Tag: Smallcapinvestor Pro

Lowes Cites Weather as Cause for Lower Earnings

Lowe’s (NYSE:LOW) reported weak earnings yesterday. Plus, the company’s guidance for current quarter earnings was weaker than expected. Needless to say, worrisome headlines about consumer spending sprang up, and stock prices went down.

LOW |

Great Earnings Driven by Cost-Cutting, Not Growth

Wow. Huge rally for stocks yesterday. All the major indices have now broken above critical resistance levels. For the S&P 500, that level was 956.

The question for investors now: Is this a sustainable move, or are we experiencing some kind of a blow-off top?

The reason I ask should be obvious. Corporate earnings have come in better-than-expected virtually across the board so far. Only 16% of the S&P 500 that’s reported so far has missed expectations.

ATVI |

Earnings Expectations Low Enough for Most Firms to Beat Them

Stocks rallied out of the hole yesterday. And the financial media, which started the day reporting that pessimism about the economic recovery was driving stocks lower, finished by saying that improvements in credit markets were driving stock prices higher.

Neither explanation gets to the heart of the matter.

AA |

Where the IPO Market is Hot

And so it begins. I’m talking about earnings estimate revisions for banks. And yes, they are headed lower. First up is Morgan Stanley (NYSE: MS). Credit Suisse analyst Howard Chen was expecting a profit of $0.80 a share. Now he says a $0.40 loss is more likely.

MS |

Housing Bottom: TOL Reports Tomorrow

Stocks are down this morning after a "surprise" drop in new housing starts and a fall in new building permit applications. This shouldn’t really be a surprise. After all, we are in a recovering economy, and that means progress will come in fits and starts. And since housing was the underlying cause of the last run-up and a major contributor to the market slide, there should be no question that we’ll see "surprises" like this going forward.

TOL |

Gains on USO, FEED, DRYS, and Update on GHM

Fed Chief Ben Bernanke has his hands full. He’s got enough balls in the air to keep an octopus busy. Consider his prime directives: raise money and keep interest rates low. These are diametrically opposed goals.

If you’re selling Treasury bonds, the yield is your bribe. The Fed has to offer buyers an incentive to buy the bonds, thereby lending the government money. So, the Fed pays interest to the bondholder.

USO |

HOV and GHM still in the green

Unemployment numbers continue to rise, but investors are more focused on the hope that the economy has bottomed and may be positioning for recovery. At least for now.

Please note that I said "positioning for recovery." Mortgage rates are down and that seems to be helping the housing market a little. Credit afforded by the Treasury aimed at removing toxic assets from banks is resulting in higher valuations for those banks.

HOV |

HOV Gives Up Gains + Oil Shock for Late 2009

*****Today is the last day of the second quarter. Mutual funds are no doubt buying the top performers to make their holdings look good. That helps explain today’s rebound. But what about yesterday’s declines?

Obviously, a quick 25% rally is going to have investors taking profits. This was especially apparent in the small-cap sector. It’s well known that small-cap stocks outperform when the stock market is recovering from a deep sell-off. Average gains for small caps digging out of the hole are 24%.

And we saw almost exactly that level of gain with Hovnanian Enterprises (NYSE:HOV).

SXC Health Solutions Crushes Earnings

Stocks didn’t exactly finish higher yesterday. In fact, they gave back all of Wednesday’s gains, and then some. But now, in a particularly ironic move, stocks appear to be ready to move back to the upside after the unemployment rate is reported to have risen to 8.1%.

Of course, we know why stocks would rally under these seemingly negative circumstances….

Investors know unemployment is rising. Fed Chief Bernanke has called for the unemployment rate to peak somewhere in the 9% range during this recession. At 8.1%, we’re almost there.

SXCI |

comment

Dull is the New Good

*****They say never sell a dull market. And it’s hard to imagine a duller day than Wednesday. The Dow Industrials added 3 points. The S&P 500 lost 2 points. The loss at the Nasdaq was measured in a fraction.

Of course, after Tuesday’s plunge, I think we can all agree that dull is good, dull is progress.

I had been expecting some upside following the stimulus plan and the bank bailout plan. That didn’t happen, largely because the GDP news from Japan splashed a dose of reality on investors. Still, after Tuesday’s big drop, I’d expect a flat-to-higher market, and that’s what we’ve seen.

bac |

comment

Honey, I Shrunk the ? Japanese Economy

*****At first glance, it might look as though the stocks market voiced its opinion of Obama’s stimulus bill with a big thumbs down on Tuesday. But the more immediate catalyst was Japan’s Q4 quarter GDP number.

Japan’s economy shrunk at a 12.7% annualized rate between October and December. That is really bad. And it goes to show just how weak the global economy is. Stimulus plans will help people weather the storm, but it’s pretty clear that $800 billion isn’t going to turn the global economy around.

comment