Archive for October, 2006|Monthly archive page

It's Just That Simple

Traders,

In my head, the time didn’t make a ripple
It’s just that simple
— Wilco, “It’s Just That Simple”

Our current position:

BUYERS’ EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

The following sections are on our home site:

Where We Are:

Taking a look at the broader market:

Our analysis has been like a broken record since the market broke out in September – but it’s no reason to get creative.

As complicated as the market is, we find it’s simplicity that keeps us sane.

The Dow has rallied for five straight weeks. Friday’s distribution day is the second in as many weeks, an possibly the first step to a correction that will happen sooner or later.

On the news front, over 70% of companies are reporting above Wall Street forecasts, with aggregate operating earnings gain up 18% to 19%. This is well above expectations.

Perhaps of most interest is the record short interest on the NYSE. We’re not so sure what to think of this other than the fact that the market has a tendency of finding a way to burn the most amount of people.

Gauging the volume and ferocity of a pullback will be critical in diagnosing the health of this bull leg.

Looking at key sector action:

The Technology sector was cool for the second week in a row as it shied from year-highs. Semiconductors represent primary weakness here, as Software and Telecoms represent the strength.

Broker-Dealers, Defense and Biotechnology are cocked in bullish cup-and-handle patterns.

Airlines are poised to launch out of a lower-base.

Energy moves of its low of the year.

REITs, Retail, Healthcare and Utilities continue to hit new highs.

Technically speaking:

The Dow Industrial Average
($INDU), 0.7 %, refuses to alter its up trajectory since breaking out five weeks ago.

The S&P 500
($SPX), 0.6 %, remains trend-up with the Dow.

Nasdaq
($COMPQ), 0.4 %, came close to yearly highs before inching off.

Russell 2000
($RUT), 0.5 %, possesses lower relative strength to its index peer as it has yet to hit a year high in this bull leg.

Volume indications the last two weeks the Dow notched in three distribution days to two accumulation days, though across the major indexes, buying has weighed in heavier than sellers.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The top 10 industry groups from the 6 month RS screen are:

  1. TOYS GAMES
  2. REIT HEALTHCARE FACILI
  3. PACKAGING CONTAINERS
  4. LONG-TERM CARE FACILIT
  5. HOSPITALS
  6. DISCOUNT VARIETY STORE
  7. CATV SYSTEMS
  8. REIT – DIVERSIFIED
  9. HEALTH CARE PLANS
  10. REIT – RESIDENTIAL

What Was Important About Last Week

STOCKS:

  • Amazon.com (AMZN) reported Q3 (Sep) earnings of $0.05 per share, $0.02 better than the Reuters Estimates consensus of $0.03. Revenues rose 24.0% year/year to $2.31 bln vs. the $2.25 bln consensus.
  • Symantec(SYMC) reported Q2 (Sep) earnings of $0.26 per share, $0.01 worse than the First Call consensus of $0.27. Revenues rose 7.0% year/year to $1.28 bln vs. the $1.29 bln consensus.
  • Microchip Technology (MCHP) reported Q2 (Sep) earnings of $0.36 per share, in line with the Reuters Estimates consensus of $0.36. Revenues rose 17.9% year/year to $267.9 mln vs. the $269.7 mln consensus.
  • Logic (LSI) reported Q3 (Sep) earnings of $0.16 per share, $0.07 better than the Reuters Estimates consensus of $0.09. Total revenues rose 2.3% year/year to $493 mln vs. the $489.4 mln consensus.
  • Analog Devices (ADI) guided Q4 revenues to the range of $640-$645 mln (consensus $667 mln), which is approximately 3% below 3Q06 revenue of $663.7 mln.
  • Centex (CTX) reported Q2 (Sep) earnings of $0.70 per share, $0.01 worse than the Reuters Estimates consensus of $0.71. Revenues fell 3.0% year/year to $3.32 bln vs. the $3.33 bln consensus.
  • Texas Instruments (TXN) reported Q3 (Sep) earnings of $0.45 per share, in line with the Reuters Estimates consensus of $0.45. Revenues rose 1.7% year/year to $3.76 bln vs. the $3.8 bln consensus.
  • Amgen (AMGN) reported Q3 (Sep) earnings of $1.04 per share, $0.06 better than the Reuters Estimates consensus of $0.98. Revenues rose 14.5% year/year to $3.61 bln (consensus $3.62 bln).
  • Kraft Foods (KFT) reported Q3 (Sep) earnings of $0.46 per share, a penny better than the Reuters Estimates consensus of $0.45. Revenues rose 2.3% year/year to $8.24 bln vs. the $8.26 bln consensus.

ECONOMY:

  • Real GDP increased 1.6% in Q3, following a 2.6% annualized growth rate in Q2. The GDP chain-weighted price index increased an annualized 1.8% in Q3. Nominal GDP (or aggregate demand) rose an annualized 3.4% in Q3. This is the slowest real and nominal GDP growth since Q4 2002. In the past year, real GDP is up 2.9% and nominal GDP is up 5.8%.
  • New single-family home sales rose 5.3% in September, to 1.07 million units at an annual rate, the 2nd consecutive monthly increase, and a sign that the housing market is stabilizing.
  • The median price of a new home fell to a non-seasonally adjusted $217,000 in September – 9.7% lower than a year ago. This is the largest YOY decline in median sales price since 1970. At the current sales pace, the supply of unsold new homes fell to 6.4 months in September versus 6.8 months in August. From 1970-2000 the inventory of new homes for sale averaged 6.4 months.
  • New orders for durable goods up 7.8% in September, completely reversing negative growth in July and August. New orders are up 14.1% in the past year.
  • Transportation orders rose 27.6% in September, thanks to a 183.2% increase in non-defense aircraft orders. Excluding transportation, new orders rose 0.1% in September. New orders excluding transportation are up 6.2% in the past year.
  • Shipments of durable goods were down 2.8% in September but YOY growth was up 4.2%. Shipments of non-defense capital goods, ex aircraft (a proxy for business CAPEX) fell 2.1% in September, but were up 5.6% at an annualized rate in Q3.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Anglogold Ashanti Limited (AU), BlackRock, Inc. (BLK), Verizon (VZ).
  • TUESDAY: DreamWorks Animation SKG, Inc. (DWA), Eagle Materials Inc. (EXP), Eastman Kodak Company (EK), InterActiveCorp (IACI), Jones Lang LaSalle (JLL), Marathon Oil Corporation (MRO), UBS (UBS), Valero Energy Corp. (VLO)
  • WEDNESDAY: Baidu (BIDU), Burger King (BK), Garmin Ltd. (GRMN), Time Warner Inc. (TWX)
  • THURSDAY: Blockbuster Inc. (BBI), Computer Sciences Corporation (CSC), Electronic Arts (ERTS), MGM MIRAGE (MGM), Public Storage (PSA), Whole Foods Market (WFMI).
  • FRIDAY: THQ Inc (THQI).

On the economic front we have potential market movers with:

  • MONDAY: Personal Income, Personal Spending
  • TUESDAY: Employment Cost Index, Chicago PMI, Consumer Confidence
  • WEDNESDAY: Auto Sales, Truck Sales, Construction Spending, ISM Index, Crude Inventories
  • THURSDAY: Initial Claims, Productivity-Prel, Factory Orders
  • FRIDAY: Nonfarm Payrolls, Unemployment Rate, Hourly Earnings, Average Workweek, ISM Services

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“Practice yourself, for heaven’s sake in little things, and then proceed to greater.” – Epictetus

Semi-True

Traders,

It’s a semi-true story
Believe it or not
I made up a few things
And there’s some I forgot.
— Jimmy Buffett, “Semi-True Stories”

Our current position:

BUYERS’ EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

The following sections are on our home site:

Where We Are:

Taking a look at the broader market:

With earnings season up and running, few warnings and mostly upside surprises aid the Bull’s progress.

Almost everything about this market suggests the Bull’s potential is intact, but participation from key sectors is drawing some concern.

Semiconductors turned down sharply from its 200-day moving average as the index struggles to reverse a bear trend. Without participation from the semis to the upside, this market will never be strong.

Disk Drives end a three-month uptrend goes out of whack after attacked with heavy selling.

Bulls need to see the semis and drives catch up with its parent Technology sector, which has regained ground near new highs on the year.

Banking has also lost its upward pace and threatens to decline into ominous ‘failed breakout’ territory.

Meanwhile, firm leadership remains in Big Caps, Telecom and REITs.

New highs were also made in Healthcare and Pharmaceuticals. Utilities is the newest sector to join the breakout club.

Poised for new highs, Broker/Dealers, Internet and Hardware are cup-and-handled. Biotech is almost there, as are Airlines which are poised to breakout of a lower base.

Energy stocks hold a neutral technical picture as the makings of what will one day be considered a bearish rounding top, or bullish consolidation, work itself out. Oil Services threaten to lead the pack down.

Technically speaking:

The Dow Industrial Average
($INDU), 0.5 %, clawed it way into new high territory for its third consecutive week of gains.

The S&P 500
($SPX), 0.4 %, ticked to new highs, though mostly consolidate for the week.

Nasdaq
($COMPQ), -0.2 %, inched closer to the year’s high.

Russell 2000
($RUT), 0.7 %, remains a lager, with some work to put into regaining the year’s high.

Volume indications remain bullish, though heavy volume on the Dow Friday is indicative of a reversal.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The top 10 industry groups from the 6 month RS screen are:

  1. REIT HEALTHCARE FACILI
  2. DRUG RELATED PRODUCTS
  3. PACKAGING CONTAINERS
  4. LONG-TERM CARE FACILIT
  5. DISCOUNT VARIETY STORE
  6. DEPARTMENT STORES
  7. HOSPITALS
  8. PERSONAL SERVICES
  9. REIT – RESIDENTIAL
  10. TELECOM SERVICES DOMES

What Was Important About Last Week

STOCKS:

  • Google (GOOG) reported Q3 (Sep) earnings of $2.62 per share, excluding non-recurring items, $0.21 better than the Reuters Estimates consensus of $2.41. Revenues including Traffic Acquisition Costs rose 70.4% year/year to $2.69 bln vs the $2.62 bln consensus.
  • Motorola (MOT) reported Q3 (Sep) earnings of $0.32 per share, which excludes $0.05 in charges and a $0.02 gain but includes $0.02 in stock based comp expense, $0.01 worse than the Reuters Estimates consensus of $0.33. Co. reported EPS excluding charges, gains and comp expense of $0.34, in line with $0.34 First Call consensus. Revenues rose 17.2% year/year to $10.6 bln vs the $11.06 bln consensus.
  • Intel Corp. (INTC) reported Q3 (Sep) earnings of $0.21 per share, excluding 1.5 cent gain, $0.04 better than the Reuters Estimates consensus of $0.17. Revenues fell 12.3% year/year to $8.74 bln vs the $8.61 bln consensus.
  • IBM (IBM) reported Q3 (Sep) earnings of $1.45 per share, excluding non-recurring items, $0.10 better than the Reuters Estimates consensus of $1.35. Revenues rose 5.1% year/year to $22.62 bln vs the $22.06 bln consensus.
  • Yahoo! (YHOO) reported Q3 (Sep) earnings of $0.11 per share, in-line with the Reuters Estimates consensus of $0.11. Revenues excluding traffic acquisition costs rose 20.3% year/year to $1.12 bln vs the $1.14 bln consensus.
  • Xilinx(XLNX) reported Q2 (Sep) earnings of $0.27 per share, $0.04 better than the Reuters Estimates consensus of $0.23. Revenues rose 17.1% year/year to $467.2 mln vs the $455.9 mln consensus.
  • eBay (EBAY) reported Q3 (Sep) earnings of $0.26 per share, excluding option exp, $0.02 better than the Reuters Estimates consensus of $0.24. revenues rose 31.0% year/year to $1.45 bln vs the $1.43 bln consensus.
  • Apple Computer (AAPL) reported Q4 (Sep) earnings of $0.62 per share, $0.11 better than the Reuters Estimates consensus of $0.51. Revenues rose 31.6% year/year to $4.84 bln vs the $4.67 bln consensus.
  • Advanced Micro Devices(AMD) reported Q3 (Sep) earnings of $0.27 per share, $0.04 better than the Reuters Estimates consensus of $0.23. Revenues rose 31.5% year/year to $1.33 bln vs the $1.31 bln consensus.
  • Ryland Group(RYL) reported Q3 (Sep) earnings of $1.85 per share, excluding a $0.12 tax benefit, $0.08 better than the Reuters Estimates consensus of $1.77. Revenues fell 9.9% year/year to $1.13 bln vs the $1.11 bln consensus.

ECONOMY:

  • Housing starts rose 5.9% in September to 1.772 million units at an annual rate. This was significantly above consensus estimates of 1.640M. Single family starts rose 4.3% while multi-unit starts jumped 12.7%.
  • New building permits declined 6.3% in September to an annualized 1.619 million units – the lowest level in over four years.
  • Housing completions rose 11.2% to 2.084 million units in September – the fastest one-month change since 1999.
  • The Consumer Price Index (CPI) declined 0.5% in September after a 0.2% increase in August. The CPI has increased 2.1% in the past year.
  • Energy prices plummeted 7.2% in September following a 0.3% gain in August. Food and beverage prices increased 0.4% last month. Excluding food and energy, the “core” CPI was up 0.2% in September. The “core” CPI is up an annualized 2.7% in the past three months and 2.9% in the past year – the fastest YOY gain since January 1996.
  • Industrial production decreased by a more than-expected 0.6% in September after showing no growth in August (upwardly revised from the original 0.1% decline in August). Over the past three months industrial production has declined an annualized 1.1%, yet it remains 5.5% higher than one year ago.
  • Manufacturing production decreased 0.3% in September, but after excluding motor vehicles dropped only 0.1%. In the past year, manufacturing production is up 6.0% and 7.3% when motor vehicle output is removed. Mining output rose 0.7% and utility output decreased 4.4%.
  • Capacity utilization fell to 81.9% in September, after reaching a six-year the high of 82.5%.
  • The Producer Price index for finished goods (PPI) fell a more-than-expected 1.3% in September after a 0.1% gain in August. Finished goods prices are up 0.9% in the past year – the lowest YOY gain since 2002. Excluding food and energy, the “core” PPI rose 0.6% last month and the YOY gain accelerated to 1.2%.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: AT&T (T), Ford Motor Company (F), Halliburton Company (HAL), Kraft Foods (K), Texas Instruments (TXN), Xerox Corporation (XRX)
  • TUESDAY: Ameriprise Financial, Inc. (AMZN), Ameritrade Holding Corp. (AMTD), BellSouth Corporation (BLS), Buffalo Wild Wings, Inc. (BWLD), Glamis Gold Ltd (GLG), Phelps Dodge (PD), XTO Energy Inc. (XTO).
  • WEDNESDAY: Applebee’s International (APPB), ImClone Systems Incorporated (IMCL), P.F. Chang’s China Bistro, Inc. (PFCB), The Boeing Company (BA)
  • THURSDAY: Boyd Gaming (BYD), ExxonMobil Corporation (XOM), Starwood Hotels & Resorts (HOT), TheStreet.com (TSCM), Wendy’s International (WEN),
  • FRIDAY: Chevron (CVX).

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: none
  • WEDNESDAY: Existing Home Sales, Crude Inventories, FOMC policy statement
  • THURSDAY: Durable Orders, Initial Claims, Help-Wanted Index, New Home Sales
  • FRIDAY: Chain Deflator-Adv., GDP-Adv., Mich Sentiment-Rev.

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“What it lies in our power to do, it lies in our power not to do.” – Aristotle

Strange isn't fashionable

Traders,

Always a stranger when strange isn’t fashionable
And fashion is rich people waving at the door
Or it’s a dealer in drugs or in passion
Lies of a nature we’ve heard before
— Paul Simon, “The Rhythm of the Saints”
Our current position:
BUYERS’ EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

The following sections are on our home site:

Where We Are:

Taking a look at the broader market:

Good earnings news, good economic news.

And still no major media hype. We prefer to be on the other side of the trade when it comes to the mass media’s take on the market.

Lack of hoopla from the press may be giving us some indication that this bull may have further to go before people start beating their chests and the last buyers get sucked in.

But in the meantime, a little Bear is lurking somewhere in this bigger Bull.

In other words, this market is due for a pull back.

Telcoms and REITs continue to be driving forces for this market. .

Consumer Staples remain dominant over Consumer Cyclicals in a show of investor defensiveness.

Banking shares consolidated for the week after breaking new highs last week.

The Dow Technology Index is at an inflection point of matching a high on the year.

Semiconductors continue to mark concern as the index trades below its major moving average. The overhead resistance of sellers looking to get out after suffering losses from the summer’s sharp decline will be a strong headwind for upward momentum.

Energy shares have rebounded, and with their negative correlation to the major averages, any serious upward momentum should be interpreted as cautionary for the sustainability a broader rally.

Technically speaking:

The Dow Industrial Average
($INDU), 0.8 %, pushed higher into all time high territory for the third week in a row.

The S&P 500
($SPX), 1.0 %, pushed higher into multi-year high territory.

Nasdaq
($COMPQ), 2.0 %, came closer to this year’s highs.

Russell 2000
($RUT), 2.3 %, came closer to year highs, though lags the broader market.

Volume indications favor the bulls.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The top 10 industry groups from the 6 month RS screen are:

  1. LONG-TERM CARE FACILIT
  2. REIT HEALTHCARE FACILI
  3. DRUG RELATED PRODUCTS
  4. DISCOUNT VARIETY STORE
  5. PACKAGING CONTAINERS
  6. REIT – RESIDENTIAL
  7. PERSONAL SERVICES
  8. MEAT PRODUCTS
  9. DEPARTMENT STORES
  10. REIT – DIVERSIFIED

What Was Important About Last Week

STOCKS:

  • Alcoa (AA) reported Q3 (Sep) earnings of $0.60 per share, excluding an $18 mln tax benefit, $0.17 worse than the Reuters Estimates consensus of $0.77. Revenues rose 19.2% year/year to $7.63 bln vs. the $7.68 bln consensus.
  • Genentech (DNA) reported Q3 (Sep) earnings of $0.55 per share, $0.08 better than the Reuters Estimates consensus of $0.47.
  • Yum! Brands (YUM) reported Q3 (Sep) earnings of $0.83 per share, $0.08 better than the Reuters Estimates consensus of $0.75. Total revenues rose 1.6% year/year to $2.28 bln vs. the $2.27 bln consensus.
  • Ruby Tuesday (RI) reported Q1 (Aug) earnings of $0.37 per share, $0.01 better than the Reuters Estimates consensus of $0.36. Revenues rose 9.9% year/year to $338.7 mln vs. the $337.9 mln consensus.

ECONOMY:

  • Import prices fell 2.1% in September after a 0.8% gain in August. Excluding a 10.3% drop in petroleum prices, import prices rose 0.1% last month. Excluding all fuels, import prices increased 0.3%.
  • Export prices unexpectedly fell 0.5% in September after a 0.4% increase in August. Non-agricultural prices also slid 0.5% last month. However, in the past year, non-agricultural export prices have risen 3.7%.
  • Retail sales unexpectedly fell 0.4% in September, versus consensus estimates of a 0.2% gain. Sales are up 5.5% from year-ago levels.
  • Despite reports from manufacturers of an increase in auto and truck sales during September, motor vehicle and parts dealers’ reported sales were unchanged in September. Excluding autos, retail sales fell 0.5% in September but are up 5.5% in the past year.
  • Gasoline service station sales plunged 9.3% in September, the largest decline on record (data goes back to 1992). Excluding autos and gas, sales rose 0.7% last month and 7.3% in the past year.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: none
  • TUESDAY: CBOT HLDGS INC (CBOT), Intel Corporation (INTC), International Business Machines (IBM), Johnson & Johnson (JNJ), Merrill Lynch (MER), Motorola Inc. (MOT), United Technologies (UTX), Wells Fargo & Company (WFC), Yahoo, Inc. (YHOO)
  • WEDNESDAY: Abbott Laboratories (ABT), Apple Computer, Inc. (AAPL), E*TRADE Financial Corp. (ET), General Dynamics (GD), J.P. Morgan Chase & Co (JPM), LaSalle Hotel Properties (LHO), Washington Mutual (WM)
  • THURSDAY: Citigroup Inc. (C ), Google (GOOG), Honeywell (HON), McDonalds Corporation (MCD), Southwest Airlines (LUV), The Coca-Cola Company (KO), The Nasdaq Stock Market, Inc. (NDAQ), The New York Times Company (NYT), TradeStation Group, Inc. (TRAD)
  • FRIDAY: 3M Company (MMM), Merck & Co., Inc. (MRK), Schlumberger (SLB)

On the economic front we have potential market movers with:

  • MONDAY: NY Empire State Index
  • TUESDAY: Core PPI, PPI, Net Foreign Purchases, Capacity Utilization, Industrial Production, Capacity Utilization
  • WEDNESDAY: Building Permits, Core CPI, CPI, Housing Starts, Building Permits, Crude Inventories
  • THURSDAY: Initial Claims, Leading Indicators, Philadelphia Fed
  • FRIDAY: none

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“The discipline of desire is the background of character.” – John Locke

Tight Grins

Traders,

Oh! stupid with your ups and downs
Your maggot brain, your grins and frowns
Super stupid you’re here today
You’ve lost the fight and the winner is fear
— Funkadelic, “Super Stupid”

Our current position:

BUYERS’ EDGE INTACT

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

The following sections are on our home site:

Where We Are:

Taking a look at the broader market:

The Bull grins, but not widely.

As the Dow hits a record high, and volume continues to support buyers, we maintain our Green Flag bias.

We also see a pullback imminent as leading indexes face the bearish divergence of advance decline ratios.

A Pullback will test our newly acquired long positions and let us know where the real strength is.

As earnings season kicks off this week we’re likely to see some shifting from institutional players.

From a technical perspective, strength in Big Caps, and in particular the Bankng Index, continue to set the pace. Any breakdown from this leadership will be a significant blow to the bear’s cause.

Leadership from the Telecom Index is also showing bearish divergence, often evident where trends end. We see this as a likely leader for a broader market pullback.

Meanwhile, the Semiconductor Index fails to rally with the broader market as it consolidates below its 200-day average. This is troublesome coming from a sector that typically provides the backbone for a strong market.

Transportation is also underperforming the market, which suggests the selling of the inversely related Energy sector may only be a near-term correction and not the start of a cyclical move.

Technically speaking:

The Dow Industrial Average
($INDU), 1.5 %, closed just off an all time high.

The S&P 500
($SPX), 1.0 %, cruised to new multi-year highs.

Nasdaq
($COMPQ), 1.8 %, continues to lag behind the Dow and S&P as it closed below a year high. The index is above its major moving averages, though the trend is questionable with the 50-day below the 200-day average.

Russell 2000
($RUT), 2.0 %, also continues to lag behind the Dow and S&P as it closed below a year high. The index is above its major moving averages, though the trend is questionable with the 50-day below the 200-day average.

Volume indications remain bullish.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The top 10 industry groups from the 6 month RS screen are:

  1. PERSONAL SERVICES
  2. DRUG RELATED PRODUCTS
  3. MEAT PRODUCTS
  4. DISCOUNT VARIETY STORE
  5. PACKAGING CONTAINERS
  6. REIT HEALTHCARE FACILI
  7. CATV SYSTEMS
  8. HOSPITALS
  9. LONG-TERM CARE FACILIT
  10. REIT – RESIDENTIAL

What Was Important About Last Week

STOCKS:

  • Starbucks Corp. (SBUX) reported Sep same store sales increase 6.0%, Briefing.com consensus +3.6%.
  • Immucor Inc. (BLUD) reported Q2 earnings of $0.18 per share, $0.01 better than the Reuters Estimates consensus of $0.17. Revenues rose 20.3% year/year to $51 mln vs the $49.1 mln consensus.
  • American Eagle (AEOS) raised Q3 EPS guidance to $0.61-0.63 vs $0.59 consensus, up from $0.56-0.58 prior guidance.
  • Valero Energy (VLO) issued downside guidance for the third quarter, seeing earnings per share of $2.25 to $2.35 versus $2.48 Reuters Estimates consensus.

ECONOMY:

  • Non-farm payrolls rose a less-than-expected 51,000 in September. Revisions added 62,000 net jobs in the previous two months.
  • The household survey showed 271,000 new jobs last month after adding 250,000 in August. The unemployment rate fell to 4.6% (unrounded 4.58%): lowest level in 5 years.
  • Average hourly earnings increased 0.2% in September after an upwardly revised 0.2% in August (originally +0.1%). Average hourly earnings are up 4.0% in the past year, well above the 25-year average of 3.3%.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: none
  • TUESDAY: ALCOA Inc (AA), Genentech, Inc. (DNA)
  • WEDNESDAY: Ruby Tuesday (RI), Yum! Brands, Inc. (YUM)
  • THURSDAY: Genzyme Corporation (GENZ), PepsiCo (PEP)
  • FRIDAY: General Electric (GE)

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: Treasury Budget, Treasury Budget — Release TBA, Wholesale Inventories, Treasury Budget
  • WEDNESDAY: Crude Inventories, FOMC Minutes
  • THURSDAY: Initial Claims, Trade Balance, Fed’s Beige Book
  • FRIDAY: Export Prices ex-ag., Import Prices ex-oil, Retail Sales, Retail Sales ex-auto, Mich Sentiment-Prel., Business Inventories

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“”Nothing is more harmful to the service, than the neglect of discipline; for that discipline, more than numbers, gives one army superiority over another.” – George Washington