More on Hewlett-Packard (HPQ) FQ2 earnings: FY2013 EPS guidance is upped to $3.50-$3.60 from $3.40-$3.60 previously. Operating margin of 8.6%, up from 7.9% in FQ1, down from 8.9% a year ago. PC sales down 20% Y/Y. Printers -1%. Enterprise hardware -10%. Services -8%. Software -3%. CC at 5 ET. Shares +12% AH. (PR) [View news story]
Yes, curious at such a positive reaction to declining sales. Whatever, this will help pump the market tomorrow. Beating estimates apparently has more importance than the reality of declining sales.
Bernanke Signaling The Fed's Power To Control The Economy Is Waning [View article]
In hindsight, the upward spiral in Dow stocks over the past two weeks may have an indicator. This morning it did appear the market had achieved a state of euphoria. This afternoon? Not so much.
Up as high as $1,413 following Bernanke's (at the time) perceived dovish testimony this morning, gold (GLD -0.9%) reverses along with stocks. Markets make opinions, and now the focus on Bernanke is he's prepping the markets for tapering. The just-released FOMC minutes push down gold even further, now at $1,357/oz. [View news story]
BB must enjoy the controversy. Perhaps he should hire an agent.
Stocks had already shed their Bernanke-testimony gains from this morning and they head even lower following the release of the FOMC minutes showing a "number" willing to begin tapering QE as soon as the next policy meeting. S&P 500 (SPY -0.4%), Nasdaq 100 (QQQ -0.6%). The dollar (UUP +0.4%) moves to a new session-high, and Treasurys (TLT -1.3%) continue to sell off. [View news story]
The impact/influence of the Fed on the equity markets is fairly apparent. Yet some argue that QE is not affecting the markets.
Are Equity Investors Pushing The Gas Pedal Too Hard? [View article]
So, market euphoria has arrived. The Fed assures us there will be QE forever with no risk to owning equities. Financial stocks that were technically overbought two weeks ago continue to spiral upward at an increasing rate. The rush is on to buy! Now we have articles (such as this one) proclaiming how attractive the values in equities. Apparently there is no top to this market.
Bernanke: Stocks continue with solid gains as the chairman suggests the Fed may never sell the massive assets it's accumulated, instead just letting them roll down. Most interesting are Treasury prices (TLT -1.1%) rolling over - the 10-year yield sunk to 1.89% as Bernanke's soft comments hit the tape, but has reversed to now threaten 2%. Gold (GLD +0.6%) has given up much of its knee-jerk gains, and the dollar (UUP +0.3%) is having none of it, higher across the board, particularly vs. the aussie (FXA -1.1%), yen (FXY -1%), and loonie (FXC -0.6%). [View news story]
The stock market will apparently never see another down day. Stocks that were technically overbought two weeks ago continue to spiral upward. Apparently there is an urgency to 'pile in' as we are promised infinity QE with no downside and no allowance for the free market to assert itself. Euphoria is here.
It is prudent to note these sales results are 'seasonally adjusted' and the source of this data is the National Association of Realtors. Consequently, there may be an 'upward bias' on the numbers.
Spot on! At times I have endured harsh comments from fellow SA contributors for stating the same. When a CEO becomes so valuable that dire consequences are threatened if they should leave, you know there is a great weakness in the organizational structure. Equally significant, JPM is the icon for the historically low public opinion of Wall Street banks. There is precious little evidence that JPM has contributed to the longer term betterment of society. They are largely a modern day 'robber baron' with expertise in generating profits at the expense of others. This in sharp contrast to actually creating lasting value that enhances the longer term 'brand' of JPM.
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
Doesn't seem there is much room left to lower interest rates. Perhaps the FED will literally begin dropping dollars from helicopters. At least that may provide a more equitable distribution than demonstrated so far.
Two points, Tack. Be careful to discern the difference between multi-family and single family building permits. Also, there seems justification to be skeptical of 'adjustments' of any kind - be they seasonal or cyclical. In my admittedly brief analysis, these adjustments frequently get revised in later months when few seem to notice. Consequently, I find it useful to evaluate 'raw' unadjusted numbers as well to draw my own conclusions.
Seems that April would be a strong month for housing starts, given weather considerations. However, this data point does fit a larger, disappointing trend in economic indicators.
Commodities are the key to measuring economic health. All these charts measure are currency induced, self reassuring results. There is already an abundant amount of currency sloshing around in the system to ignite inflation once monetary velocity gains momentum. Monetary velocity is near Depression era levels, consequently little demand for commodities. Central planning/control cannot replace the vitality of the free market, no matter the liquidity policies.
Stock index futures move to session highs following the big beat on retail sales, SPY -0.1% premarket. Excluding a 4.7% decline in gasoline sales, retail spending grew 0.6% in April. Bond prices continue their recent slide, the 10-year note off half of a point. The yield may challenge 2% today. TLT -0.9% premarket. [View news story]
Retail Sales were driven primarily by Building Materials (+7.69% to prior year). In contrast, Food & Beverage was flat (+0.35%) and General Merchandise was down (-2.74%) for a combined negative result of -1.18%. How many of us bought building materials versus food, beverage and general merchandise? Which number is more relevant? Keep in mind these results are unadjusted, they do not reflect any probable increase in pricing - particularly food & beverage items.
Allow me to share some pertinent numbers regarding Retail Sales. Building materials accounts for most of the increase in Retail Sales (+7.69% to prior year). Are there many of us acquiring building materials? In sharp contrast; those items most of us buy everyday and rely on for subsistence were down 1.18% versus prior year. The specific categories are Food & Beverage and General Merchandise. I emphasize, those categories were -1.18% to prior year. These are the unadjusted numbers - before the Census Bureau works their magic 'adjustments'. These numbers also do not reflect any increase in food prices over the past year as the measure is strictly in dollars, not units sold.
Now, which numbers are more revealing - building materials or food & beverage? Yes, we can all play with numbers.
More on Hewlett-Packard (HPQ) FQ2 earnings: FY2013 EPS guidance is upped to $3.50-$3.60 from $3.40-$3.60 previously. Operating margin of 8.6%, up from 7.9% in FQ1, down from 8.9% a year ago. PC sales down 20% Y/Y. Printers -1%. Enterprise hardware -10%. Services -8%. Software -3%. CC at 5 ET. Shares +12% AH. (PR) [View news story]
Bernanke Signaling The Fed's Power To Control The Economy Is Waning [View article]
Up as high as $1,413 following Bernanke's (at the time) perceived dovish testimony this morning, gold (GLD -0.9%) reverses along with stocks. Markets make opinions, and now the focus on Bernanke is he's prepping the markets for tapering. The just-released FOMC minutes push down gold even further, now at $1,357/oz. [View news story]
Stocks had already shed their Bernanke-testimony gains from this morning and they head even lower following the release of the FOMC minutes showing a "number" willing to begin tapering QE as soon as the next policy meeting. S&P 500 (SPY -0.4%), Nasdaq 100 (QQQ -0.6%). The dollar (UUP +0.4%) moves to a new session-high, and Treasurys (TLT -1.3%) continue to sell off. [View news story]
Are Equity Investors Pushing The Gas Pedal Too Hard? [View article]
Bernanke: Stocks continue with solid gains as the chairman suggests the Fed may never sell the massive assets it's accumulated, instead just letting them roll down. Most interesting are Treasury prices (TLT -1.1%) rolling over - the 10-year yield sunk to 1.89% as Bernanke's soft comments hit the tape, but has reversed to now threaten 2%. Gold (GLD +0.6%) has given up much of its knee-jerk gains, and the dollar (UUP +0.3%) is having none of it, higher across the board, particularly vs. the aussie (FXA -1.1%), yen (FXY -1%), and loonie (FXC -0.6%). [View news story]
Apr. Existing Home Sales: 4.97M vs. consensus 5.00M, 4.94M previous (revised). [View news story]
Jamie Dimon Needs A Boss [View article]
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
April Housing Starts: 853K vs. 970K forecast, 1.04M previous. [View news story]
April Housing Starts: 853K vs. 970K forecast, 1.04M previous. [View news story]
Initial Jobless Claims: +32K to 360K vs. 330K consensus, 328K prior (revised). Continuing claims -4K to 3.00M. [View news story]
Is A QE Exit Really Scary? [View article]
Stock index futures move to session highs following the big beat on retail sales, SPY -0.1% premarket. Excluding a 4.7% decline in gasoline sales, retail spending grew 0.6% in April. Bond prices continue their recent slide, the 10-year note off half of a point. The yield may challenge 2% today. TLT -0.9% premarket. [View news story]
Apr. Retail Sales: +0.1% vs. -0.3% expected, -0.05% prior (revised). Ex-auto -0.1% in-line with expectations. [View news story]
Now, which numbers are more revealing - building materials or food & beverage? Yes, we can all play with numbers.