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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • Big Week on Tap By: Charles Payne 0 comments
    Oct 19, 2009 9:59 AM | about stocks: HAS, ETN, AAPL, DPZ, UNG

    The futures have been edging higher all morning long in anticpation that corproate earnings will be, at the very least, okay. I will say that I can't remember entering an earnings season with so few warnings. But, for me, the big test coming into this round of earnings will be whether companies could beat on both the top and bottom lines. Last Monday, a couple of companies didn't do that and their share prices were hit (in the case of Dominos Pizza (NYSE:DPZ) the share price was fractured). We'll get a chance to see if investors are so unforgiving again today as a couple of compaies have once again missed on the top line but beat on earnings.

    • Hasbro (NASDAQ:HAS) posted earnings of $0.99 per share on $1.28 billion in revenue; the Street was looking for earnings of $0.93 per share on $1.32 billion in revenue.
    • Eaton (NYSE:ETN) earnings $1.21 per share on $3.03 billion in revenue verses consensus estimates for $0.92 per share on $3.13 billion in revenue.
    Equity futures were higher before these companies reported their results, but are still looking like an eager bull ready to bolt out of the gate and throw that rider off his back. Also eager to buck naysayers and any other non-believers is crude oil, which has surged to a new high for the year with realtively light fanfare. Just like the stock market rally, many of the aspects of this latest spike higher in crude oil can be written off as hype. However, the fact of the matter is that oil is going to move higher and the sad thing is that our policies will put America at a disadvantage with respect to gaining access to new supplies.

    This could be the coldest winter in two decades, but all our efforts and rhetoric has gone into alternative energy that isn't positioned to fuel our economy.


    By the way, speaking of crude oil, watch natural gas as it has started coming on like a gangbuster last week. This is one investment that confounded the pros all year long, but most have held their positions, and many will probably start to buy as well. They've been buying into natural gas via the ETF "UNG." At this level I like the risk/reward, but I still prefer indiviudal plays in the space including CHK and APA. The UNG above 12.50 could spark a buying stampede.

    For today, it looks as if the Street is giving Apple (NASDAQ:AAPL) the benefit of the doubt, and the rest of the market will get to ride along. Although Apple is a singular story of a company that happens to have the coolest stuff out there, a strong earnings result after the close would bode well for the entire market. I guess it does make sense that people would maybe walk out of the Apple store and then go to other stores in the mall. It makes more sense than the notion that someone would buy a car through the cash for clunkers program and not have such buyers remorse they'd drive straight to the mall from there.

    Written by Charles Payne, CEO and Principal Analyst of Wall Street Strategies (wstreet.com) providing independent stock market research to over 30,000 subscribers, in more than 60 countries. Mr. Payne is a regular contributor to the Fox Business and Fox News Networks. For more information about Mr. Payne, please refer to the company’s website www.wstreet.com.


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