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WJR September 2015 Reports

 


September 30, 2015

I can tell you that September 30this clearly a great day to get married. Historically, however, it’s been a pretty lousy day for the stock market. Since World War II, September 30thhas only been a positive day for stock prices about 38 percent of the time. Nevertheless, it looks like we’ll see rising prices in the early going today.

Costco’s quarterly sales were hurt by a strong dollar and declining gas prices. But nevertheless, earnings of $1.73 were better than the consensus estimate by 6 cents per share. Profits in the year-ago quarter were $1.58. Costco shares are indicated about a percent and a half higher pre-market. 

Not doing quite as well this morning are shares of retailer Gap. A little tsunami of broker downgrades has the shares at a seven percent discount. And not to be outdone, Barracuda Networks reported lousy earnings last night and issued downbeat guidance. Barracuda shares are taking a nearly 25 percent beat-down this morning.

The ADP private payroll report comes at 8:15 this morning. Expect the addition of another 190,000 jobs in September, just like we saw in August.

A good number of overseas markets were closed this morning, but those that are trading are trading higher. Adjusted for fair value, the S&P 500 futures are higher by about 22 points, the Dow Industrials futures are up 181, and the NASDAQ futures are about 61 points above fair value.

September 29, 2015
 
If you’ve been heavily invested in biotech stocks for a while, you’ve seen some great gains over the past few years.  You also may be in need of medication this morning.  The biotech names took yet another drubbing yesterday, with many down 20 percent or more over the past six trading days.  Fears of Congressional action and/or a Hillary Clinton Presidency that would regulate drug prices are causing the sickness there.

Goldman Sachs is finally cutting its forecast of where the S&P 500 will finish the year.  They now say the 2,000 level is their best guess.  That would be a more than 6 percent rally from where we are this morning.

The Conference Board’s reading on September Consumer Confidence will be reported at 10 this morning.  Expect the September number to come in around 96, far short of the 101.5 reading in August.

Another down day here and continuing worries about economic weakness in China led to a 2 percent decline in China and a 4 percent drop in Japan overnight. The Nikkei is now down for 2015.  Europe is relatively unchanged at this hour.

We should get a little bounce back in prices at 9:30. At this point, adjusted for fair value, the S&P 500 futures are now higher by about 9 points, the Dow futures are up 68 and NASDAQ futures are about 23 points above fair value.

September 28, 2015

Outside of health care stocks, Friday's market action was pretty positive.  But that's just a memory this morning as it looks like stock prices will once again migrate south.
 
Some disconcerting words from Carl Icahn have traders in a lousy mood.  Icahn says that his stock exposure is more hedged that it's been in a long time.  Of course, if you're Carl Icahn, you could be dramatically "unhedged" by the end of the week if you felt like it.
 
There are a few stocks that will buck the negative sentiment this morning. Media General, which was trying to buy Meredith, has attracted the attention of a bigger fish. Nexstar is now offering to buy Media General, and Media General’s shares are up more than 20 percent pre-market. 
 
Alcoa shares are indicated about 6 percent higher on news that the company wil split itself in two by the second half of 2016. SABMiller and inBev are also higher as inBev is reportedly going to offer 106 billion dollars for SABMiller.
 
Fed Bank Presidents from New York, Chicago and San Francisco (who all had losing football teams yesterday) are all speaking today, and probably not about sports.

At this point, adjusted for fair value, the S&P 500 futures are now lower by almost 15 points, the Dow futures are down 109 and NASDAQ futures are about 29 points below fair value. 

September 25, 2015

Sooner or later (and hopefully sooner) traders will lose their fascination with trying to time the Federal Reserve’s first quarter-point interest rate hike and get back to concentrating of corporate earnings.

But, in the meantime, comments from Janet Yellen last night have lit a little fire under the futures this morning. Yellen left the door wide open to a quarter point hike before the year is out and a slow pace of increase as data allows. That has the market looking to regain yesterday’s losses and then some at the open.

Not sharing in the excitement are shares of Blackberry. Earnings fell four cents short of estimates and Blackberry shares are indicated about 3 percent lower than yesterday’s close. Retailer Finish Line matched the consensus earnings estimate, although sales fell short. Nike shares are looking almost 9 percent higher on a better than expected report.

At 8:30, the Government’s final estimate on 2ndquarter Gross Domestic Product is expected to be unchanged from the preliminary estimate of 3.7%.

China a little lower, Europe is solidly higher. At this point, adjusted for fair value, the S&P 500 futures are now higher by 23, the Dow futures are up 248 points and NASDAQ futures are about 53 points above fair value.

September 24, 2015

Stocks traded in Japan for the first time this week after a three day government holiday, and maybe a four-day holiday would have been a better idea. The Nikkei lost about 2¾ percent overnight, setting the table for declines elsewhere.

We’re now officially into the last trading week of the third quarter, and so far we haven’t heard a lot of companies warning about their quarterly earnings. It’s likely to take some pretty good earnings reports to pull this market out of its interest-rate-watching funk.

Accenture is out with better than expected earnings. They also announced a 5 billion dollar stock buy-back. As long as interest rates stay this low and worldwide economies stay this weak, expect stock buybacks to continue to be the easiest way to boost earnings per share going forward.

Speaking of which, Janet Yellen is speaking at the University of Massachusetts Amherst after the close of trading today. Her topic is inflation, not interest rate policy. However, her words may influence how stocks trade tomorrow.

As for today, our futures are off their lows, but that doesn’t mean that they’re positive. Chinese stocks rose one percent overnight, but European markets are about 1½ percent lower on average.

At this point, adjusted for fair value, the S&P 500 futures are now lower by 15 points, the Dow futures are down 124 and NASDAQ futures are about 41 points below fair value.

September 23, 2015

Many say that what we’re seeing is a market “correction.” And the thing about a correction, as Yogi Berra would say, is that it ain’t over till it’s over. And judging from yesterday’s pounding …. It ain’t over. After all, if people aren’t buying stocks, how are you going to stop them? Nevertheless, this morning,it’s déjà vu all over againas we’re seeing an early recovery of some of yesterday’s losses.

If you think that housing is kind of a litmus test for the direction of the economy, we’re observing some good news this morning. And, you, know, you can observe a lot just by watching. Last week, mortgage applications for home purchases were up 9 percent. Refinancing apps were up 18 percent, although a lot of that surge could have been driven by people’s fears of a Federal Reserve rate increase.

Japan was closed once again overnight, but the rest of Asia was around 2 to 3 percent lower on a lousy Chinese purchasing managers’ report. In fact, it was the worst in 6 ½ years, as exports appear to be on life support.  French oil company Total is looking to cut a billion dollars in costs. Disney will cut 200 to 300 jobs from its ESPN unit.

Europe is a little higher, as are our futures, although well off their early morning highs. At this point, adjusted for fair value, the S&P 500 futures are now higher by less than a point, the Dow futures are up 21 and NASDAQ futures are 11 points above fair value. Just remember, when you come to a fork in the road, take it.

September 22, 2015

One day up, one day down continues to be the main theme of stock prices. Yesterday’s rally took a gut punch from a big downdraft in the biotech sector. That downdraft came after a Hillary Clinton tweet promised that today she would unveil a grand plan to bring prescription drug prices under Government control.  The trick, of course, is doing that while still providing a profit incentive for research. Nevertheless, expect another rough ride in biotech today.

Speaking of rough rides, Volkswagen will take a 7.2 billion dollar third quarter charge related to their diesel software shenanigans. That story is a long way from being over.

Darden Restaurants and General Mills should have an easier ride in early trade. Both companies beat their respective earnings bogey this morning.

We’ll get some Fed Governor commentary this afternoon, and before that the September Richmond Fed Survey at 10 o’clock is expected to improve to a reading of 3 from August’s level of zero.

The President of China is visiting the U.S. and in an interview with the Wall Street Journal, urged investors to take the long view of the Chinese economy, which he says is still growing by around 7 percent. Chinese stock rose another one percent overnight, but European markets are solidly lower, as are our futures.

Adjusted for fair value, the S&P 500 futures are now lower by 23 points, the Dow futures are down 183 and NASDAQ futures are 59 points below fair value.

September 21, 2015

Even though most people know that it’s risky to overload your investment portfolio with one particular stock, many people (especially around these parts) tend to ignore that risk by owning too much of their own employer’s stock.

If you’re guilty of that portfolio management sin and you happen to work for Volkswagen, this will not be a good morning for your net worth. After reportedly installing rigged software into “clean diesel” vehicles to make them test “cleaner” than they actually were, Volkswagen is facing as much as an 18 billion dollar fine and Volkswagen shares are indicated as much as 23 percent lower pre-market.

GoPro shares are also suffering by about 4 percent premarket as the latest product rollout is reportedly nothing you’d want to make a movie about.

Existing Home Sales data is due at 10 o’clock. Expect an annual run rate of about 5½ million units.

Chinese stocks were about 2 percent higher overnight. Japan is closed until Thursday. Almost all European markets have turned higher.

Our futures have recovered from some significantly red numbers last night. At this point, they’re almost as positive as they were negative at this point Friday. Adjusted for fair value, the S&P 500 futures are now higher by 14 points, the Dow futures are higher by 144 and NASDAQ futures are 38 points above fair value.

September 18, 2015

We’ve seen no shortage of stock price volatility over the past few weeks, but if those weeks were a mixing bowl, yesterday was a high-speed blender. After the Fed told us that they were too worried about everything to do anything, stock prices went down and up and down and up and finally mixed, but didn’t waste time doing it.

At 10 this morning, the August Leading Economic Indicators are expected to recover the two tenths of a percent they lost in July.

There’s some potentially good legal news for Apple shareholders. A California appeals court reversed a lower court ruling in Apple’s ongoing patent infringement case against Samsung. Samsung has already paid Apple monetary damages for infringement, but the reversal leaves open the possibility that Samsung may have to stop selling phones that contain features the infringe on Apple patents.

Adobe Systems reported better than expected earnings last night, but their guidance was weak, and Abode shares are indicated about 2½ percent lower this morning. It appears that traders have decided to hit the “sell” button once again. Although Chinese stocks rose overnight, European markets are lower by one to almost three percent. Our stock index futures have been slip sliding away all morning long.

At this point, adjusted for fair value, the S&P 500 futures are now down 21 points, the Dow futures are lower by 168 and NASDAQ futures are 47 points below fair value.

September 17, 2015

At long last, it’s Federal Reserve Decision Day. At 2 o’clock, we’ll finally learn if our Central Bank will take the first baby step toward normalizing interest rates. Of course, if you are seven years old or less, “zero” IS the normal short term interest rate. While there is no need to push rates higher to control runaway inflation, which if you remember, was interest rate policy’s sole purpose, the Fed has taken on so many informal mandates lately, like the job market, foreign economies and some say – the stock market – it’s hard to say what will finally push them off of zero. But at this point, an eventual hike is so widely anticipated, it may not cause more than a short term ripple in the markets.

Planning to cause a ripple in the cable TV market, European cable company Altice, which once tried to buy Time Warner Cable is proposing to buy Cablevision. That’s a nearly 18 billion dollar deal.

Rite Aid shares are looking to open almost 6 percent lower. Revenue was okay, but earnings of two cents per share came in at only half of the expected four cents.

Our futures were very slightly positive earlier, but have slipped back below the flat line. If many of the past Fed decision days is indicative of today, we may hold pretty close to that flat line right up till about 2 o’clock this afternoon.  At this point, adjusted for fair value, the S&P 500 futures are now down 3 points, the Dow futures are lower by 8 points but NASDAQ futures are just a fraction of a point below fair value.

September 16, 2015

As traders continue to wring their hands over tomorrow’s interest rate decision, one major earnings report has shipped this morning. I say “major” because good news from Federal Express often is good news for the economy. This morning’s news – well -- not so much. FedEx earnings of $2.42 per share missed estimates by four cents. Revenue was short as well. However, FedEx has conjured up a fix for that; they announced a rate hike of their own as shipping in the future with FedEx will cost 5% more. FedEx shares are about 3 percent lower pre-market.

If you think that’s bad news – how about this? After already announcing 55,000 job cuts, Hewlett-Packard’s enterprise division will cut an additional 30,000 jobs worldwide, as computer hardware sales continue their long-term decline. HP shares are pretty much unchanged on the news. Shares of beer-brewers InBev and SAB Miller are both higher on rumors of a potential merger. MolsonCoors shares also nicely higher this morning.

If Consumer Inflation matters at all to the Fed anymore, they’ll get the latest report at 8:30 this morning. Expect no change in overall consumer prices – at least the way the Government measures them. 

Markets overseas are higher across the board. China rose 5 percent on a late-day rally.

At this point, adjusted for fair value, the S&P 500 futures are now up a point, the Dow futures are higher by 31 points and NASDAQ futures are about 3½ points above fair value.

September 15, 2015

As we somewhat impatiently wait for the Fed policy statement at 2 o’clock on Thursday, today will be a bit of a data-dump day.

At 8:30 August Retail Sales are expected to have risen only two tenths of a percent, which would be down from the July reading of six-tenths of a percent. At the same time we’ll get the Empire state index which is a survey of industrial production in the New York region. After an awful reading of minus 14.9 in August, expect something close to break-even for September.

Reports on nationwide industrial production, capacity utilization and business inventories are also on the way by 10 o’clock.

United Natural Foods reports earnings after the close tonight. Oracle reports tomorrow. But as we move toward the final two weeks of the quarter, stay tuned for any fourth quarter earnings warnings that may rear their ugly heads. 

China down more than 3 percent overnight. European markets are mixed.

Just as we saw yesterday morning, our stock index futures that were well into the green are slipping down toward break-even as 9:30 approaches. At this point, adjusted for fair value, the S&P 500 futures are now up about a point and a half, the Dow futures are higher by 14 points and NASDAQ futures are about 2 points above fair value.

September 14, 2015

Once all the hysteria subsides over Greece or China or global warming or Caitlin Jenner or whatever is whipping stock prices around – it all really boils down to interest rates and earnings. This week, interest rates will be in focus. Next week we’ll start watching for third quarter earnings warnings.

But – first things first. The Fed’s Open Market Committee starts a two-day meeting on Wednesday, and it’s the first time in more than five years that there’s even a possibility that they might, just might, hike short term interest rates. Of course, it’s so widely expected at this point, no one may care.

In the world of broker upgrades and downgrades, Xilinx gets the thumbs up this morning. Marvell and H&R Block are taken down a notch.

Nothing of the economic calendar toady, and in our only significant buyout, Solara Holdings shares are up about 9 percent on a private equity firm bid.

Asian markets were mixed overnight, but Europe is mostly lower.

Our futures were indicating a substantial rally as of last night. However, the air has been leaking from that balloon ever since. Adjusted for fair value, the S&P 500 futures are now up nearly a point, the Dow futures are higher by 9 points and NASDAQ futures are still about 11 points above fair value.

September 11, 2015

We‘ll close out the shortened trading week today with some news about inflation and just how consumers are feeling given all the stock market volatility they’ve seen.

At 8:30, the Index that measures Producer Prices for Final Demand is expected to indicate that prices actually declined in August by two-tenths of a percent, mainly due to dropping energy prices. Excluding food and energy, look for a paltry increase of one tenth of a percent. If the Fed does decide to raise interest rates next week, it certainly won’t be due to runaway inflation.

Then at 10 o’clock, the University of Michigan’s preliminary reading on September Consumer Sentiment is expected to drop just a bit to 91 from the final August reading of 91.9.

Lululemon shares, which fell by more than 16 percent yesterday are indicated a little higher on a broker upgrade this morning.

Commodities are lower, including oil, which is more than 2% lower.

Major European markets are lower, but all by less than one percent. Our futures are pointing lower, but have improved a bit over the past couple of hours. We still have a shot at finishing the week higher, but at this point, adjusted for fair value, the S&P 500 futures are lower by nearly 7 points, the Dow futures are down 65 and NASDAQ futures are about 17 points below fair value.

September 10, 2015

It was another one just like the other one on Wall Street yesterday, or wherever they keep those big machines that are determining the daily direction of stock prices. A strong early rally took the Dow Jones Industrials higher by almost 200 points before a 400 point swoon dropped us well into the red again.

Krispy Kreme shares will not be very appetizing at the open after missing targets and lowering earnings guidance last night. Krispy Kreme shares are about 17 percent lower pre-market.

Sometimes even a decent earnings report isn’t enough. Lululemon beat estimates on the top and bottom line last night, but they only raised guidance by a penny per share, and the stock is lower by more than 6 percent pre-market.

The Weekly Jobless Claims are expected to check in at 275,000, which will be the last jobs data the Fed will consider before the Open Market Committee starts a very critical two day meeting next Wednesday.

Just about all markets overseas are between 1 and 2 percent lower this morning. We had a little rally cooking in the futures earlier, but that has dissipated.

At this point, adjusted for fair value, the S&P, Dow and NASDAQ futures are all just about even with fair value.

September 9, 2015

I’m not sure if “7” is a lucky number in the Japanese culture or not, but it was the operative number in the Japanese stock market overnight. The Nikkei Index rose 7.7 percent, which was its best rally in some 7 years.

Other markets overseas are also seeing a boost. In Hong Kong, stocks rose 4 percent. The Shanghai in mainland China is 2 percent higher, as are many European markets.

Tivo shares are about one percent pre-market on a good earnings report and shares of Yahoo are more than 2 percent lower on two bits of bad news. First, some tepid guidance from Alibaba, and then there’s news that the IRS will not grant Yahoo a Private Letter Ruling that could grant them tax-free treatment for a future spin-off of Alibaba shares.

The Labor Department’s July JOLTs report comes this morning, giving us a little more information on the tightening job market. Although it appears there will be fewer jobs available in brick-and-mortar retail, as Macy’s announced it will close 35 to 40 stores nationwide.

Meanwhile, it appears that our massive rally of yesterday will continue in the early going. Adjusted for fair value, the S&P 500 futures are higher by about 16 points, the Dow Industrials futures are up 148, and the NASDAQ futures are about 44 points above fair value.

September 8, 2015

Apparently, the traders who wanted nothing to do with stocks over the long weekend and hit the “sell” button on Friday are back to punching the “buy” button today. Once again, the focus is on Chinese monetary policy. Chinese exports fell another 5½ percent last month. That’s less of a drop than the previous month, but is leading to speculation that another round of monetary stimulus is on the way from the Chinese Central Bank. Chinese imports dropped almost 14 percent last month.

Procter & Gamble shares are indicated almost two percent higher pre-market on a broker upgrade. Yum Brands also granted a broker upgrade this morning. Twitter shares are a little more than 2 percent higher on no apparent news.

The National Federation of Independent Business survey came in just about as expected this morning.   Reports on Labor Conditions and Consumer Spending come later.

Japanese stocks were lower overnight, but China was higher and most European markets are higher by about 2 percent or so.

Unless something surprising happens between now and 9:30, we should regain Friday’s losses in the very early going today. Adjusted for fair value, the S&P 500 futures are higher by about 31 points, the Dow Industrials futures are up 267, and the NASDAQ futures are about 72 points above fair value.

September 3, 2015

With the Chinese market closed for the rest of the week, maybe – just maybe – traders will focus on the domestic economy for a couple of days. If so, there is plenty of data on the way upon which to focus.

The Challenger layoff announcement report this morning was a step in the right direction. August layoff announcements fell to 41,000, from over 100,000 reported for July. At 8:30, expect weekly Jobless Claims to hold steady at around 270,000. Then by 10 o’clock, two surveys, measuring the strength of the services sector of the economy are due.

In the meantime there’s more strength in the shares of Medtronic this morning. After rising about 3 percent yesterday, Medtronic announced better than expected earnings and reaffirmed full-year guidance. Shares are another half-percent or so higher.

Campbell Soup also beat estimates by a penny and affirmed guidance. Planet Fitness reported a 26 percent profit gain and guided higher.

Overseas markets are higher, with Europe up about a percent and a half. We should also head north at 9:30.

Adjusted for fair value, the S&P 500 futures are higher by about 9½ points, the Dow Industrials futures are up 69, and the NASDAQ futures are about 25 points above fair value.

September 2, 2015

September certainly got off to a flying stop yesterday, and it was only a late rally that kept the Dow Jones Industrials from falling more than 500 points. There’ll be some bounce-back this morning, but only some.

The Mortgage Bankers Association reported a big bounce-back last week. So in spite of what might be happening in China, it appears that people are still buying houses over here. Weekly mortgage applications were up over 11 percent. Importantly, applications for home purchase mortgages were up more than 4 percent.

H&R Block shares are also on the rise after reporting plans for a 3½ billion dollar share buyback. Block’s quarterly loss of 35 cents per share was a nickel better than expected. Semiconductor maker Amberella looks to be the loser of the morning. After losing 6 percent yesterday, shares of Amberella are looking another 10 percent lower after last night’s earnings report.

West Texas Intermediate Crude Oil down almost two percent this morning. Chinese stocks were down more than 4 percent overnight, but rallied back to nearly break-even by the close of trading. Thankfully, we’ll be able to ignore the Chinese market for the rest of the week, as it will be closed for a holiday.

European markets have turned modestly higher. Adjusted for fair value, the S&P 500 futures are higher by about 16 points, the Dow Industrials futures are up 151, and the NASDAQ futures are about 45 points above fair value.

September 1, 2015

September doesn’t have the reputation of being a great month for stock prices, and those prices will be dropping like autumn leaves at the open today.

Traders continue to fixate on Chinese goings-on, and overnight, the Chinese goings-on didn’t go well. The Chinese Purchasing Manager’s Index fell to a three-year low, and actually indicated economic contraction. It may have been temporarily pushed lower by the Tianjin port explosion. But, the headline is the headline, and Chinese stock indexes were 2 to 5 percent lower today.

Our own manufacturing data comes later today. The August PMI Manufacturing Report and the ISM Manufacturing Index will both be out by 10 o’clock, and neither are expected to show great improvement over July.

American Airlines, Delta and Federal Express all enjoying broker upgrades this morning. Suffering from a mixed-message earnings report is Dollar Tree. Operating earnings beat estimates, but the top line fell short.

Overseas markets are a wall or red numbers this morning. Japan was almost 4 percent lower. European markets are off about 1½ to 2½ percent. Adjusted for fair value, the S&P 500 futures are lower by about 45 points, the Dow Industrials futures are down 356, and the NASDAQ futures are about 105 points below fair value.

WJR October 2015 Reports
WJR August 2015 Reports

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