November 27-30, 2014 Have a Great Thanksgiving Weekend! See you in December!
November 26, 2014
Traders will be winding down today into the Thanksgiving Holiday. Although stocks will trade in a shortened session on Friday, all the big economic reports for the rest of the week will all be crammed into the next three hours.
So far, we have word that mortgage applications dropped off a lot last week after surging the week before. Weekly, this report can be pretty volatile. But if you take the average of purchase mortgage applications over the past four weeks, it appears that home purchases that require a mortgage loan are down about 10 percent year-over-year.
At 8:30, weekly Jobless Claims are expected to total 286,000. The October Durable Goods Report also comes at 8:30. Before the morning is done, we’ll get the Chicago Purchasing Managers Index, the University of Michigan’s final report on November Consumer Sentiment, which could rise to a reading of 90, as well as reports on October New Home Sales and Pending Home Sales.
Our sole earnings report of note comes from Deere and Company. $1.83 per share was way better than the $1.57 estimate, but Deere said sales are expected to decline about 20 percent on a pullback in agricultural machinery sales and Deere stock is off almost 3 percent pre-market.
In spite of that, our futures are a little higher once again. Adjusted for fair value, S&P 500 futures are higher by almost 3½ points, Dow futures are up 16, and the NASDAQ futures are about 8 points above fair value.
November 25, 2014
Our little market melt-up continued yesterday and until something significant gets in the way, we’re looking at rising prices again this morning.
With only 2½ trading days left in the week, we’ll be attempting to put 10 pounds of economic reports in a five pound bag. Still to come today at 8:30 is the Government’s second guess at third quarter Gross Domestic Product. Expect the first guess of 3 ½ percent to be tamped down just a bit to 3.3 percent.
At 9 we’ll find out how much home prices increased in September with the S&P Case-Shiller Home Price Index, and then at 10, the Conference Board Reports the results of their November Consumer Confidence Survey, which is expected to improve to 96.5 from October’s 94.5.
Tiffany missed the mark on sales and profits on slowness in Asia, but the 76 cent per share profit was only a penny short. Hormel Foods’s 63 cent per share profit also missed the target by a penny. Campbell Soup’s 74 cents was a couple of cents above estimates.
Asian markets were mixed. Outside of Switzerland, Europe is solidly higher. Adjusted for fair value, S&P 500 futures are higher by about 2½ points, Dow futures are up 22, and the NASDAQ futures are about 4 points above fair value.
November 24, 2014
We’ve now seen five consecutive weeks of gains in stock prices, and fresh record levels Friday for the Dow and the S&P 500. That momentum also appears to be carrying over into this morning’s action.
Post Holdings and Genesco will report earnings today. Outside of that, the docket is pretty light. There are no big economic reports due until tomorrow and Wednesday, we should start this shortened trading week on the quiet side. There will be trading on Thursday, of course, and a short day on Friday.
The biggest news may come on the international front, as today is the deadline for Iran and six world powers to come to an agreement on Iran’s nuclear plans. But, just like your last tax return, look for an extension of time on that one.
Japanese markets were closed today for Labor Thanksgiving Day. But if there had been trading in Japan, stock would likely have been higher. Every other major market worldwide is higher at this hour, with the possible exception of London, which is flat.
Our futures took a little surge higher in the past five minutes, and are indicating higher prices at 9:30. Adjusted for fair value, S&P 500 futures are higher by about 6 points, Dow futures are up 36, and the NASDAQ futures are about 12 points above fair value.
November 21, 2014
Now we know the secret for a perpetual stock market rally. We just have to get the world’s central bankers to lower interest rates forever and ever and ever. You can ring the sarcasm bell on that one. But nevertheless, we have another world-wide rally on our hands this morning. Overnight, China lowered their benchmark lending rate from 6 percent to 5.6 percent, and the head of the European Central Bank said that he’s ready to act more aggressively with asset purchases to ease rates if European economies continue to falter.
Retailers continue to report results. Taking a step up are shares of Foot Locker, which are about 2 percent higher on news that same store sales rose 6.9 percent, which was more than one percent more than expected. On the famous other hand, GAP’s same store sales were off 5 percent. They cut their full-year outlook, and GAP shares are almost 4 percent lower pre-market. Not to be outdone, GameStop shares are down about 10 percent on last night’s disappointing earnings report.
Outside of Australia, which was lower by just two-tenths of a percent, pretty much all overseas markets that are trading are trading at higher prices. And we’ll be along for the ride in the early going.
At this point, adjusted for fair value, S&P 500 futures are higher by almost 19 points, Dow futures are up 153, and the NASDAQ futures are 37 points above fair value.
November 20, 2014
It’s a busy, busy day for financial data and it started overseas with some disappointing manufacturing surveys out of Japan, China and the Eurozone, where the flash PMI came in at a 16 month low of 51.4.
Our PMI data comes a 9:45 this morning, but in front of that we’ll get weekly jobless claims, and perhaps more importantly, the October Consumer Price Index is expected at 8:30 to have declined by one tenth of one percent, on a decline in energy prices. The core rate is expected to have increased two-tenths of a percent. The CPI data is becoming important once again as traders try to guess just when the Fed will start hiking interest rates. The lower the CPI, the longer they’re likely to wait.
Also coming before 10 o’clock are the Leading Indicators, the Philadelphia Fed Index and a report on Existing Home Sales.
Best Buy shares are indicated about 9 percent higher pre-market on better than expected earnings and a surprising INCREASE in same store sales. William Sonoma also beat estimates. Dollar Tree beat, but gave some conservative guidance. L Brands and Keurig Green Mountain are out with no-such-great news.
Japanese and Chinese stocks were flat overnight, but most other overseas markets are lower. We’re likely to pull back a bit at 9:30 as well. At this point, adjusted for fair value, S&P 500 futures are now down 7 points, Dow futures are down 61, and the NASDAQ futures are about 15 points below fair value.
November 19, 2014
There’s some good news in the mortgage business this morning. The Mortgage Bankers’ Association announced that even though new applications for refinancing loans dropped 6 percent last week, there was a surprisingly strong 12 percent surge in applications for purchase mortgages. That all computes to a nearly 5 percent overall increase in mortgage applications. Not a bad business to be in.
Home improvement retailer Lowe’s reported a 5.1 percent increase in same store sales and raised their full-year earnings guidance after earning 59 cents last quarter, which was a penny better than expected. Staples is also out with better than expected numbers this morning.
Retailer Target, which has had its share of bad news over the past year, reported 54 cents of quarterly profit. That was 7 cents better than expected and Target shares are about 3 percent higher pre-market.
At 2 o’clock this afternoon, we’ll get a peek at the minutes of the latest Federal Reserve Open Market Committee meeting.
Our futures took a turn for the worse in that past half hour. They are indicated lower prices at 9:30, but not all that much lower. At this point, adjusted for fair value, S&P 500 futures are now down 3 points, Dow futures are down 15, and the NASDAQ futures are about 6 points below fair value.
November 18, 2014
Very interesting. Yesterday, we mentioned that Japan had officially fallen into recession. Two quarters ago, their economy slipped over 7 percent. Last quarter it shrank 1.6 percent. All this happened, of course, after a significant hike in the Japanese sales tax. Today, Prime Minister Abe announced a decision to delay a further increase in the sales tax by 18 months and called for new elections. That way, the Japanese people can affirm what is already obvious – raising taxes to fund big social welfare programs can really implode a shaky economy. Don’t think that that only applies in Japan.
On the other side of the globe, the ZEW survey in Germany showed surprising strength this morning. The November reading of 11.5 was a big improvement from October’s negative 3.6. The survey is an indicator of economic confidence in future conditions.
The October Producer Price Index for Final Demand figure will be announced at 8:30, and is expected to have declined by about one-tenth of a percent. We’ll also get a reading on the housing market at 10. But in front of that, it looks like we’ll have a fairly calm open.
Most Asian markets were higher overnight. Japanese stocks rose more than 2 percent. Europe is solidly higher, led by a 1.3 percent rise in Germany so far today.
At this point, adjusted for fair value, S&P 500 futures higher by about 2 points, the Dow futures are up 21, and the NASDAQ futures are about 3 points above fair value.
November 17, 2014
Today was a rough day for stock prices in Japan. Word came of a 1.6 percent decline in Gross Domestic Product in Japan. That makes two quarterly declines in a row and that is what is classically classified as “recession.” The Nikkei stock index backpedalled almost 3 percent today.
On Friday it looked as if the Halliburton- Baker Hughes deal was going to go hostile. Apparently hostilities ended over the weekend, as this morning came the announcement of a nearly 36 billion dollar merger. It values Baker Hughes at a little less than 79 dollars per share. Baker Hughes shares traded for as little as 58 bucks on Friday.
The good news/ bad news story of the morning belongs to Tyson Foods. Fourth quarter operating earnings of 87 cents per share were well ahead of the 76 cent estimate. However, sales fell short of estimates. Tyson shares, which have gained more than 20 percent this year, were looking about 4 percent lower earlier this morning, but are now indicated about 5 percent higher in the pre-market.
Outside of the big decline in Japan, there’s nothing very dramatic happening overseas. There’s nothing dramatic going on with our futures, either. But, they have been a little lower all morning. At this point, adjusted for fair value, S&P 500 futures lower by about 3 points, the Dow futures are down 18, and the NASDAQ futures are about 4 points below fair value.
November 14, 2014
If it happens, it may never get through regulatory review, but there’s a big deal bubbling in the oil services business. Halliburton is reportedly in merger talks with rival Baker Hughes. The combination of the two would theoretically be a strong challenger to industry leader Schlumberger. Shares of both Halliburton and Baker Hughes are higher pre-market.
Shares of Hertz, which have lost more than 20 percent this year are more than 3 percent higher this morning. Hertz has announced a new fleet strategy, 100 million dollars in cost cuts and restatement of its 2012 and 2013 results.
The October Retail Sales report comes at 8:30 and just before 10 o’clock we’ll get the University of Michigan’s first guess at the mood of the consumer this month. Expect an improvement in attitude to a reading of 87.5.
Two more Federal Reserve policy makers are giving speeches today to wrap up a very busy week of semi-informative head fakes. Let’s hope they’re all deer hunters and take next week off.
Asian markets were mixed overnight, but Europe is on average about a half-percent lower. Our futures are pretty much stuck in neutral.
At this point, adjusted for fair value, S&P 500 futures are flat, the Dow futures are up 4, and the NASDAQ futures are about a point below fair value.
November 13, 2014
The economic news picks up today, and this morning it’s being complemented by a little flurry of earnings and merger news.
On the earnings front, industry giant Walmart reported $1.15 in quarterly profit, which was 3 cents better than expected. A good back-to-school season gets the credit and is leading to high hopes for the upcoming Holiday season. Walmart shares are about 2 percent higher pre-market. Viacom also reported better-than-expected earnings and revenue.
Shares of Dreamworks are surging more than 20 percent this morning on a report that Hasbro is looking to buy them. IT’s still in the negotiation stage, but it’s said that the asking price is 35 bucks per share. Dreamworks closed at $22.37 last night.
General Electric is offloading its Duracell business and 1.7 billion dollars in cash to Berkshire Hathaway in return for GE stock.
Expect 280,000 new Jobless Claims to be reported at 8:30. Two Federal Reserve execs have given speeches overseas already this morning, while two more (including Janet Yellen) will be spouting off later today. Which just proves that there must be a critical worldwide shortage of interesting conference speakers.
Japanese stocks rose one percent overnight. Other overseas markets are narrowly mixed. Our futures are off their highs of the morning, but are still positive. Adjusted for fair value, S&P 500 futures are higher by about 3 points, the Dow futures are up 28, and the NASDAQ futures are about 11 points above fair value.
November 12, 2014
The bond market gets back in business today and trading volume in stocks is expected to pick up a bit. But it looks like it might be rally-interruptus in the early going, as our futures have been fairly weak most of the morning.
Stocks that could come under some selling pressure are some of the big banks. In what can hardly be considered news anymore, five big banks have reportedly agreed to pay U.S. British and Swiss regulators about 3.3 billion dollars for allegedly engaging in currency manipulation. Citigroup, J.P. Morgan Chase, UBS, RBS, HSBC. Lots of acronyms in there, lots of money, and likely no admission that anybody did anything wrong.
BB&T is buying Susquehanna Banc for 2.6 billion dollars. Dow Chemical is almost doubling the >
On the earnings front, Macy’s beat the 50 cent earnings estimate by 11 cents, but at the same time, cut their full year guidance.
It could be that everybody in the country who wanted (or could) refinance their mortgage may have done so. Refi applications dropped 11 percent last week according to the Mortgage Bankers Association. New mortgage apps were up about one percent.
Adjusted for fair value, S&P 500 futures are lower by about 7 points, the Dow futures are down 65, and the NASDAQ futures are almost 13 points below fair value.
November 11, 2014
While Veterans’ Day gives us a chance to reflect and give thanks to all those who have served to protect our freedom, November 11this a very different day in China. Back in 2009, Alibaba, China’s answer to ebay and Amazon, manufactured a holiday called “Singles Day.” The idea is, if you’re not married, you get presents today (kind of the opposite of Valentine’s Day, you might say)
I guess it makes sense, given that marriage is the gift that keeps on giving, and divorce is the one that keeps on taking away.
But anyway, Alibaba racked up over 2 billion dollars in sales during the first hour and eleven seconds of this morning. They should break the 8 billion dollar mark for the day. Alibaba shares are a little more than one percent lower pre-market after jumping over 4 percent yesterday.
Vodafone shares are more than 6 percent higher in London after a good earnings report. Home builder D.R. Horton checked in with disappointing results.
The banks and the bond market are closed, stock will trade. And once again, it looks like prices will grind higher, at least in the early going.
Asian markets are mixed, but Europe is mostly higher. Adjusted for fair value, S&P 500 futures are higher by more than 3 points, the Dow futures are up 21, and the NASDAQ futures are about 7 points above fair value.
November 10, 2014
Another airbag-related headache for shareholders of Takada this morning. Comments by a couple of U.S. Senators suggesting a criminal investigation sent shares of Takada lower by about 17 percent in Japanese trading overnight. Takada shares are now about 60 percent lower in 2014.
Not to be outdone in the bad-news department this morning is bio-tech firm Dendreon. Once a market darling, Dendreon is filing for Chapter 11 bankruptcy protection today. Its shares are lower by about 67 percent today at 31 cents per share, apparently on their way much lower.
Luxury home prices are on the rise, and according to Toll Brothers their sales were higher than expected. Toll Brothers stock is more than 2 percent higher pre-market.
McDonald’s October same store sales were lower, but not as much as expected.
As we head into Veteran’s Day, there are absolutely no economic reports on the radar until Wednesday and none of real consequence until late this week.
Stocks in mainland China were more than 2 percent higher overnight. Japanese stocks were a little lower, but most of Europe is a little higher. Our futures have absolutely no direction. Adjusted for fair value, S&P 500 futures are higher by about a point and a half, the Dow futures are up 5, and the NASDAQ futures are 5½ points above fair value.
November 7, 2014
It’s a new day for the City of Detroit, as we await the Judge Rhoades’ show at 12:30 this afternoon.
And it’s a new day, and another record for the Dow Jones Industrials and the S&P 500. The S&P 500 Index, even before you consider dividends from its component companies has now returned just about 10 percent in 2014.
One stock that has not participated to that degree is Sears Holdings, which is almost 20 percent lower on the year as of yesterday. This morning, however, Sears stock is getting a 15% boost pre-market. Although same store sales declined again last month, they didn’t slip as much as expected. Perhaps more importantly, Sears is reportedly exploring a Real Estate Investment Trust strategy as a way to harvest value from its real estate holdings.
Bank of America triple the estimate third quarter loss due to increased legal expenses and stock of Transocean, the big oil drilling firm is off about 8 percent pre-market after announcing a nearly 2 billion dollar charge. Seems that the value of deep water drilling drops when oil’s at 75 versus 100 bucks per barrel.
The Monthly Employment Report is the big data point of the day. Expect announcement of 233,000 new non-farm jobs in October, with an Unemployment Rate of 5.9 percent and a rise in average hourly earnings of two-tenths of a percent.
A lot could change after that report at 8:30. But in front of that, our futures are settling back toward the flat line, but they’re still positive. Adjusted for fair value, S&P 500 futures are higher by almost 2 points, the Dow futures are up about 18, and the NASDAQ futures are about 10 points above fair value.
November 6, 2014
The European Central Bank just announced no change in their short term interest rate, although their upcoming press conference will be closely watched to any hint on what other steps they may be considering to spur a pretty punk European economic climate. The Bank of England also held rates steady this morning.
One stock that never seem to be steady is Tesla. This is a company that only produces about 600 cars a week, yet the stock’s market cap exceeds 30 billion dollars. And, it appears to be headed up another 4 percent or so this morning after last night’s earnings report, even though they lowered current quarter’s estimates. Tesla shares are already up more than 50 percent this year and trade at a staggering 8½ times sales.
Medical device maker Hologic beat estimates on the top and bottom lines last quarter and Hologic shares are looking about 2 percent higher pre-market.
There’s a somewhat concerning survey from the Challenger employment firm this morning. Challenger says that announced job cuts in the U.S. rose 68 percent in October, to more than 51,000. The Weekly Jobless Claims figures come in 15 minute. Expect 283,000 new applications for benefits.
The Nikkei in Japan pulled back by almost one percent overnight. Other overseas markets are mixed and little changed. We’ll likely be a little weak off the get-go this morning. Adjusted for fair value, S&P 500 futures are lower by about 3½ points, the Dow futures are down 13, and the NASDAQ futures are about 6 points below fair value.
November 5, 2014
We wake up this morning without the uplifting truthfulness of incessant political advertising. Well, it’s just something we’ll have to get used to.
But in the aftermath of yesterday’s trip to the polls, stock traders are in a decidedly good mood.
Also in a good mood are shareholders in Time Warner. Time Warner reported quarterly earnings of 97 cents per share. That was 3 cents better than expected, and Time Warner shares are up about 3 percent. Not feeling the love, however and shares of NuSkin. They’re off about 20 percent pre-market on disappointing sales and a tepid outlook.
Also not so happy is mutual fund giant PIMCO. They report that their flagship Total Return fund lost another 27½ billion dollars of assets in October. That makes the total shareholder withdrawal about 51 billion since the end of August.
The ADP Employment report was released about a minute ago and it estimated creation of 230,000 new non-farm jobs in October. That was exactly as expected. Of course, we’ll get the Labor Department’s Employment Report on Friday.
Japanese stocks rose again overnight, although most of Asia was lower. Europe is solidly higher at this hour, on the order of one to two percent.
Whether your state is red or blue this morning, you stock futures are decidedly green. Adjusted for fair value, S&P 500 futures are higher by 11 points, the Dow futures are up 83, and the NASDAQ futures are about 22 points above fair value.
November 4, 2014
Stock prices took a little breather from last week’s massive rally yesterday, and it looks like they may take another one in the early going today. A big part of the weakness in the indexes is weakness in the price of oil. Saudi Arabia announced a price cut yesterday for exported crude in an attempt to increase their market share and oil this morning is down another 3 percent or so, below 77 bucks per barrel. That’s good news at the pump in the coming weeks. Not so much if you are long oil stocks.
It’s no big secret that European economies at in a bit of a funk. Today, the European Commission lowered its economic growth projection for the Eurozone countries from 1.2 percent to 0.8 percent.
Speaking of lowering expectations, Priceline’s lowered guidance is hurting the stock price this morning, even after reporting better than expected earnings. Priceline is indicated down about 6 to 7 percent this morning, as are shares of Michael Kors on a similar report – better than expected earnings, but a cautious forecast.
Archer Daniels Midland, CVS Health, International Paper and Becton Dickinson all beat expectations for last quarter. Alibaba’s first earnings report came in as expected.
Japanese stocks were up almost 3 percent overnight. Other markets overseas paint a mixed picture. Adjusted for fair value, S&P 500 futures are lower by 6 points, the Dow futures are down 37, and the NASDAQ futures are about 17 points below fair value.
November 3, 2014
The bulk of 3rdquarter earnings reports are out of the way for calendar-year-end companies. But, there’s plenty of big news on the way, including elections tomorrow, the Monthly Employment Report and the Detroit Bankruptcy ruling on Friday.
In front of all that, it IS Monday, so there must be some merger news. Not to disappoint, French advertising firm Publicis is acquiring Sapient for 25 dollars per share. That’s a 44 percent premium to Friday’s closing price and a total price of 3.7 billion dollars.
Even bigger than that, in the healthcare diagnostics space, LabCorp will pony up almost 6 billion dollars in cash and stock to acquire Covance. That’s a 32 percent premium.
At 10 o’clock, a report on September Construction Spending and the October ISM Manufacturing Index will be revealed. Construction spending is expected to be up six-tenths of a percent, recovering from an August decline. Expect the ISM to be little changed.
Auto sales will roll out today. Chrysler sales increased 22 percent in September.
In spite of our strong rally Friday, a weak manufacturing number out of China overnight is giving many foreign markets an excuse to sell.
Adjusted for fair value, S&P 500 futures are lower by 3 points, the Dow futures are down 37, and the NASDAQ futures are about 2 points below fair value.
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