On has the rest of the month off! See you Monday!
November 27, 2013
Officially, today will be a full day of trading. In reality, with the rare confluence of Thanksgiving, Hanukah and a big winter storm in New York, there may be nobody left but the cleaning crew on the trading floor by mid-day.
At 8:30, we’ll get an early Thanksgiving present (if there is such a thing.) The Labor Department will report the Weekly Jobless Claims number a day early. Expect the number to rise again to the 330,000 level, up from 323,000 last week.
We’ll also get October Durable Goods at 8:30. Expect a decline of 2 percent there. And, just before 10, the University of Michigan’s final reading on the mood of the Consumer in November is expected to rise a bit to a reading of 73.1.
Hewlett-Packard shares are up almost 6 percent pre-market on a surprisingly good quarterly report.
And in the category of “you thought it couldn’t get any worse,” there’s a report in the Financial Times that speculates what might happen if the Federal Reserve tries to coax the banks into actually making loans by cutting the interest rates it pays to the banks for funds on deposit. The report suggests that banks might actually start charging customers for the privilege of keeping their funds at the bank in a savings or checking account. Just more help for the small saver from current economic policy.
Overseas markets are mostly higher and we’ll point higher at 9:30 as well. Right now, adjusted for fair value, the S&P futures are higher by about 3 points, the Dow futures are up 32 and the NASDAQ futures are almost 7 points above fair value.
November 26, 2013
Two and a half days of trading are left in this Holiday-abbreviated week, and we’ll kick it off today with a couple of pretty encouraging earnings reports.
Possibly inspired by the Monty Python reunion concerts, increased sales of SPAM, among other products, boosted Hormel Foods to a 58 cent per share profit in the quarter gone by. That was 4 cents better than expected. Remember when SPAM was something you’d EAT, rather than DELETE?
Tiffany shoppers may not be eating SPAM, but they are buying jewelry. Tiffany earned 73 cents per share, that was 15 cents better than expected. Tiffany shares are more than 5 percent higher pre-market.
And you may recall that Joseph A. Bank recently withdrew the offer to buy Men’s Wearhouse. Well, this morning, Men’s Wearhouse is offering 55 bucks per share for Joseph A. Bank. That has shares of both companies higher this morning, Bank shares up more than 12 percent.
Overseas markets are mixed, but we should start with light green arrows at 9:30. Right now, adjusted for fair value, the S&P futures are higher by 3 points, the Dow futures are up 23 and the NASDAQ futures are just about 4½ points above fair value.
November 22, 2013
We closed last night with the Dow Jones Industrial Average above 16,000 for the first time in history. That raises the question among some – “isn’t it time to sell all stocks? After all, we’re at a record high!
Well it’s true we’re at a record high. We’ve had around 40 record highs this year. Keep in mind that if a record high is your reason to sell stocks, you’ve been wrong around 39 times in a row this year. 16,000 is just a number. A record high number, granted. But just a number.
The earnings numbers were pretty good from both Foot Locker and Marvell Technology last quarter. Those stocks are up 4 and 6 percent, respectively pre-market. Nike is raising its dividend by 14 percent.
Pandora is losing a little steam pre-market, down about 1 ½ percent, even though the six cents of operating profit matched estimates. And Gap shares are also lower, after same store sales rose only one percent last quarter.
Microsoft’s X-Box One launches today. The Bank of Japan kept interest rate policy steady overnight.
China was a little lower overnight, but most other overseas markets gained after our rally yesterday. Right now, adjusted for fair value, the S&P futures are higher by 2 points, the Dow futures are up 15 and the NASDAQ futures are just about 2 ½ points above fair value.
November 20, 2013
Ben Bernanke gave some us some interesting viewpoints last night in a speech to the National Economics Club. Mr. Bernanke implied that interest rates might remain at rock-bottom levels until pretty near the end of time, although the current 85 billion dollars per month of bond buying might not.
Specifically, Bernanke said that the Fed might not start actual tightening until well past the time when unemployment falls to 6½ percent, which is their currently stated target.
Three big earnings reports are out this morning. Two of the three are worse than expected. However, two of the three stocks are looking to open higher.
Deere’s $2.11 of operating profit beat the $1.89 estimate handily and Deere shares are looking to open about 4 percent higher. JC Penney lost $1.81 per share last quarter, which was more of a loss than expected, on sales that were lower than expected, but the shares are about 7 percent higher pre-market, on news that same store sales may be trending higher. Finally, Lowe’s followed up yesterday’s strong report from competitor Home Depot with a bit of a stinker. 47 cents of profit missed by a penny, forward guidance disappointed and the shares are 3 percent lower pre-market.
Fed minutes will be release at 2 o’clock. In front of that, we’re looking at stock prices at pretty much of a stand still. Currently, adjusted for fair value, the S&P futures are flat, the Dow futures are up 2 points and the NASDAQ futures are just about 4½ points above fair value.
November 19, 2013
Two big-time retailers reported quarterly earnings this morning, and both companies earned far more than expected. However, market reaction to the reports couldn’t be more different.
Home Depot reported 95 cents per share of operating profit, which was a nickel per share better than expected. Sales were better than expected. Home Depot also raised their estimated same-store sales expectation from 6 to 7 percent and raised earnings guidance. Home Depot shares are a little more than 3 percent higher in pre-market trade.
On the famous other hand, shares of Best Buy are on the discount rack. For the quarter gone by, Best Buy reported 18 cents of profit which was fully 50 percent better than the 12 cent estimate. Revenue was a little better than expected. The fly in the ointment here is the fourth quarter outlook. Although Best Buy guided to the high end of guidance for the full year, it warned that margins will get roughed up this Holiday season, as electronics retailers continue to believe that the best way to increase sales is to give stuff away. Best Buy shares are lower by more than 5 percent pre-market.
Shares of Campbell Soup also down almost 6 percent this morning on a 20 cent earnings miss off the 86 cent estimate.
Overseas markets are mainly lower. We’re pretty much hugging the flat line. Right now, adjusted for fair value, the S&P futures are lower by about 3 points, the Dow futures are down a point and the NASDAQ futures are 3 points below fair value.
November 18, 2013
Earnings reporting season is pretty much wrapped up for the bulk of big companies, that is, those with calendar year ends. However, there will be a handful of reports coming today, led this morning by Tyson Foods. Tyson earned 70 cents in their fourth quarter. That was a penny better than expected. Sales also beat estimates, and the stock is about 4 percent higher pre-market, on a promising outlook.
Later today, we’ll also hear from contact-management software firm Salesforce, as well as retailer Urban Outfitters.
Boeing shares are almost 3 percent higher pre-market after nailing down the biggest aircraft order in history over the weekend. They now have over 100 billion dollars in orders for the 777X, after booking 259 orders over the weekend at the Dubai airshow.
And in the seemingly unending string of fines and settlements, JP Morgan is reportedly settling claims relating to the mortgage mess for 4.5 billion dollars.
China’s latest economic reforms continue to generate excitement in their stock market as Chinese stocks rose almost 3 percent overnight.
Japan was flat overnight, most other markets overseas are higher, and we should continue our slow-motion bubble up at 9:30, although the futures have been losing altitude over the past hour or so. Right now, adjusted for fair value, the S&P futures are higher by almost a point, the Dow futures are higher by about 25, but the NASDAQ are now 2 points below fair value.
November 15, 2013
More details are coming out about policy reform in China, which could have economic impact around the world. Not unexpectedly, China will loosen its one-child per family limit, but only in cases where one of the parents is an only child. Imagine if our Government had that kind of control over OUR lives. As I understand our current law, if you like your current child, you can keep it.
And fear not, those of you who feared that you would be given only one choice of where to buy clothes. Joseph A. Bank has withdrawn their offer to buy The Men’s Wearhouse. Perhaps they were waiting for a buy one share get three shares free kind of deal. Well, it didn’t come, so at least for the time being, you’ll have your choice of outlets for a low-cost wardrobe.
Applied Materials beat the earnings bogey by a penny per share on sales that were in line with estimates.
At 8:30 we’ll get the Empire State Manufacturing Index, which measures manufacturing activity, as you might imagine, in the New York region. Expect a recovery to 5.5 from October’s reading of 1.5. Weekly Jobless claims, also at 8:30 are expected to check in at the 330,000 level.
Chinese stocks were up 2 percent overnight. European markets are more of a mixed picture. However, our quiet little rally looks to continue to 8:30.
Right now, adjusted for fair value, the S&P futures are higher by about 4 points, the Dow futures are higher by about 34, and the NASDAQ are about 4 points above fair value.November 14, 2013
Our stock futures are well off their highs of the morning, but are holding up pretty well considering that we’re dealing with several of pretty ugly corporate reports. Granted, two of them, Cisco Systems and Walmart, beat the consensus earnings number, but full year earnings guidance left a lot to be desired.
Last night, Cisco Systems reported slightly better than expected earnings. But they projected full year earnings of only about two bucks per share, which would actually be lower than last year’s $2.02 and well below the current estimate of $2.10. Cisco blamed weakness in emerging markets, perhaps engendered by qualms about our Government’s reported cyber-spying. Cisco shares are weaker by almost 12 percent per-market.
Walmart’s $1.14 beat estimates by the predictable penny per share, but sales fell short and full year guidance of $5.11 to $5.21 is not encouraging, given the current estimate of $5.20. Walmart blamed stiff competition among retailers for the weakened outlook.
Kohl’s missed on earnings and sales and Kohl’s shares are lower by almost 10 percent.
Italy, India and Spain are a little lower, but just about all other markets overseas are higher. In general, stock prices should rise a bit at 9:30. Adjusted for fair value, the S&P futures are higher by about 3½ points, the Dow futures are higher by about 11, but the NASDAQ futures, reflecting the weakness in Cisco Systems, are now almost 6 points below fair value.
November 13, 2013
It’s another day and another round of big corporate payouts for one reason or another. Starbucks shares are lower by a percent and a half premarket after it was ruled that Starbucks owes Mondelez, the company spun off from Kraft 2.7 billion dollars. That stems from a packaged coffee deal the Starbucks terminated with Kraft years ago.
Separately, it’s reported that Johnson and Johnson, which just paid 2.2 billion regarding a little marketing issue, will settle complaints about their hip replacement devices for 4 billion dollars. J&J recalled 93,000 of the hip joints in 2010 after 12% had reportedly failed within 5 years of surgery.
The average 30 year mortgage rate rose to 4.44 percent last week, as mortgage applications fell 1.8 percent.
Cisco Systems will report earnings later today. Macy’s just reported a 47 cent profit, which was 8 cents better than expected, and Macy’s shares are looking to open almost 7 percent higher. Potbelly shares are higher by about 11 percent pre-market after reporting 15 cents of profit versus the expected 9 cents per share.
Bernanke is giving a speech, but not until 7 o’clock tonight. Overseas markets are down and we’re headed in the same direction, as the futures have been fading fast. Adjusted for fair value, the S&P futures are lower by about 8½ points, the Dow futures are down about 80 points, and the NASDAQ futures are now almost 16 points below fair value.
November 11, 2013
The presumptive next head of the Fed, Janet Yellen gets her first turn in the Senate hot seat this morning at 10 o’clock. Yellen will field questions from the Senate Banking committee. Although there may be some pointed inquiries about the Fed’s current nearly free-money program, it’s not expected that Ms. Yellen will have to work up too much of a sweat.
Carl Icahn may have lost the Battle of the Dell, but it looks like his 6 percent ownership of oil services firm Transocean is paying dividends, rather literally. Transocean will dip in to accumulated earnings and pay out a three dollar per share dividend, shrink the Director’s table from 14 seats to 11, and agree to bring a Master Limited Partnership to market.
If you had to compete in the free market against FedEx and UPS, while being governed by the U.S. Congress, you might find it tough to survive as well. This morning, the U.S. Postal Service announced an agreement to deliver packages for Amazon on Sunday. The service will start in New York and L.A. and eventually spread across the country.
The bond market is closed today, along with the banks and the Post office. However, currencies, commodities and stocks will trade as usual. And the stocks that trade should start the day pretty much where they left off on Friday.
Adjusted for fair value, the S&P futures are higher by a point, the Dow futures are up 5, and the NASDAQ futures are now about a half point above fair value.
November 8, 2013
The European rate cut looked to punch stock prices higher yesterday, until a much hotter-than-expected GDP Report raised fears that the easy-money policy that appeared to be spreading across the globe may be on its last legs in the U.S.
In about fifteen minutes we’ll get a one-week-delayed October Employment Report. The Unemployment Rate is expected to take a hit due to the Government shutdown, which is kind of silly, considering those people merely got a paid vacation rather than a loss of job. Nevertheless, the number measures whether people were working rather than whether they were getting paid, and it’s expected that the Unemployment rate will hit 7.4 percent, and only 120,000 new non-farm jobs were created.
Disney’s 77 cent of operating profit beat estimates by a penny per share. And for those of you who weren’t among the privileged few getting an allocation of 26 dollar Twitter shares and are champing at the bit to buy, keep in mind that the shares opened to the hoi polio at 45 bucks, immediately went to 50, and then sagged back to about 45. This morning Twitter is indicated down a little more than one percent at 44.33. Hash tag – be careful out there.
Overseas markets are lower. Our futures are higher, but have lost some steam over the past hour or so. At this point, adjusted for fair value, the S&P futures are higher by 3½ points, the Dow futures are up 17, and the NASDAQ futures are now about 8 points above fair value.
November 7, 2013
The latest social media company to hit the IPO jackpot is Twitter. Yesterday, Twitter announced that it will offer70 million shares at 26 dollars per share, which is way above the originally rumored price. That values the entire company on a fully diluted basis at 18 billion dollars.
Now remember, this is a company that still hasn’t made a profit, but in many eyes has massive potential. Hmmm, a company with no profits and big dreams selling shares to the public who will no doubt drive the price even higher in the open market. I guess Prince was right. It’s time to party like it’s 1999.
The Government’s reading on third quarter GDP was delayed by the Government shutdown. But there are evidently enough people back at work and paying attention to get it figured out. So, in about 15 minutes expect to hear about an anemic third quarter GDP of only 2 percent.
Costco October same store sales were better than expected.
The Bank of England held short-term interest rates steady this morning. But in a pretty big surprise, the European Central Bank cut their short term interest rate in half, from one half of a percent to one quarter of one percent. The value of the Euro has dropped two cents on the move, from $1.35 to $1.33 on the move, which is a huge move. That lit a fire under stock prices in Europe and has pulled our futures out of an early deficit.
Adjusted for fair value, the S&P futures are higher by almost 7 points, the Dow futures are up 77, and the NASDAQ futures are now about 4 points above fair value.
November 6, 2013
When you find yourself standing in a hole, the first thing that you should do is to stop digging. There is some anecdotal evidence this morning that the job market may be starting to turn the corner. The Challenger, Gray and Christmas firm reported this morning that announced Job Cuts in October were down more than 4 percent from a year ago. The October cuts of about 45,000 break a string of rising job cut numbers. It’s anecdotal as best, because these are announced cuts, not actual. But still, it may indicate a step in the right direction.
Taking a step in the wrong direction this morning are shares of Tesla Motors. Tesla reported a profit of 12 cents per share. That was better than the consensus estimate. However, Tesla guided the sales forecasters lower for the coming quarter, and that has the Tesla shares lower by 11 percent pre-market.
Time Warner missed revenue estimates, but profits were fine, beating the expected 89 cents by 12 cents.
Most of the big economic numbers come tomorrow and Friday. But, we will get the September Leading economic Indicators at 10 o’clock. In front of that, we should see stock prices push higher at the open of trading.
Asia was mixed, Greece is on strike, but the rest of Europe is in the green. Adjusted for fair value, the S&P futures are higher by 7 points, the Dow futures are up about 62, and the NASDAQ futures are now almost 11 points above fair value.
November 5, 2013
There are a bunch of significant economic reports on the way this week. However, there are bunched into hump day and beyond. So, for today, we’re left to sift through some scattered earnings reports and then spend the rest of the day getting out to vote.
AOL reported 55 cents of operating profit for the quarter gone by. That was 4 cents ahead of the 51 cent estimate and AOL shares are looking to rise by about 5 percent.
Michael Kors profit of 71 cents was also ahead of expectations. They raised their guidance and the shares are up about a percent and a half pre-market.
And Regeneron, which provides a treatment for macular degeneration, beat the 90 cent estimate by a whopping 35 cents. Those shares are about 4 percent higher in pre-market trade.
Most markets overseas are in the red at this hour and our futures are indicating a little pullback in prices as well.
At this point, adjusted for fair value, the S&P futures are lower by almost 4 points, the Dow futures are down 41 points, and the NASDAQ futures are now about 9 points below fair value.
November 4, 2013
We’re entering the first full week of November. That’s the beginning of the season that’s supposedly the best for stock returns. You may remember those who said “sell in May and go away.” Well, that sage advice once again proved very expensive for those who did, as the S&P 500 is more than 10 percent higher since April, not even counting dividends.
Responding a little late, as retail folks usually do, over 50 billion dollars flowed into equity mutual funds in October. That’s the fifth highest monthly inflow on record. It could just be a case of better late than never. But, it could well mean the beginning of the end for out>
We’ve had about three-quarters of the S&P 500 report quarterly earnings so far, and about 75 percent of those have beaten earnings estimates. That’s a little above the recent average. However, only about one-half reported better than expected revenues. That may well be the important number to watch from now on as the economy struggles to get out of neutral.
Not much happened in Asia overnight, as a lot of markets were closed. Europe has drifted higher this morning.
Our futures are higher by about the same amount as they were last Friday at this time. Adjusted for fair value, the S&P futures are higher by almost 4 points, the Dow futures are up 39 points, and the NASDAQ futures are now about 11 points above fair value.November 1, 2013
The stock market got slightly spooked just before the close of trading yesterday, after a day when the indexes did not move a whole lot. But this morning, a lot of that late loss looks to resurrect itself as we look forward to more earnings and economic data.
It’s the first of the month, and as usual that means we’ll be hearing the October car sales numbers roll out all morning. Ford and GM are both expected to report double digit sales increases. Keep an eye on Tesla shares as well, which hit the skids in October after a white-hot run up earlier this year.
First Solar shares are on fire premarket, up more than 7 percent on a better than expected earnings report.
Sony shares slipped 11 percent in Japanese trade overnight, helping drag the Nikkei lower. Stocks were up a bit in Mainland china. But overall, markets overseas drifted into the red after out late day fade yesterday.
At this point, adjusted for fair value, the S&P futures are higher by 3½ points, the Dow futures are up 43 points, and the NASDAQ futures are now about 9½ points above fair value.
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