Tag Archives: New York Stock Exchange

The Best Damn Wall Street “Week in Review” Anywhere…

22 Apr
vsfbv

“Come check out these 1st quarter earnings, man”

Week of April 15th – April 19th:
Dow: 14,865 (-2.1% last week, +11.0% YTD)
S&P 500: 1,589 (-2.1% last week, +9.0% YTD)

Links Worth Snacking On:

  • Chart of the Week - Gold by the numbers
  • New Yorker - 6 conspiracy theories about why the price of gold is dropping
  • Wall Street Oasis - 7 tips for 1st year analysts
  • Bloomberg - 12 must-know images about the growing US domestic oil industry
  • Wall Street Journal - Forget gold, the gourmet cupcake market is crashing (sorry, Crumbs)
  • DealBreaker - Why are there penguins and otters running around the New York Stock Exchange trading floor?
  • Businessweek - Chipotle’s earnings are banking on a fancy new margarita drink
  • The Economist - An economic look at the market for soccer players

Someone stick us with an EpiPen before we overdose on earnings reports.  Wall Street suffered major market swings all week long as the 1st quarter earnings season kicked into high gear with some marquee corporate headlines.

#1. Gold Took A Pounding

After doubling to over $1,500 an ounce over the financial crisis, the price of gold plummeted 9% last Monday for its biggest single-day drop since 1983 (Michael Jackson was black then).  Why?  Econ data showed China’s economy is slowing, which could equal less demand.  And with stocks rallying, investors are preferring riding the stock market.  Either way, gold got punched in its pretty, little gut.

#2. Stock Winners…

Salsa, anyone?  Growth in Latin American demand helped Coca-Cola earnings surge.  Johnson & Johnson checked-in with a healthy quarterly performance thanks to some new “sponge-worthy” medication launches (#GreatSeinfeldReference).  And a jump in ad revenues boosted Google as their new Chromebook operating system gets more street cred.  Plus SeaWorld lept like a young Free Willy on its IPO.

#3. …Stock Losers

EBay lost bidders (psychologically and literally) as the economic slowdown in Europe weighed on  international sales.  Over on Wall Street, huge drops in trading revenues hurt Morgan Stanley‘s performance last quarter, while low interest rates resulted in less cash for Bank of America.  Plus Apple took a hit on pre-earnings report rumors that last quarter wasn’t up to “Jobs” standards.

#4. The Fed’s Beige Book Was “Glass-Half Full”

Congratulations on the “moderately improving.”  That’s how the Federal Reserve graded the US economy again in its “Beige Book” report.  Investors don’t have super low expectations, but they were pleased – the Fed governors vowed to keep their stimulus pledges until unemployment finally falls from 7.7% to 6.5%.  Stimulus is always a good time.

#5. Another Mixed Bag of Econ Data

Hey, you can’t win them all.  While housing starts jumped 7% last month for its best annualized rate of home construction in 8 years, manufacturing data didn’t bring its A-game.  The Fed’s regional “business activity” reports in the NY and Philly areas showed industrial production in both areas wasn’t running all cylinders at the end of the winter.

What MarketSnacks Is Checking Out This Week:

  • Monday - 1st Quarter Earnings Reports: Caterpillar, Six Flags Entertainment…
  • Tuesday - March New Home Sales, Earnings: Apple, Delta Airlines…
  • Wednesday - March Durable Goods Orders, Earnings: Ford, Zynga…
  • Thursday - Weekly Jobless Claims, Earnings: Harley-Davidson, NYTimes…
  • Friday - 1st quarter GDP reading, Earnings: Chevron, Burger King…

MarketSnacks Fact of the Day:  China’s economy grew 7 times as fast as America’s over the last decade — but China’s GDP per capita is the 91st lowest in the world.

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“Big Econ Data Powers Stocks on 2nd Trading Day of the Week”

1 Nov

Between hurricane cleanup and Halloween hitting NYC, the Ghostbusters have been busy

Dow: 13,233, +136 (+1.04%)        S&P 500: 1,427, +15 (+1.07%)

By (sore) foot, snorkel gear or simply wedged into one of the Mayor Bloomberg-mandated-carpool vehicles permitted in Manhattan, the financial employees of the submerged Tri-State area descended upon Wall Street for its 2nd post-hurricane open-for-business day this week.  Trees uptown are horizontal, midtown is gridlocked, and downtown remains blacked-out (the New York Stock Exchange is still running on a generator and maybe a giant Governor Cuomo-powered hamster wheel).  Stocks finished flat on yesterday’s return, but kicked off November with a bang today thanks to positive jobs & manufacturing data.  Some notable corporate earnings reports were mixed, but the impressive economic news propelled the Dow up 136 points.  Now all eyes are on tomorrow’s major monthly employment report from the Labor Department – the final reading before the election…

ADP Survey indicates 158,000 new jobs in October, Weekly Jobless Claims drop

Payrolls firm ADP calculated that 158K new jobs were created in October, slightly above the 155K analysts predicted.  To investors, the ADP reading is a preview to help set expectations for the government’s official non-farm payrolls report we’ve all been talking about.  In line with ADP’s news, the number of Americans filing for 1st time unemployment benefits last week dropped again by 9,000 to reach a total of 363,000.  The weekly jobless claims report was the ice cream to ADP’s apple pie (and what investor doesn’t like dessert a la mode?).  Markets were pumped, but tomorrow’s news from the Labor Department matters most.

ISM Manufacturing Index shows expansion in October

You know when you were trick-or-treating and finally hit a couple back-to-back homes (for our NYC-born/raised readers, think of multiple floors of an apartment building) with actually good candy (Kit-Kats, not gum)?  That’s pretty much been enthusiasm level for monthly manufacturing data recently.  The Institute of Supply Management surveys 300 manufacturing firms nationwide (on deliveries, inventories, etc…) and determined that business improved for the 2nd straight month.  On the ISM’s index, manufacturing rose more than economists expected, up to 51.7, and any reading greater than 50 indicates expansion in the factory sector.  The momentum is coming from improving orders and production – investors hope last spring’s slowdown was the bottom. 

Earnings keep beating expectations: Visa, Exxon Mobil, and Metlife

Visa (V), the biggest electronic payments company in these United States, posted impressive 3rd Q earnings, driven by growing transaction amounts.  Over $1 trillion in purchases were made with Visas last quarter.  Yeah, a trillion.  Visa’s stock climbed 3.7% as profits grew by 20%.  The second biggest company in the US by Market Cap is Exxon Mobil (XOM) which beat earnings expectations even though profits are down from last year.  Exxon earned over $9 billion in the quarter, driven slightly down by low natural gas prices.  Exxon profits off both oil and natural gas business, and the latter has seen so much supply (due in part by controversial “fracking”) that prices are dirt cheap and Exxon is losing some money there.  Meanwhile insurance company Metlife (MET) reported strong earnings but didn’t gain today as investors fear the record insurance payments it will have to make in connection with the Hurricane.

Tomorrow:

  • Get up early & eat your Wheaties: The Labor Department’s highly anticipated October Non-Farm Payrolls Employment Report – MarketSnacks will have you covered…
  • A Consumer Confidence Survey from the research group The Conference Board was moved from Tuesday to Thursday because of the storm – confidence rose in October to its highest level since 2008, can the momentum continue for the rest of the week?

© 2012 MarketSnacks

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“Stocks Down 3rd Straight Day On Eurozone Stability Fears”

26 Sep

 

"If you cut our government benefits, your punishment will be more severe"

“If you cut our government benefits, your punishment will be more severe”

Dow: 13,414 (-0.33%)        S&P 500: 1,433 (-0.57%)

We’re not gonna lie, Jewish holidays = quiet Wall Street.  While members of the Tribe fasted for Yom Kippur, aggressive riots lit up over in Europe.  Protestors across the pond are fighting the fresh austerity cuts that limit government spending making investors back here cringe about the stability of the debt-rattled Eurozone.  Speaking of America, despite recently improving US housing data, some surprisingly disappointing sales numbers for new homes hurt housing-related stocks.  Given both negative developments, the Dow slipped 44 points on a slow market day for its 3rd straight loss.

Rioting in Madrid and Athens send European markets spiraling downward

It’s easy to forget the human pain caused by austerity measures when analysts obsess over 10-year bond yields and debt/GDP ratios.  Today angry public reaction to Spain and Greece’s austerity splashed into the headlines as rioters threw Molotov cocktails and stones at police in Madrid and Athens.  Citizens of PIIGS countries protested the austerity policies today, i.e. government spending cuts and increased taxes.  They face tough times on the government’s decisions, seen as moves to appease international bankers and unsympathetic politicians in Berlin.  An unruly and rioting citizenry is understandably bad for an economy so the borrowing costs of Spain (and similarly debt-troubled Italy) bounced higher today.  Spain’s 10-year bond yield, the interest rate it must pay investors to give them a 10 year loan, climbed to 6%.  This is by any standard an unsustainable level for debt-dependent countries like Spain.  Unease over the inflamed crisis in Europe spooked markets across the globe.

Despite gain in home prices, new home sales drop more than forecast

To take a line from our bald friend Larry David, US housing data over the last couple weeks has been pretty, pretty, prettyyyy good – housing prices, building permits & new home construction all increased.  So investors were shocked today when the Commerce Department reported that sales of new homes dropped 0.3% over the last month to an annual rate of 373,000 (economists expected the number to rise).  A reading on the price of new homes showed a 17% jump since last year, building on yesterday’s news that overall home prices increased to their highest levels since ’05 – but investors focused on the negative and homebuilders Lenner (LEN) and PulteGroup (PHM) lost 4+% each.  Improving housing data this summer showed that the housing market that popped in ’07 is now slowly coming back…today’s data indicates there’s still room to grow.

Big Mexican Bank IPO, Apple continues fall and RadioShack CEO quits

Time to get a little south-of-the-border on you.  Grupo Financiero Santander Mexico sold its stock to the public on the New York Stock Exchange and the Mexico City exchange in an initial public offering (IPO) – the biggest on a US exchange since Facebook‘s (FB) IPO debacle.  Shares of the bank rose on its first day of trading after the IPO raised the company over $4 billion.  Apple (AAPL) shares slipped for the 3rd straight day – the tech giant has sold an insane/record amount of iPhone 5s in its opening week, but not enough to satisfy the absurdly high expectations of Wall Street analysts.  And in the ultimate punch to the face, RadioShack (RSH) rose over 1%…after the CEO, James Gooch, announced he’s leaving the company “effective immediately.”

Tomorrow:

  • A very diverse serving of heavy econ data:  2nd Quarter Real GDP, Durable Goods Orders, Pending Home Sales & Weekly Jobless Claims…

© 2012 MarketSnacks

 

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“Stock Rally Sputters To Start Week”

17 Sep

Tired investors after last week’s long stock bender

Dow: 13,553 (-0.30%)        S&P 500: 1,461 (-0.31%)

Between the media frenzy surrounding Occupy Wall Street’s 1st birthday and the Jewish New Year, we’d be lying if we said this was another typical Monday.  Thousands of creatively-dressed protestors attempted to human-link around the New York Stock Exchange while a big portion of the financial industry was simply at home for the holiday.  It was a weird combo.  After the Federal Reserve‘s announcement to initiate a quantitative easing program (“QE3″) to stimulate economic growth propelled last week’s stock rally, the Dow drifted down 40 points today.  Investors were turned off by fresh concerns over Europe and the Fed’s survey of New York State manufacturing, which showed business activity in one of the nation’s most economically significant states dipped in September, contrary to expectations.

Eurozone finance ministers cannot agree to timetable for the new banking union

It’s always a big decision to commit to someone; Vermont showed their commitment to commitment by passing laws for civil unions back in 2000, and the Eurozone is trailblazing as well with their banking union the 17 members agreed to in June.  It’s also a big move to tie financial strings with a loved one, and the 17 Euro nations did that last week, when the ECB decided it could print euros to fund struggling government budgets.  Now investors want these agreements to be acted on – and today at a meeting of euro finance ministers in Cyprus they hit a speed bump.  They couldn’t agree on a timetable to enact the rules & regulations of the continent-wide banking union.  The union is key for euro stability and investors were not thrilled to the delay in their first chance to discuss the logistics.  Remember, Europe is infamous for its slow bureaucracies…now 17 different ones need to agree to a single banking regulator with huge consequences to each their finances (it’s going to be slow and frustrating).  Stocks fell in Europe and the US on the sign of slow things to come for European unity.

Steel firms fall, Apple shares reach $700, GE and Boeing dip on plane engine news

After last week’s fancy product presentation, iPhone 5 sales reached 2 million units in the 1st day’s orders, over double the record set by the previous best-phone-ever.  The frenzy helped AT&T (T) add 1% and pushed Apple (AAPL) shares past the symbolically significant (everyone loves a round number) $700 a share in after-hours trading.  On the flip side, maker-of-everything General Electric (GE) dipped after the National Transportation Safety Board issued “urgent safety recommendations” on GE plane engines.  Boeing (BA) lost just under 2% on the news since jets need properly functioning engines to do what they do best.  The big sector move of the day though was in steel – JP Morgan analysts cut ratings of steel firms as they foresee a drop in steel demand, smacking US Steel (X) with a 5% loss.

Tomorrow:

  • The National Association of Home Builders (NAHB) September Housing Market Index measures how home prices are doing in the US.
  • The President of the NY Fed is more privileged than the other Fed presidents – he votes on every policy matter, where as the others have to take turns…this is no joke.  Gotham Fed president William Dudley speaks in NJ at 11:30. 

© 2012 MarketSnacks

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“Stocks Jump Up In Anticipation of Big Wednesday”

11 Sep
Even George Washington stands for a moment of silence

Even George Washington stands for a moment of silence at the NYSE

Dow: 13,323 (+0.52%)        S&P 500: 1,434 (+0.31%)

This wasn’t just any Tuesday and Wall Street observed admirably with 5 minutes of silence on the New York Stock Exchange before the opening bell, just blocks from Ground Zero.  The MarketSnacks team will never forget and our headquarters were covered with enough vestiges of Old Glory to make Betsy Ross guffaw.  Stocks floated directionless most of today but then eager anticipation of tomorrow’s major events drove stocks northward at the end of the day: 1st the German Constitutional Court is expected to rule that the Eurozone bailout program is legal and, 2nd, the Federal Reserve meeting could yield new stimulus measures (we’ll have you covered on the details of both mañana).  Following some mixed econ data on the trade deficit & small businesses, along with an announcement from credit ratings agency Moody’s, investors bought back stocks after yesterday’s sell-off and the Dow finished up 69 points.

US trade deficit widens in July below expectations, small business confidence grows in August

The US International Trade Report highlights the difference in the amount of goods we export vs. import.  Although today the Commerce Department reported that the trade deficit widened in July, it edged up notably less than expected.  The drop in exports came mostly from the $2.6 billion decline in US industrial supplies sent overseas as the Chinese economy slows and the European economy stalls, limiting potential buyers of Made in USA goods.  The National Federation of Independent Business (NFIB) index on small business optimism showed that owners of mom ‘n’ pop shops smiled bigger in August.  Small business confidence grew thanks to an increase in that sector’s jobs (this could just a seasonal effect of caused by the summer’s neighborhood lemonade stands).

Moody’s threatens to downgrade the United States Government

When gross American debt held by the federal government hit $10 bil-sorry, trillion-in 2008, Moody’s credit ratings agency didn’t blink about maintaining the Aaa perfect credit rating for the US government.  Since then the debt has risen to over $15 trillion, the floor of Congress looks more like the caged Octagon of a UFC battle than a legislative venue, and the debt continues to soar. Moody’s warned today that it would lower America’s rating if it didn’t agree on a long-term plan to decrease debt in 2013. On Jan 1, 2013 there are trillions in automatic spending cuts and tax increases set to go into effect that threaten to put us back into recession (dubbed the “fiscal cliff,” a massive contraction of fiscal policy harmful to the economy), which Moody’s would actually be OK with since spending would go down and taxes go up => lowering debt.  But if these cuts/tax hikes send the US back into recession, the downgrade could still happen.  Moody’s rival, S&P, already cut the US to AA+ from perfect AAA last year (equivalent to the same Aaa to Aa1 downgrade being considered by Moody’s right now – the debate on whose ratings grades are sexier than the other rages on).

Tomorrow:

  • Day #1 of the 2-day Federal Reserve FOMC Meeting begins (Chairman Ben Bernanke will speak Thursday)
  • The German Constitutional court rules on the legality of the euro-bailout
  • Apple-palooza: The tech juggernaut is having a party and rumors are iPhone 5 is hosting
  • A serving of US econ data: Wholesale Inventories and the monthly USDA Crop Report

© 2012 MarketSnacks

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“Stocks Edge Down On Surprising June Manufacturing News”

2 Jul
Some more obscure analysts believe the poor manufacturing numbers are because of fewer Transformers on planet Earth

Some more obscure analysts believe the poor manufacturing numbers are because of fewer Transformers

Dow 12,880 (+2.20%) S&P 1,362 (+2.49%%)

We’ll tell you right off the bat this is going to be a strange week. On the one hand there’s a serious amount of significant econ data coming out because we’re starting a new month and new quarter. On the other hand, 4th of July festivities will be an eagerly attended mid-week hiccup – with Wednesday off and a ½ day Tuesday, few investors are willing to trade seersuckers for slacks for the full days book-ending the week. With lighter trading volumes today, the Dow slipped only 9 points following the surprisingly poor report on US manufacturing in June.

ISM Manufacturing Index reflects contraction of US manufacturing activity

We’ve seen some storm clouds building on the horizon for the American economy, ominous hints that economic contraction may show its scary face again post-financial crisis. Today’s ISM Manufacturing Index came in at 49.7, less than economic consensus 52. This sub-50 number implies not merely slower growth, but actual contraction of manufacturing activity in American plants for the first time since 2009. It’s the strongest evidence yet that slower growth in China and the crisis in Europe are affecting America, as exports fell in June. Another factor reducing exports is the relative strength of the US dollar compared to the euro because the appreciating dollar has caused US made goods to be more expensive for foreigners to buy. Stocks didn’t drop as much though on the poor news because many investors hope this will only encourage the Federal Reserve to take stimulus action. As America fights against the drag of the world, pray to Uncle Sam for an Independence Day turnaround in data with Friday’s major job numbers.

Best Buy, Dell, Micron and Bristol-Myers Squibb move with notable acquisitions

Sometimes the market is just wheelin’ and dealin’. Mergers & acquisitions drove most of the big individual stock moves today. Best Buy (BBY) was the S&P 500‘s biggest gainer, jumping 5.92% on rumors the founder and former Chairman Richard Schulze is trying to take the electronics firm private (off the public trading markets) after its slowing sales struggles. Dell (DELL) will be buying Quest Software (QSFT) for $2.4B (“Dude, you’re getting a Quest Software…”) and Idaho-based semi-conductor maker (we don’t really know what those are but they’re probably in what you’re reading this on) Micron (MU) is purchasing Japanese rival Elpida Memory for $750M to increase its competitiveness in parts of Asia. And in the pharmaceutical world, diabetes drug-maker Amylin (AMLN) added almost 9% after agreeing to be bought by industry giant Bristol-Myers Squibb (BMY) for over $5B.

Tomorrow:

  • After the market closed, Microsoft (MSFT) announced a $6B write-down (a loss in value) in its online services division’s fiscal 4th quarter mostly from the lack of growth from an internet ad business it bought in ’07 – we’ll have more details tomorrow on how this affects shares
  • Some more minor US econ data: “May Factory Orders,” “June Vehicle Sales”
  • The New York Stock Exchange will CLOSE early at 1pm so we can all get to the beach on time for the 4th (Thursday & Friday, however, will be packed with some huge econ data)

© 2012 MarketSnacks

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“American Markets Finish Close to Even After Euro Leaders Signal No Change”

23 May

“Peace, Greece?”

Dow 12,496 (-.05%)        S&P 1,319 (+.17%)

We’re not calling this ‘the perfect storm’ (there technically aren’t any meteorologists on the MarketSnacks team).  But it was clear today that investors were (to borrow a phrase from every British movie ever involving a boat in a storm) ‘battening down the hatches’ after waves of negative market news.  New Home Sales for April in the US did jump 3.3%, but disappointing corporate earnings from Dell hit tech stocks, new developments in Facebook’s botched IPO smacked bank stocks and, most of all, news from the political summit in Europe slammed Blue Chip stocks all morning.  The Dow had lost nearly 200 points by lunch, though after the European markets closed, stocks managed to claw back and finish down just 7 points.

No news is bad news at European Summit, European markets continue free-fall
 

The highly publicized European summit unsurprisingly produced no new strategy to fix the debt crisis.  In a post-meeting statement released by a poor messenger boy, the leaders said they were excited to see the new Greek government that will continue implementing austerity reforms.  Meanwhile the Greek Prime Minister said that exiting the Euro was a real possibility, which would sadly be a catastrophe for Greeks and much of the Eurozone.  At least the Greeks are facing reality because it seems the European leaders have their heads in the sand, causing Americans investors to wake up to a bloodbath in European markets, down about 2-3% today.  The value of the euro dropped to an unholy level not seen since July of 2010, $1.26.  Part two of this European summit happens this evening with a “European Dinner.”  A tip for the Greek Prime Minister – order the lobster and down as many Grey Goose martinis as you can – this is your last free meal at that table.

Dell quarterly corporate earnings disappoint, pull tech stocks down

Dell (DELL) 1st quarter earnings fell bellow expectations and provided a weak outlook on 2nd quarter revenues.  Shares got hammered, dropping 17% at the open, and stayed there all day (could this mean a revival of the circa ’98 “Dude Your Getting a Dell” guy spots?).  The negative news was like a tsunami hitting islands of tech stocks, as Intel (INTC) and Microsoft (MSFT) lost over 2% and Juniper (JNPR) over 4%.  Dell is considered a barometer for tech firms because it’s such a long-time, large-scale cornerstone of the industry, so its earnings have an impact.

Facebook and Morgan Stanley sued over IPO valuation issues

Facebook (FB) has been getting a paparazzi-level of attention over the last few days – after sliding 19% since Friday’s bungled initial public offering (IPO), shares finally finished positive today.  The newest development (we considered going with “status update,” but we’ll spare you) was a lawsuit.  As we reported yesterday, Morgan Stanley (MS), the investment bank that valued FB at a tech IPO record $105 billion, actually cut their estimates of its revenues just before its market debut.  So investors in Massachusetts and New York subpoenaed the social network today, along with Morgan Stanley and the other investment banks that prepared (or underwrote) the IPO, for misrepresenting what it was actually worth.

Tomorrow:

  • After finishing the day down, Hewlett-Packard (HPQ) announced earnings after the close that beat expectations following a restructuring package that includes laying-off 27,000 workers over the next few years – the stock is up in after-hours trading, but can momentum be sustained….
  • Facebook (FB) may have finished up today – but what will happen after today’s post-close report that the company is considering switching its stock to the New York Stock Exchange (NYSE) after Friday’s technical issues on the Nasdaq exchange….
  • “Weekly Jobless Claims,” the amount of Americans filing for unemployment, in the AM….

© 2012 MarketSnacks

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“Dow Dragged Down For Sixth Straight Day on Fresh Euro Worries”

9 May

“A 6-day stock losing streak makes even Tom Hanks feel deserted and alone”

Dow 12,835 (-.75%)        S&P 1,355 (-.67%)

Whip out your ice packs, aspirin and top-shelf chamomile tea (the market pain does indeed continue).  The steady stock slide that has cost the Dow Jones Industrial Average nearly 400 points (or 2.6%) since last week added a 6th negative trading session today (its longest losing streak since August) because of fresh European debt crisis worries.  Weekend elections in Europe aggravated investors Monday and Tuesday – and this morning, the Dow plummeted 184 points on concerns that Greece’s newly elected (and highly unstable) politicians would prevent the country from receiving the latest round of bailout funds.  But afternoon news that Eurozone governments would provide the scheduled 4 billion euros of aid to Greece helped pull markets back up slightly, and the Dow finished down 97 points.

Industrial and financial companies lead US stock declines

Global economic news has the largest impact on industrial and financial stocks whose performance is most affected by global growth trends.  Banking institutions provide the loans and cash needed for economies to financially grow and construction-related firms get down and dirty to physically grow the economy, so economic expectations heavily influence their stocks.  US banks JPMorgan (JPM), Citigroup (C) and Goldman Sachs (GS) all finished down around 2%, as did construction equipment makers John Deere (DE) and Joy Global (JOY) on today’s developments.  Overall, despite the slight afternoon rebound, two stocks dropped for every one that was up on the New York Stock Exchange and eight of the ten sectors in the S&P 500 stock index ended down.

Oil prices, value of the euro both drop on economic expectations

The price of a barrel of crude oil has continued to drop since we last addressed the sticky subject on Friday.  The latest Greek drama has only darkened the growth outlook for the global economy, thus reducing the outlook for oil demand.  West Texas crude oil dropped another 1% today to $95.98/barrel as investors figure there will be more than enough of the commodity for the economy going forward.  The value of the euro also dropped today as investors are resorting to their trusty “Magic 8-Balls” to tell them the future of the shared European currency – “Will somebody be kicked out of Euroland?”  For Greece: “All signs point to yes.”  For Spain, Portugal and Italy: “Ask the Germans, I’m afraid to.”  Due to continued uncertainty, the cost for one euro is now just $1.29, much cheaper than the $1.32 dollar/euro exchange rate of just 9 days ago.

Tomorrow:

  • The most notable US economic data reports of the week: Weekly Jobless Claims, Import/Export Prices and the Trade Deficit.
  • Quarterly earnings season marches on: Kohl’s (KSS), AMC Networks (AMC), Nordstrom (JWN)….

© 2012 MarketSnacks

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“Markets Finish Slightly Down, But The Dow Barely Keeps 7th-Straight Monthly Gain Alive”

30 Apr

"Stocks may be falling, but I'm clenching my abs to keep this monthly winning streak going, dammit"

Dow 13,214 (-.11%)        S&P 1,398 (-.39%)

After quality corporate earnings kept stocks up last week for their biggest weekly gain in a month, we assume a little extra green was rolling between holes at golf courses across the country over the weekend.  But today, growing concerns over Spain’s slowing economy clouded over the New York Stock Exchange.  Some negative, but minor, economic data in the US, that business activity in the Midwest and Texas expanded at its slowest rate in two years, also helped pull the Dow down 15 points on the last day of the month.  Although finishing negative today, the Dow was able to end April slightly up (a mere 1.59 points) for its seventh-straight monthly gain, while the S&P 500 stock index‘s 4-month advance regrettably came to a close.

Spain announces technical recession, continued political tension

The Spanish government announced today that the country’s Gross Domestic Product (GDP) shrank by .3% in the first quarter of 2012.  This throws Spain into the group of 7 other Eurozone countries in recession (technically defined as 2 consecutive quarters of GDP contraction).  Official news of a recession is more ammunition for an angry tapas-munching population to protest the austerity measures being implemented.  This week, Spaniards are organizing widespread protests against the government policy they believe is sacrificing the people to appease banks and investors, by increasing taxes while reducing services and support for the people to reduce the debt.  While a fire burns in Europe, investors on Wall Street fear the political tension as pro-growth politicians are rising in opposition against the absolute austerity policies that have been dictated by Germany (“nein, nein, nein!”) to fix the European debt problem.

Apple falls following NYTimes Report, Microsoft invests big in Barnes & Noble

A major New York Times muckraking report over the weekend detailed how Apple (AAPL) aggressively reduces its tax burden through legal tax loopholes (FYI, worldwide iTunes purchases are recorded in the hand-sized, but tax-friendly Luxembourg).  After shares jumped last week following great quarterly earnings, the stock dropped over 3% today on the bad press.  Barnes & Noble (BKS) shot up 50% after announcing Microsoft (MSFT) was investing $300 in the company’s digital book business, Nook.  Nook is temporarily being renamed “NewCo” (pretty creative) and will aim to catch up and compete with Amazon (AMZN).

Tomorrow:

  • Bloomberg News reports that the Occupy Wall Street movement is calling for a global day of disruption on the first day of May (mañana) – will this affect affect trading or just traders’ commutes?
  • Capital IQ research indicates that 126 of the S&P 500 stock index’s representative companies are reporting 1st quarter corporate earnings this week: Stay tuned tomorrow for Pfizer (PFE), CBS (CBS) and Motorola (MOT)….

© 2012 MarketSnacks

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“Positive Housing Data Offsets Negative Jobless News to Keep Markets Up”

26 Apr

"Home, Sweet Home Sales"

Dow 13,205 (+.87%)        S&P 1,400 (+.67%)

That absurdly impressive earnings news from Apple and optimistic Federal Reserve announcement boosted markets yesterday – and apparently the lingering bullish juices are still making their way through investors’ blood streams.  Traders ignored a negative reading on the US job market today and instead focused on better-than-expected housing data, lifting the Dow 114 points for its third advance in four days.  Although both Exxon Mobile and UPS (considered a good measurement of global trade because of its worldwide delivery operations) reported profits below analyst forecasts, 80% of the companies that have reported earnings this quarter have been topping estimates – not too shabby.

Weekly Jobless Claims miss expectations and remain relatively unchanged

The number of Americans filing for unemployment last week, the “weekly jobless claims,” was announced as 388,000, not only unchanged from the previous week, but worse than economists’ forecasts of a slight drop.  The early news before the New York Stock Exchange opened disappointed traders as a sign of a potentially stalling recovery, but ultimately failed to move the markets negatively.  Over the last six months, investors danced, cheered and were all-around merry as jobless claims steadily dropped, indicating an improving job market – however the amount has been inching up recently.  Analysts will watch closely to see that the weekly claims remain below 400,000, which is broadly considered by economists to be an important threshold that indicates a growing employment market.

Agreements to purchase existing homes smashes expectations, increases 4.1%

Lick your finger and hold it up to the wind – that’s probably as good a method as any to track the status of the housing market these days.  Just the other day we learned that average housing prices were the lowest they have been since the housing bubble popped in 2006/2007, but today the National Association of Realtors reported that pending home sales increased by 4.1% in March compared to February and reached the highest level since April of 2010.  This news increased homebuilding stocks but also brightened the mood of the overall markets.  Investors watch the housing market closely because of the correlation between housing prices and consumer spending.  Remember that the majority of American families’ wealth lies in the value of their homes, so a boost in the housing market should increase consumer confidence and lead to greater spending.

Tomorrow:

  • The Michigan consumer confidence index – positive housing data tells us consumers may be feeling better about their finances – will the U of Michigan Econ department’ survey show the same positive result?
  • Oil Giant Chevron (CVX) and Ford Motor Co. (F) keep the earnings party going into the weekend.

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