September 17, 2019
The long-suffering oil-related stocks received quite a boost yesterday after the aerial attack on Saudi Arabia knocked out 5 percent of the world’s oil production. That’s the largest one-event reduction in history. West Texas Intermediate crude oil bubbled up by more than 14 percent, and some of the most heavily shorted oil stocks had a blowout day as the short sellers rushed to cover those bets.
Things appear to be settling down this morning, especially given that there has been a discernable silence from the Saudis regarding military retaliation, which could lead to a much broader conflict.
Our own domestic interest-rate conflict between the President and the Federal Reserve enters another chapter today as the Open Market Committee starts a two-day meeting. We should hear about a quarter-point interest rate cut at 2 o’clock tomorrow.
Earnings are on the way just after today’s 4 o’clock close of trading from Adobe and FedEx. FedEx just announced price hikes that will go into effect next year. And it now appears that the tumultuous IPO of Wework’s parent will be delayed by at least a month.
Overseas markets are mostly lower. Our futures just took a leg lower during the past fifteen minutes and are pointing to a lower open on Wall Street. Adjusted for fair value, the S&P 500 futures aredown 4 points, the Dow futures are down 61 and the NASDAQ futures are about 8 points below fair value.
September 16, 2019
It’s hard to find any “good news” stories this morning and we can start right here in Detroit with the UAW strike against General Motors. GM shares should open about 2½ percent lower as the picket lines start to form and rumors swirl about future legal issues for high-ranking UAW officials.
The weekend attack on Saudi Arabian oil facilities will likely take any slack out of oil inventories worldwide, at least for a few weeks if not longer. Almost 6 million barrels per day are temporarily off the market, and the price of crude oil has spiked about 8 percent this morning. The large oil company stocks are about four or five percent higher, but energy exploration company stocks are about 10 percent higher.
Economic reports from China are not horrible, but both industrial output and retail sales increases missed expectations and were worse than the prior month. Industrial output hit a 17-year low.
A bunch of earnings reports are on tap for later in the week and of course, we’ll get the Fed’s interest rate decision on Wednesday.
The Japanese market was closed overnight for “Respect for the Aged Day.” However, other markets overseas are lower.
Our futures have improved a bit but are still pointing lower. Adjusted for fair value, the S&P 500 futures are lower by about 10 points, the Dow futures are down 85 and the NASDAQ futures are about 48 points below fair value.
September 10, 2019
We learned yesterday that most all of the state attorneys general are getting together to investigate Google for anti-competitive behavior, if not worse. That threw a chill into a lot of stocks in the tech sector, and that chill continues this morning.
Speaking of chills, shares of Ford Motor are looking to open more than 3 percent lower this morning. Yesterday, Moody’s lowered its rating on Ford’s 14 billion dollars in debt to “junk” status. The other two rating agencies, Fitch and S&P still have Ford rated two levels above “junk” status. If those ratings don’t hold, it would not be good news for the company.
The National Federation of Independent Business survey was released this morning and shows a 1.6-point drop to 103.1. That’s the lowest reading since March and tells us that small business owners in the U.S. expect some rough waters ahead.
More weak economic data out of China overnight is sparking hope of another round of monetary stimulus there to counteract the impact of increased tariffs.
Ahead of our open, overseas markets are mixed. Adjusted for fair value, the S&P 500 futures are lower by about 6 points, the Dow futures are down 34, and the NASDAQ is looking to follow up yesterday’s losses with more of their own as the NASDAQ futures are about 29 points below fair value.
September 9, 2019
It should be a very quiet day for economic and earnings news, as the majority of holiday-related vacations are now in the rear-view mirror.
Another oxycontin maker may to be on the road to Bankruptcy Court. This morning, settlement negotiations with Purdue Pharmaceuticals appear to have stagnated and a couple of state attorneys general suggest that a filing may be on the way.
With better news on the pharmaceutical front, Acadia Pharmaceutical shares are more than 73 percent higher pre-market on word that their dementia-related psychosis drug passed stage three trials.
AT&T shares are almost 10 percent higher as activist investor Elliot Management has taken a stake in AT&T and is suggesting some changes.
In case you thought that ALL retailers were suffering, know that Amazon with hold a career day next week in six cities, offering 30,000 permanent new jobs.
An indication that an interest rate might be on the way in China had Asian markets higher overnight, although Hong Kong was flat. European markets are mixed, but our futures have been higher all morning.
In fact, our stock indexes will start this morning within a couple percent of all-time highs. At this point, adjusted for fair value, the S&P 500 futures are higher by about 11 points, the Dow futures are up 58, and the NASDAQ futures are about 16 points above fair value.
September 6, 2019
Hope that tensions might ease in Hong Kong and that Chinese trade talks will resume fueled a significant rally yesterday. We should get a little carry over into today’s market as well.
However, there’s a big economic elephant in the room that could trample any early rally. At 8:30, the Bureau of Labor Statistics will release the August Employment Report. Expect that 157,000 new jobs were created in August, which would be slightly higher than the July increase. The unemployment rate is expected to hold steady at 3.7 percent. Perhaps the most interesting figure, if you’re looking for a correlation between job growth an inflation, is the average hourly wage, which is expected to have increased by 3.1 percent year-over-year.
Shares of Lululemon are increasing by almost 5 percent this morning. Last night, Lulu announced 96 cents in adjusted quarterly profit, seven cents better than expected on a 15 percent increase in same store sales. They also raised full year earnings guidance.
Overseas markets followed our rally higher overnight, and our futures have been on a slow rise much of the morning, but that could all change shortly after 8:30.
At this point, adjusted for fair value, the S&P 500 futures are higher by about 8 points, the Dow futures are up 87, and the NASDAQ futures are about 17 points above fair value.
September 5, 2019
The next Federal Reserve interest rate decision is still a couple of weeks away. So, if anything was going to move the markets today it would be news about China.
Right on cue in the overnight hours, China confirmed that new talks are scheduled with U.S. negotiators in October. That, and the withdrawal of the Hong Kong extradition proposal has stock prices levitating once again. In case your keeping track, that has the 10-year Treasury yield back above 2 percent and the 2-year-10-year portion of the yield curve is no longer inverted,
But, for every silver lining there is a dark cloud, and this morning that cloud is raining losses on shares of specialty drug maker Mallinckrodt. The company appears to be headed for a bankruptcy filing due to claims brought on by their opioid production and distribution. Shares are 41 percent lower this morning at just over a buck and a half each.
Traders are also cutting no slack to office communication software firm Slack. Last night the firm announced losses that were lower than expected, but weaker third quarter guidance has the shares off almost 13 percent, which is actually a bit higher than last night’s lows.
London is lower on their political turmoil, but most overseas markets are in the green. At this point, adjusted for fair value, the S&P 500 futures are higher by about 25 points, the Dow futures are up 238, and the NASDAQ futures are about 87 points above fair value.
September 4, 2019
The withdrawal of the China - Hong Kong extradition bill has global markets in rally mode this morning, even though the protests in Hong Kong may not be over. Nevertheless, with so many potential trouble spots around the world, we’ll take whatever good news anywhere we can get it.
The was good news from truck maker Navistar International this morning, as $1.56 of quarterly profit was 38 cents per share better than expected. Navistar shares are looking to open Almost 10 percent higher. Not to be outdone, shares of Michael’s Companies are 22 percent higher as 19 cents of adjusted profit came in a nickel better than expected. They also gave full-year guidance that was a little better than the consensus estimate.
Earnings are also on the way from Palo Alto Networks and American Eagle Outfitters. Slack will also announce their earnings for the first time since going public with their shares.
Some additional insight into the country’s economic condition comes at 2 o’clock today with the release of the Beige Book, a survey of regional economic activity.
The Bank of Canada will make their latest interest rate announcement today.
As we look forward to 9:30, our stock futures are almost exactly up be as much as they were down 24 hours ago. Adjusted for fair value, the S&P 500 futures are higher by about 25, the Dow futures are up 219 points, and the NASDAQ futures are about 83 points above fair value.
September 3, 2019
Welcome to September, which historically has been the worst month of the year for stock prices. Not that August showed us any love – August was only the second month this year giving us lower stock prices.
No matter how September turns out, it’s likely to start out on the downbeat. As the new American tariffs on China and the new Chinese tariffs on America kick in, European markets and out futures are decidedly lower.
Not helping the Dow futures this morning are shares of Boeing. The 737 Max will not fly again before early December as Boeing wrestles with international regulators. Boeing shares are looking about 8½ dollars lower, which would shave about 60 points of the Dow Jones Industrials.
Furniture and home appliance maker Conn beat the 51 cent profit estimate by 11 cents and Conn shares are more than 14 percent higher pre-market.
Later this morning, we’ll get the August ISM Manufacturing Purchasing Managers Index. Expect a reading of 51½. Still slightly expansionary and in line with the July reading.
Australia’s Central Bank held their short-term interest rates steady overnight, but intimated that there may be a rate cut coming.
Our futures have recovered a bit from earlier lows, but we’re still deep in the red as we head toward 9:30. Adjusted for fair value, the S&P 500 futures arelower by about 23, the Dow futures are down 232 points, and the NASDAQ futures are about 67 points belowfair value.