Have a great Thankgiving Weekend! Ron will return to the air on December 2nd!
November 26, 2019
All three major domestic stock indexes closed at record highs once again last night. So far this morning, it appears that stock prices may pause to catch their figurative breath. In the meantime, theyâ€™ll have a fresh batch of earnings and a couple of economic reports to review as we jam 5 days of market news into a 3Â˝ day week.
Two days before the big parade down Woodward, we have Best Buy leading a parade of earnings reports this morning. Shrugging off a feared downdraft from tariffs, $1.13 of adjusted profit at Best Buy was 10 cents better than expected. Best Buy shares are indicated about 4 percent higher.
Not to be outdone, Dickâ€™s Sporting Goods reported 52 cents per share, 14 cents better than expected. Third quarter same store sales were up 6 percent, more than double the expected increase. Dickâ€™s shares are looking to open more than 12 percent higher.
Yesterday, Fed Chair Powell said that low interest rates have helped the economy, and that low inflation should allow the Fed to keep short term rates steady for the foreseeable future.
The New Home Sales Report and the Conference Boardâ€™s November Consumer Confidence report are on the way,
Right now, adjusted for fair value, the S&P 500 futures are higher by about 2 points, the Dow futures are up 27 points and the NASDAQ futures are about 3 points above fair value.
November 25, 2019
Itâ€™s been a while since weâ€™ve had a true â€śmerger Monday.â€ť This morning we have confirmation of two deals that have been rumored to be in the works as well the purchase of a company that makes a cholesterol fighting drug. That deal has Novartis buying the Medicines Company for 9.7 billion dollars is cash.
The two larger deals that are now confirmed are the 16-billion-dollar deal with LVMH buying all those little blue boxes at Tiffany, and Charles Schwab trading its stock in a 26 billion dollar deal for TD Ameritrade, presumably including the green couch and that dark-haired guy with the beard.
Fed Chair Jerome Powell is giving a speech later today, although with rates presumably on hold for a while, the spotlight on Powell isnâ€™t shining quite as brightly as it has recently.
Earnings are on the way today for Agilent, Hewlett-Packard Enterprise ad Palo-Alto Networks. Uber shares are off more than 4 percent as they have lost their license in London effective 21 days from now.
The Hang Seng Index was higher by a percent and a half overnight after the voters in Hong Kong sent the government a decisive pro-democracy message. European markets are higher, as our futures have been all morning long.
Adjusted for fair value, the S&P 500 futures are higher by about 8 points, the Dow futures up 72 and the NASDAQ futures are about 26 points above fair value.
November 22, 2019
Tesla unveiled its promised cybertruck yesterday, although IF it remains on schedule it wonâ€™t be on the market for another 2 years. The unveil didnâ€™t go exactly as planned. In perhaps the most surprising single item demonstration since the glove was tried on at the O.J. Simpson trial, the purportedly unbreakable glass in the cybertruck shattered not once, but twice when tested with a metal ball.
Major retail earnings reports are wrapping up this week and continue to be a good-news/bad-news story depending on the company.
Nordstrom shares are indicated about 9 percent higher pre-market. Last night they reported 81 cents of quarterly profit, 19 cents better than expected. They also raised the bottom end of the range of full year guidance.
GAP shares are 2 percent higher after beating the 51-cent estimate by 2 cents.
Chinese and Indian stocks declined overnight, but the possibility of an ease in trade tensions has over markets overseas in the green. Chinese President XI said that he wants to move toward a phase one agreement with the U.S., but emphasized that any agreement has to be negotiated on a platform of â€śmutual respect.â€ť
The futures are showing some respect for higher prices. Adjustedfor fair value, the S&P 500 futures are higher by about 6 points, the Dow futures up 49 and the NASDAQ futures are about 19 points above fair value.
November 21, 2019
The number one and number two (what used to be called) discount brokerage firms may announce a blockbuster merger later this morning. Of course, nowadays, the â€śdiscountâ€ť means zero commissions on stock and ETF trades.
The combination of Schwab and Ameritrade, which were both founded in 1971, would result in a firm with custody of over 5 trillion dollars of assets. In the premarket, Schwab shares are indicated about 12 percent, and TD Ameritrade shares more than 25 percent higher. Left at the altar in that combination are shares of E-Trade, almost 5 percent lower.
Speaking of lower, shares of La-Z-Boy are taking a back seat, lower by more than 10 percent on a punk earnings report.
It should be an interesting evening at the Los Angeles Auto Show, as Tesla is scheduled to unveil its first pickup truck.
The October existing Home sales report is due this morning. Expect a more than 2 percent rise to an annualized rate of 5.5 million units.
Trouble continue in Hong Kong and was reflected in the Shanghai Index dropped more than a percent and a half overnight. Other major markets oversea a lower as well.
Our futures burst into the green just about 15 minutes ago on a report that the December 15th tariffs may be delayed even absent a phase 1 agreement with China. Adjusted for fair value, the S&P 500 futures are higher by about 5 points, the Dow futures up 39 and the NASDAQ futures are about 10 points above fair value.
November 20, 2019
Itâ€™s been fairly easy to spot the relationship between stock prices and news about the trade war with China, and weâ€™ll spot it again today. Yesterday, President Trump threatened an increase in Chinese tariffs if there is no â€śphase oneâ€ť agreement with the Chinese. Also yesterday, the Senate passed a â€śHong Kong Human Rights and Democracyâ€ť bill, further irritating the Chinese. The bill would impose sanctions on Chinese officials who behave badly. It now moves to the House, where a similar bill has already passed. The Chinese are threatening â€śstrong countermeasuresâ€ť if the bill becomes law.
In response, stock markets overseas are lower, with many off by three-quarters of a percent this morning.
With somewhat cheerier news, retailer Target reported an adjusted profit of $1.36 per share, 17 cents better than expected. Target shares are looking to open about 9 percent higher. And Loweâ€™s is out with a much rosier forecast than competitor Home Depot gave us yesterday. Loweâ€™s posted a $1.41 profit, 6 cents better than expected and raised full-year profit guidance a bit. Loweâ€™s shares are indicated about 3Â˝ percent higher.
At 2 oâ€™clock the Fed will release the minutes from its latest rate cutting meeting. Should be an interesting read, if youâ€™re into that kind of thing.
In the meantime, our stock futures are lower and have been all morning. Adjustedfor fair value, the S&P 500 futures are lower by about 9 points, the Dow futuresare down 93 and the NASDAQ futures are almost 30 points below fair value.
November 19, 2019
A pessimistic story about the Chinese trade negotiations got us off to a lower start yesterday. But, as has been common over then past month, a late rally again pulled stock prices higher by the end of the day.
Shares of many brick and mortar retailers are heading for the discount rack pre-market. Leading the charge lower are shares of Kohlâ€™s. Adjusted earnings of 74 cents per share fell well short of the expected 86 cents. Same store sales were only four-tenths of a percent, less than half of the expected increase. Kohlâ€™s cut full year earnings guidance by about 40 cents per share and shares are more indicated than 11 percent lower.
Also disappointing this morning was Home Depot. Although adjusted earnings came in a penny ahead of the $2.52 estimate, same store sales of 3Â˝ percent fell short and Home Depot shares are more than 4 percent lower.
The famous other hand belongs to medical device maker Medtronic. Better than expected profit and increased guidance has shares about 2 percent higher.
Shares of a company called Myovant Sciences are almost 75 percent higher on word of a 97 percent response rate in stage 3 trials of their prostate cancer drug.
Japanese stocks fell about a half percent overnight, but most other overseas markets are higher. Adjustedfor fair value, the S&P 500 futures are higher by about 8Â˝ points, the Dow futures, even after a 70-point hit owing to Home Depot are stillup 52 and the NASDAQ futures are almost 36 points above fair value.
November 18, 2019
We're likely to open trade today with the Dow Jones Industrial Average at another all-time high, after closing over the 28,000 level for the first time on Friday.
Remember when we used to have â€śMerger Mondays?â€ť One merger that wonâ€™t be announced today is the HP â€“ Xerox deal. HP hasnâ€™t slammed the door completely, but has rebuffed the first Xerox buy-out proposal
Thereâ€™s a report out that former high-flier Wework wonâ€™t be cutting 4,000 jobs â€“ they might cut as many as 6,000.
The stock market is clearly in melt-up mode and has been shrugging of any bit of bad news for weeks now. But just as a clear sky can turn cloudy, or even stormy, these clear skies wonâ€™t last forever. Keep an eye on your exposure to stocks and rebalance your investment allocation if itâ€™s getting out of whack. It hurts to sell anything that keeps going up in price, but a balanced allocation is your financial umbrella when the rains come.
No major earnings reports are due until tomorrow and the economic calendar doesnâ€™t get crowded until later in the week.
Asian markets are up as China cut a key interest rate overnight. European markets are mixed,
Our futures have been on the slow rise most of the morning. Adjustedfor fair value, the S&P 500 futures are higher by about 4 points, the Dow futures are up 54 and the NASDAQ futures are about 19 points above fair value.
November 15, 2019
As of late, even if stock prices face challenges early in the trading day, they been able to fight their way back to about even or better by 4 in the afternoon. This morning, it looks like theyâ€™ll start higher. Comments from a U.S. Administration official indicate that trade talks are getting closer to at least a â€śphase oneâ€ť resolution.
Long suffering shareholders of JC Penney are seeing their shares about 17 percent higher this morning after Penney reported an adjusted quarterly loss of 30 cents per share. Analysts expected a loss of 56 cents. Thatâ€™s what has the stock higher, but itâ€™s still only about a buck and a quarter per share.
Applied Materials shares are also on the rise after reporting a four cent per share beat and raising guidance for first quarter earnings. Shares of RH, otherwise known as Restoration Hardware are about 8 percent higher. Berkshire Hathawayâ€™s latest 13(h) filing reported that Berkshire has taken a stake in RH.
October Retail Sales come at 8:30. Expect an increase of two tenths of a percent. A report on manufacturing activity in the New York region is expected to show improvement from last month.
The Shanghai Index was lower overnight, the FTSE in London is lower this morning, but most other markets overseas are in the green on renewed optimism (justified or not) regarding the trade war. Adjustedfor fair value, the S&P 500futures are higher by 9 points, the Dow futures areup 88 and the NASDAQ futures are about 33 points above fair value.
November 14, 2019
Itâ€™s the giant that just keeps on growing. This morning Walmart reported quarterly profit of $1.16 per share, 7 cents better than expected. Comparable store sales were 3.2 percent higher, which was also better than expected, and although sales were a little light, Walmart raised full year guidance and the shares are about 3 percent higher this morning.
Viacom shares are likewise more than 3 percent higher premarket as earnings of 79 cents came in 3 cents better than expected.
The downer of the morning is Cisco Systems, down about 5 percent after foreseeing a 5 percent revenue drop.
Over in Germany, quarterly Gross Domestic Product of just one-tenth of one percent narrowly avoided indication of recession. Concurrently, Daimler has announced their intent to decrease personnel costs by 1.1 billion dollars by the end of 2022, in order to offset the cost of mandated fuel efficiency standards.
After yesterdayâ€™s rather hot increase in headline Consumer Prices of four-tenths of a percent, weâ€™ll hear about Producer Prices at 8:30. Expect a two-tenths of a percent increase.
Overseas markets are mixed.
The earnings report from Walmart almost helped to almost pull the stock futures out of the red this morning, but not quite. They have since fallen back, and adjustedfor fair value, the S&P 500 futures are lower by 2 points, the Dow futures are down 19 and the NASDAQ futures are about 16 points below fair value.
November 13, 2019
Yesterday, President Trump confirmed that there wonâ€™t be any reduction in tariffs unless thereâ€™s a deal with the Chinese. China, of course, says there wonâ€™t be any deal unless tariffs are lifted. So, the Kabuki dance continues, my apologies to Japanese culture. That uncertainty, along with continuing protests in Hong Kong had Asian markets dropping overnight, which is spilling over to Europe and our futures.
They say a frown is just a smile turned upside down and this morning that smile is upside down at SmileDirectClub. Sales rose 50% from a year ago, but the company lost 89 cents per share, when a profit of 97 cents was expected. So, the business is growing, but the stock price is not â€“ down about 7Â˝ percent pre-market.
On the rise are shares of Canada Goose and Energizer Holdings after better than expected results.
At 8:30 the Consumer Price Index for October is expected to check in at three-tenths of a percent overall, but two-tenths of a percent core, as the lack of inflation in inflation continues, in spite of rock-bottom interest rates.
Our futures have improved a little over the past couple of hours, but at this point weâ€™re still looking at recently unfamiliar red arrows. Adjustedfor fair value, the S&P 500 futures are lower by 9 points, the Dow futures are down 86 and the NASDAQ futures are about 26 points below fair value.
November 12, 2019
If you used part of a stick of Land-O-Lakes butter on your toast this morning, know that it appears that the maker of Land-O-Lakes and other refrigerator staples will be melting down. Theyâ€™re blaming a reduction in milk product consumption as Dean Foods is filing for Chapter 11 bankruptcy protection and will pursue an orderly sale of company assets.
There are a couple of positive earnings reports out so far this morning as both homebuilder D.R. Horton and Rockwell Automation reported better adjusted profit than expected. Rockwell shares are indicated about 9 percent higher pre-market. Broadcaster CBS reported 95 cents of profit, a few cents better than expected, but revenue fell a bit short. Chip maker Skyworks Solutions reports later on.
President Trump will speak to the New York Economic Club at noon and itâ€™s possible that heâ€™ll announce another delay in threatened tariff on European goods, although thatâ€™s apparently not included in his prepared remarks. A little before that, Fed Chair Powell will begin two days of Congressional testimony.
Earlier today, The NFIB small business survey showed a small improvement in the mood of small business owners, with a reading of 102.4, versus the last reading of 101.8.
At this point, adjusted for fair value, the S&P 500 futures are higher by1Â˝ points, the Dow futures are up 15 and the NASDAQ futures are about 6points above fair value.
November 8, 2019
Reports out of the White House yesterday threw some doubt into the previously reported â€śtariff truce.â€ť That pumped the brakes on a pretty strong morning rally. Nevertheless, stocks closed at record or near-record levels and the futures are indicating that we wonâ€™t give much of those gains back in the early going today.
Not taking even a small step backward are shares of Disney. With the Disney Plus services ready to roll out next Tuesday, Disney reported quarterly earnings of $1.07, easily beating the 94-cent estimate. Disney shares are looking to open about 5 percent higher.
GAP shares are falling into about an 8 percent gap this morning on word that its CEO is stepping down and will be at least temporarily replaced by the son of the companyâ€™s founder. That sometimes doesnâ€™t work out so well.
Trending higher are three companies getting broker upgrades this morning. Those are WWE, McDonaldâ€™s and FootLocker.
At 10 oâ€™clock, the University of Michiganâ€™s preliminary November Consumer Sentiment report will be announced. Weâ€™ll see if the recent stock market rally results in a better number than Octoberâ€™s 95.5.
At this point, adjustedfor fair value, the S&P 500 futures are lower by less than a point, the Dow futures are up 31 but the NASDAQ futures are about 11 points below fair value.
November 7, 2019
The algorithms that drive the computers that drive the big stock buys and sells that drive the markets havenâ€™t had many exciting headlines to digest lately. Today, as they say, is a different day.
The overnight news from the Chinese Trade Ministry that China and the United States have agreed to roll back tariffs in phases is all the computers needed to put the futures in overdrive. Now granted, one contradictory tweet out of Washington could change things in a split second, and we donâ€™t know the details of the supposed deal yet. However, stocks will be jumping higher at 9:30.
A couple stocks arenâ€™t jumping this morning. TripAdvisor tripped over last nightâ€™s earnings news and shares are off about 5 percent. Other troubled names in the travel space are Expedia, looking to open about 13 percent lower and SeaWorld which missed the $1.40 profit estimate by 16 cents.
So far this earnings season, about 75% of the S&P 500 have reported better numbers than expected. Thatâ€™s about 10 percent lower than the long-term average.
All major markets overseas are higher on the apparent tariff truce. At this point, adjustedfor fair value, the S&P 500 futures are higher by almost 11Â˝ points, the Dow futures are up 119 and the NASDAQ futures are about 45 points above fair value.
November 6, 2019
Rising stock prices paused to catch their collective breath yesterday, although theyâ€™re still sitting around record levels. This morningâ€™s futures are looking fairly quiet, but theyâ€™ve risen a bit over the past couple of hours.
This morning, earnings reports are mixed between the winners and the losers. Drug store chain CVS shares are about 3 percent higher after reporting $1.84 of quarterly profit, 7 cents better than expected as same store sales rose 3.6 percent.
Health insurer Humana reported adjusted earnings of $5.03 per share, 45 cents better than expected. Online dating company Match shares are lower by more than 12 percent on punk earnings and WW, the old Weight Watchers is losing more than weight today, down 15 percent after reporting a 3rd consecutive quarter of declining sales.
In case youâ€™ve wanted to get into the restaurant business in a big way, Outback Steakhouse parent Blooming Brands announced that they are exploring â€śstrategic alternativesâ€ť which may indicate that the â€śfor saleâ€ť sign may be going up. So is the price, as Bloomin shares are indicated about 10 percent higher pre-market.
Most markets overseas are higher once again. At this point, adjustedfor fair value, the S&P 500 futures are higher by almost 2 points, the Dow futures are up 20 and the NASDAQ futures are about 4 points above fair value.
November 5, 2019
Itâ€™s said that the stock market climbs a â€śwall of worry.â€ť Maybe not the â€śwallâ€ť that gets the most publicity, but itâ€™s a wall thatâ€™s definitely going up as the S&P, the Dow and the NASDAQ all sit at all-time highs this morning.
While its human nature to think that we have the ability to predict the future, those trying to pick a top to the market have been consistently wrong for about 10 years running now, so proceed at your own risk if youâ€™re set on setting your investment strategy on predicting the unpredictable.
At 10 oâ€™clock this morning, weâ€™ll see if the services sector of the economy is still expanding. The ISM non-manufacturing survey is expected to read 53.3 versus the prior report of 52.6. Anything over 50 indicates expansion.
Just released earnings reports were better than expected for Tapestry, the company formerly known as Coach, Mylan and Frontdoor. Peleton lost less money than expected. Uber shares are about 6 percent lower after losing more than a billion dollars last quarter. Prudential Financial shares are also lower pre-market and ShakeShack is getting an 18 percent shakedown on disappointing same store sales.
Overseas markets generally continue to follow us higher on hope of a trade truce. At this point, adjustedfor fair value, the S&P 500 futures are higher by about 6 points, the Dow futures are up 67 and the NASDAQ futures are about 20 points above fair value.
November 1, 2019
A late rally yesterday turned a really ugly day of price action into a merely disappointing day if youâ€™re invested in stocks. Yesterday morning, a really lousy reading from the Chicago Purchasing Managers Index inferred that the manufacturing sector is heading for a big slowdown.
Itâ€™s hard to tell just how much the General Motors strike impacted that survey, but itâ€™s easy to assume that it DID drag the reading lower. At 10 oâ€™clock this morning, the ISM Manufacturing Index will shed a bit more light on that subject. Expect a reading of 48.7. Not great, but not disastrous, given the GM situation.
Before that, the Monthly Jobs Report comes at 8:30. Expect that the U.S. economy added only 80,000 or so jobs in October, after adding 136,000 in September.
So far this morning, Exxon Mobil, Colgate-Palmolive, AbbVie and Newell Brands all reported better than expected profit. And although AIG swung from a loss to a profit, their 56 cents per share in earnings fell well short of the one-dollar expectation.
Asian markets were on average a bit high overnight. Europe is higher as well. Weâ€™ll see what the jobs report brings us at 8:30, but if the market was to open right now it would open modestly higher. Adjusted for fair value, the S&P 500 futures are higher by about 5 points, the Dow futures are up 32 and the NASDAQ futures are about 12 points above fair value.