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WJR September 2004 Reports

Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any other sponsors of our daily WJR reports.
 
October 29, 2004
 
Lots of news to look forward to today, but there’s not much movement in European markets at this hour, and absent a big surprise in the GDP report at 8:30, we’ll have a pretty calm start at 9:30.
 
That advance 3rd quarter Gross Domestic Product will be the last big economic report before the election.  Expect economic expansion of 4.3%.  Obviously, the bigger the better, especially if you’re an incumbent politician,
 
Bristol-Myers missed their earnings number this morning be a penny, Avon Products and Clear Channel Communications each beat estimates.  We’ll get a lot more news from the energy industry later on.  So far, Anadarko Petroleum reported a dollar eighty seven in profits versus an expected dollar sixty five. Chevron Texaco reports a little later on.
 
Asian markets were weak.  We’re showing no great direction for U.S. stocks so far.  Adjusted for fair value, the S&P and Nasdaq futures are just about flat, Dow futures are down about 5, and we’re looking at Michigan over Michigan State by at least 15 points.
 
October 28, 2004
 
Oil prices took a dive after the release of the U.S. inventory data yesterday and are continuing to fall this morning.  Oil had traded near 56 bucks earlier this week.  We’re just at 52 dollars a barrel for light sweet crude at this hour.
 
Verizon bested estimates by a penny per share last quarter. Verizon Wireless now has over 42 million customers, second in the U.S. only to Cingular.  Gillette beat estimates by 4 cents per share. Later today we’ll hear about some oil-related earnings from Baker Hughes and Apache.  Exxon-Mobil reported a few minute ago.  They beat estimates by a penny per share.
 
Some fairly tepid fourth quarter outlooks from DaimlerChrysler and Volkswagen have helped limit gains in Europe so far today, although their markets are positive.  Asian shares were up strongly overnight following our big rally yesterday.
 
But, it looks like it may be time for a little profit-taking when we get going this morning.  The futures turned negative right around 6:30 this morning, with the Nasdaq looking at take the worst of it. Adjusted for fair value, the S&P futures are down 3 ½ , Dow futures are down 28, and the Nasdaq futures are about 8 points below fair value. 
 
October 27, 2004
 
In case you thought yesterday was a good day for stocks, well, you were right.  In fact, it was the best day we’ve seen in four months.  Insurance stocks led the rebound, as the markets became convinced that Elliot Spitzer has gotten his pound of flesh from the industry.  The thinking is that, just as in the investment banking and mutual fund businesses which have come under Spitzer attack, after a few operational changes and some settlement payments, things will pretty much get back to normal.
 
We’re well into earnings season at this point.  Fewer companies have beaten estimates and more have missed than a year ago, but the number of misses have not been substantial.
 
Boeing beat estimates by 3 cents this morning.  Comcast missed by 3 cents.  However, Comcast is picking up speed in signing up high-speed internet customers, adding almost 550,000 last quarter.
 
Domestic oil and distillate inventory numbers come out this morning.  Light sweet crude is going for $55.06 at this hour.  The futures are slightly negative at this point. Adjusted for fair value, the S&P futures are down a point, Dow futures are down 4, and the Nasdaq futures are about 3 points below fair value. 
 
October 26, 2004
 
Let’s start off by talking about the only thing that seems to matter to the stock market nowadays.  The price of oil is down to 54.16 dollars a barrel this morning, continuing its decline of yesterday afternoon.  Evidently, those irritable Norwegian oil workers have decided to play nice, so Norway’s daily 3 million barrels of oil will continue to come to market, at least for this week.
 
If there’s anything outside of oil prices that might move stock prices, it could be a big change in consumer confidence.  At 10 o’clock, the Conference Board’s reading on October Consumer Confidence is expected to come in at 94.  That would be down just a little from 96.8 last month.  However, some economists are looking for a number as low as 85.  That would certainly get the market’s attention.
 
Insurance stocks traded up a bit yesterday after Marsh & McLennan replaced their CEO.  Elliott Spitzer had hinted that criminal charges might be in the offing if that did not happen.
 
Overseas markets are up just a touch.  Out futures are in decent shape as well. Adjusted for fair value, the S&P futures are up more than 3 points, Dow futures are up 34, and the Nasdaq futures are almost 4 points above fair value. 
 
October 25, 2004
 
We’re going from baseball players with bloody socks to investors with bloody noses this morning.  Labor trouble in the Norwegian oil industry shot oil futures close to 56 dollars a barrel overnight. That sent stocks overseas into about a two percent tailspin. However, futures for light sweet crude have backed off to 55.20 in the past hour, and financial futures have improved just a bit.  But, it still promises to be a relatively ugly open for stocks.
 
On the earnings front, Kimberly-Clark and Qwest Diagnostics missed by a penny per share, BellSouth missed by two cents. American Express and EDS report later on.
 
International Steel, the successor to the old LTV, Bethlehem Steel and a variety of formerly bankrupt U.S. Steel companies is being bought for 4 ½ billion dollars, and will become part of the largest steel maker in the world.  The purchase price looks to be about a 40% premium to Friday’s closing price.
 
The Dow Jones Industrial Average will open at its low point for the year and will immediately head lower.  Adjusted for fair value, the S&P futures are down about 5, Dow futures are down 37, and the Nasdaq futures are about 7 points below fair value. 
 
October 22, 2004
 
Your baby may say goo-goo-ga-ga, but a lot of stock analysts are just ga-ga for Google this morning.  Google issued their first quarter earnings report since going public and it was a good one.  Revenue and income both doubled from last year and, although Google doesn’t give guidance about the future, there don’t appear to be too many clouds on the horizon. The stock is up about 11% this morning.
 
Microsoft beat estimates last night but warned about the current quarter. That stock is trading lower in the pre-market this morning. The big oil service firm Schlumberger and Amazon both missed their number.
 
Oil futures are up again from last night, but are just about at the same price as yesterday morning, at 54.80 per barrel. Asian markets were up just a little overnight.  European markets are mixed, but are all pretty close to a break even on the day.
 
Our stock futures have hugged the fair value line all morning.  That means that there won’t be a lot of movement in either direction at 9:30 unless we get a significant surprise before then. Adjusted for fair value, the S&P futures are down 2, Dow futures turned positive about a half hour ago and are up 2,  but the Nasdaq futures are about 2 ½  points below fair value. 
 
October 21, 2004
 
The flood of earnings reports continues this morning, but once again, for stock prices, it’s all about the oil.  Yesterday’s report on U.S. distillate inventories was not pretty, and the November futures contract for light sweet crude is near 55 bucks again this morning.
 
The weekly jobless claims are expected to drop by about 7,000 at 8:30 this morning.  At 10 o’clock we’ll get the September Leading Economic Indicators and the Philadelphia Fed Survey will be released at noon.
 
On the earnings front, it’s a mixed picture once again. Ebay, AT&T and Amgen are among the companies beating estimates.  Misses came from AIG and Maytag.  But perhaps more importantly, a bunch of companies warned about next quarter and/or next year, including Xerox, Mylan Labs and Advanced Micro Devices.
 
On balance, the morning’s news will lead us lower at 9:30, although the futures are a lot better than they were even an hour ago. Adjusted for fair value, the S&P futures are down about 3, Dow futures are down 21, but Nasdaq futures are just a fraction of a point below fair value. 
 
October 20, 2004
 
Once upon a time, you’d fear getting bills in your daily mail.  Nowadays, the bills don’t seem to matter, as long as there’s nothing in there from Elliott Spitzer.
 
Yesterday more insurance stocks took a dive on word that Mr. Spitzer is looking into the business practices at the country’s life and health insurance companies.  This, of course, comes after the stocks of property and casualty brokers got whacked last week.
 
It’s a mixed bag for earnings reports this morning.  EastmanKadak, United Technologies and Wyeth all beat their estimated earnings number.  Motorola beat estimates last night, but the stock traded lower in the aftermarket on slightly weaker than expected guidance for next quarter.  Pfizer beat the earnings number, but revenue was light.  Pfizer looking to trade down again at the open.
 
JP Morgan made 60 cents per share on an operating basis.  That was way short of the 72 cent estimate.
 
Overseas, markets are down, on average, a little more than one percent.  At this point, adjusted for fair value, the S&P futures are down almost 5, Dow futures are down 38, but Nasdaq futures are about 8 points below fair value. 
 
October 19, 2004
 
This morning, just about all if the news is good (for a change).
 
Oil topped out last night at 55.33 per barrel, but has dropped almost 3 bucks in an OPEC production report.  We’re at 52.66 right now.
 
Dozens of earnings reports this morning are almost uniformly good.  Locally, Ford Motor made 28 cents on an operating basis.  Estimates called for 14 cents.  Like GM, the financial operations are driving the earnings number.  Comerica beat estimates of a dollar five by making a dollar thirteen per share.  Kelly Services also beat estimates, but warned that the fourth quarter estimate of 26 cents looks a little rich.  19 to 25 cents looks more likely.
 
IBM, Texas Instruments and Altria (that’s Philip Morris’s parent company) all beat estimates this morning.  The only significant miss, once again, The Great Atlantic and Pacific Tea Company (you know them as A&P) lost almost 30% more than analysts expected.
 
Overseas markets are up, generally more than 1 percent, on the lower oil prices.  We’re going up at 9:30 as well.  At this point, adjusted for fair value, the S&P futures are up almost 4, Dow futures are up 41, but Nasdaq futures are 9 points above fair value. 
 
October 18, 2004
 
There’s evidently trouble in toyland.  Mattel met their earnings estimate for the quarter, but revenue was on the light side due to a 13% drop in Barbie sales.  Things aren’t any better at number two Hasbro. They had a miserable quarter, missing their earnings number by about 12 percent.
 
Locally, the good news is that Delphi did not miss lowered expectations – they matched them.  The bad news is that means a loss of 12 cents per share.
 
About a third of the S&P 500 report earnings this week. 3M missed their estimate by a penny this morning and 3M stock is looking lower in pre-market trade. IBM will report later today.
 
Outside of all that earnings stuff, oil is still the 800 pound gorilla in the news, and the gorilla is getting bigger this morning.  Oil futures broke the 55 dollar per barrel level overnight.  They’re at about 54.72 right now.  But anyway and that has our stock futures in a bit of a funk this morning.
 
At this point, adjusted for fair value, the S&P futures are down a little less than 3 points, Dow futures are down 27, but Nasdaq futures are about 3 ½  points below fair value. 
 
October 15, 2004
 
Lots of stocks had a reason to go down yesterday.  Auto-related stocks took a hit after GM’s earnings announcement.  Airline stocks had Delta’s earnings report and bankruptcy warning. Insurance brokers took a major hit – the S&P Insurance Index was down about 7 percent – on the announcement that Elliot Spitzer was about to come after some major insurance brokers for alleged ethical violations in their business practices.  Marsh & McLennan, which has already felt Spitzer’s wrath because of their Putnam mutual fund unit, saw their stock down about 25% yesterday.
 
Today, we’ll get six big economic reports by 10 o’clock, including reports of inflation, retail sales and consumer confidence.  So, there will be a lot of information to set the tone of trading.  However, the big factor that has been driving us for the past two months, the price of oil, is right around 54.50 per barrel.  That’s down a little bit from last night, but again up from yesterday morning.
 
Don’t forget to file your 2003 tax return today if it’s on extension.  Today’s the deadline.  The futures look like a carbon copy of yesterday morning’s futures.  At this point, adjusted for fair value, the S&P futures are down a fraction, Dow futures are up 6, but Nasdaq futures are a point and a half below fair value. 
 
October 14, 2004
 
There have been bad news rumors circulating about General Motors for a while now.  Today GM finally confirmed that over the next 14 months almost one of every five GM workers in Europe will no longer be GM workers in Europe.  Not only that, GM missed their quarterly earnings estimate by a bunch.  They made 78 cents.  Estimates were for 96 cents.  They’ve lowered estimates for the year to six dollars to six-fifty.  Estimates had called for $7.05.  GMAC, the financing arm, did make almost 700 million dollars last quarter.
 
Citigroup and Bank of America checked in with better than expected earnings this morning, but both were short of estimates on revenue, which is a cause of some concern.
 
Nokia, Southwest Airlines and United Healthcare all beat earnings estimates this morning.  Apple absolutely crushed the 18 cent per share estimate last night, earning 26 cent last quarter.  Apple shares are up 11% in pre-market trading.
 
Oil is again just under 54 bucks and overseas stock markets are down across the board.  Our futures have been negative all morning, but have shown improvement during the past hour.  At this point, adjusted for fair value, the S&P futures are down a fraction, Dow futures are up 2, but Nasdaq futures are 3 points below fair value. 
 
October 13, 2004
 
The big earnings reports of last night were Yahoo and Intel.  You could sum them up by saying that they were good, and not as bad as expected, respectively.  The company with the broader market impact is, of course, Intel.
 
Earnings at Intel came in a little shy of analyst expectations, and the outlook for next quarter is no great shakes. However, inventories, which had been growing at a troubling rate have been written down, and production is being curtailed.  So even though profit margins were weak at about 55%, Intel appears to be taking steps to keep inventories under control, and that’s where traders are focused.
 
Borders and Accenture both issued warnings about next quarter’s profits this morning.  Locally, Dana doesn’t report 3rd quarter earnings until next week, but they issued a warning last night that full year profits will fall about 15% short of expectations.  On the other hand, McDonald’s is raising their earnings guidance to 61 cents from 49.  Seven cents of that is a tax benefit, but no matter – it’s a good number.
 
Asian markets were mixed overnight.  European markets are solidly positive, gaining back a portion of yesterday’s losses.  Our futures have been gaining strength all morning long, and it looks like we’ll get off to a nice start at 9:30.  At this point, adjusted for fair value, the S&P futures are up almost 4 points, Dow futures are up 27, and Nasdaq futures are about 12 ½  points above fair value. 
 
October 12, 2004
 
We’ll get a fair bit of earnings news today.  However, the story of the market remains the same this morning – rising oil prices are going to start us off in the wrong direction.  Light sweet crude futures are at $54.27.  Remember when we thought that 30 bucks was expensive?
 
On the earnings front, Merrill Lynch reported revenues and earnings that were down from last year, but still came in a penny ahead of expectations.  Earlier this morning, Phillips Electronics warned that semiconductor chip sales will be flat this quarter.  They think 2005 will be fine, but then again, if oil is at 75 bucks a barrel by then, who knows?
 
Speaking of semiconductors, Intel will report after the close of regular trading today.  Expect a profit of 27 cents per share, up from 25 last year. Johnson & Johnson reported 78 cents per share.  That beat estimates by 2 cents per share.
 
Overseas markets are down across the board.  Most European markets are down about one percent.  We’ll head south at the open as well.  At this point, adjusted for fair value, the S&P futures are down 7 points, Dow futures are down 56, and Nasdaq futures are about 15 points below fair value. 
 
October 7, 2004
 
The third quarter earnings start to roll in earnest this morning.  We’ll also get retailers reporting September same-store sales.  Costco reported both.  Costco’s fiscal fourth quarter ended August 29th, and a good quarter it was.  They made 62 cents per share versus an expected 58 cents.  Higher gasoline sales helped.  Sales actually fell a little short of expectations, but that was mainly due to a required accounting change regarding rebate coupons.  Walmart sales were up 2.4% last month.  That’s a shade better than expected.
 
Genentech made 24 cents per share last quarter.  That’s 3 cents better than expected.  They are raising full year guidance.
 
The big economic news of the week, outside of the price of oil, hits tomorrow morning with the monthly unemployment numbers.  But speaking of oil – look out – up another 48 cents or so to $52.50 per barrel.
 
Asian markets were mixed overnight, as are European markets at this hour.  Just not a whole lot of movement anywhere.  The movement in the U.S. stock futures is down, but not down by a lot.  At this point, adjusted for fair value, the S&P futures are down almost 2 points, Dow futures are down 15, and Nasdaq futures are about 5 ½ points below fair value. 
 
October 6, 2004
 
Times change.  The relative importance of certain information changes.  The weekly report on domestic crude oil and gasoline inventories comes out today.  This is a report that was all but ignored until a couple months ago.  Not so anymore.  With estimates all over the board, only one thing is certain; the market will react when the report is released.
 
Take a deep breath, earnings season officially starts tomorrow with the report from Alcoa, although Genentech will jump the gun by reporting after the close tonight.  We’ve seen an uptick in earnings warnings this quarter, compared with recent history.  However, most of the warnings have been technology companies - specifically the microchip companies.  One warning last night close to home – Delphi will miss their third quarter number.  Delphi shares traded down about 5% in after hours trade last night.
 
Oil futures are up again this morning, at 51.27 per barrel.  The stock futures may look fairly negative to the casual observer.  But after you adjust for fair value, there’s just not a lot going on.  At this point, adjusted for fair value, the S&P futures are up a fraction, Dow futures are down 3, and Nasdaq futures are about 1 ½  points below fair value.   

October 5, 2004

Bloomfield Hills-based Pulte Homes has been on a roll the past few years. That roll may be coming up snake-eyes in Las Vegas.  Pulte says that “softness” in the Vegas market will make it a good bet that their quarterly and full-year earnings are going to be a few chips short of a full stack.  Pulte is lowering the quarterly number by about a nickel per share and the full year by about 35 cents, to about $7.55 per share. Pulte shares are looking to open down about 4 bucks per share this morning.
 
If you’re on the lookout for some cutting edge humor, you may want to go to New York today.  Alan Greenspan will give a speech at 9:30 this morning to the American Bankers Association convention.  Or you can just wait for the Comedy Central reruns.
 
The Institute of Supply Management will tell us how the service industries did in September a little later today.
 
A major broker upgraded its outlook on IBM this morning, and that’s a factor pushing the futures slightly higher in spite of higher oil prices this morning, although the futures are well off their highs.  At this point, adjusted for fair value, the S&P futures are up less than a point, Dow futures are up 8, and Nasdaq futures are  just a fraction above fair value. 

October 4, 2004

The fourth quarter got off to a great start on Friday, and we’re looking to extend the rally this morning on good news from Nigeria.  Now quick, grab a map and tell me exactly where Nigeria is. 
 
Anyway, the Nigerian rebels have reportedly reached an agreement with the government, they won’t be busy disrupting oil output, this week, anyway, and oil futures are down 60 cents or so, after closing above 50 bucks per barrel on Friday.
 
A little closer to home, at 10 o’clock we’ll find out how much factory orders slowed down during the month of August.  It is expected that factory orders were up just a tenth of a percent from July, which would be down from a 1.3 percent increase the prior month.
 
The Chinese stock was closed overnight.  In fact it is closed until Friday in observance of National Day.  They should call it National Week.  What a great innovation – a six day weekend.
 
Anyway, stocks in Japan had a big Monday, gaining about 2.7%.  European markets are all up, generally from a half to one and a half percent.  U.S, markets will add to Friday’s gains at 9:30 this morning.  Adjusted for fair value, S&P futures are up 6 ½, Dow futures are up 69 points, and the Nasdaq futures are about 10 points above fair value. 

October 1, 2004

As the pollsters spend the day trying to determine whether Jib beat Jab won the debate, if you want to call it that, we’ll have a couple of less scripted items to talk about.
 
At 9:45 the University of Michigan’s final September Consumer Sentiment Index is expected to come in at about 95.7, revised down just a touch from the preliminary number.   We’ll also get the ISM factory Index.  Most people expect a slight downshift in factory activity last month.
 
Speaking of downshifts, Merck’s worldwide withdrawal of Vioxx that we mentioned yesterday morning took Merck shares down about 27 percent right at the open of trading yesterday, and the stock pretty much stayed there the rest of the day.  It’s one thing when a smallcap stock loses 27%.  But when a company the >

Overseas markets did very well overnight, and we should be off and running at 9:30 as well. Adjusted for fair value, the S&P futures are up 5 points, Dow futures are up 28, and Nasdaq futures are about 11 points above fair value.

Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any other sponsors of our daily WJR reports.

November 30, 2004
 
Hunting for financial news will be easy pickings today. At 8:30 we’ll get the first revision of 3rd quarter GDP.  It’s expected that the preliminary estimate of 3.7% growth in the economy was right on target.
 
At 10 o’clock, the Chicago Purchasing Managers Index is expected to come in at 62, down from 68 ½ last month.  Later today, some consumer confidence data, a bunch of earnings reports and a meeting between stock analysts and Pfizer should be of interest.  All the drug makers had had a tough road to hoe lately.  We’ll see if Pfizer management can turn sentiment around at that meeting.
 
November car sales figures are coming tomorrow, but today, absent a big surprise in the GDP number, we’ll start in a bit of a hole.
 
Oil’s just under 50 bucks per barrel at 49.87.  Gold is down a bit, and stock futures are down a chunk, as they have been all morning long.  Adjusted for fair value, S&P futures are down about 4, Dow futures are down 34, and the Nasdaq futures are about 5 points below fair value. 
 
November 29, 2004 - Ron's on the road.  He'll be back tomorrow morning!
 
November 26, 2004
 
Forget stocks and bonds.  Head to the mall.  It will be open a lot longer and will probably be a lot more exciting today.  Stocks and bond markets will close early, and the New York Mercantile Exchange is closed until Monday.
 
Meanwhile, the mauling at the malls rolls on.  Today is Black Friday and it’s expected that retailers will ring up 7.3 billion dollars in sales today, that’s about a 5% increase from last year.  Traditionally, this and the Saturday before Christmas are the biggest two days of the year for retail sales.  We’ll see retailing stocks react on Monday based on the sales totals that will be reported tomorrow.
 
Outside of the malls – there’s nothing going on but turkey hangovers this morning.  No economic reports or earnings announcement on the docket.
 
Oil is up 50 cents as the Russian government’s confiscation of the Yukos oil company continues.  Overseas markets are down a bit at this hour.
 
We should get of to a quiet start at 9:30.  Adjusted for fair value, S&P futures and Nasdaq futures are up less than a point, and the Dow futures are about 3 points above fair value. 
 
November 25, 2004 - Happy Thanksgiving!  We'll be back tomorrow.
 
November 24, 2004
 
It’s a short day of trading for the bond market, but stocks will trade until 4 o’clock and when trading starts this morning, prices should be higher. 
 
If you watched stock prices fluctuate yesterday, you saw an almost perfectly negative correlation to the price of oil, minute by minute through the day.  Oil up, stocks down and vice versa.  That’s been prevalent for the past few months.  Interestingly, because of the holiday weekend, crude futures won’t be trading at the New York Merc for four long days.  So today’s oil market could be pretty interesting as the hedge funds place their bets. 
 
At 10:30 we’ll get the weekly report on crude and distillate inventories in the U.S.   Last week, we used 22 percent less energy to heat our homes than last year and nationwide, it will be a relatively warm weekend, although some snow is on the way here.
 
The October Durable Goods number is expected to be up a half percent at 8:30.  At 9:45, it’s the final Consumer Sentiment number out of U of M.
 
Stock futures are pointing to a pretty good rally at 9:30.  Adjusted for fair value, S&P futures are up almost 5 points, the Dow futures are up 39 and the Nasdaq futures are more than 11 points above fair value
 
November 23, 2004
 
It’s a short week of trading, and traditionally a very light trading week.  There’s not a lot of economic news on deck, so traders are paying more attention to analyst reports.  This morning, there are a couple of high profile downgrades.  Bed Bath & Beyond was downgraded be a major brokerage house, as was Intel.  The silver lining here is that what is presumably bad for Intel may be good for Texas Instruments and Advanced Micro Devices.  Keep an eye on those stocks as trading opens.
 
The price of gold is near 450 bucks this morning, and the price of a euro is near $1.30 as those figures both continue to climb.  Thankfully, oil is off just a touch this morning at about $48.53 per barrel.
 
At 10 this morning, we’ll get the October Existing Home Sales number, which is expected to be unchanged from September.
 
Futures on all major stock indexes are down. But the S&P, Dow and Nasdaq futures have been improving over the past hour, and are all within a few points of fair value. 
 
November 22, 2004
 
If you are starting to get the feeling that the stock market is paying attention to something OTHER than oil prices, perhaps you should sit down and rest until that feeling goes away.  Oil’s rise sent stocks on the skid Friday, and oil is up another 46 cents this morning at about 49 and a quarter.
 
The big semi-surprise among earnings reports this morning comes from Krispy Kreme.  Their quarter sales and earnings report have developed a rather large donut hole.  Instead of making the expected 13 cent profit, Krispy Kreme lost a nickel last quarter.  They also withdrew any earnings or sales guidance for the fourth quarter AND for next year. 
 
European stocks are selling off by about one percent or so.
 
Domestic stock futures have been negative all morning, but are not nearly as bad as they look at first glance.  Adjusted for fair value, S&P futures are down a point and a half, the Dow futures are down 24, but the NASDAQ futures are about 2 ½  points below fair value.
 
November 19, 2004
 
Disney had a pretty good earnings report last night.  They beat earnings estimates by a penny per share, on a better than expected increase in revenue.
 
Today, we’re looking at a day just about devoid of any scheduled market news.  But, there’s no shortage of things to worry about.
 
Yesterday’s Senate testimony about the FDA’s drug-approval procedures certainly put Vioxx in the spotlight.  But the safety of five other drugs, from five different drug companies, was called into question.  Safe or not, a lot of drug company stocks may be suffering from severe side effects today.
 
Oil is up a half dollar, gold is up once again the dollar is down once again.  We’ll see if all these worries can derail a market that has had a tendency to go up, no matter what, during the past month or so.
 
There’s not much shakin’ with the futures, and at this point we’re looking for a mized open for the market.  Adjusted for fair value, S&P futures are up almost a point, the Dow futures up 6, but the NASDAQ futures are about 2 ½  points below fair value.
 
November 18, 2004
 
If you think you have a rough day ahead, look on the bright side; you could be a Merck executive heading to Washington to testify before the Senate Finance Committee.  Officials from Merck and the FDA are set to testify on the approval process and subsequent withdrawal from the market of Vioxx.  Merck shares have been tossed around quite a bit since Merck withdrew Vioxx from the market.  So we’ll see if today results in more damage or more damage control.  One way or the other, rest assured that a lot of plaintiff’s lawyers will be taking notes.
 
At  10 o’clock this morning, the October Index of Leading Economic Indicators are expected to show a decline of a tenth of one percent, so any positive number could help the market.
 
Applied Materials had a good fourth quarter, but warned this morning that sales may be down 35% in the 1st quarter.  Google also warned this morning that revenue increases from recent quarters may be “unsustainable” into next year.  Curiously, Intel’s CEO says 2005 looks pretty good for the chip maker.
 
Overseas markets are mixed.  Our futures are undecided as well, although the AMAT and Google warnings are going to send the NASDAQ lower at 9:30. Adjusted for fair value, S&P futures are up almost a point, the Dow futures are up 22, but the NASDAQ futures are about 7 points below fair value.
 
November 17, 2004
 
If you didn’t see this one coming, you just haven’t been paying attention.  The only question was the structure of the deal and the timing.  Kmart is “buying” Sears.  The combined entity, which will be known as Sears Holdings, will have 3500 stores, which is second only to Walmart.  Sears shareholders will get either 50 bucks in cash, or a half share of stock.  Investor Eddie Lampert will be the biggest shareholder in the combined company, and will be Chairman of the Board.  Kmart and Sears stores will continue to operate under their respective brand names, at least the ones that won’t be sold off.
 
Yesterday’s Producer Price Index was certainly a punch in the >
 
Hewlett-Packard, with a blow-out earnings report last night, was up about 10% in after hours trading, and should help propel stocks higher at 9:30.
 
Adjusted for fair value, S&P futures are up about 3 ½ points, the Dow futures are up 35, and the NASDAQ futures are about 10 points above fair value.
 
November 16, 2004
 
You may remember that a couple of years ago, General Motors promised that by the middle of the decade, they would be making 10 dollars per share.  Perhaps an attainable goal, but perhaps the wrong decade.  GM now says that they will make barely more than 6 bucks per share this year, and that rising health care costs are forcing them to take that 10 dollar promise off the table.
 
The retailers started trotting out their third quarter earnings reports in earnest this morning.  So far, so good.  WalMart came up a little short on revenue, but matched earnings forecasts.  They raised their fourth quarter estimate to match the mid-point of what analysts had already projected.
 
Home Depot beat estimates by three cents.  JC Penney and Staples each beat estimates by a penny.
 
At 8:30 this morning, the October Producer Price Index is expected to show a 6 tenths of a percent increase, but oil price increases in October could really play havoc with that number. Subject to a positive surprise with that number, we’ll be digging out of a little hole as we start trading this morning. 
 
Adjusted for fair value, S&P futures are down a little more than a point, the Dow futures are down 29, and the NASDAQ futures are about 4 points below fair value.
 
November 15, 2004
 
It’s time for the retailers, and other companies who have a January fiscal year, to start their quarterly earnings reports, although Lowe’s is the only big name on the agenda today.
 
Lowe’s beat earnings estimates, making 66 cents last quarter versus an expected 65.
 
Lots of inter-company deals this morning.  You may not know that Altria, which owns Philip Morris, also owns most of Kraft, which owns the Life Savers candy business and Altoids.  In a curiously strong deal, those two brands are being sold to Wrigley.  Michigan based drug maker Perrigo is buying Israel’s Agis Industries.  General Electric is reportedly about to buy SPXs fire safety unit, Dow Jones is buying CBS MarketWatch, and here’s one that seems to make sense – Regis, the Supercuts company, is buying the Hair Club for Men (and Women) for 210 million bucks.  That is commonly known as vertical integration.
 
If you go out and buy oil futures, they’ll only cost you about 46.71 per barrel. Stock futures have been down all morning long and we’re looking to open lower at 9:30.  After you adjust for fair value, S&P futures are down 2 ½ , the Dow futures are down 11, and the NASDAQ futures are about 7 points below fair value.
 
November 12, 2004
 
Asian markets were on a roll overnight, after our big rally yesterday and last night’s earnings report from Dell.  Dell continues to hum along with a 25% profit increase on an 18 percent revenue increase.  None of that is a big surprise, but it’s a pretty impressive performance in a rather soft environment for PCs.
 
There’s a big shake-up in the major stock indexes coming.  Microsoft is about to pay a massive dividend.  That will decrease the price per share of Microsoft stock and give shareholders a bunch of cash.  If you’re running a mutual fund linked to one to the major indexes, like the NASDAQ or the S&P 500, you have to reinvest that cash in stocks OTHER than Microsoft, which will have a lower weighting in the indexes, especially capitalization-weighted indexes by the S&P.  Microsoft goes ex-dividend on Monday, and that could make for some interesting action just before the close of trading today.
 
We’ll get the preliminary University of Michigan November Sentiment index at 9:45 this morning, and the October Retail Sales report at 8:30.  In front of that, the futures are just about dead in the water. Adjusted for fair value, S&P futures are down a half point, the Dow futures are down 2, and the NASDAQ futures are about
2 ½  points below fair value.
 
November 11, 2004
 
A late run up in oil prices yesterday sucked the wind out of a decent rally for stocks.  However, oil is down a bit again at this hour and it looks like we’ll get off on the right foot this morning.
 
There are a couple of companies out with less than inspiring news this morning.  Tiffany reported disappointing earnings for the last quarter, making 14 cent versus an expected 19.  They blame rising metal and diamond prices, among other things. 
 
Coca-Cola finally lowered their long-term sales and earnings projections this morning, which is not a huge surprise.  Coke now expects single digit earnings growth and 3 to 6 percent sales growth.  To respond, they are going to spend more marketing dollars.
 
The bond market is closed today, but stocks will trade.  And at the open they will likely trade higher.  Stocks in Japan were down overnight, but European markets are solidly higher.  Adjusted for fair value, S&P futures are up almost 5 points, the Dow futures are up 51, and the NASDAQ futures are 10 points above fair value.
 
November 10, 2004
 
Oil prices continue to slide this morning.  Light sweet crude futures are hovering just above 47 bucks per barrel and that has the stock futures in rally mode this morning.
 
If you’ve had that laser eye surgery during the past five years or so, you’ve probably heard the name Visx.  They make those laser machines.  No matter how good your vision, if you own Visx stock, you’ve seen red over the past six months or so, as the stock lost about half of its value.  Not today.  Visx is being acquired by Advanced Medical Optics at a 47% premium to last night’s closing price.
 
The Federal Reserve Open Market Committee will see their way clear to raise short term interest rates another quarter percent this afternoon at 2:15.  Financial futures are now pricing in an 80 percent probability that they’ll do it again in December.  Sooner or later, folks, those variable rate loans are going to start to hurt.
 
Overseas stock markets are up virtually across the board, with most markets up a half percent or more.  Cisco Systems should open lower by a couple percent after their earnings report of last night.  That will restrain the NASDAQ, but in general, stocks should open higher at 9:30.  Adjusted for fair value, S&P futures are up about 2 ½  points, the Dow futures are up 24, and the NASDAQ futures are 2 points above fair value.
 
November 9, 2004
 
It’s a walk down regulatory row this morning on our trip to scandal city, just past the murky marsh.
 
The bad news keeps getting worse for Merck.  The problems with Vioxx are now reportedly the subject of a criminal investigation to determine whether any company personnel acted illegally by not disclosing the potential health risks sooner than they did.  The SEC is also asking questions.  Meanwhile an army of plaintiffs lawyers continues to mass on the outskirts of the city.
 
Speaking of scandal city, Marsh and McLennan reported earnings this morning.  They were expected to make 67 cents per share.  They made 4 cents.  That included a 27 cent charge for anticipated regulatory settlements, 7 cents for settlements regarding the Putnam mutual fund unit and 5 cents for taxes.  Add it all up, adjusted earnings were still way below expectations, perhaps the result of all those contingent commissions disappearing.  Oh, by the way, Marsh is eliminating 5 percent of their workforce. That’s about 3,000 jobs.
 
It looks like stocks will open slightly lower at 9:30, although the futures have improved in the past half hour. Adjusted for fair value, S&P futures are down about a point, the Dow futures are down 11, and the Nasdaq futures are 2 points below fair value.
 
November 8, 2004
 
More pressure on the pharmaceuticals this morning as Pfizer shares are off about 30 cents per share in German trading.  New concerns about the future of Bextra, and concurrent word of another Elliott Spitzer investigation about Pfizer’s labeling practices are the culprits. 
 
Today may be the calm before the storm for the markets.  The Federal Reserve’s next interest rate increase comes Wednesday, with another quarter point already baked in the cake.  Tomorrow will also be the big day of the week for earnings reports with more than a dozen major companies, including Cisco Systems, reporting.
 
Oil is down below 49 dollars per barrel again, at $48.95.
 
European markets, which had been negative all morning long turned slightly positive within the last hour.  Asian markets finished mixed.  We’re due for a little profit-taking after the big rally we’ve seen over the last two weeks, but the futures aren’t predicting a lot of it at this point.  Right now, adjusted for fair value, S&P futures are down about a point and a half, the Dow futures are down 20, but the Nasdaq futures are actually a fraction of a point above fair value.
 
November 5, 2004
 
Wednesday it was an election rally.  Yesterday came the oil rally as oil futures dropped about 4 percent.  To get a three-peat, we’ll be looking to the October Jobs Report that rolls out in ten minutes or so.  The average of estimates says that we added 175,000 jobs in October.  Whether we did or we didn’t, a lot of people will be watching the number of manufacturing jobs added or lost.  Last month, the number of manufacturing jobs shrunk unexpectedly after having crept higher all year long.
 
The S&P 500 will start the day at a 31 month high.  Advancers beat decliners 3 to 1 yesterday, and if we get any further rise in stock prices, it looks like we can break the series of lower highs and lower lows that have had the technicians in a lousy mood all year.
 
Every stock market overseas is in the green his morning.  Except of course for those unpredictable Norwegians.  Their leading index is down just a tiny fraction.  The U.S. market will trigger off the jobs report at 8:30.  Right now, adjusted for fair value, S&P futures are down a fraction, the Dow futures are down 5, but the Nasdaq futures are about 3 points above fair value.
 
November 4, 2004
 
Now that the election is out of the way, President Bush re-elected and we had our little election-related rally (especially in pharmaceutical companies) yesterday, we’re back to the grindstone.
 
That means, keep one eye on the economy, and the other eye on the price of oil. 
 
The economic eye will focus on the preliminary 3rd quarter productivity report at 8:30 this morning.  Staggering increases in productivity through the past half-dozen years is what has presumably kept the lid on inflation.  However, productivity in the 3ed quarter is expected to have been up only 1.7%, down from 2 ½ percent last quarter.
 
Oil is holding fairly steady this morning, but is back up over 50 bucks a barrel for light sweet crude. 
 
Asian markets were mixed overnight.  Most European markets are down about a half percent or so. The European Central Bank and the Bank of England each decided to hold the line on interest rates this morning.
 
At this point we’re looking at a mixed open for the market.   Adjusted for fair value, S&P futures are up just a fraction, the Dow futures are up 2 ½, but the Nasdaq futures are about 4 points below fair value.
 
November 3, 2004
 
We wanted a decision, we got a decision.  Markets around the world are reacting well to the election news.  We’ll see if that rally holds up for a full day here in the U.S., especially if we don’t hear concession speech before the close of trading today.
 
A little later we’ll get the weekly report on oil and distillate inventories.  That report has moved the markets during the past couple of months, and the price of oil is up slightly this morning.
 
There are a smattering of earnings reports flying around this morning, but they won’t matter much to traders.  Time Warner beat estimates, but they’re cutting more jobs at AOL.  Hain Celestial missed their earnings number by a penny per share.  Cigna beat estimates but warned about the future.  Pepsi reaffirmed their earnings outlook.
 
Overseas markets are all trading higher, with Asian markets up almost one percent.  They’ve got nothing on our futures though.  Not much of a fair value adjustment this morning, so what you see is what we’ll get.  And what we’ll get is a pretty good rally at 9:30.  Adjusted for fair value, the S&P futures are up 14 points, Dow futures are up almost 100 points, and the Nasdaq futures are about 23 points above fair value.
 
November 2, 2004
 
It’s reportedly a totally divided electorate.  But no matter who we prefer for President, every investor would prefer that we have a clear winner by this time tomorrow morning.  Any extended contest of this election could have the same effect on stock prices as the Bush-Gore debacle, and if you can remember the stock market of four years ago – well – it wasn’t pretty.  The S&P 500 lost over 10% from Election Day through the end of the year.
 
While we wait for election results, we can entertain ourselves by watching the price of oil.  Oil futures are holding smack dab at 50 dollars per barrel this morning after a big slide yesterday afternoon, and that’s the morning’s good news.
 
Earnings warnings overnight from National Semiconductor and Forest Labs.  Locally, Masco beat estimates by 2 cents per share but warned that the fourth quarter earnings may come up a little bit short.
 
Stock markets in Japan and Hong Kong were up between 1 and 2 percent overnight.  European markets are solidly in the plus column by, on average, about a half percent.  We should get off to a slightly higher start at 9:30.  Adjusted for fair value, the S&P futures are up more than 2 points, Dow futures are up 21, and the Nasdaq futures are about 3 points above fair value.
 
November 1, 2004
 
Today’s the last day that the politicians run for election.  Tomorrow the lawyers take over.  All that investors are hoping for is a decision.  Any decision.  Anything but three more months of this.
 
We’ll get an unusually large number of economic reports for a Monday, as everyone tries to get out of the way of the election.  At 8:30 September personal income and spending numbers are expected to be up 3 and 6 tenths of a percent, respectively.  At 10 o’clock, we’ll get September Construction spending and the October ISM index, which measures manufacturing activity. It is expected to hold steady at last months reading of 58 ½.  Of course, anything above 50 indicates expansion in manufacturing.
 
Oil prices are up a little on the usual potpourri of potentially bad news; a country-wide power blackout in Kuwait and a threatened strike in Nigeria.  Currently we’re at 52.27 per barrel.
 

Asian markets were mixed.  European markets are up on the order of a half percent or more, although trading volume is very light in front of our election day tomorrow. Our stock futures look better than they did a couple of hours ago.  But at this point it looks like a flat open at best.  Adjusted for fair value, the S&P futures are up a fraction, Dow futures are up 3 points, but the Nasdaq futures are 2 points below fair value.

Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any other sponsors of our daily WJR reports.

September 30, 2004
 
The oil’s not boiling over this morning, and that was good news for stocks overnight.  Light sweet crude is under 50 bucks this morning, at 49.72.  The Nigerian rebels who threatened to make war starting today have decided to make nice for a while, announcing a truce.  Check back Monday for the “oil trouble spot of the week”.  In case you’re keeping score, in the past month or so problems in Iraq, Norway, Russia, China, Venezuela, Nigeria and the Gulf of Mexico, to name a few, have sent oil prices gushing.
 
Pepsico announced earnings this morning that beat estimates.  Not surprisingly, another tech company disappointed this morning, as Micron Technology missed their number.  Merck, the big drug maker, is holding a surprise press conference at 9 this morning, reportedly to announce a worldwide withdrawal of Vioxx.
 
The nine-day losing streak ended in Tokyo overnight with a modest gain.  European markets are up, mainly a half percent or less.  The weekly jobless claims number at 8:30 is expected to show a decrease of 5,000 claims.  That number could give us some direction.  But right now, the last market open of the quarter looks like a snoozer. Adjusted for fair value, the S&P futures are flat, Dow futures are down 18, and Nasdaq futures are about a point above fair value. 
 
September 29, 2004
 
It’s almost the end of the third quarter of the year.  So, it’s about time that we finally get the final number on economic growth in the second quarter.  That final Gross Domestic Product number will be announced at 8:30 and is expected to show an increase of a nice round 3 percent.  The most recent preliminary number was 2.8%.
 
The most watched number of the day, however, will no doubt be the level of crude oil and gasoline inventories in the U.S.   More declines are expected, especially in light of the never ending hurricane season.  Expect a decline on crude inventories of about 4 million barrels and a decline in gasoline inventories as well.
 
In the meantime, light sweet crude futures are holdings just below the 50 dollar per barrel level at this hour at 49.80.
 
Agere and Computer Associates announced another wave of job cuts this morning.  Motorola announced 1,000 layoffs yesterday.
 
Japanese stocks were down for the ninth session in a row overnight. European markets are mostly positive.  We’re in wait-and-see mode in front of that oil inventory data.  At this point, adjusted for fair value, the S&P futures are down less than a point, Dow futures are down 8 and Nasdaq futures are just about even with fair value. 
 
September 28, 2004
 
The newly redesigned and colorful 50 dollar bill goes on sale today.  And to mark the event, you can trade one in for a brand new barrel of oil.  Light sweet crude oil futures blew through the 50 dollar per barrel barrier this morning, hitting a high of $50.40, an all-time record.  Things have settled down a little, as Saudi Arabia announced that they will raise production from 9 ½ million barrels per day to 11 million barrels.  Just remember, that 15% increase comes just a couple of weeks after we were told that OPEC was producing at capacity.  I just mention that in case you are tempted to actually BELIEVE anything that these people are saying.
 
At 10 o’clock, the Conference Board’s Consumer Sentiment Index is expected to score about 99 ½, which would be an increase of a point or so over the August reading.
 
Our warning of the morning comes from Snap On Tools.  Great name for a company, but sales aren’t so snappy.  That’s a third quarter and full-year warning.  On the other hand, Pepsi Bottling and Valero raised their estimates this morning.
 
Asian markets were slightly lower, but European stocks are higher.   We should have a decent start at 9:30.  At this point, adjusted for fair value, the S&P futures are up almost 4 points, Dow futures are up 32 and Nasdaq futures are about 4 points above fair value. 
 
September 27, 2004
 
We may be missing all the hurricanes again this week, but look out for a storm of earnings warnings to come our way.  It’s the last week of the quarter, and earnings growth is clearly slowing down.  Of course, we knew that companies couldn’t keep growing earnings at 20 percent or more forever.  Nevertheless, a bucket of cold water to the >
 
Walgreen’s was evidently selling more cold water than they were throwing last quarter.  They beat estimates by a penny per share.
 
We’ll find out how many new homes were sold in August at 10 o’clock this morning.  It’s expected that the number rose slightly from the July pace.  Fannie Mae, one of the reasons home mortgage loans have been so affordable (and housing prices have run so high) is facing a lot of accounting questions from its regulator.  Just how much funny accounting is found and the scope of the corrective action could throw a curve at the mortgage financing market.
 
Light sweet crude futures are above 49 bucks again this morning, and that’s put a crimp in stocks prices overseas.  We’ll likely get off to a bum start as well.  At this point, adjusted for fair value, the S&P futures are down about 1 ½  points, Dow futures are down 16 and Nasdaq futures are about 5 points below fair value. 
 
September 24, 2004
 
Want more tax cuts?  All we have to do is have more elections.  With the election just 40 days away, Congress passed a 146 billion dollar tax bill yesterday.  It’s mainly just a rollback of tax increases that were scheduled to kick in next year.  All the same, it’s more money in your pocket soon and, arguably, a bigger deficit later.  Of course, when you rob Peter to pay Paul, you can always count on Paul’s support.
 
Another day, another warning in the semiconductor chip sector.  Philips cut their forecast this morning, but evidently it wasn’t as bad as traders had feared. Philips is trading higher in Europe, where markets are mixed this morning.  Asian stocks were down fairly sharply overnight.
 
The August Durable Goods Report rolls out at 8:30 this morning.  Expect a decline of four tenths of one percent.  We’ll need a pleasant surprise in Durable Goods if we’re going to get off on the right foot this morning. 
 
The futures may look positive, but don’t believe it.  After you adjust for fair value, the S&P futures are down about a half point, Dow futures are down 4 and Nasdaq futures are about 2 points below fair value. 
 
September 23, 2004
 
Oil prices are up another 4 cents per barrel this morning.  Yesterday, the spike in the price of light sweet crude to almost 49 dollars a barrel sent stock prices down a very slippery slope.  The Dow Jones Industrials will open this morning at a 4 week low.
 
The only significant economic report of the day will be released at 10 o’clock.  The August Index of Leading Economic Indicators is expected to be down 2 tenths of one percent, which would be a little bit better than July, but still nothing to get excited about. That index also fell in June, so a negative number today would make it three in a row.  At 8:30, we’ll also get the weekly jobless claims, which are expected to rise about 5,000, to a level of 338,000.
 
No trading in Japan today.  Yes, it’s another holiday. I want their schedule. European markets a down about one percent following up on our big losses of yesterday.
 
The futures are in better shape than they were a couple hours ago, but still point to a slightly lower open for the market.  At this point, adjusted for fair value the S&P futures are down about a point, Dow futures are down 17 and Nasdaq futures are just a fraction of a point below fair value. 
 
September 22, 2004
 
Word is that there’s a big clearance sale coming.  Those $4,000 to $5,000 incentive programs to move General Motors’ 2004 inventory haven’t done the trick, so GM will reportedly offer zero percent interest 6 year loans on cars sold during the last three days of this month.   Of course, if that doesn’t work, Oprah will be doing her show all through October, so you never know what they’ll try next.  Cadillac, Saab, Hummer and Saturn models will not be eligible.
 
It’s a mixed picture of earnings this morning.  Kodak pretty much reaffirmed their guidance for the year, although the film business is fading quickly in favor of digital photography.  Federal Express met estimates.
 
On the flip side, AutoZone came in a bit shy of estimates and Wendy’s warned that it won’t be a biggie-quarter, due to sales lost to bad weather. Evidently, nobody likes to sit at a drive-thru window in a hurricane.
 
The market rallied nicely into the close after the Federal Reserve’s announcement yesterday, but it looks like we may give most of it back within the first fifteen minutes this morning.  At this point, adjusted for fair value the S&P futures are down about 4 ½ , Dow futures are down 35 and Nasdaq futures are about 9 points below fair value. 
 
September 21, 2004
 
The Federal Reserve Open Market committee meets today, although they might as well just mail it in and head for the golf course.  The Fed governors have been dropping hints left and right, leaving little doubt that short term rates will head north by another quarter of one percent.  We’ll find out at 2:15 this afternoon.
 
This interest rate increase campaign has had the interesting effect of calming the long-term bond market.  That results in lower mortgage rates for new mortgages.  However, if you’ve already closed on a variable rate loan, these rising short term rates will not be great news for you when your teaser rate-lock period expires.
 
General Mills reported earnings than fell a nickel short of expectations this morning.  The good news is that they reaffirmed their full-year guidance.  The bad news is that that guidance is about 10 cents per share light of what Wall Street is expecting.
 
European markets are still celebrating the Ryder Cup.  They’re up pretty much across the board.  We should rise a little at 9:30 as well, subject to the report on August Housing starts at 8:30.  At this point, adjusted for fair value the S&P futures are up almost 3, Dow futures are up 16 and Nasdaq futures are about 4 ½  points above fair value. 
 
September 20, 2004
 
Oil prices continue to set the direction for stock prices, and this morning that direction is down.  Russia’s Yukos oil company says that it is having trouble sending oil to China by rail.  Evidently the railroads want to get paid, and the Russian government has frozen Yukos’ accounts.  That, and the continuing hurricane season have sent this morning’s price for light sweet crude close to 46 dollars a barrel.
 
We could also see a little storm of earnings warnings during the next couple weeks.  We only have eleven days left in the 3rd quarter, and the number of companies failing to hit estimates is likely to be a lot higher than in the past few quarters.  This morning, PMC-Sierra, Unilever and Colgate are all out with warnings.
 
Stocks did not trade in Japan overnight.  They took the day off for a holiday called “Respect of the Aged Day”, the celebration of which makes more and more sense to me as each year goes by.  European markets SHOULD have taken the day off.  They are down about one percent on the oil price news.  We will get off to a bumpy start as well.  At this point, adjusted for fair value the S&P futures are down 4, Dow futures are down 26 and Nasdaq indexes are about 8 points below fair value. 
 
September 17, 2004
 
A little good news and a little bad news from Ford Motor Company this morning.  Let’s take the good news first.  Ford is raising their estimate for third quarter earnings from near breakeven to about 10 to 15 cents per share based on great performance in their lending business.  They are also raising estimated profit for the year to about a buck ninety-five from a buck eighty-five.  However, Ford will take a 450 million dollar charge, 375 million of it in this year.  That charge, of course, doesn’t show up in the operating earnings number and reflects job cuts and Ford’s exit from Formula One.  Based on pre-market bids, Ford may open up about 50 to 60 cents per share.
 
At 9:45, the preliminary September Consumer Sentiment number will be announced by the University of Michigan.  Expect a slight increase in that index to a level of 96.7.
 
Oil’s up about 40 cents this morning, again above the 44 dollar level.  Japanese stocks were down a bit overnight, but all other overseas markets are positive.
 
We should get off to a good start as well.  At this point, adjusted for fair value the S&P futures are up 3, Dow futures are up 29 and Nasdaq indexes are about 3 points above fair value. 
 
September 16, 2004
 
One of the things you learn about in auditing 101 is the “going concern opinion”.  It’s not a good thing, and an auditor uses it only when it looks like a company is headed south in a hurry.  Delta Airlines’ auditor has seen enough, and is warning that there are doubts that Delta can continue business outside of Chapter 11.
 
The big economic report of the day will be the August Consumer Price Index.  Expect a rise in core and overall inflation of 2 tenths of one percent.  The Philadelphia Fed Survey will also draw some attention at noon today.
 
Nortel and Herman Miller are out with warnings about future results this morning.  As we head into the fourth quarter of the year, the prior year comps will get a lot tougher, and warnings could become a big part of our daily diet.
 
The August CPI report at 8:30 may give us some direction, but at this point the futures on S&P, Dow and Nasdaq indexes are all within a point of fair value. 
 
September 15, 2004
 
If you are a hockey fan, today’s the day to be on the lookout for a lockout.  If you’re a stock market fan, the game you’ll be watching today is the Hurricanes versus the Oilers.  As Hurricanes Ivan and possibly Jeanne bear down on the Gulf of Mexico, the oil rigs and refinery plant shutdowns could put more pressure on oil prices.  Ivan has already shut 60% of oil production in the Gulf.
 
Meantime, OPEC is meeting in Vienna and is widely expected to increase their production ceiling by a million barrels per day.
 
There are a couple of earnings warnings this morning. Coca-Cola, whose stock has slid by about 20 percent over the past couple of months, warned that projected 3rd quarter earnings of 54 cents per share have fizzled.  They now expect 47 cents. The Tribune Companies also out with a warning this morning.
 
The futures were pointing up a couple of hours ago, but that warning out of Coke changed all that.  At this point, adjusted for fair value, S&P futures are down almost 2 ½, the Dow futures are down 13 and the Nasdaq futures are about 8 points below fair value. 
 
September 14, 2004
 
Oil prices are up again, at 44.63 per barrel, on news of another pipeline bombing in Iraq and the threat Hurricane Ivan poses to the oil rigs in the Gulf of Mexico.  That will hold us back from what might otherwise be a pretty strong opening for stock prices.
 
The big economic number for the day, outside of the price of oil, will be the report on August Retail Sales.  It’s expected that overall retail sales dipped a tenth of one percent.  However, if you remove the big expected decline in car sales, retail sales are expected to have actually gone up 2 tenths of a percent.  I don’t know how anyone can be expected to sell any cars now that Oprah’s started giving them away.
 
Pier One beat their earnings estimate by a penny, but that estimate had been lowered several times in the past couple months, so it really doesn’t much matter.
 
What will matter to the open is the retail sales number at 8:30. But for now, the futures are pointing toward a slightly positive market at 9:30.  Yes, I know they look negative on the sur>
 
September 13, 2004
 
They used to be called Allegheny Airlines.  Remember that? That was 25 years ago.  25 months ago, they first filed for bankruptcy court protection.  Well, over the weekend they filed for Chapter 11 protection again.  Now the question becomes – If they come out, how long can US Airways survive?  With United already in Chapter 11 and other legacy air carriers likely to follow, the impact of higher oil prices and discount airline competition may well bring down any traditional airlines that cannot dramatically lower their costs.
 
Walmart’s weekly sales numbers were released about an hour ago, and they are no surprise.  Same store sales are up 2 to 4 percent.
 
A big merger in the advertising world this morning as the WPP Group will buy Grey Global for about 1.5 billion dollars.
 

Asian markets did very well overnight. European markets are also up about one percent.  We’re looking for slightly higher prices at 9:30. Adjusted for fair value, S&P futures are up 2, the Dow futures are up 17 and the Nasdaq futures are about 3 ½ points above fair value. 

 

September 10, 2004

 
We have a lot of little bits of news to ponder this morning, and not a lot of it is very good.  Yesterday Alcoa warned that a fire, a strike and some plant closings will cause their quarterly earnings to fall way short of estimates. They’re talking 32 cents per share versus and expected 52 cents.
 
Over in Japan, a downward revision to their second quarter Gross Domestic Product number hit the Nikkei index overnight. 
 
Oil is pushing back to near 45 dollars a barrel this morning, as Hurricane Ivan threatens all those oil rigs in the Gulf of Mexico.
 
EDS is considering cutting 10 percent of its workforce over the next two years.
 
How about some good news?  Well, the weather will be nice today.  And maybe the Producer Price Number at 8:30 will come in at less than the expected 2 tenths of a percent increase.  Let’s hope for the best.
 
In spite of all that downbeat data, the futures are only marginally lower at this point.  Adjusted for fair value, S&P futures are down a point, the Dow futures are down 16 and the Nasdaq futures are about even with fair value. 
 
September 9, 2004
 
Texas Instruments lowered their revenue estimate after the close of trading yesterday, but they raised their earnings estimate for the quarter.  That news should help boost the stock price this morning, if the after-market action last night is any indication.  Texas Instruments was up over one percent after hours. Corning reiterated their outlook, and traded up about 3 ½ percent in the evening session.
 
Crackerbarrel Restaurants (you’ll see a lot of those on the drive down to South Bend this weekend) beat estimates this morning, although revenue was a little light. 
 
At 8:30 we’ll get the weekly jobless claims number.  It’s expected that claims went down last week to a level of about 345,000.  Also coming a little later is the weekly report on oil and gas inventories.
 

This is one of those mornings that the futures look pretty weak on the sur>

 

September 8, 2004

Alan Greenspan will sit before a Congressional Committee and talk about what he did on summer vacation.  Traders will want to know how his trip to the “economic soft patch” went, and whether the “interest rate roller coaster” we are all riding is about to get to the really scary part.
 
A little later in the day, the Fed will release their ever-fashionable “Beige Book” which is a survey of economic conditions in twelve different regions across the country. 
 
There’s a report out this morning that General Motors is about to throw an additional 500 to 1,000 dollars on the hood, as they try to move some inventory.
 
No cash on the hood at the luxury retailers.  Neiman Marcus and Coach both with good earnings reports yesterday.  Coach is boosting guidance for next quarter.
 
After the close of trading today, Texas Instruments will give their mid-quarter update.
 
Asian markets were down a bit overnight.  European markets are absolutely flat at this hour.  Our futures have been negative all morning, but have been creeping back toward even during the past hour.  Right now, adjusted for fair value, S&P futures are down about a point, the Dow futures are down 13 and the Nasdaq futures are less than a point below fair value. 
 
September 7, 2004
 
Labor Day’s done.  It’s back to work. Here’s your quiz to see if you learned anything on summer vacation:  “If the price of oil goes down, stock prices go (blank).”
 
If you answered “up”, not only have you been paying attention the past couple of months, you get the gist of what’s going on in the markets today.  Light sweet crude is down almost a dollar per barrel as Saudi Arabia is cutting prices, right around 43 bucks.  That’s going to set off a little rally in stock prices at 9:30.
 
Of course, for every party, there has to be a party pooper.  A major brokerage firm this morning is cutting their outlook for the computer semiconductor industry.  You see, now that the price of Intel stock is down about 40 percent since the beginning of the year, there’s something there that suddenly looks like a problem for the chip companies.
 
Japanese stocks have had a nice run the past couple of days while we were at the beach.  European markets are fairly flat at this hour.  But it looks like green arrows will rule at the open in New York.
 
Adjusted for fair value, S&P futures are up 5, the Dow futures are up 44 and the Nasdaq futures are about 9 points above fair value. 
 
September 3, 2004
 
We’re going to need a job jobs report at 8:30 this morning, because of the news from Intel last night.  Intel lowered their revenue estimates for the current quarter because of weak PC demand.  The midpoint of the prior revenue estimate was 8.9 billion dollars.  The news estimate is about 8.4 billion dollars, and profit margins will shrink from 60% to 58%.  After hours, the stock was down 8%, to below 20 bucks.  By the way, that’s the same price at which you could have bought Intel 7 ½ years ago.
 
The big number of the day, of course, is the Unemployment Report.  Expect an unchanged unemployment rate of 5 1/2 percent.  Estimates of job growth are all over the place.  The average estimate is an increase of 150,000 jobs.
 
Asian markets were down overnight on the Intel news.  European markets are flat at this hour.  We’re waiting for the jobs report at 8:30, but at this point, adjusted for fair value, S&P futures are down 3 ½ , the Dow futures are down 19 and the Nasdaq futures are about 11 points below fair value. 
 
September 2, 2004
 
August retail sales reports are rolling in, although it’s hard to know what to make of them.  The King of the Mountain, WalMart says that Walmart stores same store sales barely budge last month.  The Sam’s Club division did a little better, gaining 2.7%.  They now forecast September same store sales set to increase between 2 and 4 percent.  That’s better than the last estimate.  However, 3rd quarter profits will come in at the low end of the previous range of estimates.
 
Costco sales went up 4 percent, and Best Buy was us 4.3 percent, although it was expected that both would do a little better than that.
 
The big story of the day for stocks, outside of the price of oil, which is up another 54 cents this morning at $44.54, will be Intel’s mid quarter update.  That will happen right after the close of trading tonight, so tomorrow morning could be a lot more interesting than this morning. 
 
We’ll get the weekly jobless claims at and the 2nd quarter productivity numbers at 8:30.  Expect a decline of 6,000 in new unemployment claims.
 
Our futures are in a lot better shape than they were in a few hours ago, but for the third morning in a row, there’s just not a lot of movement here.  For the third morning in a row, the S&P, Dow and Nasdaq futures are all within a couple points of fair value. 
 
September 1, 2004
 
Welcome to the first day of September.  September has a well deserved reputation for being a stinker for the stock market.  But, of course, the one thing you can always be sure of -- is that you just never know.
 
Speaking of stinkers, yesterday’s Chicago Purchasing Manager’s Index came in weaker than expected, so don’t expect great things out of the August ISM Index, which will be released at 10 o’clock this morning.  The consensus estimate is a reading of 60, but based on the ISM yesterday, we could be a few points lower than that.
 
There are unconfirmed reports of a pipeline fire in northern Iraq, and although te pipeline in question hasn’t been producing much for a while, oil prices are up about a half dollar this morning.
 
We’ll be getting car sales numbers all day long as well, so keep an eye out for those.
 
Overseas stocks are doing very well after our late rally yesterday, but domestic stocks look to be waiting for more news before picking a direction.  For the second morning in a row, the S&P and Dow futures are just about even with fair value.  The Nasdaq futures are down about 3 points.
 
 
 

Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any other sponsors of our daily WJR reports.

December 31, 2004
 
This time of year the airwaves are filled with the “expert” predictions of what investments will outperform in 2005.  Before you waste any time or money paying attention to these prognostications, think about the “conventional wisdom” of a year ago.
 
It was pretty much agreed that since short-term interest rates were headed up, long term rates would follow suit, as bond investments would get crushed.  Didn’t happen.  Long term rates stayed pretty much in place.  Bonds weren’t great, but they weren’t a disaster.
 
It was pretty much agreed that small cap stocks had outperformed for so long, that the large-cap, dividend-paying stocks were the place to be.  Uh-uh.  Smallcaps again trounced largecap throughout the year.
 
Everybody knew that real estate prices were in a bubble, and that equity REITs were to be avoided.  Sorry, just another great year for real estate.
 
A year ago, after a great 2003, the best stocks for conservative investors to buy were the big, money-churning pharmaceutical stocks like Merck and Pfizer.  You know what happened there.
 
Sum it up by realizing that anyone you hear on the radio or see of TV at this time of year making 2005 predictions is about as good at fortune telling as you are.  Stay diversified, in accordance with your near term need for cash.  Avoid making dramatic moves and don’t chase the hot stock of the month.  You’ll be a lot better off in the long run.
 
Once again this morning, there’s not much shaking with the futures.  Adjusted for fair value, the S&P futures are up a point, Dow futures are up 12, but the Nasdaq futures are about a point and a half above fair value. 
 
December 30, 2004
 
The last economic reports for the year roll out today.  At 8:30, the weekly jobless claims report is expected to show a decline of 1,000 first time claims for unemployment benefits.  Then at 10 o’clock, the Chicago Purchasing Manager’s Index is expected to finish the year at 63, which would be down a bit from last month’s 65.2.
 
Outside of that, there’s not much going on – and the less we hear – the better.  Although some companies will no doubt warn about their quarterly earnings in the first week of the new year, but so far, the warnings have been few and far between – and that’s a good thing.
 
Trading is done for the year in a handful of overseas markets.  In Japan the Nikkei finished up almost 8 percent for the year.  Italian stocks rose 14% and stocks in Spain rose 19% for the year.
 
At this point, our stock futures are all positive, but not by very much.  Adjusted for fair value, the S&P futures are up a point, Dow futures are down a point, and the Nasdaq futures are about 2 points above fair value. 
 
December 29, 2004
 
A big spike in the consumer confidence number yesterday sent us higher and higher at the day rolled on.  It looks like the Dow Jones Industrial Index has a reasonable shot at closing out the year at the 11,000 level.  We’re less than 150 points away.
 
Oil and distillate inventory data reports have moved oil and stock prices in recent weeks, so watch those markets at 10:30 this morning.  It’s expected that U.S. inventories of distillates fell by about 700,000 barrels in the past week.  If they instead rose once again, look for a dip in oil futures and a rise in stock prices.
 
Sales of used homes in November were probably unchanged from the October level.  We’ll find out a t 10 o’clock.  But mortgage applications slowed a bit last week, according to the Mortgage Bankers Association, as refinancing activity slowed.  We’ll see what happens after credit card statements arrive in January.
 
Overseas, stock prices are mixed this morning. We’ll probably see a little profit taking at the open, given yesterday’s big rally.  At this point, adjusted for fair value, the S&P futures are down a half point, Dow futures are down 14, and the Nasdaq futures are about 2 points below fair value. 
 
December 28, 2004
 
The question of the day is confidence.  How confident are you about 2005?  The Conference Board’s Consumer Confidence Index has been declining for four months in a row.  But at 10 o’clock this morning, we’ll see if that losing streak comes to an end.  Expect a reading of about 94.  That would be up nicely from November’s 90.5.
 
Of course if you’re not confident about 2005 because you’re in need of a job, you may want to apply for the CEO position at Fannie Mae.  The guy who just got the heave-ho there, Franklin Raines, has about 8.7 million dollars of deferred compensation coming his way.  He’s also been awarded a pension.  The exact amount is still in question.  However, as it stands right now, it will be in the range of 1.3 to 1.4 million dollars per year.  Barely enough to get by on, I know, but the Office of Federal Housing Oversight may want to do more than just rubber-stamp this deal.
 
Oil is at 41.16 after a big drop in price yesterday. Japanese stocks were up about a third a one percent overnight, but other overseas markets are mixed, and really not moving much in either direction.  Our futures are lower than they were earlier this morning.  But at this point, we’re looking for slightly higher prices at 9:30.  Adjusted for fair value, the S&P futures are up less than 3 points, Dow futures are up 22, and the Nasdaq futures are about 3 points above fair value. 
 
December 27, 2004
 
This is almost always a pretty good week for stock prices.  In fact, over the past 30 years or so, the Dow Jones Industrial Average has averaged just about a one percent increase during the five trading days between Christmas and New Years Day.
 
We won’t really have a good picture of how the retailers did this Holiday Season for at least another week or two.  A couple of things are already known; online shopping was up about 30 percent and things were pretty firm at the high-end retailers. Coach, for instance, saw same store sales rise about 25 percent.  Things were not so good at Sharper Image.  They are lowering their guidance significantly this morning.
 
There were also a lot of gift cards bought this year.  Because of retail accounting rules, those sales don’t show up in the retailers’ revenue numbers until the card are actually used, and that could really boost the January numbers.
 
The FTSE in London is closed today for Boxing Day. Markets are also closed in Australia, Ireland, New Zealand, Hong Kong and the Philippines, and there will be no trading in Canada today.  The U.S. stock market will have a full schedule this week, although the bond market will close early on Friday.  It looks like we’ll start thing off with some Christmas Cheer.  At this point, adjusted for fair value, the S&P futures are up 3 ½ , Dow futures are up 26, and the Nasdaq futures are about 5 ½ points above fair value. 
 
December 24, 2004 - U.S. Markets are closed.  Merry Christmas everyone!
 
December 23, 2004
 
The Russian government continues to define “their” approach to capitalism. It kind of reminds one of how the female praying mantis approaches mating.  After sticking the oil Yukos oil firm with a prohibitive tax bill and forcing it into insolvency, the Russian government has now effectively devoured the company.  If you go to the dictionary and look up the word “paranoid” this morning you might see the picture of the CEO of pretty much any big Russian conglomerate.
 
This is it for the week as far as the U.S. markets are concerned.  Financial markets will be closed tomorrow for Christmas Eve, and we’ll wind up the week with a big batch of economic reports this morning.  The November Personal Income, Personal Consumption, New Home Sales, and Durable Goods numbers will all roll out by 10 o’clock.  We’ll also get the University of Michigan’s December Consumer Sentiment Index.  Look for a reading of 95.7.  Anything better than that, or any further drop in the price of oil, like we saw yesterday, could send us into the Holiday with another nice rally.
 
Oil is down another 28 cents again this morning. Most overseas markets are in the green.  We are still in wait-and-see mode in front of all those economic reports.  At this point, the Dow, S&P and Nasdaq futures are once again all just about even with fair value.  Merry Christmas, everybody! 
 
December 22, 2004
 
Santa Claus showed up on Wall Street yesterday.  The Santa Claus rally, that we have become so used to over the past 25 years or so, may have started yesterday.  Unexpectedly high trading volume for a holiday week was also a good sign.
 
The SEC is meeting at 10 o‘clock this morning.  It’s an unusual meeting in this day and age of “full disclosure” regarding investment advice. The SEC is expected, perhaps with some modification, to adopt a previously informal rule that shields salesmen, who call themselves “financial advisors” from disclosing their conflicts of interest to their clients. A lot of big brokers are hoping they do adopt that rule. Let’s hope they do the right thing for the investing public.
 
Office Max is out with a disappointing sales report, as is Solectron.  There are a lot of little “Blackberries” running around though.  Sales doubled as Research in Motion beat estimates for last quarter, tightened their estimates for the current quarter raised their guidance for next quarter.
 
The weekly report on U.S. oil and distillate inventories comes out this morning.  Lately, that’s been a bit of a market mover, but at this point, we’re looking for pretty stable prices at the open.
 
Hong Kong stocks were off a little, but most all other overseas markets are up at this hour.  Oil futures are down 20 cents.  At this point, the Dow, S&P and Nasdaq futures are all within a point or so of fair value. 
 
December 21, 2004
 
If you’re a major drug maker this morning, you may be reaching for an aspirin.  Think about that one.  After the Vioxx scare and the Celebrex scare, we now have an FDA warning about Aleve, and an advisory to take it only in recommended doses for not more than ten days.  Aleve is produced by German drug maker Bayer.  Celebrex, by the way, was included in the same study.  Although the study was never completed, no cardiovascular problems were noted during the study with Celebrex.
 
Pfizer, the maker of Celebrex, is down almost 17% over the past two trading days.  We’ll see what happens to Bayer today.
 
Investment houses Bear Sterns and Morgan Stanley each beat earnings and revenue estimates this morning.  General Mills and Research in Motion, that “blackberry” company will report in a little later.
 
Overseas, markets are not moving by much.  Oil futures are pretty much unchanged.  Our stock futures are lower than they were early this morning, but we’re still looking for higher prices at 9:30. Adjusted for fair value, S&P futures are up about 2 ½ points, the Dow futures are up just a bit more than 30 points and the Nasdaq futures are about 7 points above fair value. 
 
December 20, 2004
 
It will be a short week of trading, and just as with the freeway traffic, we should see very light volume. But it looks like it will get off to a good start, especially if you are sick and tired of watching Celebrex ads on television.
 
Pfizer is pulling all Celebrex advertising after last week’s test results which potentially link the drug to an elevated risk for heart attack.  Some brokerage firms are now revising their earnings estimates for Pfizer.  Pfizer says it has no plans to withdraw Celebrex from the market.  Of course, the FDA has yet to be heard from, but a statement from the FDA on all Cox-2 inhibitors is expected before the end of the year.
 
At 10 o’clock, we’ll get the November Leading Economic Indicators.  Expect a tiny increase of a tenth of one percent, versus October’s decline of three tenths of a percent.
 
Asian markets were up, Hong Kong in fact was up overnight more than 1 ½ percent.  Major European markets are up between a half and one percent at this hour.  We’ll be heading north at the opening bell as well.  Adjusted for fair value, S&P futures are up almost 6 points, the Dow futures are up 52 points and the Nasdaq futures are about 12 points above fair value. 
 
December 17, 2004
 
In ten minutes we’ll find out how much we paid for stuff in November.  The November Consumer Price Index is expected to have risen about 2 tenths of a percent.
 
It’s quadruple witching day as lot of options expire.  But if you’re not on options kind of guy (or gal) there’s not a whole lot on the docket today.  So, expect your internet connection to slow down this afternoon as everyone jumps on to get their Christmas shopping done.
 
Evidently, people that have done that so far have been buying lots of stuff, but not as many PalmOne products as expected.  PalmOne reported earnings that matched estimates, but warned that sales for the current quarter will fall short.  So, PalmOne stock will be on sale this morning.  PalmOne was down 2 ½ percent yesterday and lost over 6 percent after hours last night. Leapfrog Enterprises also out with a warning, and AtsraZeneca will trade down after a disappointing drug test.
 
That CPI release at 8:30 may set the direction for the early trade.  The stock futures are lower than they were earlier this morning.  But although they appear negative to the untrained eye, at this point they’re indicating a mixed picture for stocks when trading starts at 9:30.  Adjusted for fair value, S&P futures are down less than a point, Dow futures are up a fraction, but the Nasdaq futures are about 2 points above fair value. 
 
December 16, 2004
 
We’re getting close to “quiet time”.  There’s a week or so after “earnings season” ends and “earnings warning season” begins, and today we’re getting the last gasp of earnings reports today, including FedEx, Nike and Kb Home.
 
It may not be quite as “quiet” this time around.  The urge to merge it taking hold, and word is that the pipeline is full of deals in the works.  This morning the deal between Symantec and Veritas software is official.  That’s a stock swap, with Symantec getting a 60% share.  Johnson & Johnson’s acquisition of Guidant is also official.  That’s a cash and stock deal. Guidant shareholders should get about 76 billion in value. But while the deal is official, the marriage may not take place.  Anti-trust regulators will still have to bless this one as not being anti-competitive.
 
The Weekly Jobless Claims Report rolls at 8:30 this morning, and we’ll get the November Housing Starts report at the same time.  But absent any big surprises there, we shouldn’t see a lot of price movement at 9:30.
 
Adjusted for fair value, S&P futures are down less than a point, the Dow futures are down 4 points but the Nasdaq futures are just a fraction above fair value. 
 
December 15, 2004
 
The theme of the day seems to be – no surprises.  A lot of predicted events have come to pass in the last 18 hours or so, and markets around the world are in pretty good shape.
 
How’d you like a job as a member of the Federal Reserve Open Market Committee?  You show up for work for one morning every six weeks or so, you have lunch, you issue the same old memo, and you do what everybody knew was going to get done anyway.  No surprises there yesterday.
 
The Tankan index, which is a survey on Japanese manufacturing came in at 22 overnight.  That’s down from 26 in September, but – the expected reading was 22. No surprises there.
 
Sprint and Nextel formally announced their merger this morning.  Knew about that too.
 
And to top it all off, the National Hockey League owners and players are still at an impasse.  Not only did we already know – we don’t really care anymore.
 
So, add it all up, and just about all overseas markets are up, and we’re looking to open modestly higher as well.  Adjusted for fair value, S&P futures are down just a fraction, the Dow futures are up 8 points and the Nasdaq futures are about 5 points above fair value. 
 
December 14, 2004
 
The mini-wave of corporate mergers continues this morning.  Expect a lot more in the weeks to come.  There’s reportedly a big deal is cooking in the software business with Symantec looking to pick up Veritas Software.  There’s also word that Verizon may crash the altar at the anticipated marriage of Sprint and Nextel.  The engagement announcement is expected tomorrow.  Then the soap opera will begin.
 
Short term interest rates will take another quarter point pop at 2:15 this afternoon.  The only drama here is whether the Fed’s “statement” will change at all from six weeks ago.  Don’t bet on it.
 
Pier One told us that the third quarter would be lousy.  That lived up to that promise.  Same store sales were down 6.3%.  Not to be outdone, Pier One says that sales should decline by about the same percentage in the fourth quarter.
 
GE and Merck both hold meetings with analysts today.
 
Asian stocks were two thumbs up overnight. European stocks are mixed. Our futures started the morning in the hole, but have been improving.  Although they still look negative on the sur>  S&P and Nasdaq futures are actually positive.  But at this point it’s no biggie as the S&P, Dow and Nasdaq futures are all within a point or two of fair value. 
 
December 13, 2004
 
We won’t have to wait very long for economic news that may move stock prices this morning.  In just about ten minutes we’ll find out how busy retailers were in November.  It’s expected that overall sales were down just a tenth of a percent, but excluding car sales, thing might have been better.
 
Outside of that, it’s shaping up to be a good old-fashioned Merger Monday.  After a year and a half of offers, rejections, poison pills, anti-trust rulings, lawsuits, proxy battles and related hissy-fits, People Soft has finally agreed to be acquired by Oracle.  The price is a little higher, at 26.50 per share.  It may be worth it.  This morning, both PeopleSoft and Oracle beat earnings estimates for the quarter gone by. Both stocks are up in pre-market trading.
 
By the end of the day, we could get final deals for Johnson & Johnson to buy Guidant and for Sprint to buy Nextel.  With a lot of big American multinationals repatriating profits at cheap tax rates because of the recent tax bill, expect that we’ll see more of this in the year to come.
 
Oil is down a touch, overseas stocks are up pretty much across the board.  At this point, we’re looking for a good start as well.  Adjusted for fair value, S&P futures are up almost 3 points, Dow futures are up 22, and the Nasdaq futures are about 8 points above fair value. 
 
December 10, 2004
 
We’ll get a lot of economic information today and there are a couple of big mergers brewing.  But the early going in the stock market could be pretty bumpy thanks to our good friends at OPEC.
 
The oil cartel will reportedly cut production by a million barrels per day to prop up oil prices.  Of course, you never know what they’re really going to do, since they cheat on every quota they set anyway.  Nevertheless, oil futures are up 56 cents, back over 43 bucks per barrel.
 
Delphi lowered their earnings guidance for next year and announced a restructuring this morning.  They’ll be cutting the payroll by 8,500 workers.
 
At 8:30 we’ll find out about inflation at the producer level.  The Producer Price Index is expected to rise a tenth of one percent.  At 9:45 the University of Michigan will give us its preliminary reading on December Consumer Sentiment, which is expected to rise a little to 93.5.
 
In front of all that, the futures are just about as bad as they were 24 hours ago.  At this point, adjusted for fair value, S&P futures are down about 3, Dow futures are down 34, and the Nasdaq futures are about 7 points below fair value. 
 
December 9, 2004
 
There’s a wake up call for all of us this morning – and especially for younger workers.  You had better be in charge of saving and investing for your future, because what your parents took for granted may not be available to you.
 
IBM, which for years boasted one of the best employee benefit packages of any company, is reportedly planning to shut off its defined benefit pension plan to new workers.  They will reportedly offer a highly matched 401(k) plan only.  IBM says that they are only adjusting their total compensation package to be competitive with other companies.  You have to wonder, if IBM is taking that step, how it will be before the traditional pension plan is a thing of the past at all companies for all new workers.
 
Costco reported quarterly earnings in line with estimates this morning on a 10% rise in sales.  Toll Brothers, the big home builder, once again blew away estimates, earning $2.22 for the quarter versus and estimated dollar ninety-seven.
 
The Bank of England decided to hold interest rates steady this morning.  Overseas stock markets are weak and our futures have been sinking all morning.  At this point, adjusted for fair value, S&P futures are down 4, Dow futures are down 37, and the NASDAQ futures are about 13 points below fair value. 
 
December 8, 2004
 
Yesterday broke the mold of recent trading.  Oil was down over a buck, yet stocks sank across the board.  Oil futures are down again this morning, below 41 bucks per barrel at 40.83, but so far the stock futures are holding their own.
 
Later this morning, we’ll find out about oil inventories in the U.S.    It is estimated that oil inventories are down by 300 million barrels, but gas and distillate inventories are up by 1.9 and 1.6 million barrels, respectively.
 
Just when you’ve been told that sales incentives were winding down, General Motors is saying, “Okay, Merry Christmas, you asked Santa to throw more money on the hood, so here we go.” The new “Red Tag” sale will last through January 3rd.
 
IBM has finally offloaded its PC research, development and manufacturing business.  This deal has been in the works for a while.  Chinese firm Lenovo will own the business, IBM will own 19.8% of Levono.  It’s a one and three quarter billion dollar deal.
 
Stock futures are off their highs of the morning, but at this point we’re still looking for a mildly positive start on Wall Street.  Adjusted for fair value, S&P futures are up about a half point, Dow futures are up 6 1/2, and the Nasdaq futures are about 3 ½  points above fair value. 
 
December 7, 2004
 
According to a report in the New York Times, two of the leaders in the medical stent market may be getting together.  Johnson and Johnson, which makes a drug-coated stent, is reportedly in talks to buy Guidant.  Many believe that Guidant’s stent delivery system is superior, but they haven’t yet gotten approval for a drug-coated stent.  So, putting the two together seems to make a lot of sense.  The price tag is reportedly around 24 billion dollars, and J&J is reportedly talking about a mainly cash deal.
 
Credit Suisse First Boston, that’s “CSFB,” will restructure operations and drop “First Boston” from their name.  Apparently “CSFB” sounded too much like a disco band from the seventies.
 
Colgate Palmolive will be cutting 12 percent of their workforce over the next couple of years, and take a 650 million dollar after tax charge.
 
Oil is up from yesterday morning, but down about 23 cents from last night’s level.
Asian stocks slumped overnight, but European markets are up about a half percent. Our futures have been improving all morning long and just turned positive within the past half hour.  Adjusted for fair value, S&P futures are about 2 points, Dow futures are up 10, and the Nasdaq futures are about 3 ½ points above fair value. 

December 6, 2004

After dropping about 14 percent last week, oil prices are ticking up this morning, although not by very much, given the headlines.  Light sweet crude is up about 53 cents to 43.07 per barrel after the overnight attack on a U.S. consulate in Saudi Arabia, a protest in Nigeria and an upcoming OPEC meeting this Friday.
 
It’s going to be a relatively quiet week for earnings and economic announcements.
 
Walmart said this morning that Santa has been missing in action so far.  December sales are projected to rise only 1 to 3 percent.  Walmart tried to hold the line on early discounting this Holiday season, and it looks like they’ll be playing catch-up the rest of the month.
 
Pfizer is the recipient of another broker downgrade this morning.  Apple received a broker upgrade.  Both calls giving rise to the question: “Hey, why didn’t you tell me that two years ago?”
 

It’s another one of those mornings that the futures look better than they really are.  Futures on the S&P, Dow and Nasdaq are down, and they have all been down all morning long.  Adjusted for fair value, S&P futures are down about 3 points, Dow futures are down 19, and the Nasdaq futures are about 4 points below fair value. 

December 3, 2004

We have the makings of a perfect storm here.  And I mean that in a good way.  First of all, oil prices are down again this morning, to 43.06 per barrel, after falling 12% over the past two days.  Secondly, that rumor about Intel’s mid-quarter update yesterday was right on the money.  Intel raised their sales estimate for the quarter and held their gross margin estimate steady.  Intel traded up 7% after hours yesterday. 
 
Now, if we can just get a good jobs report at 8:30, we could be off to the races when the market opens.  The consensus estimate is for an increase of 200,000 jobs in November and a drop in the unemployment rate to 5.4 percent. 
 
There’s one major earnings warning this morning.  Ohio-based Fifth Third Bank says that they will fall about three-fifths short on earnings this quarter.  The estimate was 82 cents.  Fifth Third is now expecting to make 30 cents at best.
 

Japanese stocks were up overnight, Major European markets are up a bit.  Pending the jobs numbers, we’ll head north at 9:30.  Adjusted for fair value, S&P futures are up about 5 points, Dow futures are up 37, and the Nasdaq futures are about 14 points above fair value. 

December 2, 2004

Those oil and distillate inventory numbers turned the stock market into quite a gusher yesterday.  Distillate inventories rose a million barrels more than expected.  They are back to “normal” seasonal levels and the price of oil is down about 4 dollars since yesterday morning, at about 44.82 per barrel.
 
In fact, yesterday’s only disappointing news was the decline in November sales at GM and Ford, as the foreign automakers continued to grab market share.
 
If you have owned Microsoft for over a month or so, you’ll get a little Holiday spending cash in your pocket today as Microsoft pays a 3 dollar dividend.  Look for institutional investors to turn around and reinvest that cash in this rising market, which of course, could raise stock prices even more.
 
Good sales reports from Costco and Neiman Marcus this morning. Wal-Mart November sales, however, were only up 7 tenths of one percent. 
 
We’ll get Intel’s mid-quarter update after the close of trading today, and there’s a Wall Street rumor floating around that it may contain some positive news.  Intel has suffered a number of broker downgrades recently, so we’ll see what happens.
 

To the untrained eye, the futures look very positive at this hour, but not so fast.  They have actually been negative all morning, and if the market were to open right now, we’d actually see prices slip on a little profit-taking. Adjusted for fair value, S&P futures are down a fraction of a point, Dow futures are down 4, and the Nasdaq futures are about a point below fair value. 

December 1, 2004

The week that follows a holiday week usually is chock full of economic reports, and this one’s no exception.  Personal income and consumption data lead the parade in just about ten minutes.
 
At 10 o’clock the November ISM Index is expected to come in at 57.  That would be up a touch from last month.  But strength in yesterday’s Chicago Purchasing Managers Index is giving us hope that the ISM number may be even higher. Those numbers both measure strength in manufacturing.
 
At 10:30 we’ll get what may be the most market-moving number.  Inventory levels of domestic oil and distillates will be announced.  It’s expected that the build-up in distillate inventories was 1.3 million barrels last week.  Any big difference from that number could swing oil prices around, which of course, will inversely correlate with stock prices.  So far this morning, oil is down to under 49 bucks per barrel at 48.88.
 

All that being said, it looks like we may get a pretty good start out of Wall Street at 9:30. Adjusted for fair value, S&P futures are up more than 3 points, Dow futures are up 31, and the Nasdaq futures are almost 7 points above fair value. 



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  • ©2015 Starfire Investment Advisers, Inc. All rights reserved.

    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any other sponsors of our daily WJR reports

    February 28, 2005
     
    We have a little bit of everything for stock investors to consider this morning.  There are two big mergers. Yellow Roadway finally buying USF. Federated and May Department stores agreed to an 11 billion dollar deal.
     
    Heinz and Tiffany both beat earnings estimates, although Tiffany guided lower for the current quarter.
     
    Economic reports due out today include the Chicago Purchasing Managers Index, New Home Sales, which are expected to be up, and a reading on Personal Income which is expected to be down, mainly because the December reading included the big Microsoft dividend payment.
     
    The cover article in Barron’s this weekend focused on General Motors, in not an altogether positive way.  Barron’s questioned whether GM’s attempt to wean the consumer off of rebates will be successful, and suggested that GM bonds, which have declined in line with business prospects, may be a better bet than GM stock at this point.  GM and Ford both downgraded buy a major brokerage firm this morning.
     
    Get the apple chopper out.  Apple shares will split 2 for 1 at the close of trading today.
     
    Asian markets were up nicely overnight.  European markets are generally positive, but much less decidedly.  Our futures haven’t decided anything yet.   Right now, adjusted for fair value, the S&P futures are down less than a half point, the Dow futures are down 5, but the Nasdaq futures are about 2 points above fair value. 
     
    February 25, 2005
     
    At 8:30 this morning, we’ll get the second estimate of how much the Gross National Product increased in the fourth quarter of 2004.  Expect an upward revision from the advance number of 3.1% to about 3.7% or so.  Obviously, the higher the number, the more confidence traders will have that the economic recovery continues.
     
    We’ll also find out about January sales of existing homes.  They are expected to decline is little, but still come in at around 6 ¾ million units.  What’s the big deal about the sale of a previously owned home?  Yes, it’s not new construction, but people on the move lead to a lot of ancillary sales of furniture, durables like washers and dryers and a variety of other products and services.
     
    The big media company Clear Channel met earnings estimates this morning, although revenue was just a tad lighter than expected. 
     
    ExxonMobil stock is up about 20% in the past month and a half.  This morning a major brokerage firm says – “Hey, this is now a good stock!” They are now upgrading ExxonMobil to a “buy” from a “neutral,” saying that the stock will go higher than their 57 dollar target price. The stock will open at 61.13 this morning. Thanks, guys.
     
    Oil prices are down just under 51 bucks per barrel, and that fact alone has the futures pointing toward a slightly higher open.
     
    Overseas, stocks are higher, generally by ½ to 1 percent.  Right now, adjusted for fair value, the S&P futures are up a point, the Dow futures are up 11, and the Nasdaq futures are about 3 points above fair value. 
     
    February 24, 2005
     
    Fortunately, the Consumer Price Index behaved itself very nicely yesterday and oil prices held steady, allowing us to bounce back a bit from Tuesday’s drubbing.
     
    Don’t look now, but oil prices are pushing nearer to 52 dollars per barrel this morning.  That’s not good news, but the report to watch is the weekly U.S. oil inventory report, which is due out at 10:30.  Analysts expect that oil inventories rose a bit last week.  Any large decline in inventories, especially in light of the cold weather that’s reportedly on the way for the eastern half of the U.S. for much of the next month, could be trouble for stock prices. 
     
    No trouble last quarter at Host Marriott, Viacom, J.C. Penney and Limited Brands.  They all beat their earnings estimates.  Staples matched expectations.
     
    It’s never good to be a Chicken Little, but it may be time to stock up on a little Chicken Noodle.  Campbell will reportedly raise soup prices at the end of the month.
     
    Jobless claims are expected to rise by 8,000 at 8:30.  Asian markets did very well overnight.  Our futures are in wait-and-see mode.  Right now, adjusted for fair value, the S&P futures are down a half point, the Dow futures are down 3, and the Nasdaq futures are 3 points below fair value. 
     
    February 23, 2005
     
    For every action, there is a reaction, and sometimes a re-reaction.  Yesterday’s tumbling dollar lit a fuse under oil prices, which pulled the rug out from under the stock market, as the Dow Jones Industrial Average took it’s worst one-day beating in almost two years.
     
    The dollar is rallying a bit this morning and oil prices are down a bit, but they’re still a few cents over 51 dollars per barrel.
     
    Toll Brothers is out with a very good earnings report this morning,  Lowe’s beat earnings estimates easily this morning, but lowered their guidance, just as Home Depot did yesterday.  Medco Health is buying Accredo Health at about a 40 percent premium to yesterday’s closing price.
     
    The futures are indicating a slightly positive open for the market.  However, whether we start the day well or poorly will likely be decided at 8:30 when the January Consumer Price Index is released.  The consensus expectation is that consumer prices rose about two tenths of one percent in January.  However, last week’s Producer Price Index came in a lot higher than expected, with the biggest rise in almost ten years.  If that trickled through to consumer prices and we come in a lot higher than two tenths of a percent, look for another stock price downer at 9:30. 
     
    But so far, so good.  Right now, adjusted for fair value, the S&P futures are up 1 ½ , the Dow futures are up 17, and the Nasdaq futures are 6 points above fair value. 
     
    February 22, 2005
     
    We’ll be working our way uphill at the open of trading today with a couple of heavy loads in our backpack.   Overnight, the South Korean Central Bank said that they were diversifying out of the U.S. dollar by buying Australian and Canadian dollars.  Whether that’s a head-fake or not, it has sent the value of the dollar plunging this morning.
     
    Add to that sharply rising oil prices – back to almost 50 bucks per barrel earlier this morning– and stocks prices will under significant pressure this morning.
     
    One possible glimmer of hope is the Conference Board’s report on February Consumer Confidence at 10 o’clock.  Expect a reading of 103, which would be slightly lower than last month.
     
    Home Depot met their earning estimate this morning on a twenty percent increase in “services” income.  What does that mean?  Well, evidently the only tool a growing number of do-it-yourselfers know how to use is a checkbook.
     
    Overseas markets are off generally ½ to 1 percent lower. Our futures started the morning in the hole, and have not made much of a recovery in the >
     
    February 11, 2005
     
    Just as expected, the Dell profit numbers were a penny better than expected last night.  Dell made 37 cents per share for the quarter, a penny better than the consensus estimate.  There’s a lot of good news here.  Business spending for Dell products rose 19%.  Dell is way ahead of schedule in becoming a 60 billion dollar company, they’re shooting for 80 now.  Unfortunately, Dell did say that this quarter’s revenue may be a little soft, and that single needle, in the haystack of good news, will probably push the stock price lower this morning.  Dell is down about 4% in Europe.
     
    What’s on the agenda for today?  Nothing.  No big earnings, no big economic reports.  There are a couple of Fed governors running around out there giving speeches, but that’s about it.
     
    European stocks are having a pretty good day.  They’re up on the order of a half to one percent.  Our futures have improved over the past couple of hours, but futures on all three major indexes are still indicating slightly lower stock prices at the open.  Adjusted for fair value, the S&P futures are down a fraction, the Dow futures are down 3, and the Nasdaq futures are about 2 points below fair value. 
     
    February 10, 2005
     
    DaimlerChrysler shares will be under pressure today, on a disappointing earnings report.  This time, however, it’s the Mercedes unit that’s the problem.  The Chrysler unit continues to recover. 
     
    One day after all the hubbub at Hewlett-Packard, it’s Dell’s turn to make some news.  Dell, the company that appears to be single handedly taking over the personal computer business will report earnings after the close of trading this afternoon. The consensus expectation is 36 cents per share of earnings. You should expect 37 cents per share because, well, it’s Dell.
     
    The Bank of England once again left interest rates unchanged this morning.  Hong Kong markets are again closed for New Year’s celebrations.  European markets are mixed at this hour. 
     
    We talked about low yields on long term bonds yesterday.  This morning, the 10 year Treasury is under 4% at 3.98.  The 30 year, at 4.365%, in getting close to the low we saw almost two years ago.
     
    At 8:30 we’ll get the weekly jobless report.  It’s expected that jobless claims rose by 9,000.  Absent any big surprise with that report, we should see a little rebound from yesterday’s losses when the market opens.  Adjusted for fair value, the S&P futures are up a little more than a point, the Dow futures are up 22, and the Nasdaq futures are about a point above fair value. 
     
    February 9, 2005
     
    One of the real curiosities of the past year has been the price of long term bonds.  The Fed has made no secret of their intention to raise short term interest rates for the better part of a year now.  Raise short term rates repeatedly, and long term rates can be expected to rise.  So much for conventional wisdom.  Long term rates have actually come down.  That’s big news for anybody who is buying a home, or holding a mortgage.
     
    Word from the Mortgage Bankers Association this morning is that interest rates have fallen again on fixed rate mortgages (those are the ones based on long-term rates.)  The 30 year fixed now averages under 5 ½%, the 15 year is at 5.06.  That’s only about three-quarters of a percent higher than the one-year ARM.  Could be last call to lock in low long-term rates.
     
    The Carly Fiorina days are over at Hewlett-Packard.  Ms. Fiorina has resigned as CEO at Hewlett, effective immediately, due to differences of opinion with the Board of Directors. Hewlett-Packard stock is indicated up about 13 percent in the pre-market on the news. 
     
    Cisco Systems hit their earnings number last night, but were a little light on revenue.  This morning, insurers AIG and Aetna both blew away estimates. 
     
    No trading in Hong Kong or China overnight.  It’s New Year’s Day for the year of the Rooster.  There won’t be much to crow about at the open in New York, if the futures are any indication.  Adjusted for fair value, the S&P futures are up a point, the Dow futures are down 2, and the Nasdaq futures are a half point below fair value. 
     
    February 8, 2005
     
    This is a week almost devoid of any big economic news.  But, a few big earnings reports are yet to come.  Today, after the market closes, Cisco Systems will report in.   It’s expected that Cisco made 22 cents per share on the quarter.
     
    So far this morning, we’ve seen a couple of big hits and a couple big misses on the earnings front.  UBS, the big investment bank beat their number, raised their dividend and raised their guidance for ’05.  Marriott also made more money than expected, 79 cents versus the expected 74 as the level of travel spending continues to improve.
     
    Alcan missed their estimate by a bunch, as did Taser.  The stun gun maker fell two cents short of a ten cent estimate.
     
    Oil is down under 45 bucks.  Gold is down another 2 dollars to $412.  Overseas markets were mixed overnight.
     
    Our futures are in better shape than they were in a couple of hours ago.  But suffice it to say that there’s a whole lot of nothin’ going on.  Adjusted for fair value, the S&P futures are down a fraction, the Dow futures are down 5 points, and while the Nasdaq futures are pointing up, they are up less than a half-point above fair value. 
     
    February 7, 2005
     
    Now that we’re done with Inaugural Balls and Super Bowls, the Political Brawls kick off in earnest today with the release of President Bush’s proposed budget.
     
    But before the political fur starts flying, we have a few more earnings reports to clean up.  Humana and Wellpoint each beat estimates this morning, with Humana raising thier estimates for future earnings.  The earnings miss of the morning came from Hasbro.
     
    Oil a down again, just above 46 dollars a barrel, as it looks like any of the threatened production cuts will wait at least until OPEC’s next meeting in March.
     
    Asian stocks and European stocks turned positive in a big way overnight on the heels of our rally Friday.
     
    It’s one of those mornings where the futures are a little tricky to read.  Futures on all major U.S. stock indexes have been down all morning, although they’re not down by very much.  So we should have a fairly flat market at 9:30. Adjusted for fair value, the S&P are down a point, the Dow futures are down 8 points, but the NASDAQ futures have actually pulled just about even with fair value. 
     
    February 1, 2005
     
    It’s shaping up to a wait-and-see market as the Federal Reserve Open Market Committee gets together this morning.  Twice a year they have a two-day meeting, and this is one of those two twices.  So, hold your breath until tomorrow, and then exhale when short term interest rates go up by another quarter of one percent.
     
    Lots of exhaling at Disney this morning.  Last night’s earnings report was a good one, built squarely on two modern American traditions, those being theme parks and Desperate Housewives.  Disney beat estimates by a nickel per share, and those shares should trade higher this morning.
     
    The January ISM Index will be announced at 10 this morning.  Expect a reading of 57, which is down a little from December, but still represents expansion in the manufacturing sector.
     
    Earnings from Tyco met estimates this morning.  Google announces their quarter after the close this afternoon.
     
    European markets are positive at this hour.  Our futures are sitting squarely on the fence. Adjusted for fair value, the S&P and Dow futures are down less than a point but the NASDAQ futures are actually a point above fair value. 

    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any other sponsors of our daily WJR reports

    March 31, 2005
     
    It’s the last day of the quarter and the day before our absolutely favorite Holiday of the year.  So far, so good with earnings warnings.  Very few companies have admitted to fooling us with regard to first quarter earnings.  Of course, official earnings reports are still a week or so off, so there’s still time.
     
    Everybody loves a good soap opera, and it looks like a doozy is cooking at Morgan Stanley.  Evidently a bunch of former and possibly current Morgan Stanley executives were mounting a quiet campaign to oust the CEO.  Well, the CEO got wind of it and starting firing people left and right earlier this week.  It’s all getting very ugly and very public.  Lesson to be learned, young ones?  Of course there is -- There’s nothing wrong with a palace coup – but you’ve got to kill the King.
     
    The market may hold its breath today in front of tomorrow’s monthly jobs report.  However, earlier today, Monster.com released their job search index, which showed pretty healthy growth in the jobs market.
     
    Personal income and consumption data is due out at 8:30.  The Chicago Purchasing Managers Index at 10 is expected to decline a bit from the February level. In front of all that, adjusted for fair value, S&P futures are flat, the Dow futures are up 11½, and the NASDAQ futures are 2 points above fair value. 
     
    March 30, 2005
     
    What was good for Hewlett-Packard yesterday was big trouble for NCR.  NCR’s stock slumped about 16 percent yesterday when word got out that Hewlett-Packard’s new CEO would be NCR’s current CEO.  Hewlett-Packard, for its part rose about 2 bucks on the day.  That’s about 10 percent.
     
    Micron Technology stock is down about 20% since mid-February.  But last night, Micron released quarterly results, beating estimates by three cents per share.  DRAM chips are a tough business right now, but Micron should get a little boost this morning.
     
    There are a couple of Federal Reserve governors running around out there giving speeches today and potentially stirring up trouble. But more importantly, Microsoft will hold a conference this morning to give stock analysts their view of the future.  
     
    Asian stocks were down a quarter percent or so overnight.  God bless the Belgians.  Not only do they make great chocolate, their stock market is up this morning, unlike the rest of Europe. 
     
    We’ll get the final reading on 4th quarter Gross Domestic Product at 8:30.  But in front of that, our futures are indicating a positive open.  Right now, adjusted for fair value, S&P futures are up about 4, the Dow futures are up 33, and the NASDAQ futures are about 6 points above fair value.
     
    March 29, 2005
     
    Going, going, gone.  Hank Greenberg will be leaving the clubhouse at AIG Insurance completely, as the company continues to undergo regulatory scrutiny.  Greenberg has been the big power hitter at AIG for 37 years.  How long ago was that?  Well, in Detroit Tiger terms it was two World Series wins ago.  Yes, that’s a long, long time. However, it looks like this AIG regulatory story may only be in about the second or third inning.
     
    Tomorrow is Microsoft analyst day. Thursday and Friday are big economic data days.  But today, well today is just Tuesday. There’s only one moderately interesting report on the way.
     
    At 10 o’clock the Conference Board’s March Consumer Confidence Index is expected to come in at a level of 103, which would be down from 104 last month.  Obviously a higher number would help stock prices, and stock prices are going to need all the help they can get this morning, although the futures have improved over the past half hour.  Right now, adjusted for fair value, S&P futures are down 3 ½ , the Dow futures are down about 23, and the NASDAQ futures are almost 6 points below fair value. 
     
    March 28, 2005
     
    It is Monday.  That means there must be a company somewhere out there being bought.  That somewhere today is at SunGard Data Systems.  This one is going private, at least temporarily.  It’s an 11 billion dollar leveraged buyout.  That’s the largest LBO since 1989, when RJ Reynolds was bought.   At 36 bucks per share it’s a 14 percent premium to Thursday’s closing price, but it’s 44% higher than SunGard closed a week ago Friday.
     
    General Motors is taking another hit this morning.  This time it’s from the big brokerage firm UBS.  They are downgrading GM on fears of a dividend cut caused by a perceived lack of liquidity.
     
    The big economic report of the week will be the March Jobs Report, but we’ll have to wait until April Fools Day for that.  Nothing much in on the docket for today.
     
    Most markets overseas are closed today for Easter Monday.  Japan did trade and closed up about a quarter of one percent. It looks like we may get off to a decent start this morning, as the price of oil is down another half dollar or so.  At this point, adjusted for fair value, S&P futures are up about  3 ½ points, the Dow futures are up about 26, and the NASDAQ futures are more than 6 points above fair value.
     
    March 24, 2005
     
    General Electric is out with revised earnings guidance this morning, and it’s good news, at the end of week that could use some good news.  GE raised their earnings guidance for the current quarter buy a penny per share.  That may not sound like a lot.  But remember, GE has an awful lot of shares out there.
     
    Northrup-Grumman is also raising operating earnings estimate this morning by three cents per share.
     
    A couple of more data points will be out this morning to round out the trading week.  AT 8:30, the February Durable Goods Report is expected to show an eight-tenths of a percent increase, reversing course form a 1.3% decrease in January.
     
    Then at 10 o’clock the report on February New Home Sales is expected to report a slight uptick in sales.  This will be an interesting report to watch over the next couple of months to see how much the recent rise in mortgage rates is starting to bite.
     
    Light sweet crude is at 54.34, up a little after yesterday’s decline.  Overnight stocks were up a very tiny bit in Asia.  At this hour stocks are up a bit more than that in Europe.  At 9:30, we may well be going a little higher than that.  At this point, adjusted for fair value, S&P futures are up about 3 points, the Dow futures are up about 31, and the NASDAQ futures are 5 ½  points above fair value. 
     
    March 23, 2005
     
    The genius of Alfred Hitchcock is that with just a few carefully selected words, he could scare the dickens out of you.  So, maybe when he retires next year Alan Greenspan has a future in the movies.
     
    The Federal Reserve Open Market Committee did what everybody expected when they raised short term interest rates yesterday by a quarter percent.  But then, with just a few carefully selected words inserted into its accompanying statement, the Fed set the bond market on its ear, and converted a stock market rally into a pretty significant sell-off that stretched across the globe overnight.  The Fed’s new wording gives the impression that we are far from the end of the line of interest rate increases.  That, of course is good news for the dollar, but bad news for bonds and potentially for stocks.
     
    Oracle beat their earnings number last night, but most of the income came from acquisitions, like PeopleSoft, rather than the mother-ship.  Oracle is trading lower in the pre-market.
     
    The latest consumer price data comes form the Labor Department at 8:30.  That would be the February CPI.  It’s expected to be up 3 tenths of one percent.  The stock futures took a turn for the better an hour or so ago, but until we get the CPI at 8:30, we’re fighting to a draw.  Adjusted for fair value, S&P futures are down a point and a half, the Dow futures are up, but only about 9 points, and the NASDAQ futures are 2 points below fair value. 
     
    March 22, 2005

    It would be nice to have a lead story OTHER than General Motors, especially if you’re a GM shareholder. This morning, word from the Financial Times is that GM is losing a 2 billion dollar credit facility from GE Capital. That has GM stock down about 5 percent in Europe this morning, after yesterday’s nearly 4 percent rally in the stock.

    Speaking of stories that we’re getting a little tired of, Alan Greenspan and the Federal Reserve Open Market Committee get together to measure their paces this morning. At 2:15 we’ll get another quarter-point short-term interest rate hike. The only drama is whether the Fed will remove the “measured pace” prediction for the future of interest rate hikes.

    There will be a little something for the Fed to chew on at 8:30. A big rise in the price of tobacco is expected to be the catalyst for a three-tenths of one percent increase in the Producer Price Index. The PPI is, of course, an indirect precursor to consumer inflation, which is presumably what the Fed is trying to avoid by raising rates. Suffice it to say that the lower the PPI number at 8:30, the better.

    Stocks are trading lower across the globe this morning, and absent great news at 8:30, we’ll head lower at the open. Adjusted for fair value, S&P futures are down a little more than a point, the Dow futures are down 18, and the NASDAQ futures are about 3 points below fair value.

     
    March 21, 2005
     
    The big news in these parts again involves General Motors.  The Wall Street Journal’s online edition reports that GM is undertaking a significant downsizing of salaried personnel.  In some departments the cuts are estimated at 28%.  During the past five years Ford and Chrysler have undertaken fairly dramatic plant closures and cost cuts.  GM has been much more gradual in its approach.  Those days may be done. It’s expected that the white-collar cuts are the warm-up act to a call to the UAW to get some concessions work force >
     
    Several big mergers this morning.  Interactive Corp will buy Ask Jeeves at about a 17% premium.  Cosmetic implant maker Inamed’s price has ballooned from 20 to 66 over the past two years.  Look for another augmentation today.  Medicis is buying Inamed at a 13% premium in cash and stock.
     
    Japanese stocks did not trade overnight in celebration of the first day of spring.  That’s something we may get here by mid-June.  Our futures have been negative all morning, so look for lower stock prices at 9:30. Adjusted for fair value, S&P futures are down 2 ½ , the Dow futures are down 18, and the NASDAQ futures are about 2  points below fair value. 
     
    March 18, 2005
     
    We may have a “floating duck” market today.  It may appear pretty calm on the sur>
     
    Today is the day of the monthly expiration of stock futures, stock options, stock options on stock futures – it’s called “triple witching” day as a lot of big leveraged bets on the direction of the stock market get re-positioned.  On top of that, the S&P 500 and some other indexes are rebalancing today.  That means that a lot of stock will be bought and sold based on companies’ relative market capitalization.  That’s probably not good news for stocks whose market cap has shrunken quite a bit lately.
     
    Nike is out with good numbers this morning. Radio Shack, however, is cutting its quarterly forecast.  At 9:45 this morning the University of Michigan’s preliminary Consumer Sentiment Index for March is expected to rise to just short of the 95 level.  That would be up just a tad from February’s 94.1.
     
    Overseas markets are up across the board, although not by much as oil prices are declining just a bit.  We should head north at 9:30 as well.  Adjusted for fair value, S&P futures are up a little more than a point, the Dow futures are up 13, and the NASDAQ futures are about 3 points above fair value. 
     
    March 17, 2005  Happy St. Patrick's Day!  No report -- We're at the party!
     
    March 16, 2005
     
    The stock futures were pointing toward a very nice open for the stock market until about 45 minutes ago.  Right about then, General Motors, a member of the Dow Jones 30 Industrial Index, and, of course the S&P 500, issued a major earnings warning.  In case you haven’t heard, here’s the word:
     
    GM was expected to break even this quarter.  Forget it.  Expect a loss of a buck and a half per share.  Remember when GM was projecting a 10 dollar per year profit?  Last year they said, well maybe 4 to 5 bucks was more like it.  Now they say we should expect maybe a dollar to two dollars per share of profit for the year.  GM stock is bid at 31.29 in the pre-market.  That’s down about 8 down percent from yesterday’s close.  Not good news for GM, their suppliers, and quite frankly for Detroit in general. 
     
    So, outside of that, Mrs. Lincoln, or should I say Mrs. Cadillac, how did you enjoy the play?  Outside of the GM news, the big news of the day is out of the Middle East.  Saudi Arabia and Kuwait are set to increase oil output by 700,000 barrels per day immediately.  That has oil prices down about 50 cents per barrel, which is good.  Later this morning, we’ll get oil inventory data and at 8:30, February Housing starts are expected to be down about 5 percent.
     
    In front of that, stocks are looking at an uncertain start.  Adjusted for fair value, S&P futures are down a fraction, the Dow futures are down 11, after being up nearly 30 less than an hour ago, and the NASDAQ futures are a fraction of a point above fair value. 
     
    March 15, 2005
     
    If you owned a share of Genentech stock at 3 o’clock yesterday afternoon, you were worth 44 bucks.  By 4 o’clock yesterday, you were worth 55 bucks.   How’d you like that job 40 hours a week?  Positive news on Avastin, a cancer drug, sent Genentech stock soaring.
     
    The only other thing that’s been soaring lately, the price of oil, is holding steady this morning, just south of 55 dollars per barrel.  OPEC will meet tomorrow to decide whether or not to go along with Saudi Arabia’s stated intention of raising output in front of the summer driving season.
     
    In about ten minutes we’ll get reports on February Retail Sales, which are expected to be up 7 tenths of one percent, and January Business Inventories, which are expected to be up 9 tenths of one percent.
     
    Asian stocks were down a bit overnight.  European stocks are up a bit at this hour.  In front of those economic reports at 8:30, our futures are pointing up just a little.  Adjusted for fair value, S&P futures are up about 2 points, the Dow futures are up 11, and the NASDAQ futures are about 2 ½ points about fair value
     
    March 14, 2005
     
    There’s a new King-in-waiting at the Magic Kingdom.  Disney’s Number 2 will become Number 1 in October, as Bob Iger will replace Michael Eisner as CEO.  Eisner’s departure was, of course accelerated by questions from pesky shareholders about the effectiveness of the business plan.
     
    No challenging the effectiveness, but questions from pesky regulators about the ethics of the business plan will apparently drive Hank Greenberg from the Chairman’s chair at the big insurance company AIG. 
     
    Your may have never heard of Ascential Software.  However, IBM has heard of it, they know it, and they bought it this morning for more than a billion dollars.  That’s about an 18 percent premium to Friday’s closing price.
     
    Not to be outdone on Merger Monday, Philip Morris spent 5 billion overnight to buy a tobacco company in Indonesia.
     
    Lots of big economic numbers are coming this week, but there’s nothing on the schedule for today.
     
    Stocks in Hong Kong were up just a bit overnight, but just about every other foreign market is in the red at this hour.  Our futures are positive, but not by a lot.  So look for slightly higher prices at 9:30.  Adjusted for fair value, S&P futures are up about 2 points, the Dow futures are up 16, and the NASDAQ futures are about 3 points above fair value. 
     
    March 11, 2005
     
    The stars are aligning for an itty-bitty little rally this morning.  Last night Intel gave the public its mid-quarter update and the news was good.  Intel is projecting higher gross margins – 57 percent versus the expected 55 percent. They are projecting revenue at the top end of estimates, and if they hit the midpoint of the new range, it will represent a 15 percent sales increase from last year.
     
    That has chip stocks up across the globe in overnight trade.  Couple that with yesterday’s rally in the ten year Treasury, which lowered the yield to under 4.46 percent, and couple that with the price of oil down under 53 bucks per barrel – well that’s a troika of good news for stock prices.
     
    The last piece that needs to fall into place is some good news on the trade deficit.  At 8:30, the January trade deficit numbers come out.  It’s expected that the trade deficit grew just a tad to 56.5 billion dollars.
     
    Overseas, stocks in Japan up, Hong Kong was up and European markets are higher by about a half percent. If the futures hold for another hour, we’ll move up a little too.  Adjusted for fair value, S&P futures are up 1 ½  points, the Dow futures are up 8 ½ but the NASDAQ futures are about 5 points above fair value. 
     
    March 10, 2005
     
    We all remember where we were on the day of certain events.  President Kennedy’s assassination, the 1st moon landing, the wedding of Tiny Tim and Miss Vicki, you know, the major stuff.
     
    So, do you must remember where you were 5 years ago today.  The Nasdaq hit it’s all-time record high of 5,132.52, and it was perfectly obvious to some people that you didn’t really need a machine to print money – all you needed was to own technology stocks.  Well, experience is the most effective teacher, and usually the most expensive teacher. A lot of people have learned a very expensive lesson.  The Nasdaq closed yesterday at 2,062.
     
    The ten and thirty year Treasury bonds took quite a drubbing yesterday, with the 10 year closing at a yield of 4.514%, and the stock markets didn’t like those rising rates much at all.
     
    Intel gives its mid-quarter update after the close today, so expect some late-day antics in technology names.
     
    However, it looks like a quiet, albeit slightly lower open on the way for stocks. Adjusted for fair value, S&P futures are down 2 points, the Dow futures are down 10 but the NASDAQ futures are about 2 points below fair value. 
     
    March 9, 2005
     
    Oil prices took control of the stock market once again yesterday, and it looks like oil may well whip us around again today.  At 10:30 we’ll get the weekly update on oil and distillate inventories in the U.S.  It’s expected that oil inventories rose during the past week. Meanwhile, oil prices are on the march again, nearing the 55 dollar level at $54.93.
     
    For those of you who are romantically inclined, there are a couple more corporate marriage announcements this morning.  Great Lakes Chemical is being bought by another specialty chemical company, Crompton.  In Canada, a couple of metals companies hooking up with Noranda buying the rest of Falconbridge that they don’t already own.
     
    Blockbuster reported earnings of 7 cents per share this morning.  That beat estimates by 3 cents. 
     
    You may remember that a month ago today we talked about the dive in yield on the 10 and 30 year Treasury Bonds and how it might be the end of the road for low low-term rates.  Since then Treasury yield are up almost a half percent.  A spike this morning around 4.5% on the ten year bond sent a shiver through the stock futures.
     
    We were looking toward a strong open for stocks earlier this morning, but that big hit the futures took about a half hour ago has us now looking for significantly lower prices. Adjusted for fair value, S&P futures are down 5, the Dow futures are down 15 but the NASDAQ futures are about 3 points below fair value. 
     
    March 8, 2005

    Those big flat-screen televisions have been dropping, dropping, dropping in price. It looks like consumers are waiting for them to drop some more before
    re-wallpapering the house with them. Texas Instruments said after the close of trading yesterday that TV manufacturers overestimated consumer demand a bit when they built all those TV’s last quarter. As a result, TI lowered the top end of their earnings estimate for the current quarter. Analysts are expecting 24 cents per share this quarter. The company is now projecting 22 to 24 cents. It looks like Texas Instruments will open lower by 50 cents or so.

    There’s not a lot going on today as far as economic reports. Ben Bernacke, one of the Federal Reserve governors and William Poole, the President of the St. Louis Fed are out on the rubber chicken circuit today. We’ll see if they talk about the pace of future interest rate hikes.

    In Japan, the Nikkei was down about a third of one percent overnight. Hong Kong bounced back after Monday’s losses, but European markets are weak at this hour. It looks like we have red arrows in our futures as well. In fact, the futures are almost exactly the mirror image of 24 hours ago. Adjusted for fair value, S&P futures are down 2, the Dow futures are down 13, and the NASDAQ futures are 5 ½ points below fair value.
     
    March 7, 2005
     
    It may be lonely at the top, but at least you don’t have to stay there long. It’s getting harder and harder for your typical CEO to hold on to his or her job.  Sometimes it’s an accounting scandal.  Sometimes it’s a decline in market share.  That’s what did in Sony’s CEO over the weekend.  Now, word is that 68 year old Harry Stonecipher is out at Boeing because of a consensual relationship with a female executive at the company.  I don’t think those rules apply everywhere else, like for basketball players or some politicians.
     
    Two big mergers this Monday; Hibernia Bank is being bought out by
    Capital One at 33 bucks per share, that’s a 24 percent premium to Friday’s closing price.  Europe’s largest defense contractor, BAE Systems is buying United Defense Industries for 4.2 billion dollars.  UDI is the maker of the Bradley fighting vehicle.
     
    Asian stocks were up overnight, but European markets are mixed. Our futures seem pretty listless on their >
     
    March 4, 2005
     
    Clear the desk, we have only two topics to consider this morning.  In about eight minutes, one of the most closely watched economic reports each month will be announced.  That’s the monthly jobs report.  It’s expected that the unemployment rate in February held steady at 5.2 percent, and that about 245,000 new jobs were created by American businesses.  Now that the presidential election is over, most of the silly spin on this number is behind us, and if we do see new jobs of 200,000 or more, it will reaffirm the steady improvement we’ve seen in the job market.
     
    Our second big factor today is the price of oil.  We’re at 53.51 per barrel this morning.  It’s expected that OPEC will release a statement today reassuring the markets that supply will not be cut at its March meeting.
     
    At 9:45, the University of Michigan Consumer Sentiment Index is expected to tick up just a tenth of a point at 94.3.
     
    Stocks in Hong Kong took a one percent hit overnight, but most of the rest of the world is modestly in the plus column at this hour.  Our stock futures look good on the sur>
     
    March 3, 2005
     
    As anyone with school-aged children can tell you, influenza has been running rampant during the past few weeks.  Apparently, the kids are also suffering from a severe stain of “affluenza.” A bunch of retailers that cater to the school-aged are putting up some over>
     
    Walmart same store sales for February came in at a better-than-expected 4.1 percent.  However, the flip side comes from company that’s become retailing’s basket case, every pun intended.  Pier One’s sales were down over 15 percent in February, and they are again revising their guidance downward.  Sharper Image and the Limited also saw sales decline.
     
    The 14 billion dollar oil company Unocal may be in play.  ChevronTexaco and other bidders are said to be interested. Unocal stock is up almost 20% in pre-market bidding.
     
    At 8:30 unemployment claims are expected to be up 6,000 or so.
     
    We’re looking for a solid open at 9:30.  Right now, adjusted for fair value, the S&P futures are up 2, the Dow futures are up 18, and the NASDAQ futures are about 2 points above fair value. 
     
    March 2, 2005
     
    All ears on Alan Greenspan today, as he testifies before the House Budget Committee.  There’s an undercurrent of concern that the Fed may be thinking about a half-percent hike in short term rates in the near future.  We’ll see if Greenspan drops any hints.
     
    There’s been a lot of company specific news since yesterday’s closing bell.  Lear Corporation, a big auto supplier, says that car production cutbacks will take their toll this quarter.  After that announcement, Lear stock dropped over 7% in after-hours trade yesterday, and is now off over 25% over the past year.  Five brokerage firms, who evidently hadn’t heretofore detected any weakness in the auto industry, downgraded the stock this morning.
     
    Costco reported that fourth quarter same store sales were up 7 percent, but earnings fell a penny short of estimates.  That will likely not play well this morning for a retailer that goes out at 24 times earnings.
     
    Compare that with a retailer that’s at 29 times earnings; namely American Eagle Outfitters.  They reported February same store sales up over 32 percent.  They beat last quarter’s earnings estimate by a penny per share.
     
    Look for a pullback in prices at 9:30.  Right now, adjusted for fair value, the S&P futures are down about 4, the Dow futures are down 31, and the NASDAQ futures are about 7 ½  points below fair value.

    March 1, 2005

    The market taught another of its never ending-lessons on the value of diversification yesterday.  Irish eyes were smiling at Elan Corporation as the stock doubled over the past year.  Unfortunately for those who had loaded up on the stock, yesterday’s withdrawal of the MS drug Tysabri sent Elan shares down 69 percent.  Elan’s partner Biogen-Idec was down 42 percent on the day.  Tysabri was approved under the FDA’s “fast-track” program, and as they say at the racetrack, gentlemen, start your lawsuits.

    This morning, of course, brokerage houses are falling all over themselves to downgrade both stocks.  Obviously, it would have been great to know the news about Tysabri a couple of weeks ago.  Curiously, the SEC is looking into a couple of executives who dumped millions of dollars of stock oh………….a couple of weeks ago. 
     
    February car sales reports will be rolling out today.  They are expected to be up a bit from January, but a new slew of incentives are also expected to be announced.
     
    The Chicago PMI, a gauge of manufacturing activity came in above expectations yesterday.  At ten o’clock, look for the February ISM Index to confirm that with a reading of 57 or above.
     
    The futures are indicating a  positive start for stocks. Adjusted for fair value, the S&P futures are up about 2½ , the Dow futures are up 17, and the NASDAQ futures are about 4½  points above fair value. 
     
     
     
     
     
     

    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank any of the sponsors of our daily WJR reports

    May 31, 2005
                                 
    We’re bracing for a couple of disappointing economic reports this morning.  Of course, if you’re already braced for ugly news, even bad news can sound good.  We’ll see how traders react.
     
    At 10 o’clock, the May Consumer Confidence Index from the Conference Board is expected to be down to 96 from 97.7 last month.  Also at 10 o’clock, the Chicago Purchasing Manager’s Index, which is a gauge of future Midwestern manufacturing activity is expected to drop to 61.8, from 65.6.  Anything above 50 indicates expansion.  However, a slower rate of expansion is what’s expected.
     
    Overseas stock markets went nowhere fast overnight.  Not a lot of movement in either direction.  Our futures have been wobbling around in slightly negative territory all morning long. Right now, adjusted for fair value, the S&P futures are down about     1 ½ points, the Dow futures are down 12 ½, and the NASDAQ futures are about 1 ½ points below fair value. 
     
    May 27, 2005
                                 
    We’ve had quite a little string of late day rallies in the stock market over the past couple of weeks.  We’ll see what happens today.  It’ll be 77 degrees and sunny in New York City this afternoon.  It’s the day before a three-day weekend.  The trading floor might be a pretty lonely place by 3 o’clock.
     
    The University of Michigan will release the second and final revision to the May Consumer Confidence Index at 9:45.  I sure wish that I had had three chances to get my term papers right.  Anyway, the number is expected to come in at 86, which is down about a point from April.
     
    At 8:30, the April Consumer income and spending data will be released, and both numbers are expected to show pretty healthy increases.
     
    Asian stock markets tacked on some healthy gains overnight, with both Tokyo and Hong Kong up more than one percent.  European markets are mixed at this hour.  Our futures are negative, but not by so much that some good economic numbers couldn’t turn things around by 9:30.
     
    At this point, adjusted for fair value, the S&P futures are down less than a half point, the Dow futures are down 6, and the NASDAQ futures are about 2 points below fair value. 
     
    May 26, 2005
                                 
    Soft patch?  What soft patch?  That’s what we may be saying in about 7 minutes.  The 1st revision of the 1st quarter Gross Domestic Product number is expected to come in at 3.6%, which would be a full half percent above the original estimate.  If that happens, worries about recession should be put to bed for awhile.  That way we can limit our fears to other dangers that may never show up, like inflation, 100 dollar oil and Shaquille O’Neal.
     
    No big disappointments on the earnings front this morning.  Costco beat lowered expectations by a penny, although revenue was a little light.  Heinz beat estimates by a penny.  Home builder Toll Brothers continues to crank out enormous profits.  They made $2.01 per share last quarter versus the expected $1.79.
     
    Most European markets are up between a half and one percent at this hour, except for those cranky Belgians.  They’re market is down about three quarters of a percent.
     
    Pending that GDP number at 8:30, we will start with higher prices today. At this hour, adjusted for fair value, the S&P futures are up more than 4, the Dow futures are up 43, and the NASDAQ futures are about 7 points above fair value. 
     
    May 25, 2005
                                 
    The official announcement finally came in a press release about an hour ago.  Visteon and Ford have agreed to a memorandum of understanding on a relief package for Visteon.  It’s a complex deal, but here are the highlights:  Ford will get warrants to purchase 25 million shares of Visteon stock at the price of $6.90 per share.  Visteon will get relief from about 2 billion dollars of employee costs, including post-retirement health care.  Visteon also gets reimbursement for up to $550 million of future restructuring costs.  Visteon will also shed 24 different units, including 15 plants.  Two of the plants will go directly to Ford, and 13 to a Ford controlled entity.
     
    There’s a lot more to the agreement, which it is hoped can be completed by the end of September.
     
    The April Durable Goods number rolls at 8:30 this morning.  Expect a 1.3% increase.
     
    Stocks are not trading in Moscow this morning.  There’s a big power blackout there.  They could have used a day off in Asia, where stocks were down over one percent.  We’re looking for a lower open as well. At this hour, adjusted for fair value, the S&P futures are down 4 points, the Dow futures are down 34, and the NASDAQ futures are about 7 points below fair value. 
     
    May 24, 2005
                                 
    It’s been about ten months since Google started trading as a public company.  If you bought it back then at 85 bucks and still have it, it has to feel like a slot machine than just keeps paying off.  And you know how often that happens.  Google closed at 255 dollars last night.  That’s a market capitalization of about 71 billion dollars.  Comparatively speaking, if you take the combined market caps of General Motors and Ford, the total is almost exactly half that of Google.
     
    The big news of the day will be the 2 o’clock release of the minutes of the May 3rd meeting of the Federal Reserve Open Market Committee.  There’s a lot of speculation that the Fed may only hike short term rates another half percent or so.  However, Mr. Greenspan has been making noises lately about his concern about a possible bubble in housing prices.  Traders will be looking for any sign that the end of the rate hikes is near.
     
    Speaking of housing, the report on April existing home sales is expected to show a very slight increase from the March level at 10 o’clock.  But in front of that, we’ll see lower stock prices at the open.
     
    At this hour, adjusted for fair value, the S&P futures are down almost 3, the Dow futures are down 29, and the Nasdaq futures are about 6 ½  points below fair value. 
     
    May 23, 2005
     
    Stocks had their best week of the year last week, and the rally continues in Europe this morning on the prospect of a change to a more business-friendly government in Germany.  Japanese stocks were up overnight as well, although stocks in Hong Kong were down just a bit.
     
    With earnings season just about wrapped up, this pre-Holiday week should be a fairly quiet one for economic news.
     
    There is big news in the movie business.  The latest Star Wars film has already grossed over 300 million dollars worldwide, with over half of that coming in this past weekend in the U.S.  Later this week, computer movie-maker Dreamworks will release their latest film, Madagascar, and they could use some good news.  Dreamworks stock had the Shrek beat out of it last week on news that Shrek 2 DVD sales were much lower than expected.
     
    The futures had been indicating a slightly lower open for stocks.  However, during the past hour they have turned the ship around.  That was right around the time Goldman Sachs issued an upgrade of the entire software sector. At this hour, adjusted for fair value, the S&P futures are up just a point, the Dow futures are up 10, and the Nasdaq futures are about a half point above fair value. 
     
    May 17, 2005
     
    In about fifteen minutes, we’ll get word on how much raw materials and other Producer Prices rose in April.  Economists are predicting an overall rise in the PPI of three tenths of one percent, and just like in March, an increase of one tenth of a percent if you exclude the volatile food and energy components.  The stock market, of course, would like to see numbers even lower than those.
     
    A bunch of retailers made more money than expected last quarter.  Home Depot, JC Penney, Staples, BJ’s Wholesale and Zale are all out with higher numbers than expected.
     
    Asian stocks were lower overnight.  European markets are mixed, but generally lower.
     
    And unless we get some really good news from the Producer Price Index at 8:30, we’ll get some bad news from the market 9:30.  Right now, adjusted for fair value, the S&P futures down almost 4 points, the Dow futures are down about 29, and the Nasdaq futures are about 8 ½  points below fair value. 
     
    May 16, 2005
     
    The price of oil continues to drop this morning, as OPEC says that they’ll keep pumping as long as the world keeps gulping.  Light sweet crude is down another 54 cents this morning at $48.13 per barrel.
     
    Earnings misses this morning; from Lowe’s and The Limited.  Limited also lowered earnings guidance for the rest of the year.
     
    At 9 o’clock this morning, the Treasury Department will report on the level of international investment in U.S. financial markets.  This is a long-time report that has gotten more attention lately.  Massive foreign investment has supported the U.S. bond market and kept long term interest rates nice and low, even as short term rates have been going up. We’ll see if those inflows continue to support the bond market and dollar.
     
    Generally, overseas stocks are lower. However, trading is light in Europe for the Monday-after-Pentecost Holiday, known as Whit Monday.  Hong Kong markets were closed for Buddha’s birthday. Wall Street is celebrating a positive futures picture.  Right now, adjusted for fair value, the S&P futures up about 2½ points, the Dow futures are up about 21, and the Nasdaq futures are about a point above fair value.  
     
    May 13, 2005
     
    Earnings reports range from the good to the fine to the really pretty ugly this morning.   Computer graphics company Nvidia tripled their income from last year and beat estimates pretty handily.  Dell Computer continued to grow at a solid rate for a company their >
     
    And what about the ugly? In last year’s first quarter Delphi produced a 22 cent profit.  This year, a 30 cent loss was expected.  The actual loss? 68 cents per share and a lowered forward estimate for sales to GM.  While less than 50% of Delphi’s sales are to GM, it’s still a big chunk.
     
    At 9:45, the University of Michigan’s preliminary Consumer Sentiment Index for May is expected to read 88.  The price of light sweet crude oil is up a bit this morning, but is still below $49 dollars per barrel after yesterday’s big decline.
     
    For some reason, Swedish stocks are trading higher this morning.  Maybe the cold weather is leading to more sauna sales. Whatever.  Stock markets everywhere else overseas are lower at this hour.
     
    We’re looking for a little uptick at 9:30. Adjusted for fair value, the S&P futures are up 1 ½ , the Dow futures are up about 19, and on that good report from Dell, the Nasdaq futures are about 5 points above fair value. 
     
    May 12, 2005
     
    The April Retail Sales Report at 8:30 this morning is expected to reflect a rise of 7 tenths of one percent.  If you strip out car sales, the increase is expected to be 4 tenths of a percent.
     
    One fairly important retailer had some disappointing earnings news this morning.  Walmart made 55 cents per share last quarter.  That’s a lot of money, but Wall Street was expecting a penny per share more.
     
    On the flip side, Disney beat estimates by a penny per share and Mylan Labs beat by two cents.  After the close of trading today, Dell Computer is expected to report profits of 37 cents per share, which would be up about 32% from a year ago.
     
    The futures were pointing to a higher open a couple of hours ago, but the bad news from Walmart put the kibosh on that idea, inspite of lower oil prices.  At this hour, adjusted for fair value, the S&P  futures are down a point or so, the Dow futures are down about 16, and the Nasdaq futures are about 4 points below fair value. 
     
    May 11, 2005
     
    The PBGC is officially taking over the United Airlines pension plan.  That means that United is off the hook for about 6.6 billion dollars of pension liability, and the maximum a United retiree can expect in pension benefits is capped at around $45,000 per year.  However, most will receive much less, especially if they retire before age 65. 
     
    Pay attention, folks.  At the end of last year over 80% of the S&P 500 companies had underfunded pension plans.  That up from about 5% in 1999.  Just because a plan is underfunded doesn’t mean you’ll lose your pension.  But if your employer is in financial trouble, you’d better be saving your pennies.
     
    Cisco Systems beat estimates by a penny last night.  China may or may not be getting ready to unpeg its currency from the dollar.  A story in the online version of official Chinese newspaper reported that the peg would be loosened next week, however the story has now been removed from the web site.
     
    Oil’s down 58 cents at $51.49 per barrel.  We’re looking for a pretty flat open. Right now, adjusted for fair value, the S&P futures are up less than a point, the Dow futures are down 1, and the Nasdaq futures are about 2 points above fair value. 
     
    May 10, 2005
     
    The results of a survey of allegedly top-flight economists, called the “Blue Chip” survey, were released this morning, and evidently the survey participants had some salt poured in their sugar bowl last month.  The consensus calls for the U.S. economy to slow down this year.
     
    We have good news and bad from The Great Atlantic and Pacific Tea Company this morning.  You may know them as A&P or Farmer Jack or Food Basics.  Losses last quarter were narrower than expected.  In addition, the losses will come to and end in Michigan and Ohio and possibly in Canada as well.  That because the Michigan and Ohio operations will be closed or sold and Canada is apparently being shopped.
     
    Cisco Systems is the big earnings report of the day.  Analysts are expecting 22 cents per share in earnings.  Domino’s Pizza with better than expected earnings this morning, but El Paso made only 17 cents per share versus and expected 21 cents.
     
    Oil is holding above 52 dollars per barrel.  It looks like we’ll see some significantly lower stock prices at the open of trading.  Right now, adjusted for fair value, the S&P futures are down almost 5 ½, the Dow futures are down 34, and the Nasdaq futures are about 9 points below fair value. 
     
    May 9, 2005
     
    General Motors’ Board meets today.  Oh, to be a fly on the wall for that one!
     
    It’s Monday.  There must be a merger or two out there.  Duke Energy is buying Ohio-based Cinergy in a stock swap at about a 13% premium.  It’s about a 9 billion dollar deal.  Meanwhile, the online brokerage industry continues to consolidate.  Ameritrade has reportedly been in talks for a couple years or more with an eye toward buying TD Waterhouse from Toronto Dominion.  Now, E-Trade is making an unsolicited bid to acquire Ameritrade.  As the internet has eliminated many middlemen and reduced the commissions others can charge in industries that aren’t state-protected, consolidation will continue.
     
    Given all the price pressure on commissions, you may wonder why you’re still stuck paying a fixed 6% commission when you sell your home.  Well, the Justice Department is finally asking the same question.  The Wall Street Journal reports that the government is preparing to sue the National Association of Realtors for anti-competitive practices.
     
    We’re looking for a flat open for stocks at this point.  Right now, adjusted for fair value, the S&P futures are flat, the Dow futures are up a point and a half, and the Nasdaq futures are about 2 ½ points below fair value. 
     
    May 6, 2005
     
    At some point in your life, you’ve probably driven a “junker.”  But you probably didn’t expect the same kind of ride when you bought a bond from a Detroit automaker.  As we all know, Standard & Poors added insult AND injury yesterday, downgrading GM and Ford debt to “junk” status.  Although that step had been widely expected, the downgrade came a lot faster than a lot of people had thought it would.
     
    The big economic number of the day is the monthly employment report.  In March, the economy only generated 110,000 new jobs.  That was the slowest job growth in eight months.   Expect the April report to reflect 190,000 new jobs.  This is probably one of those numbers that we’d like to see not too high, but not to low.  Anything in the 175,000 to 200,000 range should be well received.
     
    The futures got a little lift last hour as General Electric raised their earnings estimate for the quarter by a penny per share.  But, we’ll have to wait for the jobs number at 8:30 to know how stocks will open at 9:30.  At this point, adjusted for fair value, the S&P futures are up about 4 points, the Dow futures are up 19, and the Nasdaq futures are about 3 points above fair value. 
     
    May 5, 2005
     
    Happy Cinco de Mayo.  It was certainly a happy “cuarto de Mayo” if you hold General Motors stock.  GM rose over 18 percent yesterday after the 28 million share tender from Kirk Kikorian. Kikorian insists that he will remain a “passive” investor in General Motors, and is not trying to take control of the company.  That may well be.  However, if he rolls up to the Ren Cen with a new vehicle design that looks like a big wooden horse, I’d be ready for anything.
     
    If you work for IBM in Europe, keep that resume on the hard drive. Ten to thirteen thousand jobs will be sent to the recycle bin.  Most of those deletions will be in Europe.  IBM employs about 300,000 people worldwide. 
     
    Costco is out with a strong sales report this morning.  Same store sales up 8 percent.  Sales at Walmart stores inched up only a tenth of a percent.  Sam’s Club saved the day for Walmart.  Sales there were up 4.9%.  JC Penney beat expectations for the 1st quarter, but appears to have lowered their guidance for the rest of the year.
     
    At 8:30 the report on first quarter productivity is expected to be up about 1.8%.  We’ll also get the weekly jobs report.  Absent any big surprises, we’re looking for slightly lower prices at 9:30.  Adjusted for fair value, the S&P futures are down less than 2 points, the Dow futures are down 16, and the Nasdaq futures are about 4 points below fair value. 
     
    May 4, 2005
     
    Kirk Kikorian’s Tricinda Corporation is making a tender offer to acquire 28 million shares of General Motors stock at 31 dollars per share.  GM closed at 27.77 last night.  This purchase would leave Kirkorian owning just a little less than 9% of General Motors.  He already owns about 4 percent. GM shares will pop at the open of trading.
     
    You know, you look at Alan Greenspan and say – “What a jokester.  What a riot he would be on “open mike” night.”
     
    Mr. Greenspan and his Open Market Committee have one very public job.  Every six weeks or so they set short term interest rates and then publish a statement.  It’s only nine or ten sentences, but the change of a word or two can send stock prices to gyrating.  Yesterday, the Committee did the expected.  The raised short term rates a quarter point.  In their statement, they reiterated a “measured” approach to further rate increases.  However, they deleted an entire sentence that in the March statement told us that long-term inflation was not a big problem.
     
    The stock market dropped immediately. 
     
    Then, six minutes before the 4 o’clock close of trading, the Committee said “Oh, come on – we were just kidding!”  Turns out that the inflation line was inadvertently omitted.  The market promptly rallied to close at a slight gain. 
     
    They have got to switch back to soft drinks at those Committee luncheons.
     
    Stock futures are weaker than they were a couple hours ago, but if you think they’re indicating a lower open for stocks, well, you’re wrong. After you adjust for fair value, the S&P futures are up 4 points, the Dow futures are up 11, and the Nasdaq futures are about 5 points above fair value. 
     
    May 3, 2005
     
    They come back every six weeks or so – kind of like that really, really bad heartburn you get in the middle of the night after you eat a pepperoni pizza.  Alan Greenspan and his big band of bodacious bankers meet again today.  At 2:15 they will raise short-term interest rates a quarter of a percent, to 3 percent.  Hopefully, they will not get too creative with their accompanying statement.  For months now, they have said that they will be raising rates at a “measured” pace.  Should they remove that “measured” language from the memo, and not replace it with other comforting words, like “we’re done now,” stock prices will not react well.
     
    Earnings continue to roll.  Locally, Masco missed their number and warned about the rest of the year.  EDS beat estimates.  Tyco beat estimates, but lowered their guidance, blaming higher raw material costs. Tyco stock is bid about 10 percent lower this morning.+
     
    Yesterday’s late day rally came on pretty thin volume.  In this current back-and-forth market environment, well you know what’s likely the day after the market goes “forth.”  We’ll probably take a step back at 9:30.  Adjusted for fair value, the S&P futures are down almost 2 points, the Dow futures are down 17, and the Nasdaq futures are 2 ½ points below fair value. 
     
    May 2, 2005
     
    Can it hold?  The oil futures are setting the price for a barrel of light sweet crude oil at 49.23.  That is down 49 cents on the morning.  That’s also a 2 ½ month low.  Stock futures have shifted into rally mode as a result.  
     
    At 10 o’clock, we get the April ISM report, which measures strength in the manufacturing sector of the economy.  Expect a reading of 55, which is down slightly from March’s 55.2, but still reflects growth in manufacturing nationwide. 
     
    So far, we have earnings reports from Avon and health management company Humana.  Both companies have better than expected bottom lines last quarter, although Avon was a little light on revenue.
     
    It’s Monday, do we have to mention mergers and acquisitions.  Neiman Marcus is being bought at about 100 bucks per share by a private equity firm.  Verizon has upped the ante again in its ping pong match against Qwest for MCI.
    European stocks are up on the order of a half percent to one percent right now.  At this point, adjusted for fair value, the S&P futures are up about 3 ½  points, the Dow futures are up 34 ½, and the Nasdaq futures are about 7 points above fair value.   

    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank any of the sponsors of our daily WJR reports

    June 28, 2005
     
    How about that Bob Dylan?  First a deal with Victoria’s Secret, and now an exclusive deal with Starbucks?  Oh, the times they a change-ed.  Starbucks will be the exclusive source of a new Bob Dylan CD for the next sixteen months. The price will be $13.95 for the CD, which I believe is still slightly higher than a cup of the house-brand coffee, although I’m not sure about that.
     
    We’ll go into the trading day with the wind blowin’ at our back today.  The price of oil has slipped below 60 dollars per barrel, currently $59.89, and that has markets overseas bubbling up.
     
    On Friday of this week, we’ll get the University of Michigan’s Consumer Confidence Index.  But at 10 o’clock this morning, it’ll be the June Consumer Confidence Index from the Conference Board.  Expect a reading around 104.  That would be up a couple points from the May number.
     
    A little later today, Congress will consider the Central American Free Trade Agreement, which gives them a chance to do something that might actually HELP stock prices for a change, but don’t bet on it.
     
    Asian markets were up about one percent.  European markets are up about a half percent, on average.  We’ll get started on the right foot as well.  Adjusted for fair value, the S&P futures are up more than 4 points, the Dow futures are up 34, and the NASDAQ futures are almost 7 points above fair value. 
     
    June 27, 2005
     
    You can look at the monthly oil futures this morning, and month by month by month, as far as you can see, they all start with the number “6.”  The August contract for light sweet crude hit 60 dollars and 64 cents per barrel overnight and that is not good news.
     
    General Motors is reportedly restricting certain employee stock trading, now that their earnings guidance to the outside world is a lot less extensive.  GM wants no trading in their stock by any GM employee who may know something that you don’t know.  That idea, like gravity, is not only a good idea, it’s the law.
     
    There’s nothing much cooking on the economic calendar today.  Of course later this week we have some consumer confidence readings as well as a two-day meeting of the Alan Greenspan coffee klatch.
     
    Nike beat estimates by 3 cents per share this morning.  Walgreen also beat estimates.
     
    Markets around the world are lower on the news of 60 dollar oil.  Futures on our major stock indexes have improved during the past hour, but are still indicating lower prices at the market open.  Adjusted for fair value, the S&P futures are down about 1 ½ points, the Dow futures are down 13, and the NASDAQ futures are about 2 points below fair value. 
     
    June 24, 2005
     
    As they say, “Sticks and stones will break my bones, but Congressional hearings can cause incredible damage.” You can pin yesterday’s 166 point loss in the Dow squarely at the feet of the Senate Finance Committee.  Yesterday, the Committee held a hearing, which included testimony from economic experts Alan Greenspan and John Snow about trade with China.  While the testimony from those two suggested that Congress keep its hands off the China, there was a lot of very protectionist talk flowing from the mouths of the non-experts in the room.  There’s nothing that spooks stock prices quite like fears of a good old-fashioned trade war.
     
    The May Durable Goods report, due out in a few minutes, is expected to show an increase of 1.3 percent.  There’s less than a week left in the second quarter, so keep an eye out as well for any earnings warnings that someone may try to leak out on a slow summer Friday afternoon.
     
    Asian markets finished mixed.  Most European markets are down ½ to 1 percent at this hour.  We’re looking for a mixed market at 9:30.  Adjusted for fair value, the S&P futures are up less than a half point, the Dow futures are down 5, and the NASDAQ futures are about 2 points above fair value. 
     
    June 23, 2005
     
    Federal Express is out with their earnings report this morning.  They missed Wall Street’s revenue and earnings estimates for the 4th quarter and issued guidance for the 1st quarter that’s not all that rosy.  It’s a tough business when energy costs are up so much.
     
    Speaking of energy, as expected, CNOOC is bidding 18 ½ billion dollars in cash to acquire Unocal.  Chevron had bid about 17 billion for Unocal recently.  Given that CNOOC is 70% owned by the Chinese Government, this offer may pour gasoline on some potentially fiery Congressional debate about trade sanctions against China. 
     
    Homebuilder D.R. Horton will be going into the S&P 500 Index, replacing Veritas Software, which is being acquired.
     
    It’s one of those funny mornings when the futures have been negative most of the morning, but at this point, they are actually predicting a rise in stock prices.  After you adjust for fair value, the S&P futures are up a fraction, the Dow futures are up 8, and the NASDAQ futures are a little less than a point above fair value. 
     
    June 22, 2005
     
    Bye-bye to salaried bonuses and bye-bye to 401(k) matching funds, and for some 1,750 Ford salaried employees, well, it’s just bye-bye altogether.  Shortly after the market closed yesterday, Ford Motor lowered their earnings estimates once again, and announced a barrage of cost cutting which is not likely to help the purchasing power of a lot of local households.  Profits for the year are now estimated to come in at a buck to a buck and a quarter per share.  Ford stock traded down about 5% in the after hours last night.  This morning, in Europe, there has been some recovery.  However, look for Ford to open a 9:30 about 3 percent or so lower than yesterday’s close.
     
    Coca-Cola and the European Economic Commission have settled a six-year-old dispute over trade practices.  Coke won’t be subject to a big fine, but will have to change their sales practices.  So, if you’re traveling to Europe, you may be able to enjoy a wider variety of “fizzy drinks” than before.
     
    Stocks in Hong Kong went vertical last night; the Hang Seng was up almost 181 points.  Most European markets area positive this morning.  That’s where we’re headed as well.  Right now, adjusted for fair value, the S&P futures are up about 4 ½  points, the Dow futures are up 40, and the NASDAQ futures are about 8 points above fair value. 
     
    June 21, 2005
     
    Obviously, with a billion or so people, China’s potential as a consumer nation is huge.  But as a growing economic power, you can look for more Chinese investors assembling Chinese-owned companies to sell stuff to those consumers.
     
    Two potential examples this morning; Maytag, which has been offered 14 dollars per share by Ripplewood Holdings, may be offered 16 bucks by an investment consortium that includes China’s Haier American Trading.  There’s also speculation that China’s CNOOC may offer $71.50 per share in cash for the big oil firm Unocal, which would easily trump Chevron’s cash and stock offer.
     
    Homebuilder Lennar reported terrific earnings this morning.  They beat estimates by 29 cents per share and raising guidance for the year by almost 10 percent.
     
    Overseas, most markets are up about a quarter percent at this hour.  Our futures have been pointing toward a lower open all morning long, but at this point they’re not terribly bad.
     

    Adjusted for fair value, the S&P futures are down about a point and a half, the Dow futures are down 17, and the NASDAQ futures are about 2 ½ points below fair value. 

     

    June 20, 2005

    Throughout the first three months of this year, when the price of oil zigged, the stock market zagged.  Hour after hour, it seemed to be an almost perfectly inverse correlation.  So far this second quarter, stock prices have pretty much decoupled from that relationship.  However, today’s oil prices may get the stock market’s attention again.
     
    The August contract for light sweet crude breeched the 60 dollar level overnight, and although we’re back down to 59.66 right now, many overseas stock markets and our futures are seeing red.
     
    If you own shares of Cablevision, you are about to be bought out.  In a complex deal that involves spinning off some assets and spitting up 21 bucks per share in cash, the Dolan family is taking Cablevision private in what amounts to a 25 percent premium to the little people.  Excuse me, I mean “other shareholders.”
     
    At 10 o’clock, the May Leading Economic Indicators are expected to be down 3 tenths of a percent.  Adjusted for fair value, S&P futures are down almost 5 ½ , Dow futures are down 38 points, and the Nasdaq futures are just about 7 ½ points below fair value. 
     
    June 16, 2005
     
    If you’ve never heard of a company called Vicuron, you’re not alone.  It’s a company that makes anti-infective and anti-fungal medical products.  It’s a stock that you could have picked up for well under 9 dollars per share last summer.  This morning, in a 2 billion dollar deal, drug giant Pfizer is buying all shares of Vicuron for more than 29 cash dough dollars per share. That’s a 74% premium from yesterday’s closing price.
     
    There’s a story in the Wall Street Journal this morning that the Justice Department is weighing obstruction of justice charges against accounting firm KPMG.  However, it may never come to that.  You’ll remember that DOJ put Arthur Andersen out of business by indicting that firm on a charge that was later overturned.  No matter how strong the case against KPMG, there are only four big accounting firms left.  Potentially eliminating one of them, especially given the demand for their services created by Sarbanes-Oxley, may not be deemed to be in the public’s best interest.
     
    May Housing start numbers are expected to be up slightly at 8:30. Stocks in Hong Kong were down overnight, but most other overseas markets are in the green.  We’re looking for a light shade of green at 9:30. Adjusted for fair value, the S&P futures are up a less than a point, the Dow futures are up 10, and the NASDAQ futures are about 2 points above fair value. 
     
    June 15, 2005
     
    We may have discovered a great new way to raise a lot of money.  Today, JP Morgan announced that, without admitting that they did anything wrong in the Enron matter, they are forking over $2.2 billion dollars.  Now that’s generosity.  Just a couple of days ago, Citigroup paid 2 billion dollars in the same matter, again without admitting that they did anything wrong.  You know, 2 billion here, 2 billion there…. this could totally replace bake sales as a way to raise some cash.  By the way, for accused firms that don’t settle with the lead plaintiff, the University of California, the trial starts in October of 2006.
     
    OPEC did the expected this morning.  They announced an increase in the production quota by 500,000 barrels per day.  It hasn’t helped much so far.  Oil futures are up 51 cents at $55.51 per barrel.
     
    At 8:30, look for the May Consumer Price Index to come in at a one-tenth of a percent increase.  We’ll also get industrial production and capacity utilization numbers at 9:15.
     
    In front of all that stock futures are pretty flat. Adjusted for fair value, the S&P futures are up a fraction, the Dow futures are up 7, and the NASDAQ futures are about 2 ½  points above fair value. 
     
    June 14, 2005
     
    A couple of big economic reports will be released in ten minutes or so.  The May Producer Price Index is expected to have declined 2 tenths of one percent. BUT, if you exclude the food and energy components, it’s expected to show a 2 tenths of one percent INcrease.
     
    Likewise, it’s expected that May Retail sales declined by 2 tenths of a percent, BUT if you exclude declining automobile sales, the core index is expected to be UP 2 tenths of a percent.
     
    Of course, if all businesses could include all the revenue But exclude all the expenses they would always be wildly profitable.  But, I digress…
     
    The Manpower Job survey is out and for the sixth quarter in a row, it reports that more businesses are planning to add workers this year than the number that are planning to trim their workforce.
     
    We have an earnings warning from Knight-Ridder and disappointing results (so what else is new) from Pier One this morning.  Best Buy announced great quarterly results just a few minutes ago and they are raising their yearly guidance. 
     
    The futures are indicating slightly higher prices at this point. Adjusted for fair value, the S&P futures are up a point and a half, the Dow futures up 6, and the NASDAQ futures are 3 ½  points above fair value. 
     
    June 13, 2005
     
    It seemed like a good idea at the time.  Let’s merge a white shoe investment banking firm, Morgan Stanley, and a retail stock broker, Dean Witter.  Never mind that apparent culture clash – they’ll work things out.  Well after some very messy and very public disputes and after dozens of firings and defections, it appears that the turmoil surrounding the head honcho at Morgan Stanley is entering a final stage. 
     
    This morning Morgan Stanley announced that Phil Purcell, the embattled CEO will step down as soon as a replacement can be found, and you can bet that the headhunter has been given orders to make it snappy.  Morgan Stanley stock is up 6% in pre-market bidding on that report.
     
    News Corp will be buying back 3 billion dollars of company stock.  Procter & Gamble is cutting their upfront television ad spending by 5% and their cable spending is going down faster than Mike Tyson on pay-per-view.  They’re cutting cable by 25%.
     
    Stock futures, which were positive earlier this morning have been backtracking pretty steadily and are pointing to slightly lower prices at 9:30.  At this point, adjusted for fair value, the S&P futures are down a point and change, the Dow futures down almost 7, and the NASDAQ futures are about a point below fair value. 
     
    June 10, 2005
     
    Intel’s stock price has been running up of late, in anticipation that the quarter was going well.  Well, Intel came through with that anticipated good news last night.  Sales of computer chips for laptops will power Intel’s sales to the high end and beyond prior expectations.  That news will be good news for stocks this morning.  Except, of course, for Intel.  It will be a case of buy on the rumor and sell on the news, as Intel is down about one percent on Europe this morning.
     
    Yesterday Alan Greenspan played his favorite verbal game, called “Ring around the Congress,” no doubt leaving them more befuddled than before.  The upshot, however, is that he gave no indication that the Fed is done (or close to being done) raising short-term interest rates.  In reaction, interest rates on the 10 year Treasury Bond are backing up to 3.97 percent this morning.  They had been below 3.90 earlier this week.
     
    We’ll get some trade data at 8:30 and some Treasury Budget data at 2 o’clock, but all in all it should be a pretty quiet trading day.  Adjusted for fair value, the S&P futures are up about a point, the Dow futures are up 16 but the NASDAQ futures, no doubt reflecting the pullback in Intel, are about 2 points below fair value. 
     
    June 9, 2005

    There’s big doings on Capitol Hill today. Alan Greenspan will be there to play baseball with the Joint Economic Committee of Congress. Expect him to catch the usual flurry of wild curveballs, as investors strain to find out whether the interest rate tightening cycle is in the sixth inning, the seventh inning, or the ninth inning. Or maybe, like the National Champion Michigan softball team, he planning a 10th inning home run. In any event, the stock market will likely hang on his every word today.

    The other major announcement of the day will come after the market closes when Intel issues their mid-quarter update. They are expected to reaffirm prior guidance, but if they surprise to the upside, like Texas Instruments did earlier this week, tech stocks should get off to a good start tomorrow.

    Tokyo was off 1 percent overnight. Most European markets are marginally lower. The Bank of England held interest rates steady today.

    Futures on our major stock indexes have rallied during the past hour and are pointing toward a flat open for stocks at this point. Adjusted for fair value, the S&P futures are up a point, the Dow futures are up 3 and the NASDAQ futures are 4 points above fair value.
     
    June 8, 2005
     
    Kirk Kikorian only got about 19 million of the 28 million shares of General Motors he was looking for yesterday in his tender offer.  Don’t cry any tears for him.  With GM trading below his offer price of 31 bucks, he can now just go out into the open market and pick up more shares on the cheap.
     
    There’s nothing quite like good news from a technology company and lower oil prices to light a little fire under stock prices.  So bring your marshmallows and get ready for a rally at 9:30.
     
    Last night Texas Instruments raised their earnings and revenue guidance for the current quarter.  They reported strong demand for calculators and cell phones.  Apparently, a lot of people are trying to calculate how much home equity they can still borrow against, and then calling their mortgage broker before an opportunity to go further in debt slips away.
     
    As I mentioned, oil prices are down this morning at $53.10.  But at 10:30, we’ll get the weekly report on crude oil and distillate inventories.  Expect a rise of about a million barrels in each.
     
    Caterpillar landed a broker upgrade this morning and is looking to open higher as is Altria, on hopes for lower potential liability with respect to an on-going trial.
     
    Stock futures have cooled a bit, but are still looking pretty good.  At this point, adjusted for fair value, the S&P futures are up almost 5 points, the Dow futures are up 47 and the NASDAQ futures are 8 ½ points above fair value. 
     
    June 7, 2005
     
    Some days, it’s just not much fun going in to work.  Or at least, it’s not as much fun as it is on other days.  I don’t know how much fun Rick Wagoner has had at work lately.  But, I can’t imagine that he was terribly happy to hear the alarm go off this morning.
     
    General Motors will be holding a shareholders’ meeting. Your run of the mill shareholders’ meeting will often have a sharp question or two directed at company management.  This meeting may serve up a couple more than that.
     
    For the general stock market, it’s another Alan Greenspan week.  Yesterday, he spoke in China about the interest rate conundrum.  On Thursday, he will testify before Congress about the economy.  Yesterday his comments calmed a jittery market and we ended the day with a small gain. 
     
    European markets are mostly positive at this point.  Our futures have been steady creeping higher all morning long. At this point, adjusted for fair value, the S&P futures are up almost 3 ½ , the Dow futures are up 29 and the NASDAQ futures are almost 5 points above fair value. 
     
    June 6, 2005
     
    It’s Monday.  There must be mergers to talk about.  Washington Mutual is buying Providian Financial, which one of the biggest credit card companies out there.  It’s about a 6 ½ billion dollar deal.
     
    A couple of real estate companies are also getting together, as ProLogis is buying Catellus at about a 16 percent premium.
     
    The music is playing a little faster in the three member waltz between E-Trade, Ameritrade and TD Waterhouse.  E-Trade is raising their bid for Ameritrade, which is reportedly in late-stage talks to buy TD Waterhouse from Toronto Dominion.
     
    Apple is reportedly switching suppliers for at least some of their chips it uses in its computers.  Word is that Apple will start buying chips from Intel.  Currently, IBM and Freescale Semicomductor are the providers.  
     
    Oil futures are up again, at $55.22 per barrel.
     
    Stock futures have been positive all morning, but not by a lot.  So, it looks like we’ll see a little net buying at 9:30.  At this point, adjusted for fair value, the S&P futures are up less than a point, the Dow futures are up 12 and the NASDAQ futures are 3½ points above fair value. 
     
    June 3, 2005
     
    The monthly jobs report will be released in about 10 minutes.  It should hold the key to how stocks trade at 9:30.  The yield on long term bonds dropping like a stone recently.  The ten year treasury yield this morning is at 3.89%.  It could well be that the bond boys and girls are signaling an upcoming economic slowdown.  A weak jobs report would add fuel to that fire.  The consensus estimate is the addition of 185,000 new jobs last month.  Any significant shortfall should add duel to that fire.  The unemployment rate is expected to hold firm at 5.2 percent.
     
    There’s a merger in the defense industry this morning, although this one has been widely anticipated.  L-3 is buying Titan in a 2 billion dollar deal.
     
    Intel stock has been on a little run lately and this morning two major brokerage firms have upgraded their rating on the stock.
                                                                                                                                                                           
    Overseas markets are mostly positive, but only by a very tiny margin.  Our futures are pointing slightly lower, but this morning everything depends on the jobs report at 9:30.  At this point, adjusted for fair value, the S&P futures are down a point, the Dow futures are down 7 ½, and the NASDAQ futures are just about even with fair value. 
     
    June 2, 2005
                                 
    At 10:30 this morning, we’ll get the weekly inventory data on gasoline and crude oil stocks in the U.S.  Don’t look now, but light sweet crude prices are over 54 dollars a barrel again.  They are down 25 cents this morning, but they’re still at $54.35.
     
    On the flip side of the consumer pocketbook, long term interest rates plummeted again yesterday.  The ten year Treasury that started the day around 4 percent ended the day at 3.9%.  Either the bond market is predicting a really lousy economy in the future, or, a lot of hedge funds are busy covering short positions in the ten year bond and are driving that yield down.  Either way, is you are about to lock in a mortgage or refinance, this is a very good thing.  But, look out for the employment report tomorrow.  A really strong number could give us a quick about->
     
    Walmart same store sales were up 2 ½ % in May, Costco sales were up 3% domestically and 12% overseas.  That works out to 5% overall.
     
    There may never be a European Union, but there is a European Central Bank.  They met this morning and decided to leave interest rates unchanged.
     

    Stock futures haven’t moved much this morning and have been pointing toward a lower open for the market all morning long.  At this point, adjusted for fair value, the S&P futures are down almost 2 points, the Dow futures are down 21, and the NASDAQ futures are up almost 4 points below fair value. 

    June 1, 2005

    We’ll find out today just how bad the numbers are when the May car sales figures roll off the line. It’s expected that Ford sales slipped 4 percent.  GM sales are expected to be off more than 5 percent.

    At 10 o’clock the May ISM index, which is another gauge of manufacturing activity is expected to show very slight expansion at a level of 52.2.  That’s down from 53.3 last month, but still above the “break even” number of 50.
     
    In case you didn’t notice, yesterday the Supreme Court threw out the conviction of accounting firm Arthur Andersen in the Enron matter.  This is roughly equivalent to changing the verdict after executing the defendant.  So to the 30,000 people who lost their jobs – try not to be in the wrong place at the wrong time – next time.
     
    Just in time for summer driving season, oil is pushing 52 and a half bucks per barrel this morning.  On the good news side, the ten year Treasury Bond opens today at just a hair above a 4 percent yield, which of course is good news if you are looking to borrow long-term money.  That assumes, of course that you are one of the remaining seven people left in this country who is not already hopelessly in debt.
     
    Stock prices should be relatively flat at the open today.  Adjusted for fair value, the S&P futures are up less than a point, the Dow futures are up 12 ½, and the NASDAQ futures are just a fraction above fair value. 

    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank any of the sponsors of our daily WJR reports

    July 29, 2005
     
    “Sell in May and go away.”
     
    It’s just another example of “conventional wisdom” being very conventional, but not very wise.  Defying that well-worn axiom of stock trading folklore, the summer rally continued yesterday as earnings reports continue to come in better than analysts expected.  On average, it looks like about a 13% profit increase for the quarter, and profit projections for the third quarter are being raised as well.
     
    Your favorite hamburger may be a single, a double or a triple, but it looks like Wendy’s stock will hit a biggie home run this morning.  Earnings for the quarter were good, they are raising the dividend, buying back stock and they’re musing about a spin off of a portion of their Tim Horton’s chain.  Shares are indicated up about 10 percent in the pre-market. 
     
    Volkswagen shares are up in Europe, on a good earnings report.  Net profits were a little light, but sales and operating profits were better than expected.
     
    AT 8:30, we’ll get the advance number on 2nd quarter Gross Domestic Product.  It’s expected to have slumped to 3.4%.  A larger number than that should give us a larger gain at 9:30, but as of now it looks like we’ll start modestly in the green.
     
    Adjusted for fair value, S&P futures are up 2 points, the Dow futures are up 14, and the NASDAQ futures are about 3 points above fair value. 
     
    July 28, 2005
     
    It’s heads up for shares of DaimlerChrysler in Europe.  For the quarter gone by, unit sales were up 4%, revenue was up 4%, profits were up 28% and that was significantly better than expected.  Taking the opportunity to say “goodnight” on a positive note, Jeurgen Schrempp will exit stage right at the end of the year.  Dieter Zetsche will plop into the driver’s seat January 1st.  Add it all up, and Daimler shares are up about 10% in Europe this morning.
     
    If you’re one of those people who lately have been spending more on gasoline than food, you’re probably losing weight, and you’re probably not surprised that Marathon Oil made $2.16 per share versus $1.52 estimate and ExxonMobil checked in with a profit of more than $7.6 billion for the past three months.  That’s $1.24 per share, which is in line with estimates.
     
    The only significant economic news scheduled for today is the weekly jobless claims report at 8:30. Expect claims to have fallen by 34,000 to 320,000. 
     
    Asian markets were fairly flat overnight, but European markets are up again. We should head a little higher at 9:30. Adjusted for fair value, the S&P futures are up a little more than a point, the Dow futures are up 14, and the NASDAQ futures are about a half point above fair value. 
     
    July 27, 2005
     
    Oil prices could get interesting today.  At 10:30 this morning, we’ll get the Energy Information Administration’s weekly report on domestic oil inventories.  Maybe they should call it the Energy Mis-information Administration.  There’s a lot of confusion on year-to-year comparisons.  It’s suspected that last year’s demand numbers were understated.  That means that THIS year’s oil demand isn’t increasing that much after all. Throw some hurricanes into the mix and it’s hard to tell just what’s really going on.  In any event, most analysts expect a build of a million barrels or more in crude inventories, but estimates on distillates are all over the place.
     
    Two very positive earnings reports should lead the market a little higher at the open.  Amazon’s sales rose 26 percent last quarter.  They made 12 cents per share, versus an expected dime.  Their controversial two-day free shipping program looks to have really delivered.  Boeing was expected to make 61 cents per share last quarter.  They came in at 70 cents, and raised their guidance for the year by about 25 cents per share. 
     
    Stocks in Hong Kong were up three-quarters of a percent overnight.  Other markets are just about all positive by a half percent or less.  Our futures were fairly listless this morning, but the Dow & S& P futures picked up noticeably after the Boeing announcement.  At this point, adjusted for fair value, S&P futures are up almost 2 points, the Dow futures are up 17, but the NASDAQ futures are actually a half-point below fair value. 
     
    July 26, 2005
     
    Hundreds of companies report earnings today, and among the majors this morning, the results are running well ahead of forecasts.  Last night, Texas Instruments kicked things off by beating estimates by more than 10 percent on a 42% jump in profit.  They raised their dividend, raised guidance and announced a new stock buyback program.
     
    This morning Lockheed Martin blew away estimates. L-3 Communications, the big defense firm also beat estimates.  British Petroleum, which never met a higher oil price it didn’t like, said profit was up 29% in the quarter.  They will also buy back more of their own stock.
     
    At 10 o’clock this morning, the Conference Board will let us know how confident we are about our economic future.  Estimates range from 101 to 107, but the consensus calls for a reading of 106.5.
     
    The stock futures are a ways off their highs of the morning, but they are still fairly positive as we head toward 9:30.  At this point, adjusted for fair value, S&P futures are up close to 3 points, the Dow futures are up 18, and the NASDAQ futures are more than 4 points above fair value. 
     
    July 25, 2005
     
    Many more earnings reports are on tap this week.  Almost 30 percent of the S&P 500 companies will report.  Perhaps the most interesting of the reports will be from oil and oil-service companies.  We’ll see how much their profits are gushing after the recent run up in oil prices. Speaking of which, Smith International beat estimates by 2 cents this morning and raised earnings guidance for the remainder of the year.
     
    One potential merger won’t happen, but it looks another will.  Forget about that dream of a cola-flavored yogurt. Pepsi will NOT be buying Danone.  However, Teva Pharmaceuticals will again become the largest generic drug maker in the world.  They are buying IVAX at about a 14% premium to Fridays closing price.
     
    This one seems like a photocopy.  Once again this quarter, Xerox missed their earnings number and warned that the next quarter will be uglier than expected.
     
    Stocks in Japan were up about a half-percent overnight.  Most other markets overseas are positive at this hour, but positive by only very slim margins.  If our market were to open right now, well, you might not notice.  Adjusted for fair value, S&P futures are down about a quarter of a point, the Dow futures are down about 7 points, and the NASDAQ futures are just a fraction above fair value. 
     
    July 22, 2005
     
    So I said to my horse, “Why the long >
     
    Google and Microsoft both beat earnings estimates last night, but their stocks are under pressure this morning.  What’s not to like here?  Microsoft warned that next quarter’s earnings might not be as strong.  Of course, I can’t remember a quarter when Microsoft didn’t temper expectations.  As for Google, it appears to be concerns about gross margins.  Yes, margins came down in the past quarter as Google hired more employees to service their rapid growth.  But again, hiring more people to support growth seems to me to be a better sign than cutting jobs due to shrinking business.  Nevertheless, Google was off 30 bucks per share in after-hours trade, although it appears to have recovered more than half of that loss this morning.
     
    Other positive earnings news this morning from Halliburton, Schlumberger, Scientific Atlanta, Fortune Brands and Kimberly-Clark.  No big disappointments so far.
     
    Stocks in Hong Kong were up over one percent overnight.  European markets are off about a quarter percent after the subway shooting in London this morning.  Our futures have been creeping up during the past couple of hours, but are still pointing toward a slightly lower open.  Adjusted for fair value, S&P futures are now almost flat, the Dow futures are down only 4 points, and the NASDAQ futures are about 5 points below fair value. 
     
    July 21, 2005
     
    Big news out of China broke about 80 minutes ago sent stock futures soaring.  They have since retreated quite a bit.  China announced that they will break their currency’s peg to the dollar.  Now, before you get too excited about this, know that they are only revaluing the yuan by about 2 percent, and in the future, will peg the yuan to a basket of currencies, and they’ll keep it within a band of 3 tenths of a percent.  In short, economically this is not a big deal immediately.  It’s not like they’re letting the yuan float in a free market.
     
    However, if you remember the Congressional hearings that were held four weeks ago today, you’ll remember all the protectionist bluster that spewed from some members of Congress.  You may also remember that the Dow Jones Industrial average fell 166 points that day.  Hopefully, today’s announcement will seal the loose lips that could trigger an ugly trade war.
     
    Earnings continue to roll.  The miss of the morning came from Nokia.  They also lowered guidance and said that they will stop giving quarterly guidance in the future.  Ebay, Allstate, Caterpillar and Coca-Cola are out with excellent earnings reports.  Google and Microsoft will report later today.
     
    Stocks across the sea are up across the board.  We’ll should head north at the open as well, but not by much.  Adjusted for fair value, S&P futures are actually down a point, the Dow futures are up just 2 points, and the NASDAQ futures are up about a point above fair value. 
     
    July 20, 2005
     
    General Motors reported earnings 20 minutes ago, and unlike Ford’s report yesterday, which was and ugly report with a pretty veneer, this report is just plain ugly.  GM lost 51 cents per share on an operating basis in the quarter.  They were expected to make 3 cents.  GM says that they are not yet making progress on the cost cutting side.  I would imagine that they may have already emailed this report over to UAW headquarters.
     
    This is the biggest day of the quarter for earnings reports, with 6 of the Dow Jones 30 Industrials companies reporting.  On the whole, the reports are pretty much in line with analyst estimates.  Unfortunately, a couple of high profile reports that didn’t exceed expectations will drag the market lower this morning.
     
    Yahoo reported last night that earnings for the quarter met expectations, but certain types of ad revenue were up less than expected.  Intel actually beat estimates, but profit margins weren’t quite up to snuff.  This morning, Pfizer, Honeywell and United Technologies all beat estimates.  Amgen had a great quarter.  Altria and Eastman Kodak both missed their numbers this morning.
     
    Mr. Greenspan goes to Washington later today, but ahead of that, we’ll head lower at the open.  Adjusted for fair value, S&P futures are down 5, the Dow futures are down 38, and the NASDAQ futures are about 12 ½ points below fair value. 
     
    July 19, 2005
     
    Just like in golf, where every shot makes somebody happy, earnings reports can be a peach or a pit, depending on your perspective.  This morning Ford Motor announced 47 cents per share in earnings for the quarter gone by.  The good news is that auto sales volume was up 5.4 percent worldwide and that analysts were expecting only 33 cents of profit. Under the sur>
     
    IBM checked in with a great earnings report last night on a healthy increase in services contracts.  IBM made $1.12, which was nine cents per share more than expected.
     
    The warning of the morning comes from Avon Products, which missed and warned.
     
    Oil is down a touch as we await damage reports from Hurricane Emily.  Stocks are down a fraction in London, but most European markets are up a bit.  We will go up more than a bit at 9:30. Adjusted for fair value, S&P futures are up 5 ½ , the Dow futures are up 75, and the NASDAQ futures are about 10 points above fair value. 
     
    July 18, 2005
     
    Brace yourself for earnings reports – and lots of them.  Half of the Dow Jones 30 Industrials report this week.  So far this morning, we’ve seen one major disappointment.  Citigroup was expected to make $1.02 per share last quarter.  Turns out that they fell a nickel short.  Citigroup is looking to open about a dollar per share lower.
     
    On the infamous “other hand,” Bank of America checked in with $1.08 of profit, compared to an expected $1.01.  Mixed results from the toy business, as Hasbro beat estimates handily, while Mattel fell short.  IBM and 3M report later today.  Locally, Eaton Corporation beat estimates by a nickel per share and raised their full year outlook.
     
    Surprisingly, this morning’s price of oil is down 42 cents per barrel, in spite of Hurricane Emily stirring things up with Mexican production.  The reason is a new report out of OPEC forecasting slower growth in economies worldwide.
     
    Markets in Europe are fairly flat.  We’re looking to open a little lower at 9:30.  At this point, adjusted for fair value, S&P futures are down 2 ½ , the Dow futures are down 27, and the NASDAQ futures are about 4 ½  points below fair value. 
     
    July 14, 2005
     
    We have a little whirlwind of good news this morning, starting with that big whirlwind in the Carribbean.  It now looks like Hurricane Emily will head for the Yucatan Peninsula rather than the Panhandle of Florida.  Accordingly, the fear of a major hurricane disrupting oil production in the Gulf of Mexico is fading fast.  Disrupting scuba diving in Cozumel is not nearly as big of an economic issue.
     
    Put that on top of yesterday’s news of a big buildup in distillate inventories in the U.S. and you now have light sweet crude below 60 dollars per barrel.
     
    Put THAT on top of great earnings reports from Apple and Advanced Micro devices and what we have is a nice rally in stock prices around the globe.  Apple is up more than 5% in the pre-market.  Hong Kong stocks are up over 1 percent for the second day running.
     
    The June Consumer Price Index is expected to be up 2 tenths of one percent at 8:30 this morning, but absent any ugly surprise there, we’ll be off and running again at 9:30.
    At this point, adjusted for fair value, S&P futures are up 4, the Dow futures are up 34, and the NASDAQ futures are almost 9 points above fair value. 
     
    July 13, 2005
     
    $57 billion.  That’s the expected Trade Deficit figure for May that will be announced at 8:30.  That would be flat with April, and is one of the two big economic numbers of the morning.  The other, of course, is the weekly report on oil and oil distillate inventories in the U.S.  It’s expected that crude inventories fell, but estimates are all over the place as to the supply of oil distillates. 
     
    Light sweet crude is up to $60.75 this morning on continuing worries about soon-to-be-Hurricane Emily.
     
    Harley Davidson, after issuing a warning a few months ago, beat estimates handily and now says that earnings per share will grow between 10 and 13 percent this year due in part to a share buyback program.  The SEC is reportedly looking into that prior warning, to make sure that it didn’t mislead investors, perhaps allowing those shares to be bought back on the cheap.
     
    Gannett met estimates for the quarter, Abbott Labs issued a warning this morning.
     
    The Hang Seng Index in Hong Kong was up more than one percent overnight.  European markets are up across the board at this hour, mostly between a quarter and a half percent.  Our futures have been relatively flat all morning, although they just took a turn to the upside about a half hour ago.  At this point, adjusted for fair value, S&P futures are up a half point, the Dow futures are up 5, and the NASDAQ futures are about a quarter-point above fair value. 
     
    July 12, 2005
     
    Another nice day for stocks yesterday, as a decline in oil prices greased the skids.  Oil’s up a little today, as we start to worry about the next potential hurricane – this one’s called Emily.  If it continues on its projected path, Emily would enter the Gulf of Mexico, where it could cause oil production problems, early next week.
     
    Corporate earnings reports have started to roll.  Pepsi beat estimates by three cents per share this morning on a 9 percent increase in revenue.  Genentech had a blowout quarter.  On a 35 percent revenue increase, they made 30 cents per share.  Analysts had been expecting a 26 cent profit.
     
    Shareholders of Procter & Gamble and Gillette vote on their proposed merger today.  Of course, the companies still need regulatory approval both in the U.S. and Europe before they can combine.  One new merger this morning, in a cash and stock deal, Hudson United Bank is being bought by TD Banknorth at a 14% premium.
     
    Overseas markets are just slightly lower at this hour.  At this point, our futures are about as flat as flat can be.  Adjusted for fair value, S&P futures are down a fraction of a point, the Dow futures are down 4, but the NASDAQ futures are about a half point above fair value. 
     
    July 11, 2005
     
    It strikes me that hurricanes are a lot like my golf game. The best you can hope for is that it’s not a huge disaster and nobody gets hurt.  That’s pretty much the story with Hurricane Dennis.  Over the weekend, Dennis blew through the Gulf of Mexico without any significant disruption of oil drilling operations.  That has the price of light sweet crude below 59 bucks this morning, and has the stock futures in pretty good shape. 
     
    Second quarter earnings reports rev up this week, although today will be a fairly quiet day as far as scheduled news is concerned.
     
    At 11 o’clock this morning, GMAC, otherwise known as the money-making division of General Motors, will be giving us an update on how business is going.  At 5:15 tonight Genentech will hold an investor conference call as well.
     
    Dreamworks is out with yet another earnings warning this morning.  Evidently, it’s not just the movie business that’s slumping – it could be the DVD business as well.
     
    Overseas, the stars of the overnight were Hong Kong, up almost 1 ½ percent, and Germany, up over 1 percent.  We’ll get the week off to a good start at 9:30.  At this point, adjusted for fair value, the S&P futures are up 2 ½ points, the Dow futures are up 30 and the NASDAQ futures are about 8 points above fair value. 
     
    July 8, 2005
     
    Stocks in London are up more than 1 percent this morning.  That just about wipes out the losses of yesterday.  So, just as our stock market turned around midday yesterday, it appears that yesterday’s events, as tragic as they were, will not shake stock prices in the least.
     
    What could shake us up a bit is an unexpected number from the June Jobs Report.  It’s expected that somewhere between 180,000 and 200,000 new jobs were created in June and that the unemployment rate held steady at 5.1 percent.  We’ll find out in less than ten minutes.
     
    Alcoa kicked off second quarter earnings season last night by beating estimates by a penny per share.  There are a small handful of companies are scheduled to report today, but none are major companies.  If we get any market moving earnings announcements today, they will be unexpected warnings rather than scheduled reports.  One warning is in so far – from Siebel Systems.
     
    Oil is back above 61 bucks due to Hurricane Dennis, but if the stock market opened right now, it would open higher.  Adjusted for fair value, the S&P futures are up 4 ½ points, the Dow futures are up 40, and the NASDAQ futures are about 7 points above fair value. 
     
    July 7, 2005
     
    This morning we were supposed to be talking about things like U.S. Jobless Claims, the beginning of earnings season, retail sales reports and the like.  Yes, all that information will be coming in today, but the terrorist attacks in London will be the big driver for stock and bond prices this morning.
     
    European markets continue to trade.  While they were down 3 to 4 percent earlier, they have recovered somewhat, and are down on average about 2 to
    2½ percent.  Bond and gold prices and are up somewhat in a flight to quality.  Perhaps the most interesting action of the morning has been in the price of oil.  Early this morning, light sweet crude touched 62 dollars per barrel.  As word of the bombing spread, oil prices plummeted to under 58 dollars.  Worries about curtailed consumer travel plans and a related economic slowdown overshadowed worries about the approach on Hurricane Dennis in the Gulf of Mexico.
     
    Alcoa and Pepsi Bottling will pop the top on 2nd quarter earnings season later today, but stock prices will head significantly lower at 9:30.
     
    Adjusted for fair value, the S&P futures are down about 15 points, the Dow futures, which had been down well over 200 points earlier this morning, are down “only” 139, and the NASDAQ futures are about 21 points below fair value. 
     
    July 6, 2005
     
    It should be another day of relative calm before next week’s storm of earnings.  But it’s a couple of storms in the Gulf of Mexico that could get oil prices bubbling up again in the next couple of days.  Tropical storm Cindy shut down some oil production yesterday as it headed toward land.  But now, Tropical Storm Dennis is posing a potentially greater threat.  Light sweet crude is again up over 60 dollars per barrel this morning as the speculators bet on how much production will actually be constrained when Dennis head up through the Gulf this weekend.
     
    On the economic front, the ISM index of activity in the services industry, if there is such a thing, is expected to have slipped to 57 in June, versus May’s reading of 58.5.  We’ll also get the job cut report from outplacement firm Challenger, Grey and Christmas.  Through May, layoffs are running about 4.6% higher that in the first five months of 2004.
     
    Absent any earth shattering news between now and 9:30, we are headed toward an absolutely flat open for stocks. Adjusted for fair value, the S&P futures are down a fraction of a point, the Dow futures are up 2, and the NASDAQ futures are about a half point below fair value. 
     
    July 5, 2005
     
    Beginning tomorrow, you can pretend that you are a DaimlerChrysler employee if you’re looking to buy a Dodge, Jeep or Chrysler product.  Just like General Motors, Daimler Chrysler is extending its employee discount to anyone who walks in the door.  I love getting auto company benefits.  I don’t need a car right now, but I really would like it if they picked up my health insurance and gave me a big pension.
     
    It looks like we’ll start this short week with some weaker stock prices.  A barrel of light sweet crude oil is going for more than 59 bucks once again and that has overseas markets seeing red as well.
     
    Walmart saw green, and lots of it, in June.  Same store sales were up 4 ½ percent.  That’s better than the 2 to 4 percent forecast, and when you consider the >
     
    Second quarter earnings don’t start rolling in earnest until next week, but watch out for earnings warnings this week.  So far, second quarter warnings have been fairly non-existent.
     
    As we head toward 9:30, adjusted for fair value, the S&P futures are down about 3 points, the Dow futures are down 18, and the NASDAQ futures are 6 ½ points below fair value. 
     
    July 1, 2005
     
    More of the same yesterday from the Federal Reserve Open Market Committee. Same quarter-point interest rate hike, same language in the memo, same witty one-liners from Alan Greenspan.  Well, okay, there weren’t any jokes.  The bottom line is that the upward pressure on short term interest rates will continue for at least one more bump, and maybe even a few more, as stock investors look anxiously for any sign of the end of rate-hike road.
     
    Lots of cars hitting the road.  June auto sales will be announced today.  General Motors is expected to report a sharp increase in sales due to their “everyone’s an employee” discount.
     
    The mood is upbeat in Japan this morning as the Tankan business survey was positive overnight.  At 9:45 the University of Michigan will let us know how confident U.S. consumers were during June.  Expect a reading of 94.6.
     
    Stocks did not trade in Hong Kong overnight.  Japanese stocks and European markets are solidly positive.  We’ll have a little snap-back at 9:30 from yesterday’s sell-off. Adjusted for fair value, the S&P futures are up more than 4 points, the Dow futures are up 34, and the NASDAQ futures are 4 points above fair value. 
    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any of the sponsors of our daily WJR reports
     
    August 31, 2005
     
    Stock index futures were pointing toward a lower open an hour and a half ago.  Then word came that the government would tap the Strategic Petroleum Reserve to alleviate oil supply problems in the wake of Hurricane Katrina.  The futures turned on a dime.  That’s the way it’s been of late and likely will be for the foreseeable future as stock prices and oil prices continue their little tango.
     
    The worsening news out of New Orleans is giving rise to speculation about a possible hurricane-induced recession nationwide.  Although hurricanes usually lead to a long-term increase in economic activity due to rebuilding, this one is causing enough disruption to oil and other material supplies that the short term impact is becoming particularly worrisome.
     
    The preliminary 2nd quarter GDP number is due in ten minutes, and at 10 o’clock, the NAPM – Chicago Index is expected in at a reading of 61, versus 63 ½ last month. That’s a survey of business activity, but the only survey that’s likely to mean anything today is the survey of damage to the oil facilities and port on the Gulf of Mexico.
     
    European markets are solidly higher this morning, and we should start a little higher as well.   At this point, adjusted for fair value, S&P futures are up about 2 points, the Dow futures are up 11, and the NASDAQ futures are more than 5 points above fair value. 
     
    August 30, 2005
     
    Damage reports in the wake of Hurricane Katrina will dominate trading today. Oil prices are up a buck this morning, and natural gas prices continue at record levels.  Those natural gas prices may be a big problem during the next six months, especially for those of us who are thinking of heating our homes this winter.  Natural gas prices are almost double the year-ago levels.
     
    At 10 o’clock, the Conference Board will release the results of their August survey of Consumer Confidence.  Expect a reading of 100 versus last month’s reading of 103.2, as consumers are catching on to the connection between these high energy prices and the lack of any spending cash left in their wallets.
     
    At 2 o’clock, the minutes from the latest Federal Reserve Open Market Committee meeting will be released.  We’ll be checking for any hint that the Fed might be getting ready to apply the brakes to the interest rate train. But, don’t hold your breath.
     
    Overseas, we’re up across the board, after yesterday’s declines.  Asian markets were up about one percent overnight.  At 9:30, however, we’ll be giving back yesterday’s gains. At this point, adjusted for fair value, S&P futures are down a little less than 2 points, the Dow futures are down 30, and the NASDAQ futures are more than 3 points below fair value. 
     
    August 29, 2005
     
    There aren’t any economic reports on the docket for today, and it’s just as well.  There’s only one real story today, and it promises to push stocks around like so many grains of sand on an Alabama beach.
     
    Hurricane Katrina has shut down over 40 percent of domestic oil production and 20 percent of natural gas production.  Of course, the Port of New Orleans, which is a major U.S. port, is shut down. How quickly things can get up and running again is problematical in a city which may well be significantly underwater for a while.
     
    Insurance stocks, gambling stocks, travel-and–vacation oriented stocks and of course, the oil stocks will all get whipped around today.  Estimates of insured damages are running as high as 30 billion dollars this morning.  Which, of course is pure speculation at this point – but no matter the final number – it’ll be a big number.
     
    Natural gas futures were more than 20 percent higher earlier, at an all time high this morning.  Light sweet crude broke the 70 dollar level earlier, although we’re down to $69.25 at this point.
     
    Asian stocks were off about one percent on those higher prices. Europe is down about half that much.  We will start the morning decidedly lower.  At this point, adjusted for fair value, S&P futures are down about 7 points, the Dow futures are down 57, and the NASDAQ futures are about 9 points below fair value. 
     
    August 19, 2005
     
    Raise that tray table and fasten your seat belts. The intrigue is building around Northwest Airlines this morning.  Word is that if Northwest doesn’t reach a contract agreement with its mechanics by midnight, a bankruptcy filing is right around the corner. 
     
    We’ll start the last day of a pretty lousy week to the upside this morning.  However, today is the poster child for quiet trading days.  There are no economic reports scheduled, there are no major earnings announcements coming, there are only five significant companies holding conference calls today and there’s a hot August afternoon on the way.  Trading could get pretty light.  Keep an eye on oil.  Light sweet crude is up a buck after the declines of the last couple of sessions.
     
    A lot of trendy retailers have given us very un-trendy sales reports this week.  The Gap beat earnings estimates but warned that their jeans are not selling well.  They lowered forecasts for the rest of the year.  Sharper Image also with a disappointing report last night.
     
    Asian markets were down, but Europe is up this morning.  We should edge slightly higher at 9:30.  Adjusted for fair value, S&P futures are up about 2 points, the Dow futures are up 14, and the NASDAQ futures are about 2 points above fair value. 
     
    August 18, 2005
     
    The major earnings reports are in the book for the second quarter, and while it was a good quarter for profits, it’s a mixed bag as far as business outlook for the current quarter.  In the meantime, all we’re left to stew about is the outlook for oil prices and inflation.  None of that data is particularly good.
     
    Year-over-year inflation is running at 4.6%, that’s the highest in over ten years.  Even the core rate of 2.8% is starting to pick up speed, as higher energy prices and lower productivity levels filter through.  Although oil prices are down about 4 bucks since last week, stock markets are not convinced that the worst is over.
     
    Several economic numbers roll today including the weekly jobless claims at 8:30 and the Leading Economic Indicators at 10 o’clock.  Perhaps the most interesting will be the Philadelphia Fed Survey at noon.  That’s a survey of manufacturing activity.  Expect a reading of 12, up from 9.6 last month.
     
    If you’re looking to own a piece of Google, there’s more supply on the way.  Google’s IPO was a year ago.  To celebrate, it’s issuing up to 14 million shares of Class A common stock.  At yesterday’s price, that would raise about $4 billion dollars, and Google says it may consider some acquisitions.  To give you some perspective of that 4 billion dollar number, the entire market cap of General Motors is 19 billion dollars.
     
    The Hang Seng in Hong Kong is hung over this morning.  It was down 2% overnight as big Chinese oil and telecom companies took a hit.  We’ll likely open lower this morning as well.  Adjusted for fair value, S&P futures are down 3, the Dow futures are down 30, and the NASDAQ futures are about 7 points below fair value. 
     
    August 17, 2005
     
    A big surprise, and a good one from Hewlett-Packard last night.  In spite of price pressures in the computer business, HP reported a 20% increase in storage and server sales and an 8.5% rise in PC sales.  Operating profits beat estimates by 5 cents per share.  Hewlett also repatriated over 14 billion dollars of overseas profit at a very low tax rate thanks to last year’s “American Jobs Creation Act of 2004.”  Of course, HP is in the midst of cutting payrolls by almost 15,000 jobs.  Those guys in Washington really know how to create jobs.
     
    Abercrombie & Fitch shares will get smacked around a bit today.  Earnings for last quarter missed estimates by about 6 cents per share, and they lowered their outlook for the year.
     
    At 8:30 this morning, we’ll find out how much the big spike in energy prices has boosted Producer Prices.  And a little later this morning, the weekly report on energy inventories is expected to show that oil and distillate stocks have risen by about 1.2 million barrels each, while gasoline stocks may have fallen by about that much.
     
    Most European markets are off about a half-percent after our big decline yesterday.  But unless the PPI at 8:30 is especially ugly, we’ll go higher at 9:30.  Adjusted for fair value, S&P futures are up more than a point, the Dow futures are up 21, and the NASDAQ futures are about 5 points above fair value. 
     
    August 16, 2005
     
    It’s “big retailer” day on Wall Street, and the reports so far are pretty good for the quarter gone by.  Forecasts for next quarter are a mixed bag.  The biggest of the big, Walmart beat a 65 cents per share estimate, reporting 67 cents of profit.  Sales were a little light and the third quarter forecast isn’t quite up to analyst estimates.  Walmart’s revenue was up almost 11% from last year, but the stock will trade lower this morning.
     
    JC Penney likewise beat profit estimates on worse than expected revenue.  Home Depot beat estimates by 3 cents and raised their guidance.  American Eagle Outfitters also beat estimates.
     
    Most bulls are interested in most cows.  But the bulls are running scared from the Gateway cow this morning after a disappointing report last night.  The discounting that hurt Dell’s profits is really pressuring Gateway, and it will be a big surprise if Hewlett-Packard, which reports later today, has particularly good news on PC profits.
     
    Japan’s Nikkei index was up a about a half percent overnight.  Most European markets are also up, although London is down ever so slightly.  That’s how we’re looking to start off as well.  Adjusted for fair value, S&P futures are down a point, the Dow futures are down about 6, and the NASDAQ futures are about 2 points below fair value. 
     
    August 15, 2005
     
    There’s a fair bit of economic and inflation news coming later in the week, but for today, there’s only one economic number that most people are thinking about – that’s the price of their next fill-up.  The Lundberg survey says that the average price of a gallon of unleaded regular nationwide was $2.50 was week.  Quite frankly, if you’re running low and you can FIND gas for $2.50 a gallon today you’re doing well.
     
    Gateway and Agilent report earnings today.  Agilent is reportedly ready to sell their chip division to a couple of private equity firms for over 2 billion dollars.
     
    There is a report out this morning that Lear Corporation may be looking into acquiring the bankrupt Collins & Aikman.
     
    It’s one of those funny mornings when the futures may look positive at first glance, but they are actually pointing toward lower stock prices at 9:30.  At this point, after adjust for fair value, S&P futures are down a point, the Dow futures are down 12, and the NASDAQ futures are a just a little more than 3 points below fair value. 
     
    August 12, 2005
     
    If you consider yourself a reasonably intelligent, reasonably rational human being, and have trouble understanding the stock market, here’s an example of why you feel that way:
     
    Dell Computer makes almost 1 out of every 5 PCs sold on the planet.  Their profit for the quarter was up 28% and matched analyst expectations.  Their revenues were up 15 percent at 13.43 billion for the quarter.  So, what’s not to like?  Dell stock was down about 8 percent in the evening session last night.  They forecast only 14.1 to 14.5 billion of sales for next quarter, versus the expected 14.6.  They say profits will be 39 to 41 cents versus the projected 41.  This, folks, is not horrible news.  However, Dell stock will be under pressure early on today.
     
    Better results from Nvidia last night; 41 cents of profit versus 34 cents. 
     
     In an hour and a half, the preliminary number on August Consumer Sentiment comes from the University of Michigan and is expected in at 96.5, matching the July number.
     
    Asian stocks were flat overnight, but Europe is down on some weak GDP numbers, especially in France where their GDP for the quarter was up a staggering 0.1%.  Oh, they’re working hard over there. 
     
    We’ll give back some of yesterday’s gains at 9:30.  At this point, adjusted for fair value, S&P futures are down 3 ½  points, the Dow futures are down 20, and the NASDAQ futures are a just a little more than 13 points below fair value. 
     
    August 11, 2005
     
    We had a nice start for stocks yesterday just about totally washed out by spiking oil prices.  Light sweet crude hit a record of 65.30 per barrel intraday.  It’s pulled back a little bit this morning at 65.21.  So, we’ll try another rally in stocks at the open and see how long it lasts.
     
    Earnings season winds down today with reports from Dell Computer, Nvidia and a handful of retailers.  For the quarter, it looks like earnings increased by an average of about 11 percent.  Analysts had been expecting about 7, and explains why the market has held up as well as it has against the surge in resource prices.
     
    July Retail sales are expected to have shot up about 2.4% overall, and 8 tenths of one percent if you strip out car sales.  We’ll find out about that and the weekly jobless claims in ten minutes.
     
    Asian stocks shot up again overnight.  Europe, however is in a bit of a funk.  We should open higher, pending any big surprises at 8:30 or another quick spike in oil.  At this point, adjusted for fair value, S&P futures are up 2 ½ points, the Dow futures are up 35, and the NASDAQ futures are a just a little more than 3 points above fair value. 
     
    August 10, 2005
     
    Things are cooking overseas this morning, and it looks like that will carry over to domestic stocks when trading starts today.  The Hang Seng Index in Hong Kong was up about 2 percent overnight, the Nikkei in Japan was higher by more than a percent and a half and European markets are up across the board this morning.
     
    The caboose of the train of big earnings reports is now arriving at the station.  Last night, there was good news from Disney, which beat estimates by 3 cents and AIG, which beat estimates by six cents per share.  Counter-balancing those, Cisco Systems met estimates, but their revenue guidance for next quarter was a little light.  Cisco shares could suffer a bit this morning, although management did put to bed the recurring rumor about the possible acquisition of Nokia.
     
    Oil prices are perking up again this morning after sliding yesterday.  Look for more movement at 10:30 when the weekly inventory report is released by the Energy Information Agency.
     
    The futures have weakened a bit during the past hour, but were still looking at significantly higher open at this point.  Adjusted for fair value, S&P futures are up 5 ½  points, the Dow futures are up 50, and the NASDAQ futures are about 3 ½  points above fair value. 
     
    August 9, 2005
     
    Get ready for another step higher in short term interest rates.  At 2:15 this afternoon, for the tenth time in a row, the Federal Reserve Open Market Committee will hike rates by a quarter of a percent, and will most likely give us no indication that they are in any mood to stop there.
     
    The Wall Street Journal is reporting today that as many as 1 in every 4 members of the sales and marketing team at Ford Motor may be busy marketing their own services to prospective employers soon, as the automotive cost cutting continues.
     
    Light sweet crude at one point this morning was over 64 dollars per barrel.  It's pulled back to 63.66 at this point.  Such a deal.
     
    Disney and Cisco Systems report earnings after the close of trading today.
     
    The Nikkei Index in Japan was up over a hundred points overnight.  European markets are up just a little bit.
     
    We should get off to a good start this morning.  Of course, we did that yesterday to no avail.  At this point, adjusted for fair value, the S&P futures are up about 4 points, the Dow futures are up 28 and the Nasdaq futures are about 5 1/2 points above fair value.
     
    August 4, 2005
     
    The Bank of England issued their first interest rate cut in quite a while this morning.  Short term rates will drop in the U.K. from 4 ¾ to 4 ½ percent.  The British economy has been pretty sluggish and consumer spending there has been dropping, so this rate cut was widely expected.
     
    A lot of retailers report sales and earnings numbers this morning.  Costco same-store sales were a little better than expected.  Walmart sales were up 4.4 percent in July and they are projecting a 3 to 5 percent increase in August, as well.  The perennial basket case of the retailers, every pun intended, Pier One, fell well short of expectations yet again.  They moved a lot of inventory, but evidently did so at fire-sale prices.
     
    Sara Lee beat earnings estimates by a nickel but warned that 2006 will not be a pretty sight due to rising costs. A good report, though, from EDS.  They made 9 cents per share last quarter.  EDS was expected to lose 3 cents.
     
    About 60 percent of the companies reporting earnings this quarter have beaten estimates, and that’s a reason stocks have done well over the past few weeks.  However, this morning’s futures are about as ugly as we’ve seen them for quite a little while. 
     
    So, absent a big positive surprise with the weekly jobless claims number at 8:30 this morning, we’ll see lower stock prices at 9:30.  Adjusted for fair value, S&P futures are down 3 points, the Dow futures are down 28, and the NASDAQ futures are almost 8 points below fair value. 
     
    August 3, 2005
     
    Oil is jumping again this morning.  We’re at $62.30 per barrel for light sweet crude.  That’s in front of the weekly inventory data that will be announced at 10:30 this morning.  It’s expected that oil inventories have been drawn down by about 1 ½ million barrels, although distillate inventories are expected to have risen.
     
    If you play soccer, you know the name Adidas.  Adidas has Reebok shareholders jumping for joy this morning.  Adidas will buy Reebok at a 30% premium to last night’s closing price. Stocks of both companies are indicated higher this morning.
     
    On the earnings front, Time Warner missed by a penny but finally settled a shareholder lawsuit over their disastrous acquisition of AOL.  The big miss of the morning comes from Duke Power.  They made 30 cents per share versus an expected 38.  However, it may be timing.  Duke is sticking to their earnings guidance for the entire year.
     
    Mortgage activity slowed last week, after interest rates took their biggest jump since March. CIBC, the Canadian Imperial Bank of Commerce, is the latest to settle in the Enron case.  They’ll pony up 2.4 billion bucks.
     
    Overseas markets are off a little on the higher oil prices.  We should head lower at 9:30 as well.  Adjusted for fair value, S&P futures are down more than 2 points, the Dow futures are down 18, and the NASDAQ futures are about 6 points below fair value. 
     
    August 2, 2005
     
    July sales numbers are due out of the Big Three today.  It’s expected that those “everybody gets the employee price” sent sales volume up between 17 and 19 percent.  Profits may be another matter, but we won’t worry about that right now.
     
    Profits ARE the topic at a bunch of companies this morning. TRW beat estimates on earnings and revenues.  Comcast made 19 cents per share versus an expected 15.  Coach beat estimates by a penny and raised guidance for the year.  Masco and Tyco each beat estimates by a penny, but both companies warned that the rest of the year won’t be as good as expected.  Tyco shares are down 10% in the pre-market.
     
    One big energy deal in the works this morning, as U.S. based Kinder Morgan is buying the big Canadian oil company Terasen.  That’s a 5.6 billion dollar deal.  It looks like the Chinese owned oil company CNOOC may withdraw from the bidding for Unocal, bowing to the bluster of the U.S. Congress.  You know, many times, for every action there is a reaction.  Let’s hope that the Chinese don’t respond with corresponding protectionist measures. 
     
    It looks like July’s stock market momentum will continue, at least at the open today.  Adjusted for fair value, S&P futures are up  2 points, the Dow futures are up 17, and the NASDAQ futures are about a point and a half above fair value. 
     
    August 1, 2005
     
    It was hot.  It was humid.  But July was a wonderful month if you were invested in stocks.  The S&P 500 and the Dow Jones Industrials were up over 3 percent and the Nasdaq was up more than 6 percent.  So, while we’re roughly even on the year to date, July healed a lot of old wounds.
     
    One more big week of earnings news is on tap.  So far, so good this morning.  Humana matched estimates and raised their guidance.  Procter & Gamble beat estimates by a penny and Walmart reported July same store sales up about 4.4 percent.
     
    At 11 o’clock today, General Motors is expected to roll out the details of their 2006 model year pricing.  Expect some permanent price cuts to take the place of the merry-go-round of incentives we’ve seen over the past few years.
     
    Oil is up above 61 bucks this morning, on news of a refinery fire, an oil rig fire and the death of King Fahd in Saudi Arabia, but stock markets are shrugging off the rise. 
     
    Australian stocks were off a bit overnight, but all other major overseas markets are positive.  We should start the month heading up as well.  Adjusted for fair value, S&P futures are up 3 points, the Dow futures are up 29, and the NASDAQ futures are about 4 points above fair value. 
    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any of the sponsors of our daily WJR reports
     

    September 30, 2005
     
    It’s the last day of the week, the month and the quarter and all have been pretty good if you have been long in energy stocks.  Crude oil has been wavering around the flat line this morning, currently down 14 cents at $66.65 per barrel.
     
    In addition to the price of oil, traders will have a lot of new data to chew this morning. August personal income is projected to have risen about 3 tenths of one percent, while spending is expected to have declined by two-tenths.  Perhaps more importantly, the NAPM-Chicago Business Survey, which plummeted to a reading of 49 in August, is expected to have risen only a bit to 51.  Either way, it’s indicating a pretty flat business climate in the months to come.
     
    The University of Michigan will put the final touches on the September Consumer Sentiment Index at 9:45.  The preliminary number at mid month sunk like a stone as consumers responded to Hurricane Katrina.  Expect a little recovery to a reading of 78 or so.
     
    Stock futures have been creeping back toward fair value during the past hour.  But at this point, we’re still looking for a slightly weaker start.  Adjusted for fair value, the S&P futures are down just about a point, the Dow futures are down 13, and the NASDAQ futures are about a point below fair value. 
     
    September 29, 2005
     
    Don’t look now, but the Japanese stock market, as measured by the Nikkei Index, which was up over 180 points overnight, is up almost 10% for the month of September.  Stocks in Hong Kong also did well overnight, up more than one percent.
     
    Shares of Pepsico ought to do pretty well this morning as well.  Pepsi reported better than expected earnings for the quarter and boosted their guidance for the rest of the year.  The shares are indicated up about 7 percent. 
     
    There’s more consolidation in the discount brokerage industry. E-Trade is buying BrownCo from JP Morgan Chase.  The market seems to like the deal, as stocks of both JP Morgan and E-Trade are looking to open higher.
     
    At 8:30 this morning, we’ll get the final revision to 2nd quarter Gross Domestic Product as well as the Weekly Jobless Claims data.  But, absent any big surprises, stock prices should continue their pattern of the week – which means – they’re going nowhere fast.
     
    Adjusted for fair value, the S&P futures are down less than a point, the Dow futures are up less than 4 points, and the NASDAQ futures are about 2 ½ points below fair value. 
     
    September 28, 2005
     
    It’s Wednesday.  That means that the weekly report on oil, gasoline and oil distillate inventories is due from the Energy Information Agency.  All three are expected to show draw-downs from last week.  But the developing story that will hit us all squarely in the pocketbook this coming winter is the price of natural gas, which has doubled in the past three months. 
     
    Because of hurricane damage, the NYMEX has declared a “Force Majeure” for the October natural gas contract.  That means that the commodity traders who are obligated to deliver the gas at the expiration of the October contract, which is today, will not be held to the delivery date. 
     
    So, one more warning – save for college, save for retirement, and start saving now for your natural gas bills this winter.  It won’t be pretty.
     
    DaimlerChrysler shares are up in Europe on a newspaper report that Daimler will be cutting 8,000 jobs, mainly in Germany. 
     
    They may or may not be premium wines, but Constellation Brands is offering an almost 40% premium to buy Canadian winemaker Vincor.  Vincor’s Board is holding out for a higher price.
     
    Australian stocks were flat but all other major foreign markets are higher, especially Germany, on the strength in Daimler. We should climb at 9:30 as well.  Adjusted for fair value, the S&P futures are up more than 3 points, the Dow futures are up 27, and the NASDAQ futures are about 4 points above fair value.   
     
    September 23, 2005
     
    Alcoa is one of the first companies to report earnings each quarter.  So it’s only appropriate that Alcoa today became one of the first to warn that hurricanes and energy prices are going to put a big squeeze on third quarter earnings.  Expect a parade of earnings warnings during the next three weeks from just about everyone except, of course the oil and oil service companies. 
     
    Don’t be too gleeful if you own stock in one of those big oil companies.  Methinks one big windfall profits tax is right around the corner when the weather calms down.
     
    Goodyear will scale back operations and try to cut costs by up to a billion bucks by 2008.  They’ll take about $200 million in charges to restructure things.
     
    There’s nothing much on the economic calendar today, so fill up your gas tank and get ready for higher gas prices and another weekend full of damage reports.
     
    Asian markets were mostly lower overnight, Europe is mainly positive, but there’s not a lot of movement is either direction.  As the price of oil has dropped this morning (it’s currently down about 77 cents per barrel) our stock futures have improved, but if the market were to open right now, we’d open with slightly lower prices.  Adjusted for fair value, the S&P futures are down a fraction, the Dow futures are down 7, and the Nasdaq futures are about 3 points below fair value. 
     
    September 21, 2005
     
    For some reason, traders held on to hope that the Federal Reserve Open Market Committee would give us a break from rising short term interest rates.  When that hope disappeared at 2:15 yesterday, so did our little market rally, as prices spiraled downward into the close.  We did see a little crack in the armor – for the first time in recent memory, the Committee’s vote wasn’t unanimous – there was one dissenting vote out of ten.  However, the probability of the short term rate going from its current 3 ¾ to over 4 percent by the end of the year has definitely gone up.
     
    But today’s another day.  Unfortunately, speaking of the number 4, Rita is now another Category 4 hurricane, and it may become a Category 5 before it makes landfall.  Current projections have it landing early Saturday morning near Houston, which is home to about 16% of domestic oil production.  On that less-than-pleasant thought, light sweet crude is up $1.60 to $67.80 per barrel, and that will pressure stock prices at the open.
     
    Earnings estimates going are up for home builder Lennar and Federal Express this morning.
     
    Japanese stocks rose about a third of a percent overnight, but all other major foreign markets are flat or down at this hour. Adjusted for fair value, the S&P futures are down about 3 points, the Dow futures are down 14 ½, and the Nasdaq futures are about 6 points below fair value. 
     
    September 20, 2005
     
    Yesterday was an ugly day for most stocks.  Yet, it taught us yet another lesson in the benefits of diversification.  A lot of market sectors did very well, and if you were invested in them, you made some dough.  For instance, the price of oil rose more yesterday than any previous day in history, up $4.39 per barrel as traders went nuts in anticipation of another big hurricane.  Hand in hand with that, Exxon stock rose almost a dollar per share, and the market capitalization of Exxon is now over $400 billion.
     
    Japanese stocks hit a four-year high overnight, the Hang Seng in Hong Kong was up 260 points, that’s close to 2 percent, and the price of gold is at an 18 year high.  So, while we can’t do much about hurricanes, we can make sure our portfolios are diversified well enough to handle their effects.
     
    Hurricane Greenspan and his band of troublemakers will likely announce another hike in short term interest rates at 2:15 this afternoon.  Expect them to thumb their collective nose at Katrina’s impact and issue the same memo for the eleventh consecutive time.
     
    Oil is down about a buck this morning, and outside of Sweden, overseas markets are up across the board.  Stock futures are almost exactly as far up today as they were down yesterday. Adjusted for fair value, the S&P futures are up 3 ½ points, the Dow futures are up 33, and the Nasdaq futures are almost 6 ½ points above fair value. 
     
    September 19, 2005
     
    Looking at the stock market this week is a little like watching your teenaged daughter leave the house on her first date.  All you can seem to think about are the bad things that could happen.
     
    Today, it’s political uncertainty in Germany after the Christian Democratic Union won a razor-thin victory yesterday, but far less than they needed to put together an effective ruling coalition.
     
    Tomorrow, short term interest rates will likely be raised another quarter, and maybe even a half percent, to head off what the Federal Reserve perceives as a budding inflation threat.
     
    Later in the week, soon-to-be Hurricane Rita will begin churning through the Gulf of Mexico.  Current projections have it heading due west to the Texas-Mexico border.  However, any unexpected turn to the north – well, let’s not even talk about it.
     
    Put those happy thoughts on top of a miserable Consumer Confidence number out of U of M last Friday, crude oil prices up a buck and a quarter per barrel and a rare brokerage house downgrade of Ebay this morning, and we’ll be heading lower at 9:30.
     
    Adjusted for fair value, the S&P futures are down 3 ½  points, the Dow futures are down 32, and the Nasdaq futures are almost 5 points below fair value. 
     
    September 16, 2005
     
    A major investment bank and broker, who shall within this report go unnamed, is out with one of those timely pieces of investment advice that makes you glad you paid the big bucks.  They are now saying that you should underweight Northwest Airlines stock in your portfolio.  As of yesterday, they had Northwest as an OVERweight.  Of course if you do sell your Northwest stock this morning, you’ll get something in the area of 88 cents per share.  The stock was around 11 dollars per share at the beginning of this year.
     
    BP and ExxonMobil both getting upgrades from a different broker this morning.
     
    At 9:45 the University of Michigan will release the preliminary reading on September Consumer Confidence.  Expect the index to slump to a reading of 85, as reaction Hurricane Katrina starts to sink into the American psyche. That would be down from 89.1 in August.
     
    Stocks in Europe are up at this hour.  The DAX index in Germany is up almost a percent and a half on hopes that a new reform-oriented Chancellor will be elected there Sunday.
     
    The futures aren’t as strong as they appear at first blush, but we’re still looking at a opening rally. Even after you adjust for fair value, the S&P futures are up 4 points, the Dow futures are up 33, and the Nasdaq futures are about 3 points above fair value. 
     
    September 15, 2005
     
    As of this morning, four of the seven major U.S. Airlines are flying under the clouds of bankruptcy protection, after Northwest and Delta chose that flight path yesterday.  Northwest says, “Don’t worry about your frequent flyer miles.”  They will evidently be honored.  Of course if you are a pilot about to retire to a handsome pension – well, let’s hope you have been getting frequent flyer miles at work.
     
    This morning’s report on weekly jobless claims will be very interesting, but not very meaningful.  We know that Hurricane Katrina put somewhere around 400,000 people out of work.  Just how many of those people reported in to their local unemployment office, that’s assuming that there still WAS a local unemployment office, that’s the big unknown.  So the number, which will be announced at 8:30 will be somewhere between 300,000 and 800,000.  We’ll also get the pre-hurricane CPI number for August.  Expect a half percent overall and a 2 tenths of a percent increase in the core rate.
     
    The Nikkei in Japan was up more than one percent overnight.  European markets are mixed.  We should head a little higher at the open.  Adjusted for fair value, the S&P futures are 2 ½ points, the Dow futures are up 22, but the Nasdaq futures are 2 ½ points above fair value. 
     
    September 14, 2005
     
    Yesterday must have been Chapter 10, because the rumor is that today may be Chapter 11 for Delta Airlines, and possibly even Northwest, although that is considered less likely.  Whether today is the day or not, you can bet that our future will feature fewer of the legacy airlines, and possibly higher airfares for all of us.
     
    Retail sales are expected to have dipped 1.4 percent in August.  But, if you exclude auto, a half-percent rise is expected.  We’ll find out in ten minutes.
     
    Once again, it is a day to watch the price of oil.  The weekly inventory data is due at 10:30 and is expected to show significant drawdowns in crude oil, gas and distillates.  In front of that data, light sweet crude in up nearly a half-buck per barrel and that rising price of oil has had the futures in retreat all morning long.  Fortunately, we had been looking for a big rally earlier, so at this point, the market open doesn’t look too bad.
     
    European markets are mixed.  Adjusted for fair value, the S&P futures are up a point, the Dow futures are up 15, but the Nasdaq futures are a little more than a point below fair value. 
     
    September 13, 2005
     
    Last week’s bidding war turned into this week’s sale.  Ford will unload its Hertz rental car business, which incidentally made almost a half-billion dollars in 2004, in order to focus its energies on how to make money by actually selling cars.  Ford will net about 5 ½ billion dollars out of the deal, while moving 10 billion of debt off the balance sheet.
     
    Nokia is evidently selling a lot more phones at a lot higher price points than expected.  They raised their revenue estimate for the quarter and now say that their profit will be about 20 percent higher than their previous forecast.  Nokia is looking to open about 4 percent higher.
     
    It will be an ugly morning for the shares of Best Buy, which missed their sales and earnings numbers and guided lower for the third quarter.
     
    In a week, Alan Greenspan’s bunch gets together again, and looking forward to that, we could use some good inflation news from the Producer Price Index this morning at 8:30.   Expect the top line number to come in at 8 tenths of a percent, due to the spike in energy prices.  The core number is expected only to have risen about one tenth of one percent.
     
    European markets are lower at this hour, most notably in Germany, where the DAX is off about 1 ½ percent.  Hopefully we’ll get some help from that PPI number, because at this point, adjusted for fair value, the S&P futures are down almost 5, the Dow futures are down 40 and the Nasdaq futures are 6 points below fair value. 
     
    September 12, 2005
     
    If you use your car for business purposes, and claim your expenses for tax purposes using the cent-per-mile method, there’s a little good news this morning.  Recognizing that flying to work may soon become cheaper than driving, the IRS has adjusted the amount per mile that you can claim for tax purposes.  This amount rarely gets adjusted mid-year.  However, your business miles driven from September 1 through the end of the year will now be allowed at 48 ½ cents per mile.  The old rate was 40 ½ cents.
     
    A couple of big mergers this morning.  One makes obvious sense, and the other is really intriguing. Oracle is buying Seibel Systems for almost 6 billion, or about 3 ½ billion if you adjust for the cash Seibel has piled up.  The more interesting deal is Ebay buying the internet-phone company Skype. 
     
    Skype was started less than 3 years ago.  Ebay is buying it for at least 2.6 billion and maybe up to 4.1 billion including performance bonuses. The idea is that buyers and sellers can talk to each other when they negotiate.  Now, why didn’t we think of THAT 2 ½ years ago?
     
    Japanese stocks rallied on the Prime Minister’s re-election.  Our futures have improved during the past hour, and we’re looking at a pretty flat open. At this point, adjusted for fair value, the S&P futures are down  a point and a half, the Dow futures are down a point and the Nasdaq futures are actually a fraction above fair value. 
     
    September 9, 2005
     
    It will be a quiet end to a short week for economic news.  There was plenty of news out of computer semiconductor companies late yesterday, and the news was pretty good.  Texas Instruments raised their sales and earnings guidance for the 3rd quarter.  Strong Asian demand should push total quarterly revenue to over 3 ½ billion and earnings to 37 cents per share.  Gross margins are also expected to improve to about 47%.  Intel also raised its revenue forecast on strong laptop sales.  Texas Instuments is indicated up 1.7% in the pre-market.  Intel is looking to lose about 19 cents per share.
     
    For all the devastation in New Orleans, Katrina did a lot of damage offshore as well.  Oil production in the Gulf of Mexico is now just about 1/3 of what it averaged during the first half of the year.  British Petroleum’s massive Mars platform is now not expected to be back online before 2006.
     
    GM will end its current “everybody’s an employee” discount program at the end of September, no doubt to be replaced with another incentive program deftly designed to move the industry away from incentive programs.  If dividends are an incentive to you, don’t look to Delphi. That 1.3% yield has now been eliminated.
     
    Overseas markets are generally up by a little bit this morning, and we should go higher at 9:30 as well.  At this point, adjusted for fair value, the S&P futures are up a little less than 2 points, the Dow futures are up 15 and Nasdaq futures are about a point above fair value. 
     
    September 8, 2005
     
    Ford is reportedly close to ridding itself of about 10 billion dollars of debt along with its Hertz rental car unit.  Ford could also get up to 6 billion dollars in much needed cash.
     
    Another big deal could be cooking this morning.  Ebay is reportedly about to go after Skype, the voice-over-the-internet company.  Estimates of the price tag there range from 2 to 5 billion dollars.
     
    A little later this morning, we’ll find out just how much Hurricane Katrina has impacted gasoline and crude oil inventories in the U.S.  A big drawdown of both is expected and the price of light sweet crude, which has dropped about 6 bucks in the past few days, is up about half a dollar this morning at just under 65 dollars.
     
    In a speech yesterday, Chicago Federal Reserve President Michael Moskow threw a big bucket of cold water on hopes that the Fed will stop hiking rates due to the hurricane.  He said that the impact of Katrina may in fact be IN-flationary.
     
    Reacting to that view of reality and the impending news on oil inventories, the futures have been slipping all morning.  At this point, adjusted for fair value, the S&P futures are down 5 points, the Dow futures are down 43 and Nasdaq futures are about 7 points below fair value. 
     
    September 7, 2005
     
    It’s a week now since the full impact of Hurricane Katrina started to become apparent in New Orleans.  Since then, the stock market is up and price of crude oil is down.  So why are we paying exactly $2.99 or more for unleaded?  The same reason everyone else may be paying 20 percent more for steel soon.  According to the Wall Street Journal, disruption in the supply of raw materials necessary for the production of steel will push price up until the shipping lanes can re-open.  Unfortunately for the auto companies, the steel companies don’t have an “everyone-gets-the-employee-price” program.
     
    And just in case you were thinking that GM and Ford were just having too easy of a go of it, Standard & Poors is talking about another debt downgrade this morning, saying that they are “nervous” about their prospects.
     
    Albertson’s is out with a disappointing earnings report this morning and they are making noises about “unlocking the value” of their real estate assets.  That kind of talk, if you remember, was last heard out of Kmart.
     
    Stocks markets overseas are pretty much all in the green this morning.  Our futures are indicating a slightly lower start after yesterday’s big rally. Adjusted for fair value, the S&P futures are down less than a point, the Dow futures are down only 3 and Nasdaq futures are also about 3 points below fair value. 
     
    September 6, 2005
     
    The Wall Street data mill will ease back in for a short trading week.  The only economic indicator due out today will be the results of the ISM non-manufacturing survey.  It’s expected that the services industries expanded in August, but at a slower rate that in July.  Expect a reading of 59 ½ .
     
    But if you’re looking for news that will move stock prices, well, once again, it’s all about the oil.  This morning, the news is good.  Japan will be releasing oil from their strategic reserve.  Valero and Marathon each have a refinery that was put offline by Hurricane Katrina.  Word is that both will be back online by mid-week.  So, although natural gas prices are up again this morning, the price of light sweet crude oil is below 67 bucks and the unleaded gasoline futures are down as well.  Those factors have the stock index futures dancing this morning. 
     
    Watch out, though for the airlines.  As the price of jet fuel rises, Chapter 11 is creeping closer and closer to the weaker carriers.
     
    Asia was down overnight , but Europe is up.  Adjusted for fair value, it looks like the S&P could rise about 6 points, the Dow more than 50 and Nasdaq futures by over 9 points. 

    September 2, 2005

    It’s the Friday before a summer holiday weekend and it will be a nice day in New York, so trading should tail off a good bit this afternoon.
     
    In front of that, of course, debate will continue about the long-term impact of Hurricane Katrina.  Light sweet crude is down 30 cents, but is still over 69 dollars a barrel.  Unleaded gasoline prices are down about 6 cents at this hour, but are still indicating that the retail price should continue well above the 3 dollar level.  The LOOP, the Louisiana Offshore Oil Platform is again open this morning and unloading crude oil, but is operating at far from full capacity.
     
    In ten minutes we’ll get the only major economic news on the docket for today.  That would be the August Jobs Report.  Expect an increase of 190,000 new non-farm jobs, which would be down a bit from last month.  The unemployment rate is expected to hold steady at 5 percent, and workers’ average hourly earnings are expected to have risen two-tenths of one percent.
     

    The futures are close enough to fair value that it looks like the Jobs Report at 8:30 will tell us which way the markets will open.  At this point, S&P and Nasdaq futures are both within a point of fair value, and the Dow futures are up about 13 points. 

    September 1, 2005

    The good news this morning is that crude oil prices are stable.  The bad news, if you happen to own a car, is that unleaded gas futures are up another 5 ½ percent or so.  You can buy all the oil you want, but until the refining capacity is back up to speed, the price of the stuff you put in your tank will likely keep rising.
     
    Sales at Costco keep rising.  Same store sales were up 9 percent in August.  Walmart was up 3.3 percent.  Limited Brands sales were down 3 percent.
     
    Lots of economic data is on the way today including the weekly jobless claims number, personal income and expenditure numbers and the July car sales reports.  The most interesting report may be the ISM Manufacturing Index at 10 o’clock.  Yesterday, the NAPM Chicago Index fell dramatically and unexpectedly.  While the two surveys are far from identical, it will be interesting to see if the ISM reflects a significant weakening in the manufacturing sector’s recent expansion.  The consensus estimate is 57, with anything above 50 reflecting expansion.  Yesterday’s NAPM came in at 49 versus an expected 62.
     
    Overseas markets are up across the board this morning, with the Hang Seng Index in Hong Kong up over 1.6 percent.  Out futures have improved, and are indicating a slightly higher open at this point. Adjusted for fair value, S&P futures are up a point, the Dow futures are up 4, and the NASDAQ futures are almost 2 points above fair value. 
    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any of the sponsors of our daily WJR reports
     
    October 31, 2005
     
    Happy Halloween!  At 8:30, we’ll find out how scared consumers were to spend last month.  Expect that personal spending was up about a half percent, while personal income was up only about 3 tenths of a percent.  Of course, if you do the math on that one, it probably means that consumers are still unafraid to borrow, even at interest rates starting to look a little spooky.  At some point, my little witches and warlocks, that could get really scary.
     
    There are three big mergers this morning. Novartis is buying the 58 % of Chiron that they don’t already own at about 45 bucks per share.  Spain’s Telefonica is buying British mobile phone operator O2 for 31 billion and in a much smaller deal, Susquehanna, the biggest privately held radio station owner in the U.S. is selling out to Cumulus Media, some private equity firms and Comcast for about 2 billion dollars.
     
    Walmart is projecting that October same-store sales came in above the high end of estimates.  We’ll find out for sure on Thursday. 
     
    Crude oil is down 62 cents per barrel.
     
    Put it all together with big gains in the overseas markets and we should get off to a good start this morning.  Adjusted for fair value, the S&P futures are up about 3 points, the Dow futures are up 14, and the NASDAQ futures are about 5 points above fair value. 
     
    October 28, 2005
     
    A couple of big economic reports are due this morning that could move the market.  At 8:30 we’ll get the “advanced” number on 3rd quarter Gross Domestic Product.  It’s expected to come in at 3.6 percent.  The second quarter GDP was 3.3 percent.  Then fifteen minutes after the market opens, the University of Michigan is expected to revise their October Consumer Sentiment number up to 76.  Positive consumer sentiment has been in pretty short supply during the past few months.
     
    Last night Microsoft, like so many companies, reported a pretty good third quarter, but downplayed expectations for the rest of the year.  Microsoft is known to be conservative with its guidance, but a weak second quarter would a big surprise to a lot of observers, who are expecting good things for Microsoft due to the unveiling of Xbox 360 next month.  So expect a little selling pressure on Microsoft at 9:30.
     
    The FTSE Index in London is up a bit, but all other major overseas markets are down at this hour, but we may well buck the trend at 9:30.   At this point, adjusted for fair value, the S&P futures are up 3 points, the Dow futures are up 31, and the NASDAQ futures are almost 4 points above fair value. 
     
    October 27, 2005
     
    When I used to work at the Renaissance Center, I remember putting in some pretty late nights.  But I don’t remember ever having to issue a press release at 1:30 in the morning.  Unfortunately, that’s what General Motors had to do this morning, to counter rumors of an impending bankruptcy filing.  Never mind that GM probably wouldn’t even be eligible for protection at this point.  The SEC is investigating GM’s accounting for its pension obligations and supplier business arrangements, especially those with Delphi.  That investigation sparked bankruptcy rumors that roiled debt markets overnight.
     
    In ten minutes, the September Durable Goods report is expected to reflect a decline of about 1.2 percent. At 10 o’clock, the September New Home Sales report is expected to show a very slight increase.
     
    Earnings reports this morning are almost universally good, but fourth quarter estimates are a mixed bag.  That’s part of the reason we’re likely to see a weaker market at the open.
     
    At this point, adjusted for fair value, the S&P futures are down about 3 points, the Dow futures are down about 21, and the NASDAQ futures are more than 4 points below fair value. 
     
    October 26, 2005
     
    Boeing checked in with their quarterly report within the hour.  It’s a tough one to figure out due to a bunch of special one-time charges and credits.  However, it appears that Boeing sales came up short, and even though they boosted guidance for next year, it may not be enough to avoid a little selling pressure this morning.
     
    You might say that the selling pressure will be flowing down the Amazon this morning.  The internet retailer reported lower margins than expected last night, and they also guided lower for the upcoming Holiday season.  They’re still making lots of sales, but sooner or later, investors would like to see a little detail called profits.  Look for Amazon shares to open about 9 percent lower this morning.
     
    The price of light sweet crude has backed off about a quarter of a dollar after a 2-dollar-plus increase yesterday.  Overseas markets are pretty much all positive, and by pretty healthy margins.
     
    We should get mixed results at 9:#0.  At this point, adjusted for fair value, the S&P futures are down a fraction, the Dow futures are up 21, but the NASDAQ futures, reflecting the impending decline of Amazon, are more than 3 points below fair value. 
     
    October 25, 2005
     
    The market’s been looking for an excuse to rally for a week or two now and finally found it yesterday.  The nomination of Ben Bernanke as the reincarnation of Alan Greenspan gave the Dow Industrial average its best day since April.
     
    Today, as they say, is another day.  We’ll get a little profit taking at the open, although it’s hard to find a disappointing profit report out there.  Dominos Pizza just checked in, beating estimates by 3 cents per share.  Other companies meeting or beating estimates include DuPont, Lockheed Martin. Southern, Legg Mason and Texas Instruments.  However, TI said that demand is so strong, they may not have all of the inventory they need next quarter.  That will hurt the stock this morning.
     
    Japanese stock rose sharply on the heels of our rally, but most European markets are slightly lower at this hour.  We’ll get at latest Consumer Confidence Index from the Conference Board at 10 o’clock.  Expect a rise to 88, from 86.6 last month. 
     
    But in front of that news, we will open lower this morning. Adjusted for fair value, the S&P futures are down 4 points, Dow futures are down 33, and the NASDAQ futures are about 6 points below fair value. 
     
    October 24, 2005
     
    We have about another week before the Fed raises interest rates once again.  Later this week, we’ll get a lot of economic data that could influence their decision.  That is, if their collective mind wasn’t already made up – which it is.
     
    Today will be pretty quiet for economic news.  But, we’ll still have a good list of corporate earnings reports to keep us entertained.  Johnson Controls beat estimates by a penny on lower than expected revenue.  Drug maker ScheringPlough earned 2 cents per share more than expected.  Merck beat estimates by 3 cents, but revenue there came up short due to the Vioxx withdrawal.
     
    Kimberly Clark had a good quarter, but warned that the fourth quarter will fall short due to increasing energy costs.  Speaking of which, crude oil is off more than a dollar per barrel this morning, as it is now clear that Hurricane Wilma has missed the already damaged oil facilities in the Gulf of Mexico.
     
    European markets are doing well, and it looks like a good start for us as well. At this point, adjusted for fair value, the S&P futures are up more than 3 points, Dow futures are up 33 points, and the NASDAQ futures are 4 points above fair value. 
     
    October 20, 2005
     
    Yesterday was, of course, the 18th anniversary of the stock market crash of 1987.  While yesterday never looked quite THAT bad, it was pretty ugly until the middle of the afternoon, when a powerful rally kicked in.  Maybe it’s just a bear market rally, maybe the bottom is now in.  It doesn’t look like the open this morning will give us any substantial indication.
     
    Earnings reports continue to pour in, and in contrast to yesterday morning, this morning they’re not so great.  Yes, Coca-Cola beat estimates on rising revenue. Look for Coke to rise about 4% at the open. However, Ford Motor lost a penny more on an operating basis than expected.  They indicated that full year results would come in at the low end of their one dollar to buck and a quarter estimate. 
     
    Pfizer beat earnings estimates, but sales were off, on shall we say, soft Viagra sales.  Pfizer guided lower for the rest of the year and withdrew their 2006 and 2007 guidance.  Pfizer is look to open down about 4 percent.  Ebay also lowered guidance and Amgen’s sales were disappointing.  McDonald’s matched expectations.
     
    Sum it all up, and it looks like a market that wants to rally, but can’t find a good reason.  At this point, adjusted for fair value, the S&P futures are down less than 2 points, Dow futures are down only 2, and the NASDAQ futures are a point and a half below fair value. 
     
    October 19, 2005
     
    We’ll get earnings reports from at least 30 of the S&P 500 companies today.  Here’s the frustration of the day – earnings are coming through in fine shape, but it looks like stock prices are going to take it on the nose again this morning.
     
    The Producer Price Index pop to 1.9% yesterday and its future interest rate ramifications sent stocks lower overnight worldwide.  Stocks are down on the order of 2 percent on just about all markets overseas.
     
    Meanwhile, back at the ranch, earnings are on the whole, pretty good. 
     
    Beating estimates or raising guidance this morning, Motorola, JP Morgan Chase, Honeywell, EMC, Altria, Bank of America, Roche -- and how about this one – Continental Airlines.
     
    The misses of the morning are Intel, Kraft and Michaels Stores.
     
    Finally, we have a warning from the Chairman of the FDIC about the number of people who are buying way too much house by using what he terms as “risky”mortgages.  He says that there is rising risk not only to the borrowers, but to the lenders as well.  We get data on September Housing starts at 8:30.
     
    Hang on to your hats at the open this morning.  At this point, adjusted for fair value, the S&P futures are down 6, Dow futures are down 53, and the NASDAQ futures are 10 ½ points below fair value. 
     
    October 18, 2005
     
    Hopefully your stock portfolio is doing well, but even if it’s not, rest assured that your broker is probably doing well.  Merrill Lynch reported a 38% increase in their 3rd quarter revenue and a 51% increase in income.  They have added 1,800 employees and beat earnings estimates by a whopping 22 cents per share.
     
    IBM’s quarterly report was a pretty good one last night, beating estimates.  Although they did it by cutting costs rather than growing revenue, IBM is looking to open a couple percent higher this morning.  United Technologies, Wells Fargo, Johnson & Johnson and 3M all with better than expected reports. Motorola and Yahoo report tonight.
     
    At 8:30 this morning we’ll find out how much rising energy prices goosed the Producer Price index in September.  Expect 1.4% in the overall rate, but only 2 tenths of a percent in the core rate, which applies to producers who don’t eat or use energy.
     
    Overseas markets are mixed this morning, and pending a big surprise out of the PPI number, we should go slightly higher at 9:30.  Adjusted for fair value, the S&P futures are up only a quarter of a point, Dow futures are up 18, and the NASDAQ futures are pretty much even with fair value. 
     
    October 17, 2005
     
    About a quarter of the companies in the S&P 500 will report earnings this week. General Motors is on the schedule to announce their quarterly loss today.  However, as we all know by now, at 8:30 this morning Rick Waggoner will be addressing GM employees.  As we all heard minutes ago on WJR, GM and the UAW have reached an agreement to cut health care costs.  No dollar amount is available, and of course, that’s where Wall Street will focus, but presumably we’ll learn that at 8:30.
     
    Citigroup posted earnings this morning that were right about at expectations.  Whether they beat or missed depends on whether you regard Hurricane Katrina as a recurring event, or just part of normal operations.
     
    Later today, IBM and Wachovia, among others, will report.
     
    Oil prices are up over a dollar per barrel as Tropical storm Wilma begins getting her act together, nearing the Cayman Islands and potentially threatening the Gulf of Mexico.  Current models have it posing the greatest threat to southwestern coast of Florida, and then possibly crossing over for a trip up the Atlantic coast next week.
     
    Overseas markets are fairly flat.  We’ll likely head south at the open on news of those higher oil prices.  Adjusted for fair value, the S&P futures are down 1 ½, Dow futures are down 27, and the NASDAQ futures are only about a point below fair value. 
     
    October 14, 2005
     
    There’s more economic data coming today than you can throw a short stack at.  First and foremost will be the September Consumer Price Index.  If you are already collecting Social Security checks, you should have more than a passing interest this month.  It’s expected that the CPI rose nine tenths of one percent in September.  That would give us a year-over-year inflation rate of 4.4%.  That would be the highest in 14 years.  And, since next year’s Social Security benefits are adjusted for annual inflation at the end of each September, the average Social Security check could be in for a big boost in January.  Not as big a boost as your home heating bill, mind you, but, a boost nonetheless.
     
    Retail sales numbers, industrial capacity and utilization numbers, all come out before the market opens, and at 9:45 we’ll get the University of Michigan’s preliminary Consumer Confidence Index for October is expected to recover to a level of 80.
     
    Don’t look now, but the yield on the 10 year Treasury Bond, that’s the one an awful lot of mortgages are based on, is up to 4.47%.  That’s up a full half percent in the past six weeks.
     
    The futures have been rallying during the past couple of hours, and although they are positive, they are still struggling to get back to fair value.  Adjusted for that ever-lovin’ fair value, the S&P futures are up almost a half point, the Dow futures are down 8, and the NASDAQ futures have just gone to a point and change above fair value. 
     
    October 13, 2005
     
    McDonald’s is serving up a happy meal for shareholders this morning.  Same store sales are up and it looks like Mickey D’s will make 2 cents more per share on the quarter than expected.
     
    The weekly jobless claims number at 8:30 will be pretty hard to interpret as the post Rita-Katrina job picture remains foggy at best.  Of a little more import will be the weekly report on oil and distillate inventories.  That report was delayed a day by the Columbus Day holiday, but when it rolls out this morning, it is expected to show a build up in crude oil, but another decline in gasoline and heating oil inventories.
     
    Freddie Mac will report on weekly mortgage rates today.  Expect the average rate on a 30 year loan to have gone above 6 percent for the first time in well over a year, and this time in may not be turning back.
     
    Trading volume should be on the light side today due to the Yom Kippur holiday.  It’s one of those curious mornings when the futures are positive, but are still indicating a lower open for most stock prices, because after you adjusted for fair value, the S&P futures are down 3 ½  points and the Dow futures are down 24, and the NASDAQ futures are about a point below fair value. 
     
    October 12, 2005
     
    There will be about 650 new homes built in North Carolina through the collaboration of KB Home and Martha Stewart.  There is no truth to the rumor that these homes will be marketed under the name “The Big House.”
     
    Shares, or slices, if you will, of Apple Computer have risen about 400 percent over the past two years, and were pretty much priced for perfection.  Well, last night’s earnings report was good, but it wasn’t perfection, and Apple shares will be under pressure this morning.  Earnings beat estimates by a penny, but iPod sales were short of estimates, as was overall revenue.  Apple should be unveiling its long-awaited video-iPod later today, so that may mitigate the losses, but the pre-market indicates Apple shares down about 8 percent.
     
    In about 15 minutes, Alan Greenspan will be giving a speech that will give traders something to chew on before 9:30.  Yesterday the minutes of the latest Fed meeting were released and gave us absolutely no hope the interest rate hikes would end anytime soon.
     
    Hong Kong stocks were off over 2 percent overnight.  Most all overseas markets are lower at this hour, and we should start the day weaker as well.  Adjusted for fair value, the S&P futures are down almost 4 points, the Dow futures are down 27, and the NASDAQ futures are almost 9 points below fair value. 
     
    October 11, 2005
     
    The Dow Jones 30 Industrials lost over 50 points yesterday.  Almost about a third of that was directly thanks to General Motors, which dropped 10%.  Of course, that looked like a winner compared to a 34% decline in Dana and a more than 70% loss in Delphi shares.  Delphi shares closed last night at 33 cents per share, as they make their way down their eventual value of zero.
     
    3rd quarter earnings season got off to a pretty good start last night, with Alcoa and Genentech beating earnings estimates.  Shares of Genentech, which have cooled considerably after more than doubling during a six-month hot streak, are looking to open a few bucks higher this morning.  Publisher Gannett met estimates this morning, and Johnson Controls raised their earnings guidance.
     
    At 2 o’clock we’ll get a peak at what was said behind closed doors at the latest Federal Reserve Open Market Committee Meeting.
     
    And there’s a big merger in Canada this morning, as metals company Inco will get control of metals company Falconbridge at a 10% premium to yesterday’s closing price.
     
    Japanese stocks, which didn’t trade yesterday opened the week with a bang, rising about 2 ½ percent.   Outside of Australia, all other major foreign markets are in the green.  We’ll see if our markets can hold on to early gains for a change. At this point, adjusted for fair value, the S&P futures are up a little more than 2 points, the Dow futures are up 27, and the NASDAQ futures are 3 ½  points above fair value. 
     
    October 10, 2005
     
    It’s a whole new ballgame for Detroit this morning after Delphi’s Chapter 11 filing.  For some suppliers there will be ripple effects, for others a tsunami that will likely roll through the Detroit economy for years to come.  Dana has just withdrawn its 2005 earnings guidance, reportedly due to accounting issues.  There’s an analyst at Bank of America this morning, who estimates that the likelihood of a General Motors bankruptcy has gone up to 30 percent.
     
    Delphi will be spending its last day as a member of the S&P 500 today.  They will be replaced by Paterson Dental tomorrow.  
     
    Stocks will trade today, but the bond market is closed for Columbus Day.
     
    There’s one big merger this morning.  In about a 7 billion dollar deal as Lincoln National will but insurance company Jefferson-Pilot at about an 11% premium to Friday’s closing price.
     
    There’s a lot of economic data on tap later in the week, but there’s nothing cooking today due to the holiday.
     
    Japanese stocks did not trade overnight, but most all other overseas markets are up a half percent or more at this hour.  Adjusted for fair value, the S&P futures are up 2 ½ points, the Dow futures are up 32 and the NASDAQ futures are almost 3 points above fair value. 
     
    October 7, 2005
     
    Wouldn’t you just love it if you had the power to move the stock market whenever you’d like?  The President of the Dallas Federal Reserve Bank must be lovin’ his job.  A few months ago, Richard Fisher blurted out a comment that the Fed “was in the eighth inning” of hiking interest rates.  The market took off in a powerful rally.  This week, Fisher has been spouting off about the big inflation threat and how the Fed has to keep raising rates.  The stock market has of course, tanked.
     
    Mr. Fisher, in case you’re listening this morning, here are two words of advice usually reserved for my children: “Shut up!”
     
    Delphi shares are off about 15% in the pre-market on the story in the Detroit News reporting that a Chapter 11 filing may come as early as today.
     
    In ten minutes, the first post-Katrina monthly jobs report is expected to reflect a loss of 175,000 jobs, although that number could be a lot better or a lot worse.  Nobody has a real firm estimate on that one.
     
    Most overseas markets are flat to down a half percent or so.  However, we’re looking for a firmer open.  At this point, adjusted for fair value, the S&P futures are up a little more than 2 points, the Dow futures are up 18, and the NASDAQ futures are almost 2 points above fair value. 
     
    October 6, 2005
     
    Just as in baseball, the stock market is looking for a stopper this morning.  The good news is that we have finally gotten something to break the market’s fear of rising oil prices.  The bad news is it has been replaced by a fear of future inflation, which is an enemy that is best defeated before it ever shows up to fight.  The last time the Federal Reserve decided to shadow-box with inflation was 1999.  Inflation never did show up, but the Fed wound up sucker punching the economy instead.
     
    The big retailers are reporting in this morning. Although Walmart says that hurricanes will trim a penny per share from profits this year, same store sales were up 3.8 percent in September. Walmart pumps a lot of gasoline, but even if gas prices had not gone up, sales would have been up 3.2 percent.   Costco beat earnings estimates for the quarter by 2 cents per share and plans to buy back a billion dollars worth of its own stock.
     
    Marriott International also beat estimates and raised their earnings guidance this morning.
     
    Asian markets were generally down 2 percent or more overnight.  European markets are down 1 to 2 percent.
     
    Our stock futures have rallied a good bit just during the last 15 minutes after starting the morning in a little hole. Adjusted for fair value, the S&P futures are up a point and a half, the Dow futures are down 11, and the NASDAQ futures are now just a fraction below fair value. 
     
    October 5, 2005
     
    It’s not a parade yet, but a little line of companies warning about quarterly earnings is starting to form on Wall Street.  Locally, Lazy-Boy says that their quarterly earnings will significantly miss estimates, and they are lowering guidance for the year.  They’re blaming rising prices and lack of supply of certain chemicals and resins that are used to make upholstery.  That shortage, of course, is due to the Rita-Katrina storms.  For much the same reason this morning, a major broker is downgrading its rating on Lear Corporation.
     
    On the flip side, we have better than expected reports and heightened guidance for the year from Yum Brands (you know them and Pizza Hut, KFC and Taco Bell) as well as Wolverine World Wide.
     
    The weekly oil inventory data rolls out at 10:30 this morning. 
     
    Comments out of no less than three of the Federal Reserve Bank Presidents sent stocks prices south yesterday, as they made it pretty clear that short term interest rates will continue to rise for the foreseeable future.  On the heels of that, markets around the world are lower this morning.
     
    Stock futures have been rallying a bit during the past half hour, but they’ve been down all morning and at this point are still indicating a lower open.  Adjusted for fair value, the S&P futures are down about 2 points, the Dow futures are down 11, and the NASDAQ futures are about 1 ½  points below fair value. 
     
    October 4, 2005
     
    It seems like summer outside, and it seems like we’ve seen this kind of stock market action for the past four months as well – oil prices up, stocks down – oil prices down, stocks up.  This morning, crude oil is down under 65 bucks per barrel, although the price of natural gas, excuse the pun, continues to explode.
     
    At 10 o’clock this morning, the August report on factory orders is expected to show an increase of 2.2 percent.  Yesterday, a much larger than expected increase in the ISM Manufacturing Index got traders worried about additional interest rate increases.  If we come in a lot larger than 2.2 percent on factory orders, we’ll probably see more of the same today.   The July factory orders were actually down from the June level.
     
    Natural gas is hot, and Chesapeake Energy knows it.  They are going to use 2.2 billion of accumulated pocket change to buy Columbia Natural Resources.  That will make them the third largest natural gas produced in the country.
     
    There are a couple of earnings warnings out this morning.  The most significant is from printer company Lexmark.  They will likely make less than half of what analysts expected in the third quarter and they warned for the fourth quarter as well.  Lexmark is indicated down almost 15% in the pre-market.
     
    Stock futures were in negative territory a couple of hours ago, but have rallied as the price of oil has declined.  Right now, it looks like we’ll edge slightly higher at 9:30.  Adjusted for fair value, the S&P futures are up about a half point, the Dow futures are up 9, and the NASDAQ futures are just about even with fair value. 
     
    October 3, 2005
     
    It’s a new quarter, and during the past couple weeks, earnings warnings have been few and far between.  That’s surprised a lot of people who expected that hurricane-related business interruptions would knock a lot of earnings projections out of whack.  Of course, it could just be that companies are still trying to assess the damage.  Whatever, it looks like Walmart is going to come through in good shape.  Same store sales in September were up 3.8 percent.  That’s at the high end of expectations.
     
    The New York Times reported this morning that the federal government has calculated the termination value of General Motors pension plan.  That is, what kind of shape would the plan be in IF the plan terminated today.  On that basis, the plan’s assets would come up short by about 31 billion dollars.  Of course, the plan ISN’T going to terminate today, and on an ongoing basis, GM estimates that the plan is actually OVERfunded by a couple billion.  However, there’s some pressure building in Congress to make companies report pensions on a termination basis – so, it’s an interesting number to keep an eye on.
     
    Asian markets were off just a little after a slight miss in the Japanese Tankan business index.  European markets are up nicely, and it looks like we’ll tick upwards just a bit at 9:30.
     
    Adjusted for fair value, the S&P futures are up about a half point, the Dow futures are up 13, and the NASDAQ futures are about 2 points above fair value. 
    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any of the sponsors of our daily WJR reports
     
    November 30, 2005
     
    The results for Cyber Monday are in, and they serve to prove that this whole computer and internet thing is really just a fad that will just fade away.  Right.
     
    Visa spending on the internet was reportedly up 26 percent this Cyber Monday over last.  Ebay ruled the roost with the most distinct visitors.  Walmart.com and Target.com also drew a lot of traffic.
     
    Traffic in shares of Google may have finally come to a “stop” sign.  Google is back down to 400 bucks from 435 on a couple analyst downgrades. Yahoo took its second downgrade this week this morning as well.
     
    Lots of data points on the way today.  It’s Oil Inventory day.  The Chicago Purchasing Manager’s Index comes out at 10, and later today, the Fed’s Beige Book will be released.  The last time out that was a significant market mover.
     
    The government’s second estimate of 3rd quarter Gross Domestic Product at 8:30 could set the early tone. It’s expected to be revised upward to 4.1% from the advance number of 3.8%. Too much of an upward revision could actually be a market drag, as traders continue to focus on future interest rate hikes.
     
    Overseas markets are down at this hour.  In front of the GDP data, our futures are pretty much in wait-and-see mode.  S&P, Dow and NASDAQ futures are all just about even with fair value.
     
    November 29, 2005
     
    Yesterday the stock market’s winning streak ran into a disappointing home sales number like it was a brick wall.  It’s not news around these parts, but now it seems that nationally there are plenty of used homes on the market.  The thinking is that a slowdown in housing sales will likely trigger a slowdown in related consumer sales as well.
     
    Today it could be déjà vu all over again.  The futures are up strongly at this hour, but at 10 o’clock we’ll get the October New Home Sales.  Early forecasts put the number at an annualized 1.2 million units, but given the used home data yesterday, we could fall well short of that.
     
    Durable Goods Orders are expected to have risen 1.5 percent in October.  We’ll get that report in about 10 minutes.
     
    Gold broke over the $500 dollar an ounce level over night, although it’s pulled back some at this point.  The last time gold spent any significant time above 500 bucks was about 22 years ago.
     
    In front of that durable goods number, the futures are looking pretty good.  Adjusted for fair value, the S&P futures are up more than 6 points, the Dow futures are up 40, and the NASDAQ futures are more than 9 points above fair value.
     
    November 28, 2005
     
    There may be heavy pockets on area freeways, but there were evidently lighter pockets leaving area malls over the weekend.  According to the National Retail Federation, the average shopper spent more than $302 over the weekend, as Thanksgiving Holiday retail sales were up 22 percent over last year.  That number is questionable to some, and it may be an unbelievable number to a lot of autoworkers who are expecting tougher times ahead.  But, whether the figure is completely accurate or not, it’s a reminder that nationally at least, the consumer is feeling just fine, thank you.
     
    Automakers aren’t the only manufacturers about to do some restructuring.  Drug-maker Merck will eliminate 7,000 jobs by 2008 and will close 5 of their 31 manufacturing facilities.
     
    This week will be loaded with economic data.  Today, the October existing home sales number comes at 10 o’clock.  Sales are expected to have declined just a bit to an annualized rate of 7.2 million units.
     
    The Wednesday before and the Friday and Monday after Thanksgiving are traditionally good days for the market, and it looks like 2005 will be no exception. 
     
    Overseas markets are in rally mode, as we will be at 9:30. Adjusted for fair value, the S&P futures are up almost 2 points, the Dow futures are up 32, and the NASDAQ futures are about 3 points above fair value.
     
    November 23, 2005
     
    The futures are indicating a pretty flat open for stocks, but take heart – the Wednesday before and the Friday after Thanksgiving are traditionally pretty good days for the market.
     
    We got a little Holiday gift yesterday when the minutes of the Federal Reserve Open Market Committee’s most recent meeting were released.  The minutes showed that the Committee members DID actually talk about the economy during their meeting, presumably because golf season was just about over.  Some Fed members expressed concern that they not go too far in raising interest rates.  That gave stocks an immediate shot in the arm, adding day number 5 to the current market rally.
     
    At 9:45, the U of M’s Consumer Confidence number for November is expected to come in at 81, as investor depression over tropical depressions wears off.
     
    Oil, gasoline, and distillate inventories are all expected to have risen in the past week.  We’ll find out at 10:30, and we’re also expecting a rise in natural gas inventories.  That’s fairly unusual for this time of year.  That data is coming out a day early due to the Thanksgiving Holiday.
     
    Japanese markets were closed today, but outside of Belgium, where they must have bitten into some sour chocolate, overseas markets are up.  Adjusted for fair value, the S&P futures are down about a half point, the Dow futures are down 8 ½, and the NASDAQ futures are just about even with fair value. Happy Thanksgiving, everybody!
     
    November 22, 2005
     
    Xbox 360 hit the market at midnight.  Microsoft calls the new machine a critical component of its future strategy, so it’s an important product to watch.  Some analyst estimates that Microsoft will sell 2 million of them this year, but estimates vary widely as to how many will be available during the next few weeks.  Hey, maybe we can start building them at some of those auto plants we don’t need anymore.
     
    For the market in general, the Dow Jones 30 Industrials Index finally closed in positive territory for the year yesterday.  The Nasdaq and the S&P 500 are at 4 ½ year highs.  But there are some uncomfortable little details rearing their ugly little heads.  Gold is just a smidgen below the $500 dollar an ounce level, as rising fast.  The Treasury Bond yield curve is about as flat as flat can be and will very likely invert before the end of the year.  An inverted yield curve is an almost certain indicator of an upcoming recession.  Finally, light sweet crude is up almost a buck today at $58.61 per barrel. 
     
    Markets around the world are little changed at this hour, but in light of all those ugly little details, we’ll see lower stock prices at 9:30. Adjusted for fair value, the S&P futures are down almost 3, Dow futures are down 17 and the NASDAQ futures are about 5 points below fair value.
     
    November 21, 2005
     
    There was a day when General Motors could rally it stock by announcing some new models with big sales potential.  Last Friday, GM shares rallied 17 percent from their intra-day low, just because Rick Waggoner said “we’re not going bankrupt.”
     
    In about 10 minutes, GM’s head honcho will have more to say.  At an 8:30 press conference, Mr. Waggoner is expected to announce some plant closings and possibly some other cost cutting measures that could help him keep last Friday’s promise.
     
    Usually the mother names the child.  Today, the child will actually assume its mother’s name.  SBC will start using the AT&T name, assume the ticker symbol ‘T’ and will make a lot of sign makers and stationery suppliers very, very happy.
     
    Cold weather is about to spread across the Midwest and Northeast, and surprise, surprise, oil and natural gas prices are again on the rise.  Light sweet crude is up 75 cents to just shy of 58 bucks per barrel.  That could weigh down the sleigh of the little Santa Claus rally we’ve been enjoying.
     
    Asian markets were positive again overnight.  Mainland Europe is in the green, but London’s FSTE Index is down just a touch.  Our stock futures have been trying to climb back to even all morning, and they’re just about there. So, at this point, it looks like a pretty quiet open is on the way.  Adjusted for fair value, the S&P and Dow futures are flat but the NASDAQ futures are about 2 points below fair value.
     
    November 18, 2005
     
    There’s not much on the economic report calendar today, so it will likely be a deals, earnings and oil kind of day. 
     
    Let’s take them in reverse order.  Light sweet crude is down 3 cents after a steep slide yesterday afternoon.  Yesterday’s drop gave a nice boost to overseas markets overnight.  Most of Europe is up about one percent at this hour.  Overnight, the Nikkei 225 in Japan was up almost a percent and a half.
     
    Earnings reports are a mixed bag.   We’re looking at better than expected reports from Hewlett-Packard and Starbucks.  However, there are less than wonderful profits and/or forecasts from Gap, H&R Block and Disney.
     
    A couple more big deals as companies continue to find ways to sop up all that darn cash lying around.  SwissRe is buying General Electric’s insurance business and Cisco Systems is buying Scientific Atlanta.  Both of those deals are in the 7 to 9 billion dollar range.  GE is also raising their dividend by 14%.
     
    Stock futures have been positive all morning and have been quietly creeping even higher. Adjusted for fair value, S&P futures are up about 3 points, Dow futures are up 17 and the Nasdaq futures are about 6 points above fair value.
     
    November 17, 2005
     
    The story stock of the day nationwide has to be General Motors, and the story is not a comedy.  GM lost almost 6 percent of its value yesterday, and another 17 cents in the after-hours market.  Closing in on 21 bucks a share, you have to go back to the Crash of 1987 to remember GM trading much below that level.  The stock has lost almost 40 percent of its value over the past three months.
     
    How about some happier stories?  It you’re long gold, it’s been a great year.  Gold is at 483 dollars an ounce mark this morning.  That’s an 18 year high.
     
    Today is the last big data day of the week.  Weekly jobless claims are expected to have fallen by just 2,000.    October housing starts are expected to be down 2.8 percent.  Industrial production, on the other hand, is expected to show a one percent pickup as we recover from the hurricanes.  Finally, at noon, the Philly Fed survey will be closely watched.  Expect a decline of 3 tenths of a percent in that forecast.
     
    Two broker downgrades this morning – one for Altria and one for ConocoPhillips.  Hewlett-Packard will report earnings later today.
     
    It’s a great day to be invested overseas.  Hong Kong and European markets are up almost one percent, Japan closed up 1.7 percent.  We should get off on the right side of the sod as well.  Adjusted for fair value, S&P futures are up 4 ½ , Dow futures are up 28 and the Nasdaq futures are about 9 ½ points above fair value.
     
    November 16, 2005
     
    There’s been a lot of discussion and speculation about the health of the housing market lately.  Rising interest rates, the theory goes, have to start biting into sales soon, and may even cause people who can’t handle their suddenly-expensive ARM loans into an unexpected move.
     
    The jury on this one is apparently still out. A few days ago, home builder Toll Brothers gave investors disappointing guidance for 2006.  However, this morning, D. H. Horton beat estimates for their fourth quarter by 14 cents, and guided toward the high end of expectations for next year. So, all may not be so horrible in house building land.  However, Horton did guide slightly lower for next quarter.
     
    Tyco is also being cautious for next quarter, although last quarter’s earnings were pretty good.
     
    It’s all about the CPI for traders this morning.  In 15 minutes the October Consumer Price Index is expected to come in unchanged.  The core rate, which excludes food and energy prices, is expected to have risen 2 tenths of a percent.
     
    Asians markets were up a little overnight, European markets are down about ¾ of a percent.  Our direction will be taken from the CPI announcement at 8:30.  Right now S&P, Dow and Nasdaq futures are all within a point or two of fair value.
     
    November 11, 2005
     
    A big drop in oil prices didn’t help energy stocks yesterday, but it sure gave the rest of the market a shot in the arm.  This morning, light sweet crude is down another 16 cents per barrel in the mid-57’s, and that has European stock markets in a very good mood.
     
    Bond traders in the U.S. should be in a good mood – they have the day off for Veteran’s Day.
     
    If you hold shares in Dell…well…..maybe you won’t be in such a good mood.  Dell warned that earnings were going to disappoint.  So, their earnings number last night was no big surprise.  However, the revenue number for last quarter was also on the light side, and the outlook for next quarter was disappointing.  So, after gaining 19 cents in yesterday’s market, Dell lost 35 cents in the after-market and should open lower this morning.
     
    Don’t look now, but after yesterday’s plunge in the stock price, the dividend yield on General Motors is over 8 ½ percent this morning.  Assuming, of course, that you believe the payout rate is sustainable.
     
    It’s pretty much whatcha see is whatcha get with the futures, and at this point, watcha gonna get is a slightly positive open for stocks.  S&P futures are up a tiny fraction of a point, the Dow futures are up 2 and Nasdaq futures are now about 3 ½ points above fair value.
     
    November 9, 2005
     
    There will be a lot of hot oil-related news in the market today.  First hot data from the Energy Information Institute, then a lot of hot air from Capitol Hill.
     
    At 10:30, the Energy Information industry will issue its weekly report on fuel inventories.  Crude oil, gasoline and distillate inventories are all expected to rise.  Perhaps most importantly, distillate inventories are expected to rise by about 600,000 barrels after a week of very mild weather in the Northeast, where a lot of residential heating oil is used.
     
    If you are the head honcho of a big oil company, you will be tied to the whipping post in Washington today. Members of the Senate will hold a hearing to find out just how in the world the oil companies have collected so much money from everybody without actually having the power to raise taxes.
     
    Big insurer AIG will be restating earnings again, as they seem to be having some trouble shaking their accounting problems.  Home Depot gets a brokerage firm upgrade this morning after losing over 2 percent of its value yesterday.
     
    Stock futures were solidly positive earlier this morning, but have been on the slide for a while.  At this point, adjusted for fair value, they are indicating a very slightly positive open for the market.  S&P futures are up a almost a point, the Dow futures are still up 4 and Nasdaq futures are now about 2 ½ points above fair value.
     
    November 4, 2005
     
    This morning, it’s all about the October Jobs Report.  The consensus estimate calls for job growth of 124,000.  The employment picture is still a moving target given the thousands of jobs that were washed away by the hurricanes.  Of course, that’s probably offset by the millions of attorneys who have put themselves to work suing Merck over Vioxx.
     
    Round 2 in the Vioxx war went to Merck yesterday as a New Jersey jury found Merck not guilty of evil doing. Merck stock popped up a bit midday, but gave up the bulk to that gain by 4 o’clock.  That’s two lawsuits done and about 6,400 to go. That is, if no new suits are filed.
     
    Apple Computer took a downgrade from a major brokerage house this morning.  The analyst is arguing that it’s time to harvest some of Apple’s tremendous price appreciation.
     
    The Japanese Nikkei Index shot up another 1.3 percent overnight, but markets elsewhere are decidedly undecided.
     
    We will find out which way the U.S. market will decide to move this morning in about 10 minutes with the release of the October Unemployment Report. At this point, after you adjust for fair value, there is absolutely nothing going on.  S&P, Dow and Nasdaq futures are all within a couple points of fair value.
     
    November 3, 2005
     
    Lots of stuff going on today.  Retailers are reporting their October numbers this morning and generally, it looks like consumers continue to party like its 1999.  Walmart confirmed their earlier guidance that October same store sales were up 4.3%.  They see 3 to 5 percent growth in November as well.  Costco same store sales were up 10 percent.  Granted, without the big run-up in gasoline prices it would have only been 8 percent.  But that’s still a big number.
     
    Comcast revenues for the quarter gone by came in as expected, but profits missed estimates by about 40%.  Comcast is also guiding lower for 2006.
     
    At 10 o’clock, Alan Greenspan will be forced to sit through another visit with the Congressional Joint Economic Committee.  Say what you will about him, the man knows how to have a good time.
     
    Also at 10 o’clock, the Durable Goods Report is expected to show a 1 percent decline. And lookout – light sweet crude is up above 60 bucks again at $60.48.
     
    Asian markets were up slightly overnight.  European markets are up on the order of a half to one percent.  We should get off to a quietly positive start as long as the unemployment claims don’t throw us a curve.  At this point, adjusted for fair value, the S&P futures are up a fraction, the Dow futures are up a point, and the NASDAQ futures are about 3 points above fair value. 
     
    November 2, 2005
     
    Yesterday, the Federal Reserve Open Market Committee said rising energy costs and recent hurricanes have depressed economic growth and job growth.  Not to be outdone by those freaks of nature, the Fed raised short term rates another quarter percent, which should of course, depress economic growth and job growth even more.  The good news is that hurricane season is almost over.  Alan Greenspan will be around until February. 
     
    October auto sales numbers were released yesterday and were scarier than anything you might have seen the night before.  DaimlerChrysler sales were off 3 percent, General Motors off 23 percent and Ford off 26 percent.  The annual combined car sales rate fell to 14.7 million units. A year ago, it was nearly 17 million.  Speaking of industries that are changing, Deutsche Telecom will cut 32,000 jobs over the next three years due to changes in the German communications industry.
     
    This morning Time Warner beat earnings estimates and raised their share buyback program. EDS also beat estimates as that turnaround continues.  Oil distillate inventory data later this morning is expected to show a drawdown.  That’s a potential market mover.  But so far today – not much is moving anywhere.
     
    Overseas markets are mixed.  Our futures started off the morning in good shape, but that was then and this is now.  Adjusted for fair value, the S&P futures are now down 2 points, the Dow futures are down 5, and the NASDAQ futures are about 5 ½ points below fair value. 
     
    November 1, 2005
     
    Later today, Treasury Secretary John Snow will finally receive a couple of proposals, developed by a special commission, on how to reform the income tax system in the U.S.  There’s a striking similarity of this exercise to the proposed Social Security reforms.  Two big wealth re-distribution systems, both horribly flawed.  And both will go “unreformed” for the foreseeable future.  Not that these new tax system proposals are bad – they’re actually very good.  Unfortunately, people don’t evaluate these things based on “right or wrong.”  They make up their mind based on “how will it effect me.”  That will likely render this proposal, like the badly needed Social Security reform, dead on arrival at Congress.
     
    Short-term interest rates will head north by another quarter of a percent at 2:15 this afternoon.  That makes it 12 increases in a row, with at least one or two more to go.
     
    The big earnings news of the morning is a big warning from Dell computer.  Sales and earnings for the quarter will come in at the low end of expectations and Dell shares, and by implication the NASDAQ, will be under some pressure.
     
    Adjusted for fair value, the S&P futures are down about 2 points, the Dow futures are down 11, and the NASDAQ futures are almost 8 points below fair value. 
    Please note that Ron Humenny and Starfire Investment Advisers, Inc. are not affiliated with, are not compensated by and do not endorse Flagstar Bank or any of the sponsors of our daily WJR reports
     
    December 30, 2005
     
    It looks like Santa Claus had a vacation planned, because he took off right after his day job was done last weekend. We started out the week with visions of Dow 11,000.  If this morning’s futures are any indication, it looks like 2005 may go in the books as a DOWN year for the Dow Jones Industrials.  The Dow closed last night up only 1 point for the year, and we’ll almost certainly open well below that this morning.
     
    A lot of overseas markets are closed already.  The UK and Germany closed early, and all major foreign markets are down at this hour.  France is down over one percent.
     
    One data point is on the way.  At 10 o’clock the November Chicago Purchasing Manager’s Index is expected to slip a little to a level of 60.
     
    Lock in those capital losses today, if you need them.  Remember the bond market closes early.  They’ll be done at 2 o’clock. But the best thing to do for your financial health may be to use the weekend to review where your investments stand.  Make sure that your investments are diversified, make sure that you are spending within your means, and make sure that you a saving enough for your future goals.
     
    As we head toward the final session of the year, adjusted for fair value, the S&P futures are down about 4, Dow futures are down 30 and the Nasdaq futures are about 5 points below fair value.  Happy New Year!
     
    December 29, 2005
     
    It should be a quiet day of trading as we wind down toward the end of the year.  Just remember, it’s today and tomorrow if you need to realize some tax losses before the end of the year.
     
    The weekly jobless claims number should, once again, be roundly ignored at 8:30.  The big number of the day will be the report of just how many used homes were sold nationwide in November.  We’re expecting a slowdown of only 4 percent, which would still mean home sales are at a very high level.  That seems realistic.  Unless, of course you’re trying to sell your house around here nowadays.
     
    Oil prices are backing off a bit this morning after a big run-up yesterday on fears that OPEC will start cutting production next year.  Light sweet crude is going for $59.64 per barrel.
     
    European markets have a modest rally in progress.  They’re up about a quarter of a percent.  Our futures must have had a late night, as they are still sound asleep at this hour. The S&P, Dow and Nasdaq futures are all within a point or two of fair value. 
     
    December 28, 2005
     
    Japan is all done for the year.  Tomorrow and Friday are year end holidays, so the Nikkei Index closed out the year overnight at 16,194.  For the year 2005, the Nikkei rose more than 31 percent.  That’s a five-year high.
     
    There are a lot of well respected warning signs on Wall Street.  One of them is called “the inverted yield curve.”  The “yield curve” is simply a line graph that depicts the current interest rate you receive by investing in Treasury bonds of different durations.  Normally, you’d expect that the longer-term the bond you buy, the higher the interest rate you receive.  So the line graph normally slopes up from bottom left to top right.  An INVERTED yield curve slopes the other way, meaning that short term yields are higher than long-term.  Just about all recessions are preceded by inverted curves.  However, not all inverted curves precede a recession.  No matter – yesterday the yield curve inverted ever so slightly several times through the trading day and it threw the market for a low-volume loop.  A lot of market watchers think an inverted curve is no big deal this time around, because of the generally low level of interest rates.  However, the three four most dangerous words in investing are “It’s different this time.”
     
    Nothing remarkable in the overseas markets outside of the big rise in Japan.  We’ll get off the December Consumer Confidence number at 10 o’clock, but in front of that, we should get off on the right foot.
     
    Right now, adjusted for fair value, S&P futures are up 3 points the Dow futures are up 31, and the Nasdaq futures are almost 4 points above fair value.
     
    December 27, 2005
     
    The week between Christmas and New Year’s Day is usually an interesting one.  Trading volumes are light, and a little good news can go a long way.  We’ll see if the Dow takes a run at the 11,000 mark by the end of the week.
     
    Bristol-Myers Squibb got a little something in their stocking on Friday.  The Food and Drug Administration has approved Orencia, which is an intravenous drug for the treatment of rheumatoid arthritis.  Orencia has been effective for patients who haven’t responded to conventional treatments.  Bristol-Myers stock is responding very well so far, up almost 5% in the pre-market.
     
    Depending on what survey you believe, it looks like Holiday season sales were up somewhere between 7 and 9 percent, although some retailers definitely took the lion’s share of the gains.
     
    A lot of overseas markets are closed in observance of Boxing Day.  Japan was down overnight, but it looks like we will start to the upside at 9:30.  Right now, adjusted for fair value, S&P futures are up 3 points the Dow futures are up 29, and the Nasdaq futures are about 7 points above fair value.
     
    December 23, 2005
     
    The bond market closes at 2 o’clock this afternoon.  Japanese stocks did not trade at all overnight, and if there wasn’t a rule against keeping our financial markets closed for four days in a row, our stock market might just as well take the day off today as well.
     
    If anything raises eyebrows today it may be the report on November New Home sales.  It’s expected to drop to an annualized rate of 1.31 million units.  That would be down from a rate of 1.42 million last month and set the tongue to wagging again about just how soft housing might get in 2006.
     
    We’ll also get the December Durable Goods number in about 15 minutes and the University of Michigan’s final reading on Consumer Sentiment at 9:45.
     
    Ford shares were 4 cents higher in the after-hours yesterday on word that the UAW rank and file did approve those health care concessions, albeit by a 51 to 49 majority.
     
    The futures are barely awake at this hour.  Right now, adjusted for fair value, the S&P futures are up just a fraction, the Dow futures are up 2 and Nasdaq futures are just about even with fair value.
     
    December 22, 2005
     
    It’s a good day to finish up your Holiday shopping, or in my case, start it.  Not only that, it’s still a long walk to work if you work at the New York Stock Exchange.  Add it all up, and we’re probably in for a light day of stock trading today.
     
    There’s somefinancial data coming out this morning, as well as the weekly oil, gasoline and distillate inventory numbers, but outside of that there’s just not a lot shaking.
     
    “Four-tenths” appears to be the number of the day.  At 8:30, we should hear that personal income rose about 4 tenths of a percent in November, personal spending should rise 4 tenths of a percent. At 10 o’clock the Conference Board is expected to tell us that the Leading Economic Indicators are up – you guessed it – about 4 tenths of a percent.
     
    Asian markets were down just a bit overnight – I’d like to say “4 tenths of a percent” -- but it’s not that much.  European markets are narrowly mixed at this hour.  Right now, adjusted for fair value, S&P futures are up about ¾ of a point, the Dow futures are up 7, but the Nasdaq futures are about 2 ½  points below fair value.
     
    December 21, 2005
     
    Oh Boy.  Now even Kirk Kirkorian is selling shares of General Motors.  Mr. Kirkorian, who not long ago, raised his stake to General Motors to 9.9%, mostly at a price of 31 bucks per share, has reportedly sold shares, which are now below 20 dollars to bring his stake to under 8 percent.  Not exactly one of those deft investment moves on which Mr. K built his reputation.
     
    A bunch of deals this morning.  IBM is buying MicroMuse.  It’s a cash deal at a 38 percent premium.  How about a 60% premium?  Shareholders of Maxtor will be getting that in a buyout by Seagate Technology.  Allergan is also paying 3 billion to acquire Inamed.
     
    Federal Express delivered its quarterly report about a half hour ago, and the quarter was a good one.  Earnings of $1.53 per share beat the dollar-forty estimate handily.  FedEx also reaffirmed guidance for their third quarter.
     
    The final reading on 3rd quarter GDP is expected to come in unrevised at 4.3 percent.  We’ll find out at 8:30.
     
    At 9:30, we should be seeing little green arrows.  Right now, adjusted for fair value, S&P futures are up almost 4 points, the Dow futures are up 30, and the Nasdaq futures are about 4 ½  points above fair value.
     
    December 20, 2005
     
    New York is an exciting place to be this time of year.  Wouldn’t you be excited if you had to walk to work this morning?  It will be interesting to see how smoothly the trading goes in light of the big transit strike in the City.  However, sales at New York City coffee shops will no doubt be up this morning.
     
    Also going up is the price of shares of Morgan Stanley after a good earnings report this morning.  What may not be going up is the Producer Price Index.  We’ll find out just how prices are doing at the wholesale level in about 10 minutes. Due to a big drop in energy prices, it’s expected that the overall rate dropped about a half percent in November.
     
    There’s word of a pending real estate purchase in central Tokyo.  AIG is said to be negotiating to buy a little spot for about 3.5 billion dollars.  That news set off a little real estate rally in Japan that took the Nikkei index up over a percent and a half overnight.
     
    Most of the rest of the overseas markets and our futures look just downright uninteresting at this point.  Adjusted for fair value, S&P futures are up a point, the Dow futures are up 6, and the Nasdaq futures are just a touch more than a point above fair value.
     
    December 19, 2005
     
    The deal between FPL and Constellation Energy that we talked about last week is done.  It will be an 11 billion dollar merger with energy assets in about half of the states in the country.
     
    If there are shareholders, outside of the auto industry shareholders, could use some good news, it’s the owners of big pharmaceutical companies.  And just in time for Christmas, a U.S. judge has issued a ruling that will protect Pfizer’s patent on Lipitor until 2011.  Pfizer shares, which were at $20.60 just over a week ago, should open north of 25 bucks per share this morning.  In fact, all the big pharmaceutical stocks should rally this morning.
     
    Circuit City beat estimates of 4 cents by making 6 cents in the quarter gone by. Circuit City shares are looking to open up a buck or two as well. 
     
    Pepsi Bottling reaffirmed their guidance this morning.
     
    Asian markets rallied strongly overnight, but Europe is kind of a mixed bag at this hour. Adjusted for fair value, S&P futures are up more than 2 points, the Dow futures are up 23, and the Nasdaq futures are now about 5 points above fair value.
     
    December 16, 2005
     
    It seems odd this week to not have a big merger to talk about.  However, one is getting close.  Albertson’s is reportedly close to unloading its drug stores to CVS and selling off everything else to a consortium of buyers that includes Supervalu stores.  It will be close to a 10 billion dollar deal.
     
    Rick Waggoner with some optimistic words about GM’s 2006 prospects last night at a holiday party.  Waggoner says that the rollout of a new line of big SUVs will help revenue early in the year.  Let’s hope he’s right, and wasn’t just spending a little too much time next to the egg nog.
     
    It’s a quadruple witching Friday as options, futures and options on futures will expire.  That used to mean be volatility in prices, although things have quieted down a lot in recent months.  Things might even be quieter in New York as traders use a pending transit strike as a good excuse to get in a little Holiday shopping this afternoon.
     
    The only economic report of the day will be the Current Account Deficit figure, and if you can get excited about that one, you really need a little vacation.
     
    European markets are firmly in the green at this hour, and we should head higher at 9:30 as well.  Adjusted for fair value, S&P futures are up almost 3, the Dow futures are up 31, and the Nasdaq futures are now about 2 ½  points above fair value.
     
    December 15, 2005
     
    Another day, another big merger this morning, and whether you own the acquirer or the acquiree, your stock price is on the rise.  Biotech companies Amgen and Abgenics are getting together.  Abgenics stock was up 55% in the after hours on news of the deal, and Amgen, after a one percent sell-off late in the regular session, came rallying back more than 3 percent last night.
     
    Everybody knows that the air is leaking out of the housing bubble, but it’s not yet obvious to home builder Lennar.  They reported $3.54 in earnings this morning versus an estimated $3.34 and the reiterated their 2006 guidance.
     
    The big number of the day and the week will come in about 10 minutes with the release of the November Consumer Price Index.  Due to a big drop in gas prices, it’s expected that the headline number fell 4 tenths of a percent, which would be the biggest drop in almost 20 years.  The core rate is expected to rise 2 tenths of a percent.
     
    The S&P 500 will start the day at a 4 ½ year high this morning.  Hong Kong was up a half percent, but most other overseas markets are down a bit.  Ahead of that important CPI data at 8:30 our futures are at a standstill. Adjusted for fair value, S&P futures are up a half point, the Dow futures are down 7, and the Nasdaq futures are now about 2 ½  points above fair value.
     
    December 14, 2005
     
    In you know anyone who does due diligence work for a mergers and acquisitions practice, don’t expect them spend a lot of time shopping for your Holiday gift. Word is that there are a lot of deals in the hopper as companies try to figure out what to do with all the cash that’s been piling up on their balance sheets.
     
    Two new deals are in the spotlight this morning. General Dynamics is buying Anteon for $55.50 per share in cash, which is a 36 percent premium to yesterday’s closing price. Also FPL, the old Florida Power and Light is thinking of linking up with Constellation Energy, which is the old Baltimore power company. That would be an 11 billion dollar deal.
     
    Short term rates moved up again yesterday, but the market loved the Federal Reserve’s statement yesterday.  Of course, truth be told, nobody really knows what it meant.  For the first time in memory, the Committee did not describe its monetary policy as “accommodative.”  Unfortunately, they didn’t promise that their policy wouldn’t get “un-accommodative.”  Nevertheless, Wall Street loves an excuse to rally and that’s what we got.
     
    Tokyo was hit with a 2 percent decline on a disappointing Tankan survey of business conditions.  European markets are off a quarter-percent or so at this hour.  We should see a little profit taking at 9:30 as well.
     
    Adjusted for fair value, S&P futures are down a point and a half, the Dow futures are down 6, and the Nasdaq futures are now about 3 points below fair value.
     
    December 13, 2005
     
    At 2:15 this afternoon, the Fed will announce yet another hike in short term interest rates.  Odds are it will be another quarter point, and odds are that the Fed’s statement will be changed very little, if at all from last month.  However, any hint in that statement that the Fed is near the end of the road for rate hikes would likely give stock prices a big boost.  This is the second-to-last meeting for Chairman Greenspan.  He may not want to wait for his finale to shift gears in that statement.
     
    The potential ConocoPhillips acquisition of Burlington Resources is potential no more.  The 36 billion dollar deal is done and will create another mega-company in oil and natural gas.
     
    Lehman Brothers announced earnings that beat estimates by 12 cents per share this morning. Best Buy with a miss and a warning this morning.
     
    S&P doing General Motors no favors yesterday as they dropped GM’s credit rating 2 notches and said that a GM bankruptcy isn’t farfetched.
     
    With those less-than-kind words, GM shares will open lower at 9:30, but the market should move a bit higher.  At this point, adjusted for fair value, S&P futures are up a fraction, Dow futures are up 20, and the Nasdaq futures are now about a point above fair value.
     
    December 12, 2005
     
    If you spend a lot of time on the road working for a big company, today’s announcement from Hewlett-Packard could mean that you’ll soon get to see what your spouse and your kids look like again.  Hewlett has partnered up with a Hollywood animation company, most probably Dreamworks, a soon-to-be division of Paramount Pictures, and will unveil a new high-end video conferencing system that is reportedly unlike anything else.  It will be somewhat short of “Beam-Me-Up, Scottie,” but is said to be so good, that the high-end corporate customer may be able to vaporize its corporate travel budget.
     
    The two big economic events this week will be tomorrow’s meeting of the Federal Reserve Open Market Committee and Thursday’s release of the Consumer Price Index for November.  Although the CPI probably fell last month due to declining oil prices, short-term interest rates will no doubt be rising by another quarter percent tomorrow.  We’ll all be watching for any hint of a change in the wording of their Statement at 2:15 tomorrow.
     
    There’s a potential 30 billion dollar deal cooking in the oil and natural gas sector.  ConocoPhillips is reportedly looking to buy Burlington Resources.
     
    Japanese stocks were up over 2 percent once again overnight, and we’re looking to open with higher prices as well.  Adjusted for fair value, S&P futures are up 4, Dow futures are up almost 35, and the Nasdaq futures are now about 6 points above fair value.
     
    December 9, 2005
     
    The University of Michigan goes center stage at 9:45 with their preliminary reading on December Consumer Sentiment.  As the impact of the hurricanes fades, it’s expected that that reading will come in around 85, which would be a nice jump from last month’s 81.6.
     
    Intel’s mid-quarter update wasn’t exactly the shot in the arm we were hoping for.  Intel narrowed its sales forecast with the midpoint falling a tad lower than analysts had hoped.  Gross margins are still in good shape at 63% and year-over year earnings growth is over 9%.  But, Intel shares are lower in Europe by 2 percent or so.
     
    IBM was hit with a broker downgrade this morning, based on valuation.  And Merck will also be under pressure this morning after an article in the New England Journal of Medicine accused Merck scientists of playing fast and loose with the facts regarding Vioxx. Not exactly great PR when you have 700 lawsuits pending against you.
     
    Stock futures, which were in pretty good shape early this morning, have been on the slide ever since.  If the market were to open right now, well, you probably wouldn’t notice.  Adjusted for fair value, S&P futures are up a point, Dow futures are flat, and the Nasdaq futures are now about a point and a half below fair value.
     
    December 8, 2005
     
    11,000 should be just another number on the Dow Jones Industrial Average.  Nothing special -- no big deal.  But every time prices threaten that 11,000 level, the bears seem to take over and push the Dow down into that 10,200 to 10,800 trading range that it seems we’ve been in for about a million years now.
     
    Expect the day to start with another step backward on the heels of some pretty ugly results overseas.  The red-hot Japanese market, for instance, took a cold shower to the tune of about 2 percent overnight.
     
    Yes, last quarter was great, but luxury home builder Toll Brothers is now uncertain about fiscal 2007 profits and admits that the real estate market is softening.  They beat last quarter’s estimates handily, but said that for 2007 they might “beat or miss” estimates.  How’s that for uncertainty?
     
    Texas Instruments and Xilinx with great mid-quarter guidance last night in computer chip-land.  Intel will release its mid-quarter report card later today.
     
    The futures are a little improved over the past half hour, but we’re still looking for little red arrows at 9:30.  At this point, adjusted for fair value, S&P futures are down 3, Dow futures are down 30, and the Nasdaq futures are now a little less than a point below fair value.
     
    December 7, 2005
     
    There’ll be a new resident at the Renaissance Center next month, or should I say a return resident, as Fritz Henderson will assume the CFO and Vice-Charman positions at General Motors.  Henderson has been the head of just about every other big GM unit worldwide over the years, most recently GM-Europe.  It’s a return to the Ren Cen because Fritz worked there years ago when he was with Price Waterhouse.  Actually he and I worked there together and I can tell you, he’s one sharp individual.
     
    Texas Instruments stock is up almost 65% since January, and after the market closes today they’ll give us a mid-quarter update.  We’ll also get the weekly oil inventory numbers at 10:30 this morning.  But in the meantime, oil is again floating above 60 bucks per barrel.  Light sweet crude has been over 60 bucks every day this week, but hasn’t closed above 60.  Should it clear 60, we may see a little more bad news in short order.
     
    Gold is at $516 an ounce this morning.  Outside of a slight downtick in the German DAX Index, all major overseas markets are in the green.  We’ll likely start off in the yellow this morning.  At this point, S&P, Dow and Nasdaq futures are all within a point or so of fair value.
     
    December 6, 2005
     
    For stock traders, it’s all about oil prices and interest rates. Oil prices are down a little this morning, on the news that the East Coast escaped a big winter storm, and a hint as to future interest rates is on the way at 8:30. 
     
    Presumably, the Fed will stop raising interest rates when they perceive no threat of inflation.  The biggest component of inflation pressure is rising wages.  The most beneficial way to avoid inflation yet provide good wages is to increase productivity.  The Government’s final reading on third quarter productivity is expected to be revised upward to 4.6 percent.  Unit labor costs are expected to have fallen by almost one percent.   Anything higher on productivity or lower on unit costs will be good news.
     
    Apple Computer gets a broker upgrade this morning and is likely to open higher.
     
    It’s a split decision overseas, with Asian markets down and European markets up on the order of a half-percent or so. As long as the productivity report behaves itself, we should get off to a stronger start as well.  At this point, adjusted for fair value, S&P futures are up about 2, the Dow futures are up 20 and the NASDAQ futures are 4 points above fair value.
     
    December 5, 2005
     
    We’ll see if this is the week that the Dow Jones Industrial Average revisits the 11,000 level.  It teased us back in March before falling back.   The Dow starts this morning at 10,877.
     
    Just when Johnson & Johnson thought that it had successfully renegotiated the price of Guidant, Boston Scientific is saying, “not so fast.”  Boston Scientific is offering 72 bucks in cash and stock for Guidant this morning.  That is 14% more than the J&J offer and 16 % higher than Guidant’s Friday close.
     
    The ISM non-manufacturing index is the only scheduled data point of the morning.  It’s expected that the services industry expanded at a slower rate in November, but this time of year, that index is pretty volatile and hard to take too seriously.  The number that the market will be watching is the final revision to the 3rd quarter productivity numbers.  That report comes out tomorrow.
     
    Wal-Mart continues to rack up some serious Holiday sales.  They reaffirmed their estimate of this morning for 2 to 4 percent same store sales growth in December.
     
    Japan was up almost another one percent overnight.  Most other overseas markets are a little lower as they and our futures have been following oil prices around.  Light sweet crude is up over 60 bucks once again, and that has the stock futures pointing a little lower.  At this point, adjusted for fair value, S&P futures are down about a point, the Dow futures are down 10 ½ but the NASDAQ futures are a half point above fair value.
     
    December 2, 2005
     
    Like those five dollar coffees?  Starbucks’ November same store sales were up another 7 percent, as we just can’t seem to get caffeinated enough.
     
    It’s all about the jobs report this morning.  At 8:30 we’ll get the report, and the expectation is that the U.S. economy added 223,000 new non-farm jobs.  It’s expected that the unemployment rate held steady at 5 percent.  Perhaps more eagerly watched will be the average hourly wage.  Last month it spiked up by a half percent.  Analysts expect an increase of a far more moderate 2 tenths of a percent in November.
     
    You may not be able to afford a meal at Morton’s, but you will soon be able to buy a share or two of their stock and chew on that.  Morton’s, which has 69 restaurants nationwide, announced this morning that they will soon have an IPO on the menu.
     
    Overseas, the screens are all green this morning.  We’re up another 2 percent in Japan over night, another one percent in Hong Kong, another half percent or so in European markets.  Although our futures have been positive all morning, they were below fair value until an hour or so ago.  But in front of the jobs report at 8:30, things are about as flat as flat can be.  Adjusted for fair value, S&P futures are down a quarter-point, the Dow futures are flat and the NASDAQ futures are a point and a half below fair value.
     
    December 1, 2005
     
    Retailers and the car companies are reporting November sales today and there’s another wave of economic data coming as well, we could get some twists and turns as the day unfolds.  But at least the open should be a turn to the positive after the big blue chips took a tumble yesterday.
     
    The early retail numbers are a mixed bag.  Costco reported a 6 percent increase in same store sales.  That’s great.  Unfortunately, analysts were expecting more like 7.2 percent.  American Eagle Outfitters also missed their same store sales target by a bunch.  That’s the bad news.  The worse news is that there is widespread suspicion that the retailers that hit their sales targets did so by slashing prices.  So sales may be great, but profits may be hard to come by.
     
    Speaking of which, car sales in November, spurred by incentives that supposedly weren’t needed anymore, are expected to have gone back up to an annualized rate of 15.7 million units from October’s 14.7.
     
    Personal income and spending data at 8:30 and the November ISM index at 10 may influence the market a bit more than all that.  The ISM is expected to decline to a reading of 58.
     
    The Nikkei in Japan closed above 15,000 for the first time in 5 years.  Europe is also positive at this hour.  Adjusted for fair value, S&P futures are up 5 1/2, the Dow futures are up 57 and the NASDAQ futures are 9 points above fair value.
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