November 30, 2015
With the vast majority of earnings reports in the rear-view mirror, global economic news and a couple of Janet Yellen speeches will likely draw traders’ attention as will build up to the Labor Department’s Employment Report on Friday.
Fifteen minutes after the market opens, we’ll find out about business conditions in the Chicago Region. The November Chicago PMI is expected to dip a bit to a reading of 54. That would be down a couple of points from October. And a little later on the Dallas Fed’s Manufacturing survey is expected to improve, but just a bit to a pretty lousy reading of minus 11.
Microsoft gets a broker upgrade this morning. Oil is higher by about a half percent, but certainly not enough to challenge the wonderfully low gasoline prices we’ve been enjoying. OPEC holds a big meeting later this week to see if anyone can convince Saudi Arabia to cut production. Good luck with that one, fellas.
China was about the only Asian market with price gains overnight, but Greece is the only European market currently in the red.
Our stock index futures have been strengthening gradually for most of the morning, and are indicating a solid rise in prices at 9:30. At this point, adjusted for fair value, the S&P 500 futures are higher by about 6½ points, Dow futures are up more than 70 and the NASDAQ futures are about 19 points above fair value.
November 25, 2015
Early session fears about a heated Russian response to Turkey gave way thoughts of rushin’ to thaw the Thanksgiving turkey yesterday, as the Dow ended up with a nice pre-Holiday gain after being down more than 100 points.
As you begin to prepare that Butterball, you can look forward to a light volume trading day, basted with a sizable flock of economic reports.
No few that ten more reports are due by noon today, following up on the Mortgage Bankers Report this morning which told of a 3 percent drop in mortgage applications last week, mainly due to a drop in refis.
Headliners in the bunch will be the Durable Goods Report and Weekly Jobless Claims at 8:30 and the University of Michigan’s final verdict on November Consumer Sentiment at 10 o’clock. After a surprisingly weak Consumer Confidence report yesterday from the conference Board, the U of M report is expected to be unchanged at a level of 93.1, which would ties for the best reading since July.
Confidence is high at Hormel Foods. After a good earnings report yesterday, Hormel has announced a 2 for 1 stock split. And in spite of hunting season, Deere shares are about two percent higher pre-market on a good earnings report.
Asia was mixed overnight, but European markets are now generally a little higher. At this point, adjusted for fair value, the S&P 500 futures are higher by about 2½ points, Dow futures are up 29 and the NASDAQ futures are about 9 points above fair value.
November 24, 2015
The Thanksgiving week is usually positive for stocks. Then again, we usually don’t have Russian fighter jets getting shot out of the air, the U.S. issuing a worldwide travel alert, and politicians railing against big companies that run their businesses according to the laws the politicians have put in place.
If you catch the drift here – yes, we’ll get off to a lower start this morning, and certain earnings reports aren’t helping. Take for instance, the report from Tiffany. Quarterly earnings of 70 cents were a nickel per share short. Same store sales were only up one percent and Tiffany shares are about 4 percent lower pre-market.
We may not be able to travel without worry, but at least we’re eating well. Hormel Foods, beat the 69 cent estimate by a nickel per share and Campbell Soup’s 95 cents in profit was 19 cents better than expected.
The Government’s second guess at third quarter Gross Domestic Product comes at 8:30. We’ll also get the Conference Board’s reading on Consumer Confidence at 10 o’clock.
Asian markets were mixed overnight, but European markets are one to two percent lower.
Our futures have been lower all morning, but dipped again within the past half hour. At this point, adjusted for fair value, the S&P 500 futures are down almost 14, Dow futures are down 119 points and the NASDAQ futures are about 34 points below fair value.
November 23, 2015
Stock prices are coming off their best week of the year, and there’s more hope ahead as the short Thanksgiving week usually results in higher stock prices.
The big news over the weekend came in the drug space, as the United States will lose the headquarters of another big company due to our corporate tax rates. Drug giant Pfizer is buying drug giant Allergan in a deal valued at about 150 billion dollars. Allergan shareholders can get a small amount of cash and over eleven shares of Pfizer for each share of Allergan. Pfizer’s tax home will move to Ireland which will probably lower its effective tax rate by 5 points or so. Hopefully the brain trust in Washington will wake up and get rational about tax policy before all of our major businesses make the move overseas.
Pepco isn’t moving overseas, but they have agreed to go private in a 4.7 billion dollar deal.
We’ll get five day’s worth of economic data stuffed into the next three days. Today, it’s a Chicago Fed report, the PMI Manufacturing Flash Report and the report on October existing home sales, which is expected to be down just a bit from September to an annualized run rate of 5.4 million homes.
Overseas markets are mixed. Our futures have dug out of an earlier hole. Adjusted for fair value, the S&P 500 futures are flat, Dow futures are down a point and the NASDAQ futures are about 2 points above fair value.
November 20, 2015
Footlocker and Nike are the retailers leading the charge higher this morning. Nike announced a 12 billion dollar stock buyback and a 2 for 1 stock split. Stock splits, in and of themselves, mean nothing, because you’re effectively getting two slices of a 16 slice pizza rather than one slice of an eight piece pie. However, Nike is also raising its dividend by 14 percent, and Nike stock is looking to open another 4 percent higher.
Footlocker reported a dollar of operating profit for the quarter gone by, which was a nickel better than expected. Same store sales were 8.7 percent better than a year ago. That also was much better than expected.
Abercrombie & Fitch shares may be the stars of the morning. A&F Shares are up about 20 percent pre-market, as 37 cents of quarterly profit beat the 22 cent estimate handily.
The Kansas City Manufacturing Index comes at 11 this morning, but that’s about it for scheduled economic reports.
Foreign markets are generally higher, and we’re on our way there as well. Adjusted for fair value, the S&P 500 futures are higher by about 7½ points, Dow futures are up 88 points and the NASDAQ futures are almost 18 points above fair value.
November 19, 2015
The stock index futures were again higher this morning after another big rally yesterday, but all is not well with several issues, and that is putting a little damper on all the optimism.
Best Buy reported 41 cents per share of operating profit. That was 6 cents higher than expected. Problem is that same store sales were only up eight-tenths of a percent, which was half the expected increase. Best Buy shares are looking to open about ten percent lower on that news.
Also looking less than healthy this morning are shares of United Health. Lowered profit estimates have UNH off about six percent pre-market.
On the up-escalator this morning on strong profits are shares of Salesforce.com, up about 4 percent, and Keurig Green Mountain, which could open more than 17 percent higher.
Over in IPO land, shares of Square will be offered to the public today at only 9 dollars per share. That gives the entire company an implied value of only about half compared with what private investors paid the last time Square looked for funding about a year ago. Be careful out there, folks. Match is also coming public with shares priced at the low end of the expected range.
Foreign markets are higher. At this point, adjusted for fair value, the S&P 500 futures are higher by 3½, Dow futures are up only 3 points but the NASDAQ futures are about 12 points above fair value.
November 18, 2015
Two more retailers have reported earnings and once again, what you’re selling and how you’re selling it has a lot to do with how you’re doing. Lowe’s followed Home Depot’s strong report with one of their own. 80 cents per share in quarterly profit beat estimates by two cents, as same store sales rose five percent, which was one percent better than expected. Lowe’s shares are indicated more than 2 percent higher this morning. Target shares also up about two percent after meeting estimates.
The famous “other hand” belongs to Staples. They matched the earnings estimate, but sales fell short on a more than 6 percent decline in same store sales. Staples shares are looking to open about three percent lower.
If you buy EggBeaters, or PAM or Healthy Choice or Orville Reddenbacher’s, you’re buying them from a company soon to be known as Conagra Brands. The current company Conagra will spin off its frozen potato product business soon into a separate publicly traded company.
Fairchild Semiconductor shares are almost eight percent higher pre-market on a takeover bid by On Semiconductor.
Fed minutes will be released at 2 this afternoon.
Overseas markets are mixed, but mostly lower. Our stock futures are indicating higher prices at 9:30, have been fairly trendless in doing it. At this point, adjusted for fair value, the S&P 500 futures are higher by 5 points and Dow futures are up 39 and the NASDAQ futures are about 15 points above fair value.
November 17, 2015
It may be the hope that the international terror threat will keep interest rates in check. It could just be a reflex reaction to last Thursday and Friday’s 400 plus point downdraft. No matter, stock prices rose throughout the day yesterday and the futures are giving no reason to believe the rally won’t continue this morning.
Even the beleaguered stock of Walmart is looking to open about 2 percent higher. Walmart reported 99 cents per quarterly profit, which was a penny per share better than expected. Their full year guidance was a little higher than Street estimates. Nuance Communications checked in with better than expected profits and sales, and Nuance stock is indicated about 9 percent higher. Home Depot shares are about 3 percent higher as same store sales rose a whopping 7.3 percent.
The disasters of the day appear to be Dick’s Sporting Goods, with shares about 15 percent lower pre-market on weak guidance. Urban Outfitter’s shares are lower by about 12 percent on weak sales.
If anyone is still worried about inflation, the October Consumer Price Index comes at 8:30 and is expected to have risen two-tenths of a percent on the headline and also excluding food and energy. Industrial Production and Consumer Sentiment Survey results are also on the way by 10 o’clock.
Overseas markets are higher, with Europe up about two percent. At this point, adjusted for fair value, the S&P 500 futures are higher by 5 points and Dow futures are up 57 and the NASDAQ futures are about 16 points above fair value.
November 16, 2015
In the wake of Friday’s events in Paris, the important considerations are human, not financial. Nevertheless, the knee-jerk financial impact over the weekend was a sharp downdraft in financial futures. However, by this morning, there wasn’t a lot of change in European markets and our stock futures are actually pointing a little higher.
It’s another merger Monday and the big deal that came together over the weekend has Marriott buying Starwood Hotel. It’s a cash and stock deal valued at over 12 billion dollars and values Starwood shares at $79.88 per share.
One more retailer reported an earnings miss this morning, as Dillard’s checked in at $1.42 of profits which was a penny per share short.
Our lone economic report of the day comes at 8:30. It’s the Empire State Manufacturing Survey and is a measure of business conditions in the New York area. Since August, it’s been indicating a pretty marked deterioration in factory output. Expect the November reading to recover a bit to a reading of minus 5, versus October’s minus 11.36.
Asian markets were mainly a little lower overnight, but Europe has actually turned a bit higher. At this point, adjusted for fair value, the S&P 500 futures are higher by 4 points and Dow futures are up 31 and the NASDAQ futures are about 6 ½ points above fair value.
November 13, 2015
It’s Friday the 13th, but there’s no reason to be scared – unless your portfolio is chock full of department store stocks. Retailers’ earnings reports have been a mixed –up bag this quarter. But it seems that the problem is that their strategy is mixed-up and there just not enough in customers’ bags as they leave the store.
The disaster du jour is the report from Nordstrom. Adjusted earnings if 57 cents were a whopping 15 cents below estimates and Nordstrom stock is on the 20% discount rack this morning.
JC Penney’s loss of 47 cents per share was 8 cents less than expected. That’s the good news. The bad news is that inventories are way up and you just can’t keep losing that kind of money forever.
Cisco Systems and El Pollo Loco shares are also lower on weak guidance.
On the famous other hand, Planet Fitness beat estimates and raised guidance and the shares are indicated about 11 percent higher this morning. YUM Brands shares about 4 percent higher as Chinese same store sales rose 5 percent. And Applied Materials beat estimates and raised earnings guidance.
The October Retail Sales Report comes at 8:30 and is expected to reflect a three-tenths of a percent increase. Reports on Consumer Sentiment and Producer Prices are also on the way.
It looks like Friday the 13thwill get off to a slightly spooky start. Right now, adjusted for fair value, the S&P 500 futures are lower by about 5 points and Dow futures are down 35 and the NASDAQ futures are about 15 points below fair value.
November 12, 2015
If you enjoy listening to economists give speeches, today is your day. And, boy oh boy, do you need a new hobby. Anyway, by ten o’clock this morning we’ll hear from three FedHeads, including Janet Yellen. Two more speak later today, and by this evening we’ll know if the old saying is true: If you laid all the economists in the world end to end, they still wouldn’t reach a conclusion.
A company known as IAC has concluded that Angie’s List stock is just too cheap to ignore. Angie’s List shares are 11 percent higher in the pre-market on a takeover bid from IAC. That’s the good news for Angie’s shareholders. The bad news is that the stock is still only around 9 bucks a little more than two years ago it was near 30.
Kohl’s shares are about 10 percent higher on an earnings beat on better than expected sales. Same store sales were also better than expected. That’s quite the mirror image of Macy’s report of yesterday.
Asian markets were narrowly mixed overnight, but Europe is mostly lower and our futures dipped a bit within the past half hour.
Right now, adjusted for fair value, the S&P 500 futures are lower by about 6½ points and Dow futures are down 61 and the NASDAQ futures are about 12 points below fair value.
November 11, 2015
We’re heading into third quarter earnings season for retailers, whose fiscal years generally end in January. Macy’s just reported earnings that beat estimates by two cents, although sales came in lower than expected.
And is looks like JC Penney’s rumored turnaround may be the real deal. Same store sales were up 6.4% and they settled a big false-advertising lawsuit. Penney share were higher by almost 10 percent earlier this morning, although they’ve settled back a bit, now up around 7 ½ percent.
Horizon Pharmaceutical shares are 15 percent lower this morning, as ExpressScripts cut ties with a pharmacy that distributed drugs made by Horizon.
It looks like the big beer merger between SABMiller and InBev is a done deal at 105 billion dollars, with the MillerCoors business to be sold off to MolsonCoors.
Mortgage applications dipped a bit last week, but that’s the last big data point on the Veteran’s Day calendar today.
European markets are higher in front of an upcoming speech today by Mario Draghi. His speeches have a recent track record of moving markets on any given day. We shall see.
Our futures are indicating that yesterday’s late surge higher may continue in the early going today. Right now, adjusted for fair value, the S&P 500 futures are higher by 9 points and Dow futures are up 85 and the NASDAQ futures are about 25 points above fair value.
November 10, 2015
Stock prices met their worst day in six weeks yesterday as the reality of soon-to-be-rising interest rates put traders in a profit-taking mood.
There’s some potentially good news this morning from the International Energy Agency. Oil prices may not return to the 80 dollar level for another 4 to 5 years. And, under a less-bullish scenario, they may get no higher than 50 bucks. So it looks like those who are so inclined still have time to buy one more gas guzzler without breaking the budget.
The National Federation of Independent Businesses issued the results of their October survey this morning and the resulting 96.1 came in at the low end of expectations. That survey reflects the level of optimism among people who run small businesses in the U.S.
Import and Export Prices and Wholesale Trade reports will be out by 10 this morning.
Italian stocks are a little higher, but most other foreign markets are lower. Our futures are in a little better shape than a couple of hours ago, but are still indicating lower prices at 9:30. Right now, adjusted for fair value, the S&P 500 futures are lower by almost 6 points and Dow futures are down 35 and the NASDAQ futures are about 19 points below fair value.
November 9, 2015
It looks like we’ll follow up the market’s six-week winning streak with a lower open this morning. Traders are still wrestling with the impact of Friday’s very strong Employment Report. Is it good news that the economy is slowly improving? Or, is it bad news that interest rates will soon be on the way toward normalization?
On Saturday, San Francisco Federal Reserve President John Williams indicated that the time is drawing near for the rate increase and odds now favor a hike in December. Historically, slow rate increases from very low levels have not been hurt stock prices. It’s the expected rate of increase that will start to get attention.
Getting some unwelcome attention this morning are shares of Priceline. Earnings of $25.35 per share beat estimates by a dollar and twelve cents. But, the outlook for the coming quarter was cautious, and Priceline shares are about 7 percent lower pre-market. And, after rallying more than 4 percent on Friday, Hertz Global shares are a bit lower this morning after missing the 52 cent profit expectation by 3 cents. Apache shares are 12 percent higher pre-market on word that they may be an acquisition target.
China and Japan were higher by almost 2 percent overnight at levels they haven’t seen since late summer. Most European markets are a little lower.
Right now, adjusted for fair value, the S&P 500 futures are lower by more than 6 points and Dow futures are down 39 and the NASDAQ futures are about 15 points below fair value.
November 6, 2015
Ever since the Federal Reserve decided that they were responsible for the nation’s unemployment rate, as well as the soundness of the dollar, the monthly Employment Report has been watched very closely. Well, hold onto your hats. In just over 10 minutes, it’s expected that we’ll hear about the creation of 184,000 new non-farm jobs. A number in that area or higher may give the Fed the backbone to raise interest rates a bit sooner than later. A much weaker number could have us looking well into 2016 for an interest rate adjustment.
If you own shares of Men’s Wearhouse, you won’t like how they look today. I guarantee it. Men’s Wearhouse, now combined with Joseph A. Bank, warned that same store sales may drop 25 percent this quarter. Not to be outdone, the stock looks to drop about 36 percent in the pre-market.
On the famous other hand, Weight Watchers looks to open 19 percent higher. Monster Beverage and Dreamworks are indicated about 9 percent higher on strong results.
Beating on earnings but coming up short on sales are Disney, Humana and Cigna. Berkshire Hathaway reports results after the close of trading today and AstraZeneca is buying biotech firm ZS Pharma for 90 bucks per share. That’s a 42 percent premium to last night’s close.
Our futures were pretty flat, but have ticked higher during the past half-hour. Right now, the S&P 500 futures are up about 2½ points and Dow futures are up 25 and the NASDAQ futures are about 9½ points above fair value.
November 5, 2015
With the bulk of earnings reports in the rear-view mirror, it looks like we’ll see about two thirds of the big companies exceeding profit estimates, but less than half with more sales than expected. Sales, of course, don’t equal profits, but if sales growth continues to decline and interest rates start heading higher, stock prices could be in for some headwinds.
Yesterday’s rally was gone with the wind after our old pal Janet Yellen told the House Financial Services Committee that a December interest rate hike was very much alive, although not a done deal. Keep an eye on the two Employment Reports we’ll get between now and then.
The weekly Jobless Claims Report at 8:30 is expected to come in at 262,000 new claims, but the with the past hour, Challenger Report told us that only 50,000 job cuts were announced last month. That doesn’t include the 2,600 job cuts that were announced this morning by Kraft-Heinz, which will be closing 7 plants.
Costco’s same store sales, excluding gasoline rose 5 percent company wide, which was a little short of expectations. Facebook shares are another 5% higher pre-market after their 57 cent quarterly profit beat the estimate by a nickel. Locally, Visteon’s 56 cents of profit was 26 cents better than expected.
Japan, China and most European markets are higher, as are our futures. At this point, adjusted for fair value, the S&P 500 are higher by almost 7 points, Dow futures are up 66, and the NASDAQ futures are about 13 points above fair value.
November 4, 2015
There are lots of moving parts in financial news this morning, and two companies whose stocks are moving in distinctly different directions are both in the automotive industry. Tesla shares are on another roll today, higher by about 8 percent pre-market. They missed the earnings target last night, but reported strong demand, and Tesla is speeding up production for the rest of the year. One the famous other hand, Volkswagen shares are about 8 percent lower today in Europe on news that their emission-falsifying software scandal is a lot broader than we were led to believe.
Groupon is the disaster du jour on a lousy earnings report and word that its co-founder is stepping down as CEO. Groupon shares could open lower by about 29 percent.
Three Fed officials are speaking today, including Janet Yellen’s little chat with the House Financial Services Committee. That starts at 10 o’clock, just after we get the monthly ISM and PMI reports on the health of the domestic services industries. Both of those reports are expected to reflect little change from last month.
Time Warner beat estimated earnings and sales this morning, and in a few minutes, we’ll get the ADP Jobs Report. Expect word of the creation of 180,000 new jobs in October.
Our index futures are indicating another little rally, and absent a lousy ADP report, that’s what we’re likely to see at 9:30. At this point, adjusted for fair value, the S&P 500 are higher by almost 3½ points, Dow futures are up 44, and the futures are indicating that NASDAQ, which is already at an all-time high, could rise about 16 points at the open.