The Federal Open Market Committee lowered its target for overnight interest rates by a quarter percentage point to 4.5% Wednesday. This is the lowest federal funds rate in the tenure of Fed chairman Ben Bernanke. The quarter-point drop in the rate was expected by traders and economists on Wall Street. However, the vote was not unanimous.
The U.S. economy shook off the worst housing downturn in a generation to grow at a 3.9% annual pace in third quarter, the best performance in six quarters. The increase in gross domestic product was better than the 3.4% gain expected by economists.
ADP reported that private payrolls grew by 106,000 in October, following a revised 61,000 gain in September.
U.S. compensation costs rose 0.8% in the third quarter, as benefits eased a bit. The increase in quarterly employment costs was below expectations.
Gains in spending on commercial and public construction projects offset another decline in spending on housing projects in September, pushing overall construction spending up by 0.3%.
Crude supplies fell by 3.9 million barrels to 312.7 million barrels in the week ending Oct. 26. Gasoline supplies rose by 1.3 million barrels to 195.1 million barrels.
J.P. Morgan Chase (JPM) announced that its mortgage origination rose 35% in the third quarter from year-ago levels, reaching $39.2 billion.
Google Inc. (GOOG) is in discussions with Verizon Wireless (VZ) to bring cell phones to market customized for Google's software. Google is expected to make an announcement related to its mobile plans in the next two weeks and hopes to have customized phones on the market by the middle of next year.
Alcatel-Lucent SA (ALU) said it will cut a further 4,000 jobs and replace its chief financial officer after it posted its third straight quarterly loss.
Wal-Mart Stores Inc. (WMT) said it will begin offering holiday deals to customers beginning Friday. The company said instead of waiting until the day after Thanksgiving -- the traditional start to the holiday shopping season -- it will offer the holiday prices three weeks early.
In Forex News Today
Prior to this afternoon?s Fed decision, analysts pondered the Federal Reserve's next move on interest rates, while currency investors considered the possible and likely market reaction -- the consensus for both is a matter of degree, not direction. As no one was expecting an interest rate hike, no one bet on a sustained dollar rally this quarter, either. And just as bad economic or corporate headlines -- or even record-high crude oil prices -- rarely seem to derail stock market rallies these days, nothing the Fed could possibly deliver was likely to stop or prevent the dollar's decline. Whatever the Fed decided to do, the dollar was likely to bear the near-term brunt of the market's knee-jerk reaction either way, and then move in one direction - down. Whether or not the Fed decided to cut rates today, many analysts believe that the dollar is in for a near term global beating.
Meanwhile, sterling rose to a 26-year high against the dollar after a member of the Bank of England?s monetary policy committee, questioned the need for a near-term cut in UK interest rates. Fears over the effect of the credit squeeze on the economy, combined with signs of a slowdown in the housing market, have seen markets price in a cut as the next move in UK interest rates, which at present stand at 5.75 per cent.
The Hong Kong dollar hit the upper end of its trading band for the first time this week, prompting the Hong Kong Monetary Authority (HKMA) to refute speculation that it would abandon its peg against the US dollar. Analysts said speculation had been increasing that they might abandon its peg to the dollar, or allow its currency to trade in a wider range, since a strengthening Chinese currency and a weakening US dollar were making the territory?s imports more expensive.
Scheduled Economic Reports (Thursday)
Initial Jobless Claims (Week of Oct 27), Incomes (Sep), Consumer Spending (Sep), Coe Inflation (Sep), ISM Manufacturing Index (Oct)
In Earnings News
Hess Corp.'s (HES) said earnings rose to $395 million, or $1.23 a share, up from $296 million, or 94 cents, earned in the year-earlier third quarter. Analysts were looking for earnings of $1.36 a share.
MasterCard Inc. (MA) said that increased cardholder spending, particularly overseas, boosted its profit by 63 percent in the third quarter. The company said profit in the July to September period was $314 million, or $2.31 a share.
Weyerhaeuser Co. (WY), one of the world's largest lumber and paper producers, said its third-quarter profit dropped 55 percent on charges and weakness in the housing construction market that hurt its real estate business.
Scheduled Earnings Reports (Thursday)
Exxon Mobil, Blockbuster, Eastman Kodak, Credit Suisse, Office Max, Electronic Arts, Napster, SBA Communications, Trump Hotels & Casino, World Wrestling Entertainment
Stocks in the News
Dell Inc (DELL) filed past-due reports with the SEC, including information for fiscal years 2003 through 2006 and the first quarter of fiscal 2007.
Sirius Satellite Radio (SIRI) and XM Satellite Radio Holdings Inc. (XMSR) continue to talk about merger possibilities. An independent proxy advisory firm, urged shareholders of the two companies vote in favor of a proposed merger.
DreamWorks Animation (DWA) said its third-quarter profit grew more than four-fold on proceeds from the hit sequel "Shrek the Third."
Wednesday, October 31, 2007
Tuesday, October 30, 2007
The PremiereTrade Market Wrap for 10/30/07
The FOMC started their meeting in Washington to discuss the fate of interest rates. Some analysts believe the Fed could cut another half-point. But such expectations were cooled off after a report in the Wall Street Journal that said a cut this week is no sure thing and officials are not seriously considering a half-point move. The FOMC interest rate announcement is scheduled for Wednesday afternoon at 2:15 Eastern time.
The International Council of Shopping Centers-UBS Retail Chain Store Sales Index edged up by 0.1% in the week ended Oct. 27 from its level in the week before on a seasonally adjusted, comparable-store basis. On the year, chain store sales were up 2.5%.
U.S. Treasury Secretary Henry Paulson said that the American economy is strong enough to overcome the trouble in the country's housing market although the subprime mortgage crisis may take longer than expected to resolve. And according to the Case-Shiller Price Index, home prices in 20 major U.S. cities were down 4.4% on average in the past year. Prices in 10 cities fell 5% since August 2006, the fastest decline since 1991. Fifteen of the 20 cities have seen prices fall in the past year, led by Tampa with a 10.1% decline, followed by Detroit at a 9.3% loss.
Banks shut out of the market for short-term loans are finding salvation in a government lending program set up to revive housing during the Great Depression. Countrywide Financial Corp., Washington Mutual Inc., Hudson City Bancorp Inc. and hundreds of other lenders borrowed a record $163 billion from the 12 Federal Home Loan Banks in August and September as interest rates on asset-backed commercial paper rose as high as 5.6 percent.
Merrill Lynch & Co Inc (MER) announced that CEO and Chairman Stan O'Neal is retiring from the company less than a week after the venerable Wall Street firm said disastrous positions in mortgage markets generated a more than $2 billion third-quarter loss.
In Forex News Today
The dollar rose against the euro, clawing its way back from its all-time low set a day before even as markets anticipated a likely quarter-percent rate cut by the U.S. Federal Reserve Bank this week. Although lower interest rates can jump-start the economy, they can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns. Higher rates can boost a currency.
The euro has been climbing steadily against the dollar, regularly touching new highs since August amid fears over the health of the U.S. economy -- worries stoked by the subprime credit crisis and increasingly disappointing economic reports.
The euro's rise, which makes goods from the U.S. much cheaper to buy, can hurt exports from countries that use the currency, among them Germany and France.
Scheduled Economic Reports (Wednesday)
Gross Domestic Product (Q3), Employment Cost Index (Q3), Construction Spending (Sep), FOMC Announcement
In Earnings News
Procter & Gamble?s (PG) fiscal first-quarter net income rose 14% to $3.08 billion, or 92 cents a share, from $2.7 billion, or 79 cents a share, a year earlier, due in part to higher sales and an improved operating margin. On average, analysts predicted earnings of 89 cents a share on revenue of $20.2 billion.
MGM Mirage?s (MGM) third-quarter earnings rose 18% to $183.9 million, or 62 cents a share, boosted in part by higher revenue and income from Hurricane Katrina insurance recoveries. Analysts, on average, had been expecting the company to earn 50 cents a share.
Sirius Satellite Radio (SIRI) reported a loss of $120.1 million, or 8 cents per share, for the three months ended Sept. 30 compared with a loss of $162.9 million, or 12 cents per share, in the year-ago period. The result was in line with expectations on Wall Street.
Scheduled Earnings Reports (Wednesday)
MasterCard, Brinks, Amerada Hess, Newmont Mining, JDS Uniphase, MetLife, Weyerhaeuser
Stocks in the News
Saks (SKS) shares rose 9% in pre-open trade after an Icelandic investment group said that it may make a joint offer for the luxury retailer.
Hanover Insurance Group (THG) announced that third-quarter net income came in at $53.9 million, or $1.03 a share, up 61% from a year earlier.
Sohu.com's (SOHU) third-quarter net income climbed 47% to $9.69 million, or 25 cents a share.
The International Council of Shopping Centers-UBS Retail Chain Store Sales Index edged up by 0.1% in the week ended Oct. 27 from its level in the week before on a seasonally adjusted, comparable-store basis. On the year, chain store sales were up 2.5%.
U.S. Treasury Secretary Henry Paulson said that the American economy is strong enough to overcome the trouble in the country's housing market although the subprime mortgage crisis may take longer than expected to resolve. And according to the Case-Shiller Price Index, home prices in 20 major U.S. cities were down 4.4% on average in the past year. Prices in 10 cities fell 5% since August 2006, the fastest decline since 1991. Fifteen of the 20 cities have seen prices fall in the past year, led by Tampa with a 10.1% decline, followed by Detroit at a 9.3% loss.
Banks shut out of the market for short-term loans are finding salvation in a government lending program set up to revive housing during the Great Depression. Countrywide Financial Corp., Washington Mutual Inc., Hudson City Bancorp Inc. and hundreds of other lenders borrowed a record $163 billion from the 12 Federal Home Loan Banks in August and September as interest rates on asset-backed commercial paper rose as high as 5.6 percent.
Merrill Lynch & Co Inc (MER) announced that CEO and Chairman Stan O'Neal is retiring from the company less than a week after the venerable Wall Street firm said disastrous positions in mortgage markets generated a more than $2 billion third-quarter loss.
In Forex News Today
The dollar rose against the euro, clawing its way back from its all-time low set a day before even as markets anticipated a likely quarter-percent rate cut by the U.S. Federal Reserve Bank this week. Although lower interest rates can jump-start the economy, they can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns. Higher rates can boost a currency.
The euro has been climbing steadily against the dollar, regularly touching new highs since August amid fears over the health of the U.S. economy -- worries stoked by the subprime credit crisis and increasingly disappointing economic reports.
The euro's rise, which makes goods from the U.S. much cheaper to buy, can hurt exports from countries that use the currency, among them Germany and France.
Scheduled Economic Reports (Wednesday)
Gross Domestic Product (Q3), Employment Cost Index (Q3), Construction Spending (Sep), FOMC Announcement
In Earnings News
Procter & Gamble?s (PG) fiscal first-quarter net income rose 14% to $3.08 billion, or 92 cents a share, from $2.7 billion, or 79 cents a share, a year earlier, due in part to higher sales and an improved operating margin. On average, analysts predicted earnings of 89 cents a share on revenue of $20.2 billion.
MGM Mirage?s (MGM) third-quarter earnings rose 18% to $183.9 million, or 62 cents a share, boosted in part by higher revenue and income from Hurricane Katrina insurance recoveries. Analysts, on average, had been expecting the company to earn 50 cents a share.
Sirius Satellite Radio (SIRI) reported a loss of $120.1 million, or 8 cents per share, for the three months ended Sept. 30 compared with a loss of $162.9 million, or 12 cents per share, in the year-ago period. The result was in line with expectations on Wall Street.
Scheduled Earnings Reports (Wednesday)
MasterCard, Brinks, Amerada Hess, Newmont Mining, JDS Uniphase, MetLife, Weyerhaeuser
Stocks in the News
Saks (SKS) shares rose 9% in pre-open trade after an Icelandic investment group said that it may make a joint offer for the luxury retailer.
Hanover Insurance Group (THG) announced that third-quarter net income came in at $53.9 million, or $1.03 a share, up 61% from a year earlier.
Sohu.com's (SOHU) third-quarter net income climbed 47% to $9.69 million, or 25 cents a share.
Monday, October 29, 2007
The PremiereTrade Market Wrap for 10/29/07
Federal Reserve Chairman Ben S. Bernanke and the board of Fed governors sound as if they'd prefer to just say no to an interest-rate cut this week but the financial markets may not let them. Policy makers from Bernanke on down have avoided signaling they want to reduce benchmark lending rates at their Oct. 30-31 meeting, ever since lowering them by a larger-than-anticipated half percentage point in September. The decision is scheduled to be announced at 2:15 pm Eastern on Wednesday afternoon.
Oil prices rose above $93 a barrel to a new trading high in Asia after Mexico's state oil company said it was suspending about a fifth of its oil production due to a storm. Light, sweet crude for December delivery rose as much as $1.34 to $93.20 a barrel, a new intraday record, in early afternoon Asian electronic trading on the New York Mercantile Exchange. It later slipped back to $92.82 a barrel.
General Motors Corp. (G) said it will set up a $250 million alternative-fuel research center in Shanghai amid efforts by global automakers to produce commercially viable alternatives to gasoline engines. Global automakers are stepping up research into fuel cells, biofuels, diesel and other power sources.
Stan O'Neal, Merrill Lynch & Co.'s (MER) beleaguered chief executive has decided to leave the firm and was negotiating the terms of his departure. The Merrill board is expected to conduct a broad-based search, both internally and externally, for O'Neal's replacement.
In Forex News Today
The dollar slipped lower against the euro, reaching a record low, then continued its slide in morning European trading, as markets looked for signals from the Federal Reserve about a likely rate cut this week. The European currency has been climbing steadily against the dollar all year, soaring to new highs almost weekly since August on the back of market fears over the U.S. economy's health because of the subprime credit crisis and increasingly disappointing economic reports.
But the euro's rise, which makes goods from the U.S. much cheaper to buy and shopping for U.S.-bound tourists ideal, can hurt exports from countries that use the euro, particularly Germany and France. Earlier this month, a survey looking at German investor confidence showed strong concern about exports. The strength of the euro risks making European exports less competitive.
The Hong Kong dollar hit the upper end of its trading band for the first time, prompting the Hong Kong Monetary Authority to refute speculation that it would abandon its peg against the US dollar. The U.S. currency slid to its weakest in 33 years versus the Canadian dollar and a 23-year low against Australia's dollar. Yields on two-year Treasuries are now the lowest among bonds of the Group of Seven nations excluding Japan after traders raised bets the Fed will reduce rates on Oct. 31. The yen weakened against all but one of the 16 most-traded currencies as gains in stocks spurred so-called carry trades.
Scheduled Economic Reports (Tuesday)
Retail Chain Index (week of Oct 27th), Consumer Confidence (Oct), the FOMC Meeting begins
In Earnings News
Verizon Communications Inc. (VZ), the nation's second largest telecommunications company, reported third-quarter earnings fell by a third from a year ago due to tax charges. Verizon earned $1.27 billion, or 44 cents per share, in the July-September period.
Humana Inc. (HUM) said its third-quarter profit nearly doubled from a year ago, as income from its government segment surged, aided by a one-time gain and improvements in its commercial business. Net income grew to $302.4 million, or $1.78 per share. Analysts expected $1.49 a share.
Office Depot Inc. (ODP) said it is delaying its third-quarter earnings results due to an independent review of vendor program funds by its audit committee. The review primarily relates to the timing of the recognition of certain funds. The company was scheduled to release its third-quarter results tomorrow; a new date wasn't released. As a result, Office Depot shares lost more than 10 percent on the announcement.
Scheduled Earnings Reports (Tuesday)
Procter & Gamble, Colgate Palmolive, DreamWorks Animation, AirTran Holdings, Fresh Del Monte, Chipotle Mexican Grill, MGM Mirage, Avon Products, Martin Marietta, Goodyear Tire & Rubber, Liz Claiborne, Sirius Satellite Radio
Stocks in the News
Alton USA Energy (ALJ), the Dallas refiner and retailer of petroleum products, estimated third-quarter earnings at 23 cents to 29 cents a share.
Brookfield Homes Corp (BHS) reported a third-quarter profit of $1.6 million, or 6 cents a share, down from $27.6 million, or $1.03 a share, in the year-earlier period.
Coca Cola Bottling (COKE) reported third-quarter profit of $5.3 million, or 58 cents a share, up from $4.9 million.
Oil prices rose above $93 a barrel to a new trading high in Asia after Mexico's state oil company said it was suspending about a fifth of its oil production due to a storm. Light, sweet crude for December delivery rose as much as $1.34 to $93.20 a barrel, a new intraday record, in early afternoon Asian electronic trading on the New York Mercantile Exchange. It later slipped back to $92.82 a barrel.
General Motors Corp. (G) said it will set up a $250 million alternative-fuel research center in Shanghai amid efforts by global automakers to produce commercially viable alternatives to gasoline engines. Global automakers are stepping up research into fuel cells, biofuels, diesel and other power sources.
Stan O'Neal, Merrill Lynch & Co.'s (MER) beleaguered chief executive has decided to leave the firm and was negotiating the terms of his departure. The Merrill board is expected to conduct a broad-based search, both internally and externally, for O'Neal's replacement.
In Forex News Today
The dollar slipped lower against the euro, reaching a record low, then continued its slide in morning European trading, as markets looked for signals from the Federal Reserve about a likely rate cut this week. The European currency has been climbing steadily against the dollar all year, soaring to new highs almost weekly since August on the back of market fears over the U.S. economy's health because of the subprime credit crisis and increasingly disappointing economic reports.
But the euro's rise, which makes goods from the U.S. much cheaper to buy and shopping for U.S.-bound tourists ideal, can hurt exports from countries that use the euro, particularly Germany and France. Earlier this month, a survey looking at German investor confidence showed strong concern about exports. The strength of the euro risks making European exports less competitive.
The Hong Kong dollar hit the upper end of its trading band for the first time, prompting the Hong Kong Monetary Authority to refute speculation that it would abandon its peg against the US dollar. The U.S. currency slid to its weakest in 33 years versus the Canadian dollar and a 23-year low against Australia's dollar. Yields on two-year Treasuries are now the lowest among bonds of the Group of Seven nations excluding Japan after traders raised bets the Fed will reduce rates on Oct. 31. The yen weakened against all but one of the 16 most-traded currencies as gains in stocks spurred so-called carry trades.
Scheduled Economic Reports (Tuesday)
Retail Chain Index (week of Oct 27th), Consumer Confidence (Oct), the FOMC Meeting begins
In Earnings News
Verizon Communications Inc. (VZ), the nation's second largest telecommunications company, reported third-quarter earnings fell by a third from a year ago due to tax charges. Verizon earned $1.27 billion, or 44 cents per share, in the July-September period.
Humana Inc. (HUM) said its third-quarter profit nearly doubled from a year ago, as income from its government segment surged, aided by a one-time gain and improvements in its commercial business. Net income grew to $302.4 million, or $1.78 per share. Analysts expected $1.49 a share.
Office Depot Inc. (ODP) said it is delaying its third-quarter earnings results due to an independent review of vendor program funds by its audit committee. The review primarily relates to the timing of the recognition of certain funds. The company was scheduled to release its third-quarter results tomorrow; a new date wasn't released. As a result, Office Depot shares lost more than 10 percent on the announcement.
Scheduled Earnings Reports (Tuesday)
Procter & Gamble, Colgate Palmolive, DreamWorks Animation, AirTran Holdings, Fresh Del Monte, Chipotle Mexican Grill, MGM Mirage, Avon Products, Martin Marietta, Goodyear Tire & Rubber, Liz Claiborne, Sirius Satellite Radio
Stocks in the News
Alton USA Energy (ALJ), the Dallas refiner and retailer of petroleum products, estimated third-quarter earnings at 23 cents to 29 cents a share.
Brookfield Homes Corp (BHS) reported a third-quarter profit of $1.6 million, or 6 cents a share, down from $27.6 million, or $1.03 a share, in the year-earlier period.
Coca Cola Bottling (COKE) reported third-quarter profit of $5.3 million, or 58 cents a share, up from $4.9 million.
Friday, October 26, 2007
The PremiereTrade Market Wrap for 10/26/07
Consumer confidence fell to the level of 80.9 points in October, from the 83.4 points registered in September. The market consensus was a smaller decline to the level of 82.0 points. The decline in confidence was mostly due to the decreasing home prices.
Merrill Lynch and Wachovia are contemplating a merger. The merger approach, which came before Merrill's disclosure this week of a $7.9 billion third-quarter write-down for collateralized debt obligation investments, was viewed as "a major breach of corporate protocol. There is some speculation that Merrill's CEO could lose his job over the proposal since he didn't check with board members before the meeting.
Bank of America Corp. ( BAC) is leaving the wholesale mortgage business. Bank of America officials said that the company will stop offering home mortgages through brokers, eliminating 700 jobs.
Crude oil prices spiked above $92 a barrel on tensions in the Middle East and renewed concerns about supply. The United States announced new sanctions against Iran this week and a confrontation between the world's largest oil consumer and its fourth largest oil producer could upend markets.
In Forex News Today
The dollar fell to another new low against the euro in midmorning trading on speculation that U.S. interest rates might be cut again when the FOMC meets next week. The euro was lifted higher by a wave of negative economic reports this week from the United States, including a report that showed U.S. orders for durable goods dropped 1.7 percent in September.
The Aussie was helped by expectations that the Reserve Bank of Australia will raise rates next month. In contrast, weak U.S. durables goods data reinforced bets for a growth-boosting Fed cut on Oct. 31 from 4.75 percent. The rise in high-yielding commodity currencies, coupled with gains in Asian equity markets, helped boost risk appetite and encourage investors to put on carry trade bets funded by cheap borrowing in the Japanese yen. The latest Japanese inflation data showed ongoing deflation with the core annual rate remaining negative in September for the eighth consecutive month.
Higher-yielding currencies advanced against the yen as stock markets in Asia gained, boosting risk appetite. Analysts said this encouraged investors back into carry trades, in which the low-yielding yen is sold to fund the purchase of riskier, higher-yielding assets elsewhere.
Scheduled Economic Reports (Next Week)
Consumer Sentiment, Gross Domestic Product, Chicago PMI, Construction Spending, ISM Manufacturing Index, Vehicle Sales, Non-Farm Payrolls, and the Federal Open Market Committee meeting
In Earnings News
Countrywide Financial Corp. (CFC) posted a third-quarter loss of $1.2 billion, or $2.85 per share. Analysts forecast a loss of $1.28 per share. Countrywide also said they expect to be profitable in the fourth quarter.
Microsoft (MSFT) reported a profit up 23 percent to $4.29 billion, or 45 cents per share, as brisk sales of the new "Halo 3" video game, Windows and Office helped it breeze past Wall Street's expectations. Analysts expected a profit of 39 cents per share.
Waste Management Inc. (WMT) reported its third-quarter earnings fell 7 percent, missing Wall Street's expectations, on the impact of a labor stoppage and rising crude oil prices. Waste Management earned $278 million, or share, in the year-ago quarter.
Fortune Brands Inc. (FO), which makes consumer products ranging from Jim Beam bourbon to Moen faucets, said its third-quarter profit rose 38 percent with wine and spirits sales helping to offset a decline in sales of home products as the housing market slowed.
Scheduled Earnings Reports (Next Week)
Hertz, Kellogg, Loews, Winn Dixie, AirTran, DreamWorks Animation, Qwest Communications, Procter & Gamble, Sirius Satellite Radio, Brinks, MasterCard, Blockbuster, Credit Suisse, Eastman Kodak, Electronic Arts, World Wrestling Entertainment
Stocks in the News
Emulex Corp?s (ELX) fiscal first-quarter net income fell 32% to $10.2 million, or 12 cents a share, from a year earlier.
Wendy?s International (WEN) third-quarter profit was cut by better than half, weighed down by charges and the spin-off of Tim Horton's.
And Allegheny Energy (AYE) reported its third-quarter net income rose to $115 million, or 67 cents a share, from $110.2 million, or 65 cents.
Merrill Lynch and Wachovia are contemplating a merger. The merger approach, which came before Merrill's disclosure this week of a $7.9 billion third-quarter write-down for collateralized debt obligation investments, was viewed as "a major breach of corporate protocol. There is some speculation that Merrill's CEO could lose his job over the proposal since he didn't check with board members before the meeting.
Bank of America Corp. ( BAC) is leaving the wholesale mortgage business. Bank of America officials said that the company will stop offering home mortgages through brokers, eliminating 700 jobs.
Crude oil prices spiked above $92 a barrel on tensions in the Middle East and renewed concerns about supply. The United States announced new sanctions against Iran this week and a confrontation between the world's largest oil consumer and its fourth largest oil producer could upend markets.
In Forex News Today
The dollar fell to another new low against the euro in midmorning trading on speculation that U.S. interest rates might be cut again when the FOMC meets next week. The euro was lifted higher by a wave of negative economic reports this week from the United States, including a report that showed U.S. orders for durable goods dropped 1.7 percent in September.
The Aussie was helped by expectations that the Reserve Bank of Australia will raise rates next month. In contrast, weak U.S. durables goods data reinforced bets for a growth-boosting Fed cut on Oct. 31 from 4.75 percent. The rise in high-yielding commodity currencies, coupled with gains in Asian equity markets, helped boost risk appetite and encourage investors to put on carry trade bets funded by cheap borrowing in the Japanese yen. The latest Japanese inflation data showed ongoing deflation with the core annual rate remaining negative in September for the eighth consecutive month.
Higher-yielding currencies advanced against the yen as stock markets in Asia gained, boosting risk appetite. Analysts said this encouraged investors back into carry trades, in which the low-yielding yen is sold to fund the purchase of riskier, higher-yielding assets elsewhere.
Scheduled Economic Reports (Next Week)
Consumer Sentiment, Gross Domestic Product, Chicago PMI, Construction Spending, ISM Manufacturing Index, Vehicle Sales, Non-Farm Payrolls, and the Federal Open Market Committee meeting
In Earnings News
Countrywide Financial Corp. (CFC) posted a third-quarter loss of $1.2 billion, or $2.85 per share. Analysts forecast a loss of $1.28 per share. Countrywide also said they expect to be profitable in the fourth quarter.
Microsoft (MSFT) reported a profit up 23 percent to $4.29 billion, or 45 cents per share, as brisk sales of the new "Halo 3" video game, Windows and Office helped it breeze past Wall Street's expectations. Analysts expected a profit of 39 cents per share.
Waste Management Inc. (WMT) reported its third-quarter earnings fell 7 percent, missing Wall Street's expectations, on the impact of a labor stoppage and rising crude oil prices. Waste Management earned $278 million, or share, in the year-ago quarter.
Fortune Brands Inc. (FO), which makes consumer products ranging from Jim Beam bourbon to Moen faucets, said its third-quarter profit rose 38 percent with wine and spirits sales helping to offset a decline in sales of home products as the housing market slowed.
Scheduled Earnings Reports (Next Week)
Hertz, Kellogg, Loews, Winn Dixie, AirTran, DreamWorks Animation, Qwest Communications, Procter & Gamble, Sirius Satellite Radio, Brinks, MasterCard, Blockbuster, Credit Suisse, Eastman Kodak, Electronic Arts, World Wrestling Entertainment
Stocks in the News
Emulex Corp?s (ELX) fiscal first-quarter net income fell 32% to $10.2 million, or 12 cents a share, from a year earlier.
Wendy?s International (WEN) third-quarter profit was cut by better than half, weighed down by charges and the spin-off of Tim Horton's.
And Allegheny Energy (AYE) reported its third-quarter net income rose to $115 million, or 67 cents a share, from $110.2 million, or 65 cents.
Thursday, October 25, 2007
The PremiereTrade Market Wrap for 10/25/07
Sales of new homes rebounded in September from summer sales levels that were much weaker than previously reported. Sales increased 4.8% to a seasonally adjusted annual rate of 770,000 from a revised 735,000 in August. The inventory for new homes dropped from 9 months to 8.3 months.
The average rate on fixed-rate 30-year mortgages slipped to 6.31% this week from 6.49% last week. The average 15-year fixed mortgage fell to 6.00% from 6.17%. The average rate on 30-year jumbo loans -- above $417,000 -- also dipped to 7.04%.
Demand for defense goods tumbled in September, pushing down orders for durable goods for a second month in a row. Total orders fell 1.7% after a revised 5.3% decline in August. Economists were expecting orders to rise 1.1%.
First-time claims for state unemployment benefits declined in the latest week, but only partially reversed the big jump in the prior week. The number of initial claims in the week ending October 20 fell 8,000 to 331,000. The consensus forecast of Wall Street economists was for claims to fall 17,000 to 320,000.
Bank of America (BAC) announced that it will restructure its investment banking unit, starting with that unit's president. The bank also said it will eliminate about 3,000 jobs, most of which will be in the Global Corporate and Investment Banking unit, but other units will also be affected by the layoffs.
In Forex News Today
The dollar edged towards a record low versus the euro, after a report showed the unexpected fall in U.S. September durable good orders, bolstering the view a slowing economy will herald a cut in U.S. interest rates next week.
The yen rose against the dollar and euro this week as weaker stocks and an unexpectedly softer September U.S. existing-home sales report caused investors to flee risky assets. Mike Moran, foreign exchange strategist at Standard Chartered Bank in New York said, "We are seeing a degree of risk aversion creep back into the FX markets.?
Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency. He said he?s in the process of moving all of his assets out of U.S. dollars. Rogers, delivering a presentation at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.
Scheduled Economic Reports (Friday)
Consumer Sentiment (Oct)
In Earnings News
Motorola (MOT) said its profit plunged in the third quarter, as sales fell substantially in its cell phone business. The company posted profit of $60 million, or 3 cents per share while analysts were looking for 4 cents a share.
Royal Dutch Shell PLC (RDS-B) said third-quarter net profit rose 16 percent despite a drop in production, but it warned that the underlying performance of its refining operations was weaker than it appeared.
Sony Corp. (SNE) announced that net profit jumped in the July-to-September quarter as brisk sales for its Cybershot digital cameras, camcorders and other goods spurred a turnaround in its consumer electronics division.
And, XM Satellite Radio Holdings Inc. (XMSR) reported its third-quarter loss widened, despite higher subscriber numbers. XM reported a loss of $145.4 million, or 47 cents per share. Analysts expected a loss of 45 cents per share.
Scheduled Earnings Reports (Friday)
Countrywide Financial, Colgate-Palmolive, Fortune Brands, Brunswick, Waste Management, Volkswagen
Stocks in the News
Microsoft (MSFT) will acquire a significant stake in popular online social networking company Facebook Inc.
Pulte Homes (PHM) reported a third-quarter net loss of $787.9 million, or $3.12 a share, compared with a net profit of $190.2 million, or 74 cents a share, in the year-earlier period.
The average rate on fixed-rate 30-year mortgages slipped to 6.31% this week from 6.49% last week. The average 15-year fixed mortgage fell to 6.00% from 6.17%. The average rate on 30-year jumbo loans -- above $417,000 -- also dipped to 7.04%.
Demand for defense goods tumbled in September, pushing down orders for durable goods for a second month in a row. Total orders fell 1.7% after a revised 5.3% decline in August. Economists were expecting orders to rise 1.1%.
First-time claims for state unemployment benefits declined in the latest week, but only partially reversed the big jump in the prior week. The number of initial claims in the week ending October 20 fell 8,000 to 331,000. The consensus forecast of Wall Street economists was for claims to fall 17,000 to 320,000.
Bank of America (BAC) announced that it will restructure its investment banking unit, starting with that unit's president. The bank also said it will eliminate about 3,000 jobs, most of which will be in the Global Corporate and Investment Banking unit, but other units will also be affected by the layoffs.
In Forex News Today
The dollar edged towards a record low versus the euro, after a report showed the unexpected fall in U.S. September durable good orders, bolstering the view a slowing economy will herald a cut in U.S. interest rates next week.
The yen rose against the dollar and euro this week as weaker stocks and an unexpectedly softer September U.S. existing-home sales report caused investors to flee risky assets. Mike Moran, foreign exchange strategist at Standard Chartered Bank in New York said, "We are seeing a degree of risk aversion creep back into the FX markets.?
Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency. He said he?s in the process of moving all of his assets out of U.S. dollars. Rogers, delivering a presentation at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.
Scheduled Economic Reports (Friday)
Consumer Sentiment (Oct)
In Earnings News
Motorola (MOT) said its profit plunged in the third quarter, as sales fell substantially in its cell phone business. The company posted profit of $60 million, or 3 cents per share while analysts were looking for 4 cents a share.
Royal Dutch Shell PLC (RDS-B) said third-quarter net profit rose 16 percent despite a drop in production, but it warned that the underlying performance of its refining operations was weaker than it appeared.
Sony Corp. (SNE) announced that net profit jumped in the July-to-September quarter as brisk sales for its Cybershot digital cameras, camcorders and other goods spurred a turnaround in its consumer electronics division.
And, XM Satellite Radio Holdings Inc. (XMSR) reported its third-quarter loss widened, despite higher subscriber numbers. XM reported a loss of $145.4 million, or 47 cents per share. Analysts expected a loss of 45 cents per share.
Scheduled Earnings Reports (Friday)
Countrywide Financial, Colgate-Palmolive, Fortune Brands, Brunswick, Waste Management, Volkswagen
Stocks in the News
Microsoft (MSFT) will acquire a significant stake in popular online social networking company Facebook Inc.
Pulte Homes (PHM) reported a third-quarter net loss of $787.9 million, or $3.12 a share, compared with a net profit of $190.2 million, or 74 cents a share, in the year-earlier period.
Wednesday, October 24, 2007
The PremiereTrade Market Wrap for 10/24/07
Demand for previously owned homes fell more than expected in September amid continued problems in the mortgage market, with single-family sales hitting their lowest sales pace in nearly 10 years. Overall home resales declined to a 5.04 million annual rate. Inventories of homes rose 0.4%, which represents a 10.5-month supply at the current sales pace.
Japan's trade surplus climbed a higher-than-expected 62.7% in September from a year earlier, as continuing strong export growth to Asia and Europe offset weaker U.S. demand. Exports rose 6.5% in September from a year earlier.
Microsoft Corp. (MSFT) has withdrawn the two remaining appeals related to a European Union antitrust order that it now says it will stop fighting. The company has formally dropped an appeal against the 280.5 million euros ($364 million) in fines levied by the EU in July 2006.
Billionaire Warren Buffett believes investors should be ``cautious'' about China's stocks after the country's benchmark index more than doubled this year. Buffett this month said Berkshire had sold its stake in PetroChina Co., which has actually risen 76 percent this year.
Merrill Lynch & Co. (MER) reported its first quarterly loss in six years after a larger-than-forecast $7.9 billion of write downs for subprime mortgages and asset- backed bonds. Merrill?s third-quarter loss was $2.24 billion, or $2.82 a share.
In Forex News Today
The dollar was up against the euro and lower against the yen after Merrill Lynch's huge third-quarter losses were not as bad as investors had feared. Analysts said the dollar was helped by rising risk aversion, which encouraged investors to cut local market risk positions and switch back to dollars. Risk aversion also prompted the unwinding of yen-funded carry trades, in which investors borrow in a low-yielding currency to buy higher yielding assets elsewhere.
Analysts believe that in order to keep the bullish environment for high-yielding and emerging market currencies intact, US inflation rates and the asset backed security market needed to be watched carefully. They say the dollar is increasingly being used as a funding currency. However, if US inflation rises too quickly too early, potentially freezing further US interest rate cuts, the US will likely fall into recession, putting the entire global growth outlook at risk.
Scheduled Economic Reports (Wednesday)
Initial Jobless Claims (Week of October 20th), Durable Goods Orders (Sep), New Home Sales (Sep)
In Earnings News
Boeing (BA) reported that its third-quarter profit climbed 61 percent, thanks to higher commercial airplane deliveries and growth in its defense business. For the quarter ending Sept. 30, Boeing's profit rose to $1.1 billion, or $1.44 per share, up from $694 million, or 89 cents, a year ago.
General Dynamics Corp. (GD), the largest maker of armored vehicles for the U.S. military, said third-quarter profit gained 24 percent as it sold more blast-resistant trucks and armored transports for the war in Iraq. Profit from continuing operations climbed to $544 million or $1.34 a share, from $440 million, or $1.08, a year earlier
Taser International Inc. (TASR) reported its third-quarter profit more than doubled as sales surged and the company paid lower taxes. The company earned $6.2 million, or 9 cents per share. Analysts expected a profit of 5 cents per share on $23.7 million in revenue.
Scheduled Earnings Reports (Thursday)
Microsoft, DaimlerChrysler, Motorola, XM Satellite Radio, Frontier Airlines, Wendy?s International, Bristol Myers Squibb, Dow Chemical, Ericsson, Honda, Raytheon, US Airways
Stocks in the News
Amazon.com (AMZN) third-quarter earnings topped expectations, quadrupling from a year earlier to $80 million, or 19 cents a share.
Aflac (AFL) reported third-quarter profit rose to $420 million, or 85 cents a share, from $367 million, or 73 cents, in the year-ago period.
Children?s Place Retail Stores (PLCE) said that it has engaged Lehman Brothers as its financial adviser while it undertakes a review of its strategic options.
And Juniper Networks (JNPR) reported fiscal third-quarter profit rose 46% from the year-earlier period, amid strong sales of its networking equipment.
Japan's trade surplus climbed a higher-than-expected 62.7% in September from a year earlier, as continuing strong export growth to Asia and Europe offset weaker U.S. demand. Exports rose 6.5% in September from a year earlier.
Microsoft Corp. (MSFT) has withdrawn the two remaining appeals related to a European Union antitrust order that it now says it will stop fighting. The company has formally dropped an appeal against the 280.5 million euros ($364 million) in fines levied by the EU in July 2006.
Billionaire Warren Buffett believes investors should be ``cautious'' about China's stocks after the country's benchmark index more than doubled this year. Buffett this month said Berkshire had sold its stake in PetroChina Co., which has actually risen 76 percent this year.
Merrill Lynch & Co. (MER) reported its first quarterly loss in six years after a larger-than-forecast $7.9 billion of write downs for subprime mortgages and asset- backed bonds. Merrill?s third-quarter loss was $2.24 billion, or $2.82 a share.
In Forex News Today
The dollar was up against the euro and lower against the yen after Merrill Lynch's huge third-quarter losses were not as bad as investors had feared. Analysts said the dollar was helped by rising risk aversion, which encouraged investors to cut local market risk positions and switch back to dollars. Risk aversion also prompted the unwinding of yen-funded carry trades, in which investors borrow in a low-yielding currency to buy higher yielding assets elsewhere.
Analysts believe that in order to keep the bullish environment for high-yielding and emerging market currencies intact, US inflation rates and the asset backed security market needed to be watched carefully. They say the dollar is increasingly being used as a funding currency. However, if US inflation rises too quickly too early, potentially freezing further US interest rate cuts, the US will likely fall into recession, putting the entire global growth outlook at risk.
Scheduled Economic Reports (Wednesday)
Initial Jobless Claims (Week of October 20th), Durable Goods Orders (Sep), New Home Sales (Sep)
In Earnings News
Boeing (BA) reported that its third-quarter profit climbed 61 percent, thanks to higher commercial airplane deliveries and growth in its defense business. For the quarter ending Sept. 30, Boeing's profit rose to $1.1 billion, or $1.44 per share, up from $694 million, or 89 cents, a year ago.
General Dynamics Corp. (GD), the largest maker of armored vehicles for the U.S. military, said third-quarter profit gained 24 percent as it sold more blast-resistant trucks and armored transports for the war in Iraq. Profit from continuing operations climbed to $544 million or $1.34 a share, from $440 million, or $1.08, a year earlier
Taser International Inc. (TASR) reported its third-quarter profit more than doubled as sales surged and the company paid lower taxes. The company earned $6.2 million, or 9 cents per share. Analysts expected a profit of 5 cents per share on $23.7 million in revenue.
Scheduled Earnings Reports (Thursday)
Microsoft, DaimlerChrysler, Motorola, XM Satellite Radio, Frontier Airlines, Wendy?s International, Bristol Myers Squibb, Dow Chemical, Ericsson, Honda, Raytheon, US Airways
Stocks in the News
Amazon.com (AMZN) third-quarter earnings topped expectations, quadrupling from a year earlier to $80 million, or 19 cents a share.
Aflac (AFL) reported third-quarter profit rose to $420 million, or 85 cents a share, from $367 million, or 73 cents, in the year-ago period.
Children?s Place Retail Stores (PLCE) said that it has engaged Lehman Brothers as its financial adviser while it undertakes a review of its strategic options.
And Juniper Networks (JNPR) reported fiscal third-quarter profit rose 46% from the year-earlier period, amid strong sales of its networking equipment.
The PremiereTrade Market Wrap for 10/23/07
The International Council of Shopping Centers-UBS Retail Chain Store Sales Index fell by 1.5% in the week ended Oct. 20th from its level the week before, on a seasonally adjusted, comparable-store basis. On the year, chain store sales were up 2.2 percent.
The Federal Reserve indicated it supports the plan brokered by Treasury Secretary Henry Paulson to increase liquidity in the market for asset-backed commercial paper. The agreement reached by Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. is well-enough designed that it may help credit markets.
Countrywide Financial Corp. (CFC), the nation's largest mortgage lender, said it will begin calling borrowers to offer refinancing or modifications on $16 billion in loans whose interest rate is set to adjust by the end of 2008.
In Forex News Today
Treasury Secretary Henry Paulson reiterated that China should let its currency strengthen on Tuesday, following weekend meetings during which the world's seven richest nations stepped up their pressure on Beijing over the yuan. That pressure, however, was met by a shrug from Chinese authorities, and the yuan was even allowed to sink a little in Monday trading.
The U.S. Dollar once again set record lows against the euro amidst a torrent of truly awful economic data. The worst of the lot included housing starts which dropped more than 10% and jobless claims which increased to 337K ?.much more than expected. The news pushed the Fed Funds futures to a 75% chance of a rate cut in October dragging the dollar to new lows.
The yen fell the most in a month against the euro as a rebound in global stocks encouraged investors to resume buying higher-yielding assets financed by loans in Japan. Japan's yen declined against the 16 most-actively traded currencies after better-than-expected earnings and forecasts from companies including Apple Inc. eased concern that profit growth is slowing. And the dollar dropped against the euro as increased risk appetite reduced demand for the safety of U.S. government debt.
Scheduled Economic Reports (Wednesday)
Existing Home Sales (Sep)
In Earnings News
Apple (AAPL) reported fiscal fourth-quarter profits that jumped 67 percent to cap a year of unprecedented momentum in the company's Macintosh computer business, as well as continued demand for iPods and the successful launch of the iPhone.
BP Plc (BP) posted net profit of $4.4 billion (3.09 billion euros) for the three months ending Sept. 30, down from $6.2 billion over the same period of 2006. Revenue rose 2.7 percent to $72.6 billion (50.9 billion euros).
AT&T Inc. (T), the nation's largest telecommunications company, reported net income of $3.1 billion in the third quarter, a 42 percent jump from the previous year before its acquisition of BellSouth Corp. was completed.
DuPont (DD) reported a net profit of $526 million, or 56 cents per share, compared with $485 million, or 52 cents per share for the third quarter of last year. Sales rose to $6.68 billion from $6.31 billion a year earlier. Analysts expected earnings per share of 52 cents on sales of $6.73 billion.
And UAL Corp (UAUA), the parent of the nation's second largest air carrier, said it earned $334 million, or $2.21 per share, for the July-through-September quarter. That's up from $190 million, or $1.30 per share, during the same period last year.
Scheduled Earnings Reports (Wednesday)
Boeing, Coca Cola, Glaxo Smith Kline, Monster Worldwide, Anheuser Busch, Merrill Lynch, General Dynamics, Choice Hotels, Occidental Pete, Taser International
Stocks in the News
W.R. Berkley (BER) third-quarter profit rose to $180.5 million, or 93 cents a share, from $174.3 million, or 87 cents a share, in the year-ago period.
Equifax (EFX) third-quarter net income declined to $67.9 million or 48 cents a share, from $78.9 million, or 61 cents a share, a year earlier.
Lexmark International (LXK) said it will transfer roughly 1,650 jobs to low-cost countries by the end of 2008 in a move that should save about $40 million in 2008 and $60 million later.
Monday, October 22, 2007
The PremiereTrade Market Wrap for 10/22/07
Nationwide, gasoline prices rose about 5 cents over the past two week. According to the Lundberg Survey, the average price of regular unleaded gasoline was $2.80 on Friday. The national average for mid-grade was $2.92 a gallon and premium gasoline was $3.03.
Microsoft Corp. (MSFT) agreed to observe key parts of a 2004 antitrust ruling upheld by an appeals court last month, cutting royalties for rivals and handing information over to open source developers.
Investment bank Bear Stearns Cos. (BSC) and Chinese bank Citic Securities Co. said they will form a strategic partnership that includes $1 billion in cross-investments and the creation of a new Asian joint venture.
Toyota (TM) said it sold 2.34 million vehicles globally in the July-September quarter, fewer than General Motors' (GM) tally, as its U.S. rival regained the lead in the race to be the world's top automaker.
In Forex News Today
The U.S. dollar fell to a six-week low on Monday vs. the Japanese yen as investors continued to shun equities and as a meeting of leading industrialized nations failed to rally support for the dollar.
Over the weekend, the Group of Seven leading industrialized nations called for China to accelerate the pace of the yuan's appreciation, but didn't make mention of recent dollar weakness. The G7 statement does not mention the weak dollar or the strong euro, dashing the hopes held by some in Europe that the group would say something to stop the slide in the dollar against the euro. Risk aversion was also a theme after Friday's loss on U.S. stock markets carried over to Asia and Europe on Monday, with declines in stock markets in Tokyo, Hong Kong, London and Frankfurt.
Interest rate expectations added to the dollar's problems. Lower rates bite into the returns on dollar-denominated assets and are therefore usually negative for a currency. Fed funds futures were pricing in a chance of about 90% for a quarter-point cut at the Fed's next policy meeting Oct. 30-31. Today, the implied chance is about 35%.
Scheduled Economic Reports (Tuesday)
Retail Chain Index (week of October 20th)
In Earnings News
Merck & Co. (MRK) posted a 62 percent increase in its third-quarter profit Monday, as the drugmaker's revenues increased by double digits, while lower administration and overhead costs offset more spending on research and development.
Hasbro Inc. (HAS), the nation's second biggest toymaker, said its third-quarter profit climbed 62 percent on higher sales led by its Transformers and Marvel brands and a favorable tax adjustment.
And Halliburton Co. (HAL) continues to benefit from placing greater emphasis on its operations in the Eastern Hemisphere, where expanding business helped the company post a 19 percent rise in third-quarter earnings.
Scheduled Earnings Reports (Tuesday)
Lockheed Martin, BP Plc, Amazon.com, Juniper Networks, New York Tines, 1-800-Flowers, BankUnited, JetBlue Airways, Level 3 Communications, Raymond James Financial, UAL Corp
Stocks in the News
Vonage Holdings (VG) disclosed that it is being sued by AT&T for alleged patent infringement.
Wal-Mart (WMT) said it was pulling animal toy sets from its shelves after discovering that they contained excessive levels of lead.
MoneyGram International (MGI) traded lower after Fitch Ratings downgraded its long-term issuer default rating and senior unsecured revolving-credit line.
Friday, October 19, 2007
The PremiereTrade Market Wrap for 10/19/07
Workers at Chrysler LLC's pickup truck plant in suburban St. Louis rejected a tentative four-year labor contract between the United Auto Workers and the automaker. Union officials said workers were bothered by the contract's creation of "core" and "non-core" workers at the Fenton plant, with newly hired non-core workers being paid a lower hourly wage.
Northern Rock PLC said it was replacing its chairman, after two months of troubles during which the mortgage lender took emergency funding from the Bank of England and saw the first run on a British bank in nearly a century.
Defrauded investors in Fannie Mae (FNM) are getting a $356 million payout from securities regulators stemming from the mortgage-finance giant's settlement with the government.
Government-controlled investment funds from China, Saudi Arabia and other countries will face pressure this week from finance ministers of the world's richest countries concerned about their lack of transparency and potential to gain stakes in companies linked to national security.
In Forex News Today
The dollar hit a new all time-low against the 13-nation euro, breaking through the previous record, set a day earlier, as the U.S. currency remained under pressure. The further dip in the dollar followed another weak economic report from Washington.
Currency trading markets are likely to see extensive volatility in the week ahead, as Forex speculators are largely unsure of what to expect from this weekend?s G7 summit in Washington DC. The event has historically forced extensive moves in the Japanese Yen and other major currencies, and this particular meeting should be no exception.
Many believe that recent official commentary on exchange rates will not be enough to influence all the G7 Financial Ministers and create a distinguishable shift in the accompanying summit text. Proponents of such arguments claim that pressure from European politicians will be unable to convince US and Japanese officials that such rhetoric shifts are in their best interests.
Extended weakness in the Japanese Yen and the US dollar may produce a fairly significant shift in text regarding currency policies among the G-7 Ministers. The trade-weighted US Dollar index now remains at its lowest levels in nearly three decades, depreciating nearly five percent since the April G7 summit.
Scheduled Economic Reports (Next Week)
Existing Home Sales (Sep), Durable Goods (Sep), New Home Sales (Sep), Consumer Sentiment (Oct)
In Earnings News
Wachovia Corp. (WB), said net income fell to $1.69 billion, or 89 cents per share, in the July-September period compared with $1.88 billion or $1.17 per share in the year-ago period.
Google Inc. (GOOG) said net income for the third quarter ended Sept. 30 rose to $1.07 billion, or $3.38 a share, compared to $733.4 million, or $2.36 a share in the same quarter last year.
McDonald's Corp.'s (MCD) third-quarter earnings climbed 27% to $1.07 billion, or 89 cents a share.
Caterpillar (CAT) said net income for the three months ended Sept. 30 increased to $927 million, or $1.40 a share, from $769 million.
Scheduled Earnings Reports (Next Week)
Apple, Merck, Royal Caribbean, BP plc, American Express, Netflix, 1-800-Flowers, Amazon, UAL Corp, Anheuser Busch, Motorola, Boeing, Microsoft
Stocks in the News
Cytec Industries (CYT) reported third-quarter net income of $52.4 million, or $1.06 a share.
Intuitive Surgical (ISRG) reported third-quarter net income of $40.9 million, or $1.04 a share, compared with $17.3 million, or 45 cents a share, in the year-earlier period.
Steve Madden Ltd (SHOO) said that unnamed third parties have expressed interest in buying the company.
Thursday, October 18, 2007
The PremiereTrade Market Wrap for 10/18/07
The number of newly laid off workers filing claims for unemployment benefits shot up by the largest amount since early February. The Labor Department reported that applications for jobless benefits hit 337,000 last week, an increase of 28,000 from the previous week.
The Conference Board said slow growth could continue into the early months of 2008, reporting that a gauge of future economic growth rose 0.3% in September. Seven of the 10 leading economic indicators increased in September, with the largest positive contribution from slow vendor performance.
Wal-Mart Stores Inc. (WMT), the world's largest retailer, said it will reduce prices this week on 15,000 items ahead of the holiday season, increasing cuts by 20 percent compared with last year. Wal-Mart previously made similar price cuts on back-to-school items in July and on toys earlier this month.
Walt Disney Co. (DIS) announced that it is planning a major overhaul of its troubled California Adventure park near its cornerstone Disneyland Park in Anaheim, Calif., and indicated the entire facility may be renamed. According to news reports, the overhaul would cost $1.1 billion and take five years to complete.
Apple Inc. (AAPL) Chief Executive Steve Jobs said that the company will soon make it possible for third-party developers to build their own applications for use on the iPhone. Jobs said that Apple would make a software development kit available sometime in February for developers to write programs for the iPhone and the iPod touch digital media player.
In Earnings News
Bank of America (BAC) said net income fell 32 percent to $3.70 billion, or 82 cents a share. That fell short of estimates of $1.06 a share.
Washington Mutual (WM) reported net income fell 72 percent to $210 million, or 23 cents a share, from $748 million, or 77 cents a share, a year earlier.
Pfizer Inc. (PFE) said third-quarter profit fell 77 percent on costs for discontinuing the diabetes treatment Exubera.
Southwest Airlines Co. (LUV) said net income for the quarter rose to $162 million, or 22 cents per share. Analysts expected 21 cents.
Continental Airlines (CAL) reported a net profit of $241 million, or $2.15 per share.
Nokia (NOK) reported a near-doubling of its third-quarter earnings and a larger share of the global handset market.
Scheduled Economic Reports (Friday)
None Scheduled
Scheduled Earnings Reports (Friday)
Xerox, McDonalds, Burlington Coat Factory, 3M, Alltel, Overstock.com, Caterpillar, Fifth Third Bank, Boston Scientific
Stocks in the News
EBay Inc (EBAY) reported it swung to a loss in the third quarter due to a charge related to its acquisition of Skype in 2005.
Labor Ready Inc?s (LRW) third-quarter net income fell 8.5% to $22.7 million, or 51 cents a share, from $24.8 million, or 48 cents a share, a year earlier.
Packaging Corp pf America (PKG) said its third-quarter net income rose to $48.7 million, or 46 cents a share, compared with $43.6 million, or 42 cents a share, a year ago.
Wednesday, October 17, 2007
The PremiereTrade Market Wrap for 10/17/07
U.S. economic activity has slowed over the six weeks, according to the latest Beige Book report on current economic conditions released by the Federal Reserve. Anecdotal reports from the 12 Fed districts "suggest economic activity continued to expand in all districts in September and early October but the pace of growth decelerated since August."
Prices paid by U.S. consumers rose more than forecast in September as food and energy costs climbed, while core measures showed inflation remains contained. The 0.3 percent increase followed a 0.1 percent decline in August prompted by falling oil prices. The core CPI rose 0.2 percent for a second month, in line with forecasts.
U.S. home builders continued to cut back construction in September, starting construction on the fewest number of new homes in more than 14 years. Housing starts fell 10.2% to a seasonally adjusted annual rate of 1.19 million, the lowest since 1.32 million in March 1993.
The International Monetary Fund lowered its projection for the global expansion next year to 4.8 percent in its semiannual World Economic Outlook, from an estimate of 5.2 percent in July. A weaker outlook for the U.S. was mostly to blame, as the fund reduced its forecast to 1.9 percent, from 2.8 percent.
The government announced that starting in January; Social Security benefits for nearly 50 million Americans are going up 2.3 percent, the smallest increase in four years. It will mean an extra $24 per month in the average check.
In Earnings News
Altria Group Inc. (MO), the world's largest tobacco company, said profit exceeded analysts' estimates on higher cigarette prices and top-selling Marlboro's growing share of smokers. It raised its full-year forecast. Third-quarter profit adjusted for Altria's spinoff of Kraft Foods Inc. increased 19 percent to $2.63 billion, or $1.24 a share.
Coca-Cola Co. (KO), said income increased 13 percent to $1.65 billion, or 71 cents a share. Sales jumped 19 percent to $7.69 billion.
JPMorgan Chase & Co. (JPM) reported income increased to $3.4 billion, or 97 cents a share, in the third.
United Technologies Corp.'s (UTX) said earnings rose to $1.2 billion, or $1.21 a share, up from $996 million, or 99 cents, earned in the year-ago period.
Gannett Co. (GCI), reported earnings fell 11 percent, as revenue slipped from a year-ago period boosted by spending on political advertising. Analysts expected profit of $1 per share.
Intel Corp.'s (INTC) soaring sales of microprocessors helped the company overcome flat prices for those chips and reap a 43 percent boost in profits in the third quarter.
Scheduled Economic Reports (Thursday)
Initial Jobless Claims (Week of October 13), Leading Indicators (Sep), Philly Fed Index (Oct)
Scheduled Earnings Reports (Thursday)
Bank of America, Dow Jones, Pfizer, Advanced Micro Devices, Hershey, Capital One, Eli Lilly, Southwest Airlines
Stocks in the News
CSX Corp (CSX) posted a third-quarter profit of $407 million, or 91 cents a share.
IBM (IBM) reported a third-quarter profit from continuing operations of $2.36 billion, or $1.68 a share, on $24.12 billion in revenue.
Apple Inc (AAPL) said that it cut the price of its iTunes Plus tracks to 99 cents each and expanded the iTunes Plus catalog to more than 2 million songs. iTunes Plus music is of higher digital quality and is DRM-free with no personal use restrictions users are accustomed to with the traditional iTunes catalog.
Tuesday, October 16, 2007
The PremiereTrade Market Wrap for 10/16/07
The Federal Reserve said that industrial output edged up 0.1 percent in September following no change at all in August. With the tiny increase in output in September, the nation's factories, mines and utilities operated at 82.1 percent of capacity, unchanged from August.
The International Council of Shopping Centers-UBS Retail Chain Store Sales Index was up 1.0% in the most current reporting week from its level the week before on a seasonally adjusted, comparable-store basis. Last week, the report was unchanged. On the year, chain store sales were up 2.5% in the week ended Oct. 13th.
Boston Scientific (BSC) is preparing to cut thousands of jobs to counter falling sales. Analysts predict it will cut between 2,000 to 3,400 jobs, or about 7 to 12 percent of its work force of 28,000.
Apple Inc. (AAPL) announced its next-generation operating system, Mac OS X "Leopard," will go on sale Oct. 26 for $129. Apple's online store is taking pre-orders.
Movie Gallery filed for bankruptcy, succumbing to a mountain of debt incurred when it bought rival Hollywood Entertainment for $1 billion in 2005.
In Earnings News
Johnson & Johnson's (JNJ) net earnings dropped 7.7 percent to $2.5 billion from the year-earlier quarter, and diluted earnings per share fell 6.4 percent to 88 cents.
Delta Air Lines Inc. (DAL) said it earned $220 million, or 56 cents a share. Analysts expected 42 cents.
Wells Fargo & Co. (WFC) said net income rose to $2.28 billion, or 68 cents per share. Analysts forecast earnings of 70 cents.
Genentech Inc. (DNA) reported that net profit was $685 million, or 64 cents per share.
Domino's Pizza Inc. (DPZ) reported income fell to $11 million, or 17 cents per share, from $24.5 million, or 39 cents per share in the prior-year quarter.
D.R. Horton (DHI), one of the nation's largest homebuilders, said fiscal fourth-quarter orders fell 39 percent as the housing slump worsened in September following a weak summer. Horton's cancellation rate hit 48 percent.
Scheduled Economic Reports (Wednesday)
Consumer Price Index (Sep), Housing Starts (Sep), Beige Book
Scheduled Earnings Reports (Wednesday)
Altria, Coca Cola, EBay, Abbott Labs, Gannett, E Trade Financial, Allstate, Manpower Inc, Piper Jaffray, and Washington Mutual
Stocks in the News
Steve Madden Ltd (SHOO) expects third-quarter sales to fall 8.3% to $113 million amid a 15% decline in same-store sales.
State Street Corp (STT) reported third-quarter earnings rose 29% on 48% higher revenue, and it said it expects to exceed its targets for earnings.
Adtran Inc's (ADTN) third-quarter net income fell 11% to $21.5 million, or 31 cents a share, from $24.2 million, or 33 cents a share, a year earlier.
Monday, October 15, 2007
The PremiereTrade Market Wrap for 10/15/07
Growth in the New York manufacturing sector was widespread in October, a "substantial" improvement from September. The Empire state index rose to 28.8 vs. 14.7 in September. Manufacturers expect business conditions to remain favorable; the future index increased to 50.6.
The G7 finance ministers will meet behind closed doors on Friday. After that, officials will remain in Washington for the weekend annual meetings of the International Monetary Fund and World Bank.
Citigroup (C), Bank of America, (BAC), and JP Morgan Chase (JPM) and several other financial institutions confirmed plans to create a single master liquidity enhancement conduit to purchase qualifying highly-rated assets from existing structured investment vehicles. Investors have grown concerned recently about the size of bank-affiliated funds with huge sums invested in subprime mortgage-related securities and other assets.
In Earnings News
Citibank said its net income fell 57 percent to $2.38 billion, or 47 cents a share, in the July through September period, from $5.5 billion, or $1.10 a share, a year earlier.
Mattel Inc. (MAT) said net income for the quarter ended Sept. 30th slipped to $236.8 million, or 61 cents per share. Analysts expected profit of 70 cents per share.
Charles Schwab Corp. (SCHW) said its third quarter earnings multiplied from over the year-ago period, mainly due to its sale of U.S. Trust. Schwab reported earnings of $1.53 billion, or $1.28 per share.
W.W. Grainger Inc. (GWW) earned $109.2 million or $1.29 per share in the third quarter. Analysts expected profit of $1.26 per share on revenue of $1.64 billion.
Scheduled Economic Reports (Tuesday)
Retail Chain Index (week of Oct 13th), Industrial Production (Sep), Capacity Utilization (Sep), Home Builders Index (Oct)
Scheduled Earnings Reports (Tuesday)
Intel, Delta Air Lines, Yahoo, Crown Holdings, Johnson & Johnson, Dominoes Pizza, IBM, Seagate Technology
Stocks in the News
Bombay Company (BBAOE) was sold to a joint venture of two investment firms. The buyers plan to close the U.S. stores and maintain the Canadian stores in operation.
Biogen Idec?s (BIIB) board authorized management to evaluate whether third parties would be interested in buying the company and said it has received expressions of interest, including one from investor Carl Icahn.
Reddy Ice Holdings (FRZ) approved a proposed GSO Capital Partners LP-led takeover.
Friday, October 12, 2007
The PremiereTrade Market Wrap for 10/12/07
Prices paid by businesses at the wholesale level jumped more than expected in September on higher food and energy prices. The Producer Price Index showed a 1.1 percent increase in the month, following a 1.4 percent drop in those prices in August. The more closely watched core PPI reading, which strips out volatile food and energy prices, rose only 0.1 percent.
Retail sales saw a surprisingly better-than-expected bounce in September, although many merchants complained that unseasonably warm weather hurt demand for fall merchandise last month. The Commerce Department said that total sales last month rose 0.6 percent after rising 0.3 percent in August. Economists had forecast a rise of 0.2 percent for the month.
U.S. businesses built up their inventories in August from a very lean level. Sales at U.S. businesses fell 0.4% in August, the biggest decline since January, while inventories increased 0.1%. The report indicates that most businesses have lean inventories and are positioned well to respond to any unexpected declines in demand.
Confidence among U.S. consumers this month fell to the lowest since August 2006 as the outlook for housing worsened. The University of Michigan preliminary index of consumer sentiment fell to 82.0 from 83.4 in September.
Oracle Corp. (ORCL) confirmed it offered to buy BEA Systems Inc. (BEAS) for more than $6.66 billion earlier this week.
Alcoa Inc. (AA) has been awarded a $360 million contract by the defense contractor Lockheed Martin Corp. to supply parts for new stealth fighter jets that will replace aging military planes.
In Earnings News
General Electric Co. (GE) said that third-quarter earnings rose 14 percent. The company earned $5.54 billion, or 54 cents per share.
McDonald's Corp. (MCD) said its third quarter profit would beat Wall Street analysts' expectations. The country's No. 1 hamburger chain said it expects to earn 89 cents per share in the quarter.
Scheduled Economic Reports (Next Week)
New York Empire State Index, Industrial Production, Capacity Utilization, Consumer Price Index, Housing Starts, Building Permits, Fed Beige Book, Leading Indicators, Philadelphia Fed Survey
Scheduled Earnings Reports (Next Week)
Citigroup, Mattel, Dominoes Pizza, Delta Air Lines, IBM, Intel, Yahoo, Johnson & Johnson, AMR Corp, Coca Cola, Gannett, Washington Mutual, Bank of America, Continental Airlines, Google, Nokia, Southwest Airlines
Stocks in the News
Black Hills Corp's (BKH) board approved a review of the company's strategic options, including potential divestiture of certain independent power production plants throughout the western U.S.
Avon Products (AVP) authorized a $2 billion stock buyback over a five-year period after it completes its current buyback.
Electronic Arts (ERTS) said it agreed to acquire VG Holding Corp., the owner of video game companies BioWare Corp. and Pandemic Studios., for $620 million in cash.
Thursday, October 11, 2007
The PremiereTrade Market Wrap for 10/11/07
Initial jobless claims dropped by 12,000 to 308,000 in the week that ended Oct. 6th, from a revised 320,000 a week earlier; the four-week moving average, a less volatile measure, decreased by 3,000 from the previous week.
The U.S. trade deficit declined to $57.6 billion in August, down 2.4 percent from the July imbalance. It was lowest gap between exports and imports since January.
Warm weather and an uncertain economy kept consumers out of malls and stores in September, leaving many of the nation's big retailers with disappointing sales for the month and forcing several to cut their earnings forecasts.
The number of foreclosures across the country dropped in September, falling 8 percent from a 32-month high in August. Delinquencies and defaults fell as well.
Countrywide Financial Corp. (CFC), the nation's largest mortgage lender, said its mortgage fundings for the month of September fell 44 percent from the same period a year ago.
The Bank of Japan kept its benchmark interest rate steady after a two-day policy meeting ended amid concerns U.S. credit worries may hurt economic growth in Japan. The central bank's policy board voted to keep a key interest rate unchanged at 0.5 percent. The decision was in line with expectations.
In Earnings News
Wal-Mart (WMT) reported a moderate increase in September sales at its stores open at least a year, but also raised its earnings guidance for its third quarter. .
PepsiCo Inc. (PEP) said its third-quarter profit rose 17 percent on double-digit growth in international sales.
Safeway Inc. (SWY) said its third-quarter profit jumped 12 percent due to cost reductions and strong performance from its newly remodeled stores. The results matched Wall Street analysts' expectations.
Winnebago Industries Inc.'s (WGO) fourth-quarter earnings surged 59 percent, a reflection of increased sales of its larger and higher-profit motor homes.
Scheduled Economic Reports (Friday)
Retail Sales (Sep), Producer Price Index (Sep), Business Inventories (Aug), Consumer Sentiment
Scheduled Earnings Reports (Friday)
General Electric, Pinnacle Financial, United Securities Bancshares
Stocks in the News
Costco Wholesale (COST) reported that fiscal fourth-quarter net income rose 4.7% on 5% higher same-store sales and 3% higher total sales.
Vonage Holdings Corp (VG) said it filed a motion for a court panel to review the decision in its patent litigation with Verizon.
Compellent Technologies (CML) shares rocketed up 79.2% on its IPO day.
Wednesday, October 10, 2007
The PremiereTrade Market Wrap for 10/10/07
The Dow dropped lost ground today, one session after ending at an all-time high, as investors considered Dow component Alcoa's earnings miss as well as a big setback for Boeing.
Former Fed chairman Alan Greenspan said that while U.S. economic data look good in the third quarter, the growth rate will continue to slow and the housing market will weaken further.
Meantime, Federal Reserve policy makers signaled they are in no hurry to reduce interest rates again because they aren't convinced the U.S. economic expansion is coming to an end. Officials didn't want investors to conclude extra cuts were guaranteed.
Inventories at U.S. wholesalers remained at the leanest levels ever in relation to sales in August. Wholesale sales increased 0.4% in August, while inventories rose 0.1%.
According to the National Association of Realtors, the decline in 2007 sales of existing homes will be steeper than previously anticipated. The eighth straight downwardly revised forecast calls for U.S. existing home sales to be 10.8 percent lower than last year as housing market struggles persist.
According to the Mortgage Bankers Association's weekly application survey shows mortgage application volume increased 2.4 percent during the week ending Oct. 5th.
MGM Mirage (MGM) said its board approved the development of a major resort casino project at Renaissance Pointe in Atlantic City, N.J.
In Earnings News
Alcoa Inc. (AA) said its third-quarter profit edged up more than 3 percent, helped by the sale of its stake in China's largest aluminum maker. But the results fell short of Wall Street expectations.
Chevron Corp. (CVX) shares came under pressure after the oil giant warned investors to expect third-quarter net earnings "significantly below" the record $5.4 billion it posted in the previous quarter.
Meanwhile, Valero Energy Inc. (VLO) joined other big oil refiners issuing profit warnings, becoming the latest victim of higher crude prices squeezing margins.
Costco Wholesale Corp. (COST) said its fiscal fourth-quarter profit climbed 5 percent on increased membership fee revenue and higher same-store warehouse sales.
Monsanto Co. (MON) posted a fiscal fourth-quarter loss, weighed down by charges related to its acquisition of cotton company Delta and Pine Land Co.
Shaw Group Inc. (SGR) reported a profit in its third quarter on strong demand for power generation capacity and petrochemicals processing.
Scheduled Economic Reports (Thursday)
Initial Jobless Claims (Week of October 6th), Import/Export Prices (Sep), Trade Gap (Aug)
Scheduled Earnings Reports (Thursday)
Meade Instruments, Safeway, Samsung Electronics, Winnebago Industries, Bank of the Ozarks, Pepsico
Stocks in the News
International Paper Co. (IP) warned that disappointing land sales will push third-quarter profit below Wall Street's target.
iRobot Corp (IRBT) said its third-quarter financial results will be weakened by initial production delays on its vacuum-cleaning robot product.
99 Cents Only Stores (NDN) expects to report a fiscal second-quarter net loss because of short-term operating-margin and execution issues.
The PremiereTrade Market Wrap for 10/09/07
The International Council of Shopping Centers-UBS Retail Chain Store Sales Index was unchanged in the week ended Oct. 6 from its level in the week before on a seasonally adjusted, comparable-store basis. Last week, the report was also unchanged. On the year, chain store sales were up 2.1% in the week ended Oct. 6, compared with a rise of 2.7% the prior week.
Brewers Molson Coors Brewing Co. (TAP) and SABMiller PLC plan to combine their U.S. operations in a joint venture, which the makers of Miller Lite and Coors Light said should help them compete more effectively. The new MillerCoors will compete with U.S. industry leader Anheuser-Busch Cos., maker of Budweiser, Michelob and Bud Light.
AT&T Inc. (T) said it agreed to buy spectrum licenses from Aloha Partners LP for about $2.5 billion, expanding the telecommunication provider's ability to deliver wireless voice, data and video services.
Xerox Corp. (XRX) announced that it received an approximately $93 million contract from the Navy to support its multipurpose copier program.
Google Inc. (GOOG) shares may surge 17 percent to $714, according to Lehman Brothers Holdings Inc., which said the operator of the world's most popular Internet search engine may introduce a mobile phone as early as February. Google's phone may be ``simple,'' ``low-priced'' and designed to run software over the Internet.
The biggest quarterly rally for U.S. government securities in five years is getting an extraordinary boost from the burgeoning reinvestment of petrodollars by the Organization of Petroleum Exporting Countries. OPEC members increased their holdings of Treasuries 12 percent this year through July to $123.8 billion.
In Earnings News
Children's Place Retail Stores Inc. (PLCE) sharply slashed its profit forecast for the second half, making the reduction after lower sales forced the retailer to implement price cuts.
Johnson Controls Inc. (JCI) expects to beat Wall Street's revenue target and hit its profit objective next year as management eyes generating overseas sales growth and making market-share gains.
Yum Brands Inc. (YUM) posted a 17% gain in third-quarter profit, helped by strong overseas growth particularly in China, and raised its full-year forecast. Yum Brands reported net income of $270 million, or 50 cents a share. Analysts expected 45 cents a share.
Scheduled Economic Reports (Wednesday)
Wholesale Inventories (Aug), Energy Department Oil Inventories (Week of October 5th)
Scheduled Earnings Reports (Wednesday)
Costco Wholesale, Host Marriott, Monsanto, Infosys Technologies, Ruby Tuesday, Mercantile Bank Corp.
Stocks in the News
Taser International Inc (TASR) said a U.S. District Court granted its motion for summary judgment, dismissing a product liability suit involving the February 2006 death of a cook who worked in a New Orleans restaurant.
Coca-Cola Co. (KO) was downgraded by Deutsche Bank to hold from buy, citing valuation.
Sony Corp (SNE) said it would cut the prices of its next-generation PlayStation 3 game consoles in Japan, as well as offer a new low-range model.
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