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WJR November 2017 Reports


November 30, 2017

It’s no secret that a lot of retailers have been having trouble adjusting business models to meet more innovative competition lately. One of those innovative competitors just keeps on growing. Costco reported overall sales up 13 percent on the month and same store sales up a rather amazing 7.9 percent. Costco shares are higher by more than 2 percent this morning.

While another retailer’s shares are 30 percent higher in pre-market trade this morning, it’s for dramatically different reasons. Sears reported a loss of $5.19 per share as same store sales declined more than 15 percent. Sears and Kmart have managed to keep about 1,100 stores open, as opposed to 1,500 a year ago. But, believe it or not, Sears shares are about 30 percent higher at $5.45. Accompanying the report were comments about the willingness to “maximize value” of certain corporate assets. Sounds like the mother of all blue-light specials isn’t far away.

Kroger shares are more than 8 percent higher this morning.

Most of the week’s big economic reports for the week come tomorrow, although in an hour and a half, the Chicago PMI is expected to rise to 63.2

Overseas stocks are higher and here we go again……adjusted for fair value, S&P 500 futures are higher by almost 7 points, the Dow futures are up 73, and the NASDAQ futures are about 10 points above fair value.

November 29, 2017

In spite of a North Korean missile launch that put a temporary chill in stock prices yesterday, shortly after that rocket hit the ocean, stock prices soared to the sky on hopes that the tax reform bill was gaining traction in the Senate.

Also helping yesterday was a solid day of testimony from Federal Reserve Chairman nominee Jerome Powell. Among comments that indicated that he thinks that bank regulation has gone at least as far as it should, Powell gave indications that interest rates might not need to move significantly higher any time soon.

Janet Yellen takes her turn entertaining a joint Congressional Committee this morning, and the Fed’s latest Beige Book survey of regional economic conditions comes our way at 2 o’clock. 

At 8:30, the Government’s second guess at third quarter Gross Domestic Product is expected to check in at 3.3 percent.  If so, expect the President to check in with another Victory Tweet.

Tiffany reported earnings of 80 cents for last quarter. That was 4 cents better than expected, although Tiffany shares are pretty much unchanged pre-market.

Asia is again mixed, but European markets are again higher. The Dow futures turned sharply higher right around midnight. At this point, adjusted for fair value, S&P 500 futures are higher by almost 3 points, the Dow futures are up 73, but the NASDAQ futures are about a point below fair value.

November 28, 2017

Wall Street is slapping on the hot sauce this morning. Apparently not only does Arby’s have the meats, they have the money. Or, at least the private equity firm that owns Arby’s does. They will now own Buffalo Wild Wings, just in time for the college bowl games. It’s a $157 per share deal valued at 2.9 billion, including debt. However, it doesn’t appear that Beef ‘N Cheddar Hot Wings are in our immediate future. Arby and Buffalo Wind Wings Restaurants will reportedly function as separate establishments.

And, as one deal is announced, another falls apart. Emerson Electric has withdrawn its bid for Rockwell Automation. Rockwell shares are more than three percent lower this morning.

Fed-head in waiting Jerome Powell heads to Capitol Hill as the Senate Banking Committee gets its turn at the whipping post. 

At 10 o’clock will get the Conference Board’s Report on Consumer Confidence, but I think the consumer has already tipped us off via the Thanksgiving Retail Sales that they’re in a pretty good mood.

Asian markets were mixed overnight, but Europe has turned a little higher, and our futures have been modestly higher most of the morning. At this point, adjusted for fair value, S&P 500 futures are higher by about 4½ points, the Dow futures are up 44, and the NASDAQ futures are about 13 points above fair value.

November 27, 2017

After last week’s Holiday shortened schedule, this week is bound to feel like a long one. But, as most weeks tend to start, we’ll start this Monday with news of another merger. This time it’s time for a publishing deal, with Time Inc. being acquired by Meredith. The price is $18.50 per share. That’s almost a 50% higher than Time traded a couple of weeks ago, although the stock has been pretty much stuck in the mid during the past 3½ years.

The October New Home Sales Report comes at 10 o’clock and will be interesting if for no other reason that the September report turned in the biggest gain in 28 years. Expect the October number to cool off by about 7 percent to an annual run rate of 620,000 units.

This week could give us an early indication of how easily, if at all, the new income tax proposal will survive Congress and head for Presidential approval. It sure would be nice if we had at least a day or two to know the rules before the end of the year.

Oversea markets are little moved, but mostly a little lower. Our futures were modestly higher a couple of hours ago, but have been on a slow slide ever since. At this point, adjusted for fair value, S&P 500 futures are down a little more than a point, the Dow futures are down 22, and the NASDAQ futures are about 6 points below fair value.

November 22, 2017

It’s another day and another set of record closes for the major domestic indexes, and although the futures on those indexes were in the red earlier this morning, they have turned positive once again as we head toward 9:30.

So far this morning, Deere shares are indicated more than 4 percent higher on strong demand for farm equipment. Last quarter’s profit of $1.57 was a dime better than the average forecast.

Lower by more than 5 percent pre-market are shares of Hewlett-Packard Enterprise. Yesterday, CEO Meg Whitman announced that she will be leaving HPE early next year. Some are speculating that Whitman may use her upcoming free time to start working on a campaign to challenge President Trump for the 2020 Republican nomination.

The most recent Fed Meeting minute will be released at 2 o’clock. IN front of that we’ll get weekly jobless claims, the October Durable Goods Report and the University of Michigan’s final reading on November Consumer Sentiment. Expect a tick higher to 98.1.

At this point, adjusted for fair value, S&P 500 futures are higher by a point, the Dow futures are up 33, and the NASDAQ futures are about 6 points above fair value.

Among the more important things like health and family, give some thanks tomorrow for the stock market’s performance in 2017. Have a great Thanksgiving everyone!

November 21, 2017
We’ll start the day with at least three better-than-expected earnings reports.

Home improvement company Lowes reported $1.05 of operating profit, three cents better than expected on a 5.7 percent increase in same store sales.

Palo Alto Networks beat the 69-cent estimate by a nickel as internet security fears stoked demand there. Palo Alto shares are about 7 percent higher pre-market.

Not to be outdone, Urban Outfitters reported record third quarter sales and earnings of 41 cents per share, which is almost 25 percent better than expected.

The famous other hand belongs to Campbell’s this morning. 92 cents fell a nickel short and the blame falls on higher transportation costs due to hurricanes and a rise in the cost of carrots. Campbell's lowered full year guidance and their shares are in the soup by more than 8 percent.

Asian markets were mostly higher overnight. Europe shows green across the board.

Our futures are giving us reason to believe that that yesterday’s uptick may mean that stock prices are shifting back into rally mode. At this point, adjusted for fair value, S&P 500 futures are higher by almost 10 points, the Dow futures are up 95, and the NASDAQ futures are just about 34 points above fair value.

November 20, 2017

It’s the start of a short week of trading. There will be an early market close on Friday after a complete day off to eat turkey and watch football on Thursday.

It’s a rather quiet Merger Monday, but there is one deal in the chip sector. Marvell Technologies is buying chip maker Cavium at a 17 percent premium to the day when rumors of the deal sur>

At 10 o’clock, look for the October Report on Leading Economic Indicators to bounce back from September’s decline of two tenths of a percent. There were no big hurricanes to deal with in October, so expect an increase of six-tenths of a percent.

Internet giant Alibaba has raised its stake in grocer Sun Art to 36 percent. Kind of the Chinese version of the Amazon/Whole Foods deal, it appears.

Asian markets were mixed overnight. European markets have bounced back from earlier levels and are now mostly in the green.

Our futures are pointing a little lower, but have been gaining ground slowly over the past few hours. At this point, adjusted for fair value, S&P 500 futures are lower by 3 points, the Dow futures are down 16, and the NASDAQ futures are just about 2 points below fair value.

November 13, 2017
If you hold General Electric stock for the dividend, well -- you had to know this was coming – GE announced a 50 percent cut in its dividend this morning and will reportedly undergo a major restructuring. They’ll focus on three core businesses and divest in about 20 billion dollars worth of businesses that they’ve been busy acquiring over the past 15 years or so. Over the past year, GE shares have lost almost a third of their value. However, the shares are fractionally higher pre-market.

Qualcomm is reportedly saying “thanks, but no thanks” to the buyout bid from Broadcom. And Hasbro has reportedly approached Mattel with an undisclosed offer. Disclosed offer or not, Mattel shares are quoted about 22 percent higher this morning.

Tyson Foods reported $1.43 this morning, which is a 5-cent beat. We’ll hear from Target and Walmart this week, and we’ll also get the latest Producer and Consumer Inflation figures. And, of course, traders will be watching every Congressional move on the tax proposals.

Most overseas markets are in the red, with Japanese stocks closing more than one percent lower. At this point, adjusted for fair value, S&P 500 futures are lower by 6 points, the Dow futures are down 65, and the NASDAQ futures are just about 17 points below fair value.

November 10, 2017

The Senate produced their version of what is billed as tax reform yesterday. That version would preserve the medical deduction and double the maximum mortgage deduction, but would totally remove the deduction for any state and local taxes. The two houses will eventually get together to hammer out something on which to vote. While it’s passage is far from certain, it’s a good idea for every taxpayer to read the bills to estimate how their own taxes would be impacted. By the time we get something signed into law, it may be too late to rearrange your personal situation.

In another case of winning by losing less, JC Penney shares are more than 11 percent higher pre-market after announcing a quarterly loss of 33 cent per share. The expected loss was 42 cents. Penney now sees full fiscal year adjusted profit of 2 to 8 cents per share.

Chip maker Nvidia is about 5 percent higher pre-market on a positive report.

And Equifax beat the adjusted earnings estimate and reported a 6% rise in adjusted profit. “Adjusted” is the important word there. Generally Accepted Accounting would make them count 87 million dollars is losses related to the big data breach. Adjusted earnings, which is reportedly what they use to calculate executive bonuses, does not. 

It looks like another morning of hand wringing over a possible delay in corporate tax cuts. At this point, adjusted for fair value, S&P 500 futures are lower by 5 points, the Dow futures are down 29, and the NASDAQ futures are just about 8½  points below fair value.

November 9, 2017

Until yesterday, there was no indication that the Government was out to disrupt the pending merger of AT&T and Time Warner. A vertical integration, not much overlap in properties, what could the problem be? Well yesterday the Department of Justice insisted that AT&T sell either Direct TV or CNN and the other Turner properties. A cynic might suggest that it’s all a Trump hissy-fit in his ongoing feud with CNN, but whatever the reasoning, having the Government throw a questionable monkey wrench into the transaction in the eleventh hour has some hitting the “sell” button today.

Monster Beverage is getting hit with some of those sell orders. The stock is off 5 percent on weak earnings. Office Depot’s 14 cents was a penny to the good, in spite of the recent hurricanes, and shares are almost 7 percent higher. Retailer Kohl’s is 9 percent lower on an earnings miss. Macy’s shares dipped early on lower than expected sales, but are now fractionally higher on decent full-year guidance.

Generic drug maker Perrigo share are about 13 percent higher, after making $1.39, which was 28 cents better than expected.

The rocket of the morning is streaming firm Roku. Shares are about 35 percent higher after last night’s earnings report.

Overseas markets are mixed, and after seven consecutive positive sessions, it looks like rally interruptus on Wall Street today. At this point, adjusted for fair value, S&P 500 futures are lower by 13 points, the Dow futures are down 116, and the NASDAQ futures are just about 42 points below fair value.

November 8, 2017

As Mr. Haefner mentioned, Donald Trump was elected President one year ago today. Without judging who is to blame, we can note that it has been the best one-year-post-election stock market since the end of World War Two.

The roller coaster ride of the morning is provided to us by shares of Snap. Last night’s revenue number and new user number was disappointing, to say the least. The shares dropped about 20 percent until earlier this morning, when it was revealed that Chinese company Tencent had taken a ten percent position in Snap. Shares snapped all the way back to even, but have since declined about 10 percent.

Also sliding this morning in the wake of disappointing earnings are Wendy’s, MGM and Plug Power. The famous other hand has Take Two Interactive, Humana  and Regeneron riding the up escalator on positive results. A firm called Digital Ally is seeing its shares higher by almost 20 percent after announcing that the company is putting itself up for sale.

Overseas markets are mixed, and we should head a little lower to start the trading day, although the futures have rallied a bit over the past half-hour. At this point, adjusted for fair value, S&P 500 futures are lower by 2½ points, the Dow futures are down 12, and the NASDAQ futures are just about 2 points below fair value.

November 7, 2017

Advertising wars in the online travel business are hurting a bunch of stocks this morning. Expedia, Priceline and TripAdvisor all lower with TripAdvisor off more than 10 percent.

Drug maker Valeant earned more than expected put drug maker Mallinckrodt fell short. Mallinckrodt shares are more than 8 percent lower.

Tapestry, which is the new name for the company formerly known as Coach earned 42 cents, 6 cents better than expected, even though sales fell short of expectations. Crocs loss of three cents was two cents per share better than expected.

At 10 o’clock, we’ll get the JOLTS report. That’s the Job Openings and Labor Turnover survey. Interestingly, the number of Job Openings in this country is estimated at just over 6 million, which is getting very close to the number of people supposedly looking for work. Ah, if only the skills matched the needs. 

Janet Yellen gives a speech at 3 o’clock today to update us on her retirement plans.

All three of our major stock indexes closed the day at record highs yesterday, but today will likely get off to a rather muted start. At this point, adjusted for fair value, S&P 500 futures are flat, the Dow futures are up 22, and the NASDAQ futures are just about 2 points below fair value.

November 6, 2017

The horse-trading now begins with the Republican taxation game plan as the Administration will try to hold all Republicans feet to the fire to vote for the very unusual proposal. The big question for investors is how much corporate stock will fall, if at all, if the proposal goes down in flames.

Shares of Drug giant Mylan were lower by about 4 percent after reporting $1.10 cents in earnings, which fell a dime short of estimates. However, they have now turned about 1 ½ percent higher. CVS Health beat the $1.48 bogey by two cents. Shares are fractionally higher.

The upside surprise of the morning is retailer Michael Kors. $1.33 was 50 cents ahead of the consensus guess. Kors issued some encouraging guidance and shares are a percent or two higher.

The Sprint / T-Mobile deal fell apart over the weekend, lowering Sprint shares by almost 11 percent pre-market. This morning, Broadcom is offering 70 dollars per share to buy Qualcomm, consisting of 60 dollars per share in cash and 10 dollars in Broadcom stock. Qualcomm closed at 61.81 per share on Friday.

Overseas markets are mixed, but generally a little lower.

At this point, adjusted for fair value, S&P 500 futures are lower by a point, the Dow futures are down 11, and the NASDAQ futures are just about 2 points below fair value.

November 3, 2017

As if a torrent of earnings, a Fed meeting and a brand new tax proposal weren’t enough big news for one week, at 8:30 this morning, the Monthly Employment Report comes from the Labor Department. Expect that 315,000 new non-farm jobs were created in October and contributed to a stable unemployment rate of 4.2 percent.

Apple’s iphone X debuts today to a lot of media ballyhoo, and Apple’s quarterly earnings were unveiled last night. Put the two together, and Apple shares are almost 4 percent higher. Lines are long for those who have to pay a thousand bucks or more have a new phone immediately, irrespective of whether they have anything saved for retirement.

Starbucks sales and outlook both disappointed last night, and shares are a little lower, but the loser of the morning appears to be music streamer Pandora. Shares are more than 20 percent lower on an earnings miss and a lousy outlook.

T-Mobile and Sprint shares are both higher on reports that both companies are working hard to accomplish a merger.

Overseas markets are mixed. Our futures are telling us that stock prices will continue to quietly rally in the early going today. At this point, adjusted for fair value, S&P 500 futures are higher by a point, the Dow futures are up 20, and the NASDAQ futures, on strength in Apple shares, are 20 points above fair value.

November 2, 2017

At 3:00 this afternoon, we should hear the official announcement that President Trump’s choice to head the Fed is Jerome Powell. Although he’s not Janet Yellen, interest rate policy is not likely to be meaningfully different in a Powell-led Fed.

We’re also expecting to hear the “framework” of the Republicans’ tax plan. However, the devil there will be in the details and the devil appears to have plenty of places to hide, as consensus on the details of any potential tax bill appears to be more of a wish than a reality.

Earnings reports this morning show Alibaba, YUM Brands, AutoNation and ADP earning more than expected. Facebook eared $1.59, which was a 31-cent beat. However, next year’s expenses are projected to be 45 to 60 percent higher due in part to more security folks reviewing whether those nasty Russians are leading our population astray with misleading advertising. Apparently, domestic political parties are not also a focus of the new security effort, as they would never do such a thing.

Blue Apron lost 47 cents per share, which was a nickel worse than expected, although shares are a few percent higher pre-market. Wayfair also lost more than expected. And Tesla shares are off about 6 percent and concerns grow about Model 3 production delays and rising costs.

At this point, adjusted for fair value, S&P 500 futures are lower by almost 3 points, the Dow futures are down 2, and the NASDAQ futures are just about 8 points below fair value.

November 1, 2017

Lots of earnings news, an Open Market Committee statement, October Car Sales, a game 7 of the World Series – there’s something for everyone today.

Earnings reports from Clorox, Estee Lauder, Sony and Allegan all checked in better than expected this morning. SodaStream beat the 76-cent estimate by 11 cents and raised full-year guidance. That stock is 6½ percent higher. Southern Company fell a penny short, hurt by hurricanes, just as Generac was helped by the weather. Generac checked in at a nickel ahead of the 88-cent estimate.

At 2 o’clock, we’ll likely hear the Fed say that short term interest rates are on hold for another month, but probably not longer than that. Last week the average rate on a 30-year conventional mortgage rose by four basis points to 4.22 percent.

By 10 o’clock, the ISM and PMI Manufacturing Surveys will be released, and in a couple of minutes, the often-in-error-but-never-in-doubt ADP Employment Report is expected to estimate that 210,000 new jobs came into being in October. 

SunTrust downgraded shares of UnderArmour today. Something they apparently don’t like there, as UnderArmour trades around 12½ dollars after being over thirty dollars just 10 months ago.

Most overseas markets are higher. It looks as though we’ll see all three major indexes open at intra-day record levels this at 9:30 this morning. At this point, S&P 500 futures are higher by almost 10 points, the Dow futures are up 136, and the NASDAQ futures are just about 32 points above fair value.

WJR December 2017 Reports
WJR October 2017 Reports

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