November 30, 2016
Welcome to the last trading day of November, and it may be a pretty good one for you is your portfolio is dripping with oil related stocks. Optimism about a production limiting agreement among OPEC members has the price of oil up almost 7 percent and the price of most oil-related stocks higher pre-market.
By the way, for November so far, the Dow Industrials are more than 5 percent higher, the S&P 500 is up almost 4 percent, and the small-cap Russell 2000 is up over 11 percent.
Also focused on a higher price are shares of GoPro. Now, understand that the price of Go Pro shares has been nearly cut in half this year. But this morning, they’re looking about 4 percent higher on word that about 15 percent of GoPro workers will be wearing their cameras on the Unemployment Line soon.
We’ll get the Fed’s Beige Book survey of regional economic conditions at 2 this afternoon, and we’ll also be treated to no fewer than four Fed-head speeches, one of which is already underway.
But in just a couple of minutes, ADP’s November Employment Report is expected to report creation of 160,000 new jobs in November.
November 29, 2016
The post-election rally bus hit a bit of a bump in the road yesterday, after three consecutive rally weeks, but it looks like yesterday’s losses may be recovered early on today. As we all know that past performance is not necessarily indicative of future results, but keep in mind that in the 28 years since 1987, stock prices have risen 22 times between Black Friday and New Year’s Day.
Tomorrow’s meeting of the Organization of Petroleum Exporting Countries is in focus, and this morning, it looks like the betting is against any type of production limiting agreement. Oil prices are lower by almost 3 percent as it looks like getting as agreement there is somewhat harder than herding cats.
At 8:30 we’ll get the Government’s second guess at 3rdquarter Gross Domestic product. Expect a tick higher to 3 percent.
Tiffany shares are ticking almost 5 percent higher, on word that profits last quarter rose from 70 cents per share to 76 cents on surging sales. Profit had been expected to decline by 3 cents per share.
Overseas markets are mixed, although European markets are, on average, about a third of a percent higher. Adjusted for fair value, the S&P 500 futures are higher by about 3½ points, the Dow futures are up 32, and the NASDAQ futures are almost 10 points above fair value.November 28, 2016
We’ll get off to a relatively slow start with financial information this week. Keep an eye on small-cap sector of our stock market. The Russell 2000 has now gone higher 15 sessions in a row in the post-election rally. That can’t go on forever, but if it goes on one more day, it will be the longest such streak in 28 years. The longer is goes on the more it rewards those with truly diversified portfolios.
Black Friday is behind us and the big winners (once again) look like the online retailers, as more people reportedly shopped online rather than in stores for the first time ever.
Samsung may be splitting itself in two in an attempt to boost its share price. And Wells Fargo, on top of all their other legal problems, is now facing an employee lawsuit alleging that the company loaded the employee savings plan with high-expense proprietary mutual fund choices.
The Dallas Fed Manufacturing Report comes at 10 this morning, but that’s about it for economic reports.
Asian markets are mixed, but Europe is mostly lower.
Our futures have improved a bit, but are still hovering at slightly lower levels. Adjusted for fair value, the S&P 500 futures are lower by about 5 points, the Dow futures are down 28, and the NASDAQ futures are about 8 points below fair value.
It’s the day before Thanksgiving, but for the stock market, it might be Groundhog Day (as in the movie.) All four major domestic stock indexes closed at all-time highs once again yesterday, as the post-election melt-up continues.
Not participating this morning, however, will be shares of Eli Lilly. Lilly shares are about 14 percent lower after announcing that a new drug, which was in testing to combat mild Alzheimer’s disease has not passed muster and further testing will be discontinued. Also on the slippery slope this morning are shares of Urban Outfitters. 40 cents of adjusted profit last quarter fell 4 cents short of expectations and Urban Outfitters shares are falling about 11 percent pre-market.
On the famous other hand, shares of Deere are about 11 percent higher. 90 cents of profit per share last quarter more than doubled the 40 cent estimate.
October Durable Goods are expected to have risen a percent and a half, due mainly to strength in the transportation sector. We’ll find out in about 15 minutes.
The Japanese market was closed overnight. Other overseas markets are mixed, but little changed.
Our futures have been relatively flat much of the morning, but just perked up a bit over the past half hour. At this point, adjusted for fair value, the S&P 500 futures are flat, the Dow futures are up 15, and the NASDAQ futures are a fraction of a point below fair value.
Perhaps it’s finally time to party like it’s 1999. All four major domestic stock indexes open the day today at record highs, and that’s the first time we’ve seen that happen in almost 17 years. That makes this the 18thof the last 32 Decembers when the S&P 500 closed at a calendar year high during the month.
However, Medtronic shares won’t be enjoying that ride higher this morning. Medtronic shares are about 6 percent lower after announcing $1.12 per share of quarterly earnings. That was the good news - a penny ahead of estimates. However, revenue was light and current quarter guidance was lousy.
The mirror image came from Hormel. Earnings fell a penny short of expectations, but forward guidance was good and Hormel shares are about 3 percent higher. Cracker Barrel just reported $2.03 in profit, 17 cents better than expected.
The loser of the morning may be Palo Alto Networks. A lousy report and lowered guidance has those shares more than 11 percent lower this morning.
The sales rate for existing homes has been pretty much steady for the past couple of years. The October results come at 10 o’clock, and are expected to pretty much match September’s annual run rate of 5.47 million homes.
Major markets overseas are higher, and at this point, adjusted for fair value, the S&P 500 futures higher by a bit more than 2 points, the Dow futures are up 29, and the NASDAQ futures are 18 points above fair value.
The Thanksgiving week has traditionally been a pretty good week for stock prices and we’re looking at a mildly higher open for prices this morning.
Last week, the S&P 500 picked up about eight-tenths of a percent, but the star of the show again was the Russell Index of small-cap stocks, gaining almost 3 percent on the week and 13 percent over the past 2 weeks.
If you’re portfolio hasn’t been doing all that well, take a look at the bond holdings. This morning, the interest rate on the 10-year Treasury Bond is at 2.34 percent. That’s the highest in a year, as bond prices have been slumping now since July.
Shares of Tyson Foods are slumping about 8 percent pre-market on a lousy earnings report. Adjusted profit of 96 cents per share was well short of the $1.17 estimate. And oh, by the way, Tyson’s CEO is stepping down at the end of the year.
Novartis is exercising its right to buy Selexys. That’s a company that produces a drug to fight sickle cell anemia. $665 million dollars gets the job done there.
Federal Reserve Vice-Chair Fischer is giving a speech to the Council on Foreign Relations in New York right now, and as he speaks, adjusted for fair value, the S&P 500 futures higher by almost 6 points, the Dow futures are up 31, and the NASDAQ futures are 13 points above fair value.
At 10 o’clock, we’ll learn what the October Leading Economic Indicators have to say about our economic future. Expect a couldn’t-be-narrower one-tenth of a percent increase is expected. That would be half of the September reading, but still positive. The interesting reading will come next month, which will measure the impact of the recent election.
Speaking of things that are scheduled but will likely not be interesting, four Federal Reserve Presidents and a Fed Governor will speak today. However, now that everybody knows that short term rates will go a quarter of a percent higher in a few weeks, there should be plenty of seats available if you’re interested.
YUM Brands is interested in buying back more of its own stock. They’re in the middle of a 4 billion-dollar buyback and announced that they’ll throw another 2 billion in the pot. Shares of Salesforce.com are about 7 percent higher pre-market on better than expected earnings.
The yin and yang story in retailing today comes from Ross Stores, whose shares are 4½ percent higher on a good earnings report and raised guidance. The famous other hand belongs to Williams Sonoma, with shares down 3 percent on a 4 percent dip in same store sales.
Japanese stocks rose more than one-half of one percent overnight. However, European markets are mixed, but generally about a half percent lower.
Our futures turned positive during the past hour, but just bent back to the flat line over the past ten minutes. At this point, adjusted for fair value, the S&P 500 futures are flat, the Dow futures are down 3, and the NASDAQ futures are 5 points above fair value.
After seven consecutive positive days, stock prices experienced a little rally interruptus yesterday, at least outside of the NASDAQ 100, which continued to rally on.
This morning comes the last big flood of earnings from major retailers, and while the news overall isn’t bad, outside of Best Buy’s news, it’s not exactly inspiring. So, let’s talk Best Buy to get off on the right foot. Earnings of 62 cents were a full 15 cents better than expected. Best Buy raised full year guidance and the shares are about 7 percent higher pre-market.
The other big winner this morning is Hain Celestial. Shares are 10 percent higher after they announced that an internal accounting review uncovered no serious hanky-panky.
Walmart, the 800-pound Gorilla of retail did beat the 96 cent estimate by 2 cents, but sales were a little light, forward guidance was weak and Walmart shares are looking to open about 2½ percent lower.
First Solar shares are shedding more than 11 percent this morning on word that First Solar will be shedding a quarter of its workforce. Shares of Cisco Systems and L Brands are looking to open a little lower on downbeat forecasts. Tesoro is buying Western Refining in a 41-billion-dollar deal and Amgen reported positive results for a new anti-migraine drug.
Overseas markets are narrowly mixed. Adjusted for fair value, the S&P 500 futures and Dow futures are flat, and the NASDAQ futures are 2 points above fair value.
It’s prime time to find out how the country’s retailers did last quarter, and this morning, there’s a tale of grow and a tale of woe.
Target hit the bullseye last quarter, earning $1.04 per share, which was 21 cents better than expected. Sales were more than a billion lower than the comparable quarter in 2015, but were still better than expected. Target also raised fourth quarter guidance by a nickel per share. Target shares are about 9 percent higher pre-market.
About 4 percent lower are shares of home improvement retailer Lowe’s. Profit was 8 cents lower than the 96 cent estimate, revenues also missed and Lowe’s lowered full year guidance by 13 percent, to $3.52 per share from $4.06..
Reports on Producer Prices and Industrial Production are on the way along with four more Federal Reserve pep talks, but it looks like the post-election rally might take a bit of a time-out in the early going.
Asia was mostly higher overnight, but European markets are mostly lower at this hour. Our stock futures, which traded higher last evening turned negative after midnight and have been slowly sinking much of the morning, although the decline is still pretty moderate in magnitude, compared with the rally we’ve seen.
Adjusted for fair value, the S&P 500 futures are lower by about 5 points, Dow futures are down 40, and the NASDAQ futures are more than 15 points below fair value.
Home Depot shares have not had one of their better years, dropping almost 7 percent before this morning’s earnings report. The home improvement giant reported earnings and sales that beat expectations and raised full year guidance to $6.33 of profit per share. Home Depot shares are more than 1½ percent higher pre-market.
The October Retail Sales Report comes at 8:30 this morning, and is expected to match the six-tenths of a percent increase recorded in September. The Empire State Manufacturing Index and no fewer than four Federal Reserve President speeches will also be available by mid-afternoon.
There’s not a lot of consistent direction overseas.
Our futures have been weakening over the past few hours, but just perked up a bit over the past 5 minutes or so. Adjusted for fair value, the S&P 500 futures are higher by almost 4 points, Dow futures are up 20, and the NASDAQ futures are more than 7 points above fair value.
Samsung, as if it didn’t have enough going on, is making a big move into automotive audio. For 8 billion dollars, Samsung is buying Harman International. Harman shares are almost 25 percent higher in the pre-market this morning.
Speaking of big acquisitions, shares of Mentor Graphics are about 20 percent higher this morning, as they will be acquired by Germany’s Siemens in a 4½ billion dollar deal.
If you’re one of the five or six people out there who really enjoy listening to Federal Reserve officials give speeches, get ready for a week you’ll never forget. Two or more Fed heads are out on the stump teach and every day this week. You’d think they were getting paid by the speech or something. Maybe they have a charitable foundation. Who knows?
The bond market was closed on Friday for Veterans’ Day. However, yields are on the rise this morning big league, if you’ll excuse the expression. Earlier this morning, the yield on the 2-year Treasury topped 1 percent for the first time in about a year. Yields across the board are on the rise, with the 30 year yield over 3 percent, which is not particularly good news if your portfolio is already heavy in long-term bonds.
Overseas markets are mixed, but most of the biggest markets are a bit higher. Our futures are well off earlier highs, remain mildly positive. Adjusted for fair value, the S&P 500 futures are higher by about 2 points, Dow futures are up 45, but the NASDAQ futures are about 5 points below fair value.
Once again, it’s “Singles’ Day” in China. That’s the day when all single people in China are encouraged to go on Alibaba (which is China’s Amazon.com) and spend, spend, spend. The theory here is to make them feel better about being single. Or maybe it’s to get them to spend money before marriage, while they still have some. In any event, with a few hours to go, it looks like the Chinese will spend the equivalent of over 20 billion dollars online today.
Disney shares are a bit higher this morning after a positive conference call with analysts last night. That in spite of a disappointing quarter. $1.10 of adjusted earnings fell 6 cents short of estimates. Revenue was also short as ESPN subscriptions continue to fall.
Also falling last quarter were same store sales at JC Penney. An eight-tenths of a percent decline fell well short of an anticipated 2.2 percent increase. The quarterly loss of 22 cents per share wasn’t any worse than expected, but Penney still >
Asian markets were mixed overnight, but Europe is mainly a bit lower, and it looks like our post-election rally may hit some resistance early on.
Right now, adjusted for fair value, the S&P 500 futures are lower by about 2½ points, Dow futures are higher by about 16, but the NASDAQ futures are about 30 points below fair value.
No matter where you reside on the political spectrum, everyone had one fervent wish this week – that this train wreck of an election be over. Yesterday, we heard a very gracious concession speech from Secretary Clinton, and another very calming transition speech from President Obama. So, gone is the threat of recounts, hanging chads and recriminations, replaced with the prospect of some political cooperation. Of course, when you’ve just lost the House, the Senate and the Presidency, you don’t have a whole lot of choice.
In any event, the hope is that Washington may finally be able to get something done to help the economy, rather than abdicating that responsibility and dumping it on the Federal Reserve. In response to that hope, the Dow gained more than 250 points yesterday, that’s more than a one thousand point reversal from the early morning futures that indicated that the Dow could drop more than 800 points.
Shares of retailer Kohl’s are almost 8 percent higher in the pre-market. Adjusted earnings of 80 cents per share beat the expected 70 cents. Kohl’s will also increase its stock buyback program by 2 billion dollars. Not to be outdone MetLife has authorized a 3 billion buyback program. Macy’s shares are lower after an earnings miss.
Japanese stocks sank 5 percent yesterday, but bounced back by 7 percent today. In fact, all major markets are higher this morning, and we could start at record levels. Right now, adjusted for fair value, the S&P 500 futures are higher by 11 points, Dow futures are up 96, and the NASDAQ futures are just about 27 points above fair value.
It’s hard to believe that having the Dow Futures down 200 points is good news. Early this morning, futures trading was actually halted after stock futures fell by 5 percent. At that point, futures on the Dow Industrials were lower by about 800 points. Now that the initial surprise of a Trump Presidency wears off, and after a very calm and conciliatory acceptance speech from the President-elect this morning, stock futures are bouncing back, although we’ll still be looking at lower stock prices at 9:30.
And, of course, if you’re planning a Mexican vacation soon, you’re in for a price cut. The Mexican peso went limit down overnight. It’s recovered somewhat this morning, but at this point a Mexican peso is worth just a little more than five cents, down about 8 percent from yesterday.
If you stop off at Wendy’s on the way, you’ll be part of a growing trend. Wendy’s same store sales rose a better than expected 4 percent last quarter. Earnings also beat estimates and Wendy’s is raising its dividend by 8 percent.
There are a couple of Federal Reserve Regional Presidents speaking later today, although the election of the National President may kill any chance of a near-term interest rate hike.
Japanese stocks fell by almost 5½ percent overnight. European markets are lower, but only by about one to two percent. Our futures continue to recover from the post-election swoon, but they still have quite a mountain to climb.
Adjusted for fair value, the S&P 500 futures are down about 30 points, Dow futures are down 240 points, and the NASDAQ futures are just about 90 points below fair value.
Don’t you just wish that the election was still five or six months away? You know, so we could get to know the Presidential candidates a little better? Me neither.
Stock prices had their best day in over eight months yesterday, with the S&P 500 gaining back two-thirds of the decline incurred over the previous 9 trading days.
This morning, pre-market traders are casting their votes on at least eight large companies this morning, and like in an election, there are winners and there are losers.
Johnson Controls had a great report yesterday, with $1.21 in profit beating estimates by 15 cents on better revenue than expected. Priceline shares are about 5 percent higher on a good report and share of The Gap are 2 percent higher even though October same store sales slipped by 1 percent. Better sales at Old Navy are providing that boost.
On the famous other hand, troubled drug firm Valeant has shares that are about 7 percent lower after reporting a loss of $3.49 per share. Drug seller CVS and hotelier Marriott shares are off 13 percent and 2 percent respectively on lowered guidance.
Chicago Fed President Evans will give two speeches today, but nobody cares. Election news will dominate the day. Asian markets were higher overnight. Europe is pretty calm, as are our futures. Adjusted for fair value, the S&P 500 futures are down a fraction of a point, Dow futures are down 3, and the NASDAQ futures are just about even with fair value.
Like the Cleveland Browns, the S&P 500 Index has now declined for nine sessions in a row. It’s the first time that’s happened to stock prices in almost 36 years. While the market’s decline in value has been consistently shallow and unfortunate, kind of like the Presidential campaign, stock prices will get a lift this morning related to that Presidential race.
Last night, as the FBI informed Congress that their investigation of Hillary Clinton emails had ended without indictment, stock prices around the world surged, as did our stock futures. During its nine-day decline, the S&P 500 lost about 66 points. The futures are indicating that we might recover almost half of that decline at 9:30 this morning.
Rockwell Automation, which last week announced a 5 percent increase in its dividend, reaffirmed full year guidance this morning, after quarterly revenue was higher than expected. Quarterly profit, however, was lower than last year’s comparable quarter.
Online jewelry vendor Blue Nile is being bought by Bain Capital for $40.75 per share, which is a 34 percent premium to Friday’s close.
Overseas markets are solidly higher. European markets are generally up by more than one percent. Adjusted for fair value, the S&P 500 futures are higher by 29 points, Dow futures are up 235 and the NASDAQ futures are almost 75 points above fair value.
The pre-election jitters continued whipsaw stock prices yesterday. For any number of reasons, Wednesday can’t come soon enough.
We will get one more monthly employment report before the election, and that comes in just about 10 minutes. Expect that 173,000 new jobs were created in October and that the official unemployment rate held at 4.9 percent.
As earnings reports start to dwindle in volume, they continue to hold their share of surprises. Last night GoPro fessed up that the launch of the GoPro5 isn’t going any better than the GoPro4 did, and that’s not good. GoPro shares, which went for about 26 dollars apiece a year ago, will open at around $9.65 this morning, which is almost 20% lower that yesterday’s close.
And, if things weren’t bad enough at Samsung, which they are after the exploding Note 7 debacle, Samsung is now recalling certain top-loading washing machines. Fortunately, there’s apparently no threat of them exploding, although the danger is that apparently the tops might fly off.
CBS shares are up 2 percent, Weight Watchers up 4 percent on good earnings reports.
Overseas markets are generally lower by one percent or less. Our futures are not tipping their collective hands so far. Adjusted for fair value, the S&P 500 futures are down a point, Dow futures are down 15 and the NASDAQ futures are about 2½ points below fair value.
Janet Yellen and her gaggle of Federal Reserve speech-makers stayed out of the headlines yesterday, leaving market volatility pretty much all in the hands of the most recent Presidential polls.
Without any new bombshells this morning, we should recover most of yesterday’s losses in the early going today. That is, of course, unless you’re talking about Fitbit or Facebook.
Fitbit shares are the disaster du jour. In the fourth quarter of last year, Fitbit’s revenue increased by 92 percent. Last night, they issued forecasted growth of 2 to 5 percent in the upcoming Christmas quarter. So, you may not lose weight by wearing a Fitbit, it looks as if will lose about 30 percent of the value of your Fitbit shares this morning.
Facebook shares are lower by about 5 percent pre-market after warning that advertising revenue growth is starting to slow. Whole Foods shares are a couple percent higher this morning, after beating the profit estimate for last quarter, even though sales fell a little short. Transocean shares are 5 percent higher after last night’s report.
There are at least a half dozen economic reports are on the way today, but any revised Presidential polls will likely Trump their impact (pun intended.)
China was higher overnight. Most of the rest of Asian was lower. Europe has turned higher after a British court ruling that may stall a quick exit from the European Union.
Adjusted for fair value, the S&P 500 futures higher by about 4 points, the Dow futures are up 42, but the NASDAQ futures, weighed down by the Facebook report, are about 3 points below fair value.November 2, 2016
As we barrel on down the track toward next Tuesday’s train wreck of an election, stock prices continue to wax and wane based on every new poll that hits the news.
One poll that is almost going unnoticed is the vote that the Federal Reserve’s Open Market Committee will announce at 2 o’clock this afternoon. There appears to be almost no chance that the Fed will hike short term interest rates this afternoon given everything else that’s going on. Their December meeting, however, will likely give us a different result.
Results are in for Electronic Arts, Time Warner, Estee Lauder and Alibaba this morning and all reported better than expected results. Alibaba shares are almost 4 percent higher, Electronic Arts shares are up about 6 percent. Facebook reports in later today.
On the merger front, the rumored hook up between Broadcom and Brocade Communications is a done deal. Brocade will go out at $12.75 per share in the 5½ billion dollar all-cash deal.
Japanese stocks are at a two week low. In fact, almost all overseas markets are lower, presumably on concerns about the U.S. election. Our futures are lower, also likely on concerns about the U.S. election.
Adjusted for fair value, the S&P 500 futures lower by about 3 points, the Dow futures are down 37, and the NASDAQ futures are about 2 points below fair value.