent.
Overseas markets are up nicely on the hope of Washington politicians doing their job like patriots rather than panderers. So, the rally may be short-lived.
But, no matter. Outside of China, overseas markets are higher, and adjusted for fair value, the S&P futures are higher by 7 points, the Dow futures are up 59, and the NASDAQ futures are about 15 points above fair value.
Asian markets followed our market lower overnight as traders continue to obsess over every little bit of grandstanding that comes out of a Congressman’s mouth. Yesterday’s comments by Utah’s Senator Harry Reid sent stocks for a tumble. Maybe the United States eventually goes over the over-hyped “fiscal cliff” or maybe not. One thing that appears certain – if you’re trying to do any 2012 versus 2013 tax planning, plan on doing it over what WAS to be your Christmas vacation, because it may be late December before we know what THIS year’s tax law will be.
Here’s a little early tax planning Holiday present: Costco will pay anyone who owns their shares on December 10tha special 7 dollar per share dividend. We’re likely to see a lot of cash-laden businesses pay similar special dividends prior to the expiration of the 15% Bush dividend tax rate on January 1st.
At 2 o’clock, the Federal Reserve will release the latest “Beige Book” which is their view of how the economy is doing in various regions of the country. But before that, at 10 o’clock, October New Home Sales are expected to dip slightly to 387,000 as a result of Super Storm Sandy.
Europe is lower at this hour. Our futures were relatively flat earlier this morning, but have been heading lower ever since. But it’s more of an escalator glide than an elevator drop, so things aren’t that bad. Right now, adjusted for fair value, the S&P futures are down 4½ points, the Dow futures are down 24, and the NASDAQ futures are about 6 points below fair value.
Today is “Cyber Monday,” when all office workers show up, shut their doors and spend at least half of the day buying stuff, thankful that they didn’t give up that second piece of pecan pie on Thursday night in order to go to a “door-buster” sale.
Stock prices celebrated the Thanksgiving Holiday last week with a rise of nearly 4 percent. But perhaps stocks were just giving thanks that Congress was in recess.
The folks in Washington are back this week, and heaven help us all. However, some signs of compromise on fiscal matters are surfacing. Over the weekend, some Republicans voiced a willingness to raise some taxes, evidently having been informed that they did, in fact, lose the recent election. We’ll see if “compromise” can be undertaken on both sides of the argument.
Several recently beleaguered companies are enjoying broker upgrades this morning, namely Facebook, Yahoo and Research in Motion. No big economic reports are due today, but earnings are on the way from Joseph A. Bank, Big Lots and Hillenbrand.
Much of Asia was higher overnight, but China was lower and Europe is in the red on the continuing Greek drama. We will give back some gains at 9:30. Adjusted for fair value, the S&P futures are down 7½ points, the Dow futures are down 73, and the NASDAQ futures are about 10 points below fair value.
While your favorite retail store may be open tomorrow, the stock market will not, no matter how many desperate people are willing to camp out in the cold for a deal on their favorite stock. That being said, all the normal Thursday economic releases will be jammed into today.
Perhaps of most interest will be the weekly Jobless Claims report. Last week, the Labor Department reported a huge surge in jobless claims, likely attributable to Hurricane Sandy. They also told us that the claims filed in the week before the election were higher than first reported. That, of course, is no big surprise. This time around, expect 415,000 new claims, which is still about ten percent higher than figures that were reported in the weeks prior to the election.
U of M’s final November Consumer Confidence number is expected to ease off a bit to 84 for 84.9 and the Conference Board’s October Leading Indicators are expected to dip from six tenths to two tenths of a percent.
There’s more trouble brewing in Europe this morning as Greek leaders failed to agree on new austerity measures. Not surprisingly, the European Central Bank leaders will refrain from doling out any more rescue money until more austerity measures are approved.
Chinese stocks rose more than one percent overnight, but other markets are painting a mixed picture, and we should start modestly lower in the U.S. Adjusted for fair value, the S&P futures are down 2½, the Dow futures are down 29, and the NASDAQ futures are about 8½ points below fair value.
Two percent rallies have been few and far between lately. But yesterday, hopes of compromise in Washington triggered some pretty significant buying.
Today, of course is another day, and it looks like a chunk of those gains will evaporate early on.
Ten percent of the value of Hewlett-Packard shares are gone already in pre-market trade, with HP shares trading at a ten year low. Quarterly operating earnings of $1.14 were two cents better than expected. However, back in 2011, HP acquired British software company Autonomy for over 10 billion dollars. HP is now writing off over half of that amount, claiming that the books were cooked, and they were misled about margins, growth rates and the color of paint used in the cafeteria. This one should keep lawyers on both sides of the Atlantic pretty busy until their kids are well through with college.
Best Buy piled on the bad news bears moments ago, reporting 3 cents per share of profit. Analysts expected 12 cents. Same store sales dropped over 4 percent.
October Housing starts roll at 8:30 and are expected to cool off a bit to the annualized level of 836,000. Ben Bernanke will give a speech at 12:15.
Overseas markets are mixed, but we’re heading lower at the open. At this point, adjusted for fair value, the S&P futures are down about 3½ points, the Dow futures are down 43, and the NASDAQ futures are about 8 points below fair value.
It will be an interrupted week of trading on Wall Street, but stock futures are on the rise this morning. Comments last Friday and over the weekend are raising hope that Congress and the Administration will come to SOME sort of an agreement in December. Whether that agreement solves any of our fiscal imbalances or merely kicks the can once again, avoiding a stalemate will give stock prices a boost.
Lowe’s shares should get a boost this morning. Quarterly earnings of 40 cents beat estimates by a nickel. Same store sales at Lowe’s were up 1.8 percent. Tyson Foods beat the 44 cent profit target by 11 cents. Brocade Communication reports are little later on.
Asian shares were mainly higher overnight led by strength in Japan. The opposition candidate, who is expected to be the next Prime Minister, voiced his support for a Japanese version of Ben Bernanke’s QE forever. That, of course, would weaken the yen even more as seemingly all fiat currency economies race to the bottom. European markets are mostly higher by a percent or so.
At 10 o’clock, October existing home sales are expected to slip just a little from the September rate of 4.75 million units.
No matter, we’ll likely head higher at 9:30. At this point, adjusted for fair value, the S&P futures are up about 11 points, the Dow futures are up 86, and the NASDAQ futures are almost 20 points above fair value.
As the day’s that Congress will actually be in session between now and January 1stdwindle down, traders are becoming more and more anxious that no one in Washington can spell the word “compromise.” And as each day ticks away without action, our stocks tend to sell off as the day wears on.
Load up on your Twinkies. Hostess Brands, which makes Twinkies, and Ho-Ho’s and Ding Dongs and the like had warned their employee unions that if they didn’t end their strike they would bankrupt the company. Well, this morning, 18,500 workers are being terminated and the company is filing for liquidation. Which means, of course, that some other investor will buy the brands and the formulas and likely open new factories to make Twinkies in right-to-work states in the years to come. The good news is that the Twinkies in your cupboard should last until then.
Sears Holdings is out with a bigger loss than expected this morning. Nike will split its stock 2 for 1 and boost its dividend.
Industrial Production numbers for October are due at 9:15, but that’s about it for economic reports for the week. Overseas markets are mixed, but mostly a bit lower. Adjusted for fair value, the S&P futures are up about 4 points, the Dow futures are up 26, but the NASDAQ futures are 5 points above fair value.
We had a pretty decent day in the works yesterday until President Obama’s press conference. His stated goals regarding tax increases on both corporate and individual taxpayers and the perception of how “compromise” is defined in his dictionary sent stock prices lower in a hurry.
There’ll be lots and lots of data points out today. So far this morning, Viacom beat the consensus estimated earnings number, as did Target. Walmart and Williams-Sonoma also managed to earn more than expected, but both guided lower for the full year. Walmart may also be in more trouble with the Government regarding overseas operations under the Foreign Corrupt Practices Act. Walmart shares are looking 3 to 4 percent lower pre-market.
At 8:30 this morning, Weekly Jobless Claims should continue to portray a weak Job market. Look for 376,000 new claims. Expect the Consumer Price Index to increase one-tenth of a percent and the Empire Manufacturing Index to register a minus 5. Then at ten o’clock, the Philadelphia Fed Index is expected to decline to a reading of 4.5 from last week’s 5.7, not exactly moving in the right direction.
Most overseas markets are lower, but our stock futures aren’t predicting any big price moves at the market open. Adjusted for fair value, the S&P futures are up about 1½ points, the Dow futures are down 4, but the NASDAQ futures are 3 points above fair value.
November 14, 2012
To call stock prices as a bit dizzy would be overstating their sense of direction this week. We’ll have an abundance of news and events today that should stir the pot even more.
Let’s start out with what we know. Last night Cisco Systems beat earnings and revenue targets and Cisco stock is looking to open about 7 percent higher. The big surprise of the morning, however, is Abercrombie and Fitch. A&F crushed the 59 cent estimate by earning 87 cents on better than expected sales. They raised full year guidance and Abercrombie stock is bid more than 20% higher pre-market.
At 8:30 we’ll get October Retail Sales and the October Producer Price Index, and at 1:30 this afternoon President Obama will hold his first post-election press conference. Markets will be listening intently for any sign of compromise on tax increases and hoping to NOT hear about any “lines in the sand.” Don’t get your hopes up.
Panasonic announced that 10,000 of its employees will soon be “pursuing other opportunities.” Meanwhile, Fed Governor Janet Yellen says that today’s near-zero interest rates May have to stay in place until 2016.
Europe is lower on a report that even two years from now, Greece may need another 32 billion euros short, requiring yet another bailout. Our futures are up, then lower, and are now head north again. Adjusted for fair value, the S&P futures are up about 6 points, the Dow futures are up 45, and the NASDAQ futures are 15 points above fair value.
The European Central Bank decision on the next tranche Greek bailout funds will come a week from today. However, word is that they’ve agreed that the new Greek austerity measures will be given another two years to work their magic before any plugs get pulled. This ensures that we’ll have something threatening to talk about well into the future just in case economies around the world do get back on their feet.
Speaking of back, Congress is back in their seats today, with seven weeks to go until we hit the obsessed-about “fiscal cliff.” It sure would be nice to know what the tax rules are for this year and next sometime before Christmas. But then again, that only affects the “little people.”
Michael Kors is out with better than expected earnings. Home Depot earned 63 cents per share last quarter, which was a 7 cent beat. Home Depot also raised estimates for the year from $2.95 to $3.03, on a pickup in residential home sales.
This morning the National Federation of Small Business Survey improved just a touch from last month, and the ICSC-Goldman Retail Sales index jumped almost 2 percent year over year on a boost in post-Hurricane Sandy sales out east.
Overseas markets are mixed, but mainly lower, but like our futures, are not as low as they were a couple of hours ago. Adjusted for fair value, the S&P futures are down about 4½ points, the Dow futures are down 33, and the NASDAQ futures are 14 points below fair value.
News-wise, it will be a quiet today for Wall Street. The bond market and banks and the post office are closed in observance of Veteran’s Day and any regularly-scheduled economic reports have been re-scheduled for later in the week.
So, we’ll look overseas for news, and so far, so good. The Greek Parliament approved a new budget over the weekend that includes additional austerity measures that are not exactly popular with the Greek population at large. That opens the door to another flood of funds from the European Union, which will help Greece meet its near-term obligations. Those additional funds have yet to be approved, but without the additional austerity, it wasn’t gonna happen.
Target and Toys R Us have joined Walmart in short-circuiting the Thanksgiving Holiday for their employees, by starting Black Friday on Thanksgiving Day.
Time Warner shares are getting a pop pre-market on the strong performance of the new James Bond movie over the weekend. And, HTC and Apple have agreed on a 10 year licensing agreement and with get out of court and back to business, settling their patent dispute.
Overseas markets are mixed, but our futures are trending a bit higher. Adjusted for fair value, the S&P futures are higher by 3 points, the Dow futures are up 26, and the NASDAQ futures are 14 points above fair value.
Just before 10 this morning, the University of Michigan’s first look at November Consumer Sentiment is expected to improve to 83.3 from the final October reading of 82.6. While that report will draw traders’ attention, it will be nothing compared to the attention President Obama will draw at one o’clock.
Stock prices have not exactly embraced the election results with unbridled enthusiasm. The President’s comments will be closely watched for hints regarding his attitude toward what the term “compromise” means when making a deal with the Republicans in Congress. You know, in poker, the losers say “deal.” The winner just says “give me your money.” We’re already tired of hearing the term “fiscal cliff,” and the sooner Washington can steer us in another direction, the better.
J.C. Penney moved in a different direction with their stores in 2012, but appears to be driving off a cliff anyway. Penney lost 96 cents per share last quarter, which was 86 cents worse than expected on a 26 percent drop in same store sales. Penney stock is more than 7 percent lower pre-market. Meantime, in the online world, Priceline is buying competitor Kayak for 40 bucks per share, which is a 29 percent premium to yesterday’s closing price.
Retail sales and industrial production numbers out of China were pretty good overnight, but outside of New Zealand, overseas markets weren’t impressed. As we head toward 9:30, our futures are flashing red once again. Adjusted for fair value, the S&P futures are down 9, the Dow futures are down 81, and the NASDAQ futures are 10 points below fair value.
As I mentioned yesterday, yesterday’s morning sell-off was triggered more by European speeches than American elections. But by the end of the day, it was hard to imagine that Mario Draghi’s comments on Europe were entirely responsible for a 312 point loss on the Dow.
Last night, we learned that the Greek Parliament DID narrowly pass the latest unpopular austerity plan. That takes the heat off for now, but if the Greek crisis were an opera, well, the fat lady hasn’t even arrived at the opera house. Earlier this morning, both the Bank of England and the European Central Bank held short term interest rates steady.
Retailer Kohl’s reported 91 cents in 3rdquarter profit this morning, three cents better than expected and Dean Foods beat the 26 cent estimate by 7 cents, although revenue was a little light. Surprisingly, McDonald’s just announced October same store sales that declined more than expected.
Oil is up a dollar per barrel after a four dollar drubbing yesterday. And Walmart has announced that this year Black Friday sales will actually start on Thanksgiving night. So Friday will become Thursday, and will probably eventually become Tuesday. Kind of like Christmas music on the radio.
Following our lead, Asia was lower overnight, but European markets are mixed and we should head a little higher at 9:30. Adjusted for fair value, the S&P futures are up 2½, the Dow futures are up 23, and the NASDAQ futures are about 9 points a fair value.
Well, the U.S. election is over and the voters are evidently happy with the way things have been going. After 6 billion dollars spent on the campaign, we still have the same old divide in Congress and still have the same old President. Unfortunately, that means we still have the same old fiscal cliff just nine weeks away. Hopefully, now that our beloved officials don’t have to call us ten times a day to try to get elected, they can start talking to each other in order to try to do their jobs.
Kraft Foods and Time Warner did their jobs last quarter. Kraft reported 79 cents in profit, which was a 10 cent beat. Time Warner beat the 82 cent estimate by 4 cents and reaffirmed full year guidance.
Weekly jobless claims come at 8:30. Our stock futures are sharply lower this morning, but don’t blame the election. Futures were significantly higher until the 7 o’clock hour when European Central Bank President warned that European (and specifically German) economic growth would be hampered for some time to come. After our markets close today, we’ll learn the results of the Greek Parliamentary vote on their austerity package. If that vote fails, we could be under additional pressure tomorrow.
But for now, adjusted for fair value, the S&P futures are lower by 11 points, the Dow futures are down 97, and the NASDAQ futures are a whopping 24 points below fair value.
The big vote is at hand, and will likely have a big impact on stock prices tomorrow. There’s also an election going on here in the United States.
The vote that may well have the biggest impact on world financial markets will happen tomorrow in the Greek Parliament. Greek unions have started another two-day general strike to protest the proposed austerity package. Should the package be voted down, the great Greek drama will likely continue without additional bailouts, with the final act probably featuring a sovereign default.
Perhaps the only thing worse than backing a losing candidate today is holding shares of the online real-estate company named Zillow. While Zillow reported record third quarter revenue and profit last night, sloppy fourth quarter guidance has the stock lower by about 20 percent pre-market.
CVS/Caremark beat the 84 cent estimate by a penny. Office Depot earned an adjusted 6 cents, which was a penny better. And, if you’re in the market to buy an automobile made by Suzuki, visit the used car lot. American Suzuki is filing for bankruptcy protection and will no longer sell cars in the U.S.
Asian markets were mixed overnight. Europe is higher and we should drift higher this morning as well. At this point, adjusted for fair value, the S&P futures are higher by about 2½ points, the Dow futures are up about 26, and the NASDAQ futures are about 4 points above fair value.
It should be a relatively quiet day in the U.S. for economic news, which is just as well, since that everyone is plenty busy answering and then hanging up their phones to fend off unwanted political phone solicitations.
Nevertheless, at 10 o’clock, we’ll get the October ISM Report on the services industries. Overnight, similar reports from Asia painted a mixed picture. Ours should be a muted shade of beige as well, falling to 54.9 from the September reading of 55.1.
Ford Motor shares are higher pre-market on news of strong sales in China. Meanwhile Tesla Motors reported a loss of $1.05 for the quarter, which is 15 cents worse than expected.
There’s some concern in Europe this morning that the European Central Bank may have violated its own rules with regard to Spanish loans. Another report highlighted the fact that the Greek bailout is still fragile and a sovereign default there may be inevitable. That’s always the kind of headline guaranteed to get our markets off to a sloppy start.
Just about all markets overseas are lower, except for Ireland, which is evidently up because of Notre Dame’s triple overtime victory last Saturday. If you can find a better reason, let me know.
Anyway, we’re likely to head lower at 9:30. At this point, adjusted for fair value, the S&P futures down 4½, the Dow futures are down about 33, and the NASDAQ futures are about 9 points below fair value.
It’s all wait-and-see in the markets this morning. In just 9 minutes it will be time for latest episode in the Labor Department’s new hit reality show called “So You Think you Can Work.” Yes, the Unemployment Rate for October will be announced at 8:30 and the odds of the final Unemployment Rate before the election going back above 8 percent are about as good as the Tigers’ odd of winning the World Series this year.
In any event, your average economist is looking for 125,000 new non-farm jobs to have appeared in October and the Unemployment Rate going no higher than 7.9 percent.
Priceline and Starbucks bucked higher after hours last night. Priceline, on an unexpected increase in revenue. Starbucks raised their dividend 24% per 21 cents per share.
We’ll get earnings from Chevron later this morning, as well as the September Factory Orders at 10 o’clock, which are expected to surge higher to 4.9 percent from the August decline of 5.2 percent.
Asian markets were mostly higher overnight, but Europe has shifted into neutral along with our futures as we all await the Jobs Report at 8:30. At this point, adjusted for fair value, the S&P futures are flat, the Dow futures are down about 6½, but the NASDAQ futures are about 2 points above fair value.
Stock trading resumed yesterday and not a moment too soon, as a lot of mutual funds have an October 31styear end. Because of the two-day standstill in the markets, a lot of economic reports were pushed off until today. That’s giving us the biggest one-day agenda to economic reports that I think we’ve ever had.
No fewer than twelve economic data points are on the docket today, including October Auto Sales. So far, we have the results of the October Challenger Layoff Survey, and it’s not great news. 47,724 new layoffs were announced. That’s the worst number that survey has reported since May. The ADP employment Report comes at 8:15, and the weekly Jobless Claims come at 8:30. All that will be viewed with particular interest as we awaiting whatever “official” employment number that the Labor Department decides to announce tomorrow, just four days before the election. Last month’s 7.9% unemployment number was met with some well-justified skepticism, in light of a decided dearth of corroborating data.
Costco, despite its >
Asia was mixed overnight. Outside of Spain, Europe is higher. Our futures are playing wait and see. At this point, adjusted for fair value, the S&P futures are down a point, the Dow futures are up about 3½, and the NASDAQ futures are about 4 points above fair value.
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