| » Earnings Mixed Yahoo Beats Estimates | |
| Yahoo announcing after the bell Tues earnings of $0.15 beating expectations of $0.08 sending the sock to $14.61 up $0.23 in midday trading on Weds. Off the highs at $15.39. The company reported revenues excluding traffic acquisition costs of $1.16B or $1.35B in total revenues vs. $1.2B estimated. Yahoo sees 2nd Profits at $1.425B to $1.625B below the $1.69B forecasted. EBIDA was a little lower than expected at $375M to $425M expected. Yahoo will cut 5% of their global work force the company announced Tues.
Earnings this season is mixed but somewhat better than expected. There are not a lot of alternative that look good right now bonds not very compelling and certainly not real estate. So stocks are looking quite good by comparison.
UAL corp. the parent company of United Airlines narrowed its Q1 loss to $382M excluding charges beating est. as lower fuel costs offset weaker travel demand.
Lockheed Martin reported an 8.8% drop in 1st Q profits down to $666,000,000. The company raised their 09 forecast because of its buy back program which will result in fewer outstanding shares.
Schering Plough which is in the process of being acquired by Merc reported profits up to $767M due to lower costs but sales dropped 5.7% to $4.4B from a change in currency rates.
AMD advanced micro devices reported a loss of $0.66 in line with expectation. Q1 revenues where $1.18B vs. $978M forecasted including $0.04 unfavorable impact. The companys guidance for the next quarter was non existent which is not making the stock happy down 3% to $3.25 today.
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| » Bank of America down on Q1 Results | |
| Shares of BAC are down over $2.00 this afternoon after the company reported better than expected earnings of $0.44 vs. $0.04 EST. President Obama speaking over the weakened called for additional transparency and said that any additional tax payer's money would not be put into a black hole. Stress test results are expected on May 4th and a strong run up in financial stocks all put selling pressure on the financials.
Ken Lewis CEO of Bank of America announced today that the company had net income of $4.2B, diluted earnings of $0.44 per share after preferred dividends including $402 M paid out to the government. BAC took several action in the 1st quarter to enhance the capital and liquidity position including strengthening the loan loss reserves and building the cash position. Mr. Lewis talks about how they were able to post strong positive net income for the 1st quarter.
He was extremely happy with the country wide and Merrill Lynch's outstanding performance that "contributed significantly to our success" The announcement went on to say that they continue to face extremely difficult challenges this year especially from the deteriorating credit quality driven by weakens in the economy and growing unemployment. Lewis went on to say the company continues to be a solid contributor to the effort to revitalize the U.S. economy through our industry leading efforts to reform mortgage lending restructuring home loans when appropriate and mitigate foreclosures whenever possible.
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| » Markets Rally on Less Negative Beige Book Report | |
| The Dow Jones Industrials rallied after a less gloomy beige book report was released today at 2:00pm closing at 8029.62 up 100 Wednesday April 15, 2009.
5 of 12 districts showed moderation in the pace of decline vs. 10 of 12 last month showing an increase in decline.
This data supports the idea that there is moderation in the pace of decline in the economy which indicates that we may be bottoming here. Hopefully the next report will go to some real improvement in economic activity. The main points on today’s beige book report are:
Overall economic activity contracted further or remained week
Several districts see signs some sectors stabilizing at low levels
Manufacturing was weak across a broad range of industries but some bouncing along the bottom.
Firm orders & sales of high tech seen in Dallas and San Francisco districts.
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| » Commerce Dept Retail Numbers Down | |
| March retail sales were down to a disappointing 1.1% vs. .3% for February lead by a sharp decrease in major purchases such as autos and electronics. This shows we are not out of the recession yet and no clear indication of a bottom. Other than auto sales and auto parts, sales were down 0.9% vs. a 1% increase in February. Commerce dept retail sales reports were up the last two months which gave some optimism that we were near bottom. Auto sales were among the weakest sectors with a drop of 2.3% vs. 3% last month. | |
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| » Oil down almost 6% lower forecasts | |
| Reports from the IAE (International Energy Agency) showed a reduction in estimates of 09 crude oil to 83.40 mbpd to 84.4 mbpd. The Organization of Petroleum Exporting countries production levels at almost 28 mbd for the month of March which was below Feb.
Crude oil futures were over $50 due to bullish sentiments coming into play in the end of March. Futures have generally followed expectations based on supply and demand factors and the economy which would show indications of future demand. Generally weak fundamentals for the markets should curtail any large rallies in the near term.
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| » U.S. Trade Deficit; Biggest Drop Since 1996 | |
| Economic data released today included the biggest one month drop in the trade deficit since 1996.
Rising layoffs were a major factor in slowing consumer spending while exports rose 1.6% after falling 6% for 3 months in a row. U.S. Trade deficit dropped to $26Billion from $36.2Billion in Jan. Imports were down 5.1% basically due to consumers purchasing a lot less. This is very helpful towards global rebalancing and good for the dollar. The U.S. china trade gap was at the smallest level in 3 years. This should show up as a less of a drop in GDP numbers in the 1st and maybe 2nd Quarters. Jobless claims were at 654,000 above 600,000 for 10 weeks still showing a great deal of weakness but may be stabilizing.
Exports were up 1.9% which helps produce the drop in todays trade numbers.
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| » Wells Fargo projects 3B in Profits for Q1 | |
| Shares of Wells Fargo soar today April 9 setting a positive tone to the market. A surprisingly upbeat preliminary report release today,
Howard Atkins CFO for Wells Fargo stated this morning that a sharp increase in deposits along with excellent increases in the mortgage business should lead to first quarter EPS of about 55 cent vs. the 26 cents estimated. Better than expected 4.1% net interest margins and a successful Wachovia deal "one of the largest banking acquisitions in U.S. history" made us want to come out early and announce the news.
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| » Crude Oil Reverses after Lower Inventory Numbers Released | |
| Oil prices were down sharply Wend morning April 8, 2009 continuing into its fourth day of sliding prices.
Yesterdays NYMEX crude oil contract was down 3.7% but prices suddenly reversed after the crude oil market responded positively to the EIA report release at 10:30 this morning. The market was anticipating a big build up in overall inventory on top of yesterdays API American Petroleum Institute stronger than expected numbers. To ad to this mornings bearish sentiment UBS cut expectation for crude levels also downgrading Conoco Philip to neutral sighting production problems and problems with its integration with Chevron.
At 11:30am crude oil rallied from its low of 47.5 to just under 51 dollars per barrel for the QMK9 contract.
The report said that U.S. crude oil refinery inputs averaged nearly 14.3 million barrels per day
During the week ending April 3, up 129 thousand barrels per day from the
Previous week's average. Refineries operated at 81.8 percent of their operable
Capacity last week. Gasoline production increased last week, averaging nearly
9.0 million Barrels per day. Distillate fuel production increased last week,
Averaging 3.9 million barrels per day. | |
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| » Was that a Bear Market Rally? | |
| We are now getting into the heart of earning season starting today with Alcoa announcing after the closing bell.
Alcoa is down 3% ahead of todays earnings announcement. The question on traders minds is will this earrings season take away the gains made from this most recent rally? The market is waiting to see if this was a bear market rally or the real thing signifying that we passed the bottom and we are on our way higher. Some traders are looking closely at the guidance some CEOs are giving to see if there is any optimism on the horizon. There are some positive signs coming from the restaurant and consumer companies with mixed signs and some indicating that things may be looking better in the 2nd half of the year. Many people are worried about a lot more than just earnings. People are paying attention to the stress test and worrying about GM and the June 1 delaines. As far as this earnings season people are expecting such bad numbers that if the worst is not realized we could see a market bounce.
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| » GM Bankruptcy? | |
| GM is trying to speed up its efforts to slim down the company but the bottom line is that they have not yet gotten concessions from unions and bond holders in order to survive outside bankruptcy court. GM is now looking for even deeper cuts than before. GM executives will be meeting with treasury officials and auto task force member this week to get more guidance from the government. GM also needs to show that they can come up with more fuel efficient vehicles at the same time as showing the government that they will be a viable business into the future with greener cars. Introduced today GM and Segway are developing a two-wheeled, two-seat electric vehicle called P.U.M.A. standing for: Personal Urban Mobility and Accessibility. This is a prototype vehicle which will have a top speed of 35 miles per hour and travel 35 miles before needing to be recharged. | |
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| » March Unemployment Rate 8.5% | |
| March Unemployment numbers were up across the board compare to last month. March goods producing jobs were down 305,000, construction jobs down 126,000, servcie jobs down 358,000, retail down 48,000 jobs and government jobs only down 5,000.
Last month Feb. unemployment rate was 8.1%. March non farm payrolls were down 663,000 and Jan. non farm payrolls were revised to down 741,000 from 655,000.
In the stock market stocks seem over bought with 76% of the S&P stocks above their 50day moving average. So a pull back would not be surprising. The rally
has signs of being a bear market rally with the market lead higher by the most shorted stocks. The volatility index didn't pull back and is still relatively high. Global chip sales as reported by the semi conductor industry association fell by over 30% in Feb. year over year but sales may be bottoming. | |
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| » Manufacturing index better than Expected | |
| Somewhat better than expected manufacturing data released today Wednesday April 1, 2009.
Analysis were expecting 36% and we got 36.3% very slightly better than expected number. The economy is still contracting because any number under 50% indicates that the manufacturing sector is getting worse and not better.
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| » Fiat Rating cut to Junk Status by S & P | |
| Fiat's bond rating cut $15B of Fiat debt to junk status by Standard and Poors rating agency. Mainly due to the automaker asking for concessions from creditors, poor operating performance and high debt levels. Significant because this is the company that is suppose to stabilize Chrysler.
This does not give the market an overwhelming sense of confidence.
More troubles for the auto industry are revealed by the President saying that the best bet for GM is a quick restructuring through the bankruptcy. GM says it will get the job done either with or without chapter 11 bankruptcy.
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| » President talks about Bankruptcy for GM | |
| President Obama openly discusses bankruptcy option for General Motors. Auto stocks lower across the board by about 25% with the Dow Jones down 256 at midday Monday March 30, 2009.
Market is experiencing some profit taking after a great run up over the last few weeks.
Commodities are up by 25% off the march bottom and bank stocks also had a tremendous run up by 50% off the resent bottom so some profit taking is to be expected.
GM shares lower by $0.76 this morning. Wallstreet is completely revelutating GM. More go vernment money will be required to complete the restructuring. "We cannot, we must not, and we will not let our auto industry simply vanish. This industry is, like no other, an emblem of the American spirit; a once and future symbol of America’s success," Mr. Obama said in remarks made from the White House. He also went on to say: "But we also cannot continue to excuse poor decisions
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| » President Obama calls for Patience/Market Rallies on Pos Data | |
| Better than expected home sales and Retail sales sent the market up by 140 pts midday Wends. President Obama's press conference yesterday called for patience. The President said that we didn't get into this over night and we won't get out of it over night either.
Some traders expressed concern over the long term prospects of the U.S. dollar in light of the huge spending packages.
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| » Futures Up on Treasury Plan to include Private Money | |
| Treasury announces plan to buy up toxic assets. Reaction is mostly positive on Capitol Hill. People were waiting for the treasury secretary to come up with a plan. This makes it a win win or a lose lose situation with the private sector involved in the plan. | |
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| » Gold up $65 Going to $2000? | |
| With the Fed printing money like drunken sailors the dollar is being devalued every day. The only true currency will soon be gold. $2000 gold in the next year is a distinct possibility. Todays rise in gold prices is an indication that the current rally in stocks is for real and the worst may be over. | |
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| » Latest Data for the Economy (Todays Jobs Report) | |
| 8:30am March 19 Initial jobless claims for the week of March 14 showed the 7th straight week above 600,000 at 646,000. Forecasts were expecting 655,000 which resulted in a positive boost to the market already strong from yesterdays Fed bond buying. Dow lost its early morning gains by noon with the Dow down around 100pts. Positive news from GE came under some caution when they announce GE capital will make 5 billion in 2009. Analysis are expecting employment numbers to stabilize towards the middle of this year after inventory levels come back to more normal levels. Total benefit claims even adjusted for population growth is up to 4.1% vs. 3.9% last week. 2% of the population claiming unemployment benefits is considered normal. | |
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| » Rates expected to remain unchanged in Fed FOMC Meeting | |
| How to deal with deepening recession is the main topic and focus of todays FOMC meeting. Any rate changes are very unlikely in the two day meeting. The Fed is expected to work to contain the economies downward trend. They will discuss whether to expand economic assistance and expand purchases of mtg backed securities. Fed funds should remain at zero to 0.25% | |
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| » AIG CEO Testifies before Congress | |
| President Obama gives press conference on AIG as Edward Liddy AIG's CEO testifies before congress today.
American International Group under pressure as lawmakers focus on ways to recoup millions payed out in bonuses.
Fed announces further purchases on gov. debt helps stabilize markets. Markets are down to mixed at midday with the Dow Jones down 78pts and the NASDAQ up a modest 2pts. Citigroup shares up sharply on a short squeeze. Amazon and GE also up today. | |
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