Ron's off on a Holiday break. Happy Thanksgiving! See you Monday, November 26th.
November 20, 2018
It was just Friday when we talked about the stunning decline in the value of a bitcoin to $5,560. Today, two trading days later, Bitcoin is more than 20 percent lower than that, under $4,400. If you bought it last year at near $20,000, donâ€™t call it a bad investment, call it good estate tax planning.
Call it what you will but, most of the earnings announcements this morning have been less than encouraging. Target led it off by missing the $1.12 earnings estimate by 3 cents. Sales were okay in total, but the gross margin fell from 29.6 to 28.7 percent. Evidently all those new free-delivery and same-day fulfillment services are pressuring those margins, and are not likely to abate any time soon. Target shares are off about 9Â˝ percent pre-market. Loweâ€™s is pulling out of Mexico, and shares are about 6 percent lower after lowered full-year earnings guidance.
L Brands is cutting their dividend in half and shares are about 5 percent lower.
Kohlâ€™s shares are about 8 percent lower. Even Best Buy is one percent lower, even after beating the 85 cent earnings estimate by 8 cents. Urban Outfitters shares are a couple percent higher after good news on same store sales.
Overseas markets ae lower after our pounding yesterday and our futures have been falling all morning as well.
At this point, adjusted for fair value, the S&P futures are lower by 25 points, the Dow futures are down 270, and the NASDAQ futures, hit by the semiconductor weakness, are about 85 points below fair value.
November 19, 2018
The big earnings reporting day of the week is tomorrow, with Deere and Company and a lot of major retailers slated to tell us about the quarter gone by. Software firm Intuit will report at about 5:25 this afternoon.
So far, this morning, Chinese internet company JD.com is seeing its shares lower by 4 percent or so. Earnings were better than expected last quarter, but sales came up short of expectations.
There are reports of trouble at the Nissan-Renault Alliance today. Reportedly, Carlos Ghosn was arrested and is out as Chairman after an internal investigation that allegedly reported significant financial mis-behavior.
Nissan shares are indicated about 8 percent lower, and Renault shares are off more than 10 percent.
There could be some good news for potential homebuyers as the 10-year Treasury yield is down to 3.08 percent. Mortgage rates tend to track along with the direction of the 10-year yield.
And here we go again, Bitcoin is another 5 percent lower this morning, at about $5,250.
Major overseas markets are mixed, but generally a little higher. Not so much with our futures. At this point, adjusted for fair value, the S&P futures are lower by 4points, the Dow futures are down 17, and the NASDAQ futuresare about10points below fair value.
November 16, 2018
After this weekâ€™s big dive, the prices of various cryptocurrencies appear to be stabilizing this morning, with Bitcoin at about $5,560. However, the decline in crypto prices is making the mining of the coins far less profitable. That, in turn, is leading to lack of demand for some high-end computer chips. And that, in turn is leading to a 18 percent decline in the price of shares of Nvidia this morning. Nvidia missed on revenue last quarter and warned about demand for the full year.
Applied Materials shares are likewise down 9 percent. Earnings there were okay, but guidance was weak.
Williams Somona shares are looking to open about 13 percent lower, as last quarterâ€™s sales missed estimates.
The bright spot of the morning may be speaker-maker Sonos. Last night, Sonos reported that sales were up 28 percent, and shares are about 17 percent higher as the 2 cents per share loss reported was a lower loss than expected.
Overseas markets are mixed, but we should head lower at 9:30.
At this point, adjusted for fair value, the S&P futures are lower by 14 points, the Dow futures are down 127, and the NASDAQ futures, hit by the semiconductor weakness,are about 61pointsbelow fair value.
November 15, 2018
Walmart reported earnings this morning of $1.08 perc share, which was 7 cents better than expected. Overall sales rose from a year ago, but fell a fraction below estimates. Nevertheless, Walmart confirmed full-year earnings guidance in line with analyst expectations and shares are about one and a half percent higher pre-market. Walmart e-commerce sales were higher by more than 40 percent last quarter.
The ongoing bidding for Dell tracking stock took another leg higher today. In response to agitation from activist investor Carl Icahn, the buyout offer is now up to $120 per share.
Federal Reserve Chair Powell commented last night that he perceives that global economic growth is slowing down, giving hope to some that we may not see more than one or two interest rate hikes next year.
Thereâ€™s blood on the tracks in cryptocurrency world this morning. Bitcoin is now priced around $5,400. Thatâ€™s down about 60 percent year-to-date and a long, long way from the nearly $20,000 price we saw in 2017.
Stock prices bounced all over the place once again yesterday, as strength in the morning futures gave way to selling later in the day. Stock futures are a good bit lower than they were a couple of hours ago and have given up their earlier gains.
Adjusted for fair value, the S&P futures are down 5Â˝, the Dow futures aredown 37 points, and the NASDAQ futures are about a point below fair value.
November 14, 2018
When talked on Monday, it looked like oil prices would head higher based on talk out of Saudi Arabia. Well, talk is talk and actions speak louder than words. The Price of oil is now down almost 30 percent since early October. We havenâ€™t seen that kind of drop in almost 3 years, and the 12 consecutive days of decline in the oil futures contract is the longest weâ€™ve ever seen.
Oil futures this morning are about a half-percent higher, but are still under 56 dollars per barrel.
Macyâ€™s reported 27 cents of adjusted earnings this morning, almost double the 14-cent estimate. Shares of Snap are sliding about 5 percent lower pre-market on word that the Justice Department and the SEC are asking questions about Snapâ€™s disclosures or lack thereof prior to their initial public offering.
Marijuana investing has been all a buzz recently, but this morning Canopy Growth shares are 9 percent lower after reporting lower selling prices which lead to $1.52 in losses last quarter. About 52 cents of that loss related to non-cash accounting charges, but still, the loss in last yearâ€™s comparable quarter was only a penny per share.
At 8:30, weâ€™ll find out about October Consumer Price Inflation. Expect a three-tenths of a percent increase.
Japan was a little higher overnight, but most other overseas markets are a little lower. Adjusted for fair value, the S&P futures are higherby about 9points, the Dow futures are up 78, andthe NASDAQ futures are about 10pointsabove fair value.
November 12, 2018
Itâ€™s no secret that industries go â€śin and outâ€ť of favor. Currently, just the mention of a â€śdata analyticsâ€ť firm gets peoplesâ€™ attention. A data analytics firm called Qualtrics caught the attention of SAP just before offering its shares to the public. SAP will take the place of that IPO by buying Qualtrics for 8 billion dollars in cash.
Private Equity money is behind two other big deals this morning. Software-as-a-service firm Apptio is going private for 2 billion dollars. That stock is 51 percent higher this morning. AthenaHealth has accepted a five and a half billion-dollar deal, at $135 per share.
If you have filled your gas tank lately, youâ€™ve probably been pleased with the dropping price of gasoline. If you havenâ€™t filed up lately, perhaps you should do so soon. Oil futures are 1 to 2 percent higher this morning as Saudi Arabia has announced a cut in production, reversing policy set just six weeks ago.
Overseas markets are narrowly mixed. The bond market is closed today in recognition of Veteranâ€™s Day. However, stocks will trade and theyâ€™re likely to start the day on a Veteranâ€™s Day sale, as the futures took a little tumble about 20 minutes ago and continue to slide.
Adjusted for fair value, the S&P futures are lower by about 10 points, the Dow futures are down 91, and the NASDAQ futures are about 44 points below fair value.
November 9, 2018
The Federal Reserve surprised absolutely no one yesterday afternoon by holding short term interest rates steady but inferring that on December 19th weâ€™ll get another quarter-point hike and 2019 will see a minimum of two more. While rising rates arenâ€™t great news for financial assets other than money market yields, at least the market knows what to expect, and thatâ€™s important.
You can expect that shares of Activision Blizzard will head south today. Early indications are for an 11 percent drop in the video game makerâ€™s stock. Fewer active users for the third consecutive quarter led to an earning miss last night.
If youâ€™re a long-suffering shareholder of General Electric, get ready to suffer a little more. A broker downgrade has GE shares off about three percent, and below 9 bucks per share.
Happier news came from Disney last night on strong theme park and movie revenue. Snap-on announced a dividend hike of 16 percent this morning to 95 cents per share. Dropbox shares are about 8 percent higher and Hertz Global is about 19 percent higher, both on good earnings.
The October Producer Price report comes at 8:30 this morning. Expect three-tenths of a percent headline and two-tenths on the core rate.
Overseas markets are pretty much all in the red. Our futures are off earlier lows but are still indicating a weaker open. Adjusted for fair value, the S&P futures are lower by about 11points, the Dow futures are down 85, and the NASDAQ futures are about 54points belowfair value.
November 8, 2018
The short-term market impact of speeches and elections and press conferences and speeches at press conferences is hopefully over for a while. Perhaps we can get back to the boring old stuff thatâ€™s important long-term like interest rates and earnings.
At 2 oâ€™clock this afternoon, the Federal Reserve Open Market Committee will likely tell us that short term interest rates will not change, at least until their next meeting that ends December 19th.
Earnings are a bit of a mixed picture this morning. TripAdvisor are more than 8 percent higher pre-market after reporting adjusted earnings of 72 cents, which beat the consensus estimate by 50 percent. TakeTwo Interactive shares are looking about 2Â˝ percent higher after they raised earnings guidance based on the anticipated popularity of the Red Dead Redemption 2 game. L Brands and Cardinal Health are also looking to rise on earnings.
Shares of Square, Wynn Resorts, Qualcomm and Roku are all looking to lose ground after reporting on past earnings and future guidance. Monster Beverage shares are about 10 percent lower. Word is that they are in a dispute with Coca-Cola over a three-year-old agreement between the two companies. Coke is reportedly developing a couple of beverages which would compete directly with Monster. Monster claims that would be a violation of the agreement.
After yesterdayâ€™s huge rally, weâ€™ll likely open today in a much calmer mode. Adjusted for fair value, the S&P futures are lower by about 6points, the Dow futures are down 3, andthe NASDAQ futures are about 26points belowfair value.
November 7, 2018
If youâ€™re wondering why your home phone has finally stopped ringing and the unsolicited text messages seem to have stopped, well, perhaps the election is finally over and the politicos can stop throwing verbal bricks at each other.
Historically, the stock market enjoys pretty good results in the weeks and months following midterm elections, and we seem to be continuing that tradition so far this morning.
Speaking of pretty good results, health insurer Humana reported $4.58 of profit for the quarter gone by. That was 32 cents per share better than expected and Humana raised full-year earnings guidance. Southern Company beat the $1.07 estimate by 7 cents.
The famous other hand, or should I say handbag, belongs to Michael Kors. Earnings of $1.27 were 17 cents better than expected, but same store sales were down more than expected, and shares are about 11 percent lower pre-market. Dish Network shares are off about 4 percent even though earnings were good. Subscriber losses were higher than expected.
The Federal Reserve Open Market Committee starts another two-day get together today. Their likely non-eventful statement comes tomorrow.
Asia was mixed overnight, but Europe is higher. Adjusted for fair value, the S&P futures are higher by almost 21 points, the Dow futures are up 174, and the NASDAQ futures are about 81points above fair value.
November 6, 2018 - Happy Election Day! Ron's away today but will be back tomorrow!
November 5, 2018
The third quarter earnings season is pretty much in the rear-view mirror at this point, and a good one it has been, with earnings increases well in excess of the 20 percent mark on average. Arguably, if we could just get past this Chinese tariff roadblock, there might be some smooth roadway ahead.
Nevertheless, it could be that the services sector of the economy hit a speed bump in October. A little later this morning the Institute for Supply Management is expected to report a reading for their services index of 59, down from a strong 61.6 in September.
As we clean up some of the remaining earnings news, Marriott International, Mylan, PG&E and Booking Holdings (the old Priceline) will report today.
As of January first, Verizon will turn into a three headed hydra, splitting itâ€™s customer-facing heads into consumer, business and media divisions. Letâ€™s hope they all talk to each other, so as not to complicate the consumer experience.
Spotify announced a plan to buyback one billion dollars of its own stock.
Most of Asia was lower overnight. Most of Europe is a little higher at this hour. Our futures crawled out of a significant hole a few hours ago, before slipping a bit during the past fifteen minutes. At this point, adjusted for fair value, the S&P futures are flat, the Dow futures are down 11, andthe NASDAQ futuresare about11 points below fair value.
November 2, 2018
Thereâ€™s news on the economic front, the trade front and the earnings front this morning, and most of it seems to indicate we might see a fourth consecutive day of gains.
Asian markets spiked higher, with Chinese stocks up around 3 percent on word that China and Washington may be talking turkey about tariffs. One report suggests that President Trump has instructed staffers to start drafting some sort of agreement between the two nations, although the report is being denied by Administration officials.
Appleâ€™s earnings came in better than expected last night, but iphone shipments were a little less than expected. Apple warned that things might not be peachy in the current quarter. Even though Apple has the reputation of sandbagging guidance, traders have Apple shares about 6 percent lower this morning. Kraft Heinz shares are about 7Â˝ percent lower after missing the 81-cent adjusted estimate by 3 cents. Shake Shack shares are about 5Â˝ percent lower on guidance.
Heading higher are shares of ExxonMobil, up 2Â˝ percent, Alibaba up about 4 percent, Newell Brands up 6 percent and Starbucks, which is almost 8 percent higher after reporting 62 cents of profit, 2 cents better than expected.
At 8:30, the monthly Labor Department is expected to report 188,000 new non-farm jobs in October and a 3.7 percent unemployment rate.
Europe is 1 to 1Â˝ percent higher. Our futures have been on the rise most of the morning. Adjusted for fair value, the S&P futures are higher by about 16 points, the Dow futures are up 224, and the NASDAQ futures, although weighed down by Apple,are about 2points above fair value.
November 1, 2018
Goodbye and good riddance to October, as far as stock prices go. The S&P 500 index had its worth month in seven years, losing about 7 percent. But, itâ€™s a new month, prices are on a two-day winning streak, earnings reports continue to be generally good, and in a few days the election uncertainty well be behind us.
Yesterday, General Motors reported a 25% increase in quarterly profit and GM shares bolted 9 percent higher. Last night, Fitbit reported a surprise profit and those shares look to open 10 percent or so higher this morning.
Also out with better than expected earnings this morning are Cigna, Generac, DowDupont and Teva Pharmaceuticals. AIG reported a lower loss than expected. After 4 oâ€™clock this afternoon weâ€™ll hear for Apple, Starbucks and Kraft-Heinz.
The losers of the morning include mattress maker TempurSealy with a shortfall in earnings and lowered guidance, and insurer Allstate, where $1.93 in profit came up 28 cents short of expectations.
As the day roll on, weâ€™ll get October sales numbers from many of the automakers. Itâ€™s expected that total vehicle sales dipped about 2.1 percent from last October. Preliminary third quarter productivity numbers come in about 15 minutes.
Asia was mixed, but Europe is generally higher. Adjusted for fair value, the S&P futures are higher by about 11points, the Dow futures are up about 94, and the NASDAQ futures are about 25points above fair value.