| Date | Event |
| July 1 | Initial Unemployment Claims-8:30 Construction Expenditures, May-10:00 ISM’s Purchasing Manager’s Index, June-10:00 Weekly Fed Data-4:30 |
| July 2 | Employment Situation, June-8:30 Factory Orders, May-10:00 |
| July 5 | Independence Day (observed)—U.S. Financial Markets Closed |
| July 6 | 13- & 26-Week Treasury Bill Auction |
| July 8 | Initial Unemployment Claims-8:30 Consumer Installment Credit, May-3:00 Weekly Fed Data-4:30 |
| July 9 | Wholesale Trade, May |
| July 12 | 13- & 26-Week Treasury Bill Auction |
| July 13 | Merchandise Trade Balance, May-8:30 Treasury Budget Report, June-2:00 |
| July 14 | Advance Retail Sales, June-8:30 Mfg. & Trade: Inventories & Sales, May-10:00 |
| July 15 | Initial Unemployment Claims-8:30 Producer Price Index, June-8:30 Capacity Utilization, June-9:15 Industrial Production, June-9:15 Weekly Fed Data-4:30 |
| July 16 | Consumer Price Index, June-8:30 Real Earnings, June |
| July 19 | 13- & 26-Week Treasury Bill Auction |
| July 20 | Housing Starts & Building Permits, June-8:30 |
| July 22 | Initial Unemployment Claims-8:30 Leading Indicators, June-10:00 Weekly Fed Data-4:30 |
| July 26 | 13- & 26-Week Treasury Bill Auction New Home Sales, June-10:00 |
| July 28 | Durable Goods Orders, June-8:30 |
| July 29 | Initial Unemployment Claims-8:30 Weekly Fed Data-4:30 |
| July 30 | Employment Cost Index, 2Q10 Gross Domestic Product, 2Q10 (Advance) Agricultural Prices |
Archive for the ‘Economy’ Category
July 2010 Economic Release Calendar
In Economy on July 12, 2010 at 8:36 amWeek Ahead: China’s Yuan Statement Rallies Risk Assets
In Central Banking, China, Earnings, Economy, Financial Crisis, Forex on June 21, 2010 at 7:53 amGlobal equity markets surge on news that China will let its currency float gradually over time. The dollar slips as investor appetite for risk rises.
Market Preview
The risk trade is back in favor after China’s announcement that it plans to gradually let the yuan float against the U.S. dollar. Global risk assets (stocks and commodities) jumped higher on Monday after the central bank news out of China.
In overseas equity markets this morning, Hong Kong’s Hang Seng index rose 3.1 percent. Japan’s Nikkei 225 jumped 2.4 percent and China’s Shanghai Shenzen surged 3.1 percent.
The German DAX is higher by 1.4 percent mid-day. Britain’s Footsie 100 is also up by 1 percent.
U.S. S&P 500 index futures were trading higher by 1.5 percent in Monday’s pre-market action.
Crude oil prices rose to the highest level in six weeks after China announced it will increase flexibility in its currency. Oil is up over 1.5 percent this morning and hovering around $78.50 a barrel.
Spot gold is trading higher by 0.4 percent, near its all-time high just above $1,262 an ounce.
The euro is trading at 1.239 after rebounding against the dollar earlier this morning. The single currency had traded as low as 1.237 today. This price action is all on the heels of the euro’s best weekly advance in nine months against the greenback last week.
China Loosens Currency Peg
On Saturday, China’s central bank announced plans to enhance the flexibility of its exchange rate. China ruled out a one-time revaluation and indicated any strengthening of the yuan would be gradual. The U.S. government has pressured China to let its currency move more freely against the dollar.
An appreciation of the yuan is expected to translate into lower inflation risk and greater purchasing power for Chinese consumers while increasing inflation risk and lowering purchasing power for U.S. consumers. Lower inflation in China would take the pressure off the People Bank of China (China’s central bank) to raise interest rates in an attempt to cool off the its high growth economy.
Mining stocks are expected to benefit from this move as it reduces the pressure for continued monetary and fiscal policy tightness in China.
Mining stocks surged in London this morning with Xstrata higher by 4.8 percent and BHP Billiton (BHP) jumping 4.3 percent.
Economic Preview
On the economy, existing home sales for May will come out on Tuesday with observers expecting an annualized rate of just over 6 million in sales forecast for the month, a five percent rise from the 5.77 million sales rate reported for April.
New home sales will be released on Wednesday with an annual rate of 400,000 forecast for May, a 20 percent decline from the 504,000 rate for the previous month.
Also on Wednesday, the two-day meeting of the Federal Open Market Committee (FOMC) ends and releases a statement. The Fed will again likely leave short-term interest rates unchanged at nearly zero percent. Language in the statement is once again expected to say that rates will stay “exceptionally low” for an “extended period.” The FOMC will also likely maintain that expansion in the economy continues with few signs of inflationary pressure. is However, the statement could mention potential risks to the U.S. economy, particularly from a European sovereign debt and banking crisis.
On Thursday, initial jobless claims will be released with expectations for 465,000 new unemployment claims for the week of June 19th. Economists will be watching this week’s number carefully after the Labor Department reported higher than expected jobless claims last week.
Also on Thursday, all eyes will be on the durable goods orders announcement. Orders for durable goods are forecast to be weak, with economists forecasting a 0.5 percent decline for May after rising 2.9 percent in April.
Earnings Preview
On the earnings front, Adobe Systems (ADBE) will report on Tuesday. Analysts are expecting first quarter profits of 42 cents per share.
Oracle (ORCL) will post profits on Thursday, with Wall Street expecting 55 cents per share.
Also on Thursday, the Blackberry company, Research in Motion (RIMM) is expected to report $1.33 per share in earnings.
KB Homes (KBH) will post earnings on Friday with analysts expecting a loss of 30 cents per share.
June 2010 Monthly Economic Release Calendar
In Economy on June 9, 2010 at 8:26 am|
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April 2010 Monthly Economic Release Calendar
In Economy on April 1, 2010 at 12:29 pm| DATE | EVENT |
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Best Buy (NYSE: BBY): Earnings Preview for Fiscal Q4 2010
In Economy on March 24, 2010 at 10:22 am
Minneapolis-based electronics retailer Best Buy Inc. ($BBY) is scheduled to report its fiscal fourth quarter 2010 results before the market opens on Thursday, March 25. Based on our analysis, Best Buy is expected to report results that are slightly better than Wall Street’s consensus expectations.
Consensus Expectations
The average consensus estimate by analysts is for revenue of $16.05 billion and $1.79 per share in earnings. Excluding special items for restructuring, Best Buy’s earnings per share was $1.61 with revenue of $14.72 billion for the fiscal third quarter.
We are forecasting revenues of $16.2 billion and earnings per share of $1.80, slightly higher than the consensus estimate. This would represent a 10 percent growth in revenue from the fiscal third quarter of $14.72 billion.
Earlier this week, Janney Capital Markets reiterated its BUY estimate for Best Buy, raising the fair market value to $48 from an earlier target of $44 per share. Yesterday, Guy Adami from CNBC’s Fast Money show recommended going long on Best Buy.
Investors are also very interested in Best Buy’s guidance for its fiscal 2011 when it issues fourth-quarter results tomorrow.
Best Buy is a specialty retailer of consumer electronics, home office products, entertainment software, appliances, and related services. Demand for electronics is improving. Best Buy reported strong sales in December, particularly for phones, TVs, and computers and can be expected to expand on recent gains in market share. Some analysts see continued decline in international sales, putting some pressure on overall sales.
Share Performance
Since the beginning of 2010, Best Buy’s shares have gained 5.1 percent. The stock closed yesterday at $41.51.
Valuation
Shares are now trading at a 12.3x forward price earnings ratio for consensus 2011 earnings per share. This is a discount to the valuations of major competitors like Wal-mart ($WMT) at 12.8x, and Amazon.com ($AMZ), with its hot-selling Kindle at 33.7x forward price to earnings ratios. Best Buy remains an attractive company based on peer valuation.
Recommendation: Buy with a $47 price target.
Disclosure: No position
March 2010 Economic Release Calendar
In Economy on February 27, 2010 at 10:54 am|
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Dollar Edges Lower Waiting for Bernanke Testimony
In Economy, Forex on February 24, 2010 at 10:05 amThe U.S. dollar edged downward on Wednesday morning as traders are anxiously waiting for Federal Chairman Ben Bernanke’s testimony before Congress on the state of the economy and monetary policy.
Traders aren’t expecting to hear any new information on the exit strategy from quantitative easing. The Fed has already taken symbolic “tightening” actions by terminating various special credit facilities, increasing the discount rate 25 basis points from 0.5 percent. In addition, just yesterday the Treasury revived the Supplementary Financing program, draining about $200 billion of liquidity.
It is always a big event for currency markets when the Federal Reserve Chairman testifies because the Chairman is often asked questions about the economy and monetary policy. The last time Mr. Bernanke spoke was on February 10, about one week before the central bank announced the surprise 25 basis point hike in its discount rate.
Comments by Bernanke could rally the dollar if he answers questions with a hawkish tone and introduces new ideas for tightening monetary policy in the near future. Higher interest rates would be bullish for the dollar and bearish for hard assets, including gold.
The U.S. dollar index, a trade-weighted basket of six major currencies traded against the greenback, is at 80.780 just before the Fed chief’s testimony, down from 80.874 in late trading yesterday.
The euro edged slightly higher to change hands at $1.3562, up from $1.3534 or 0.4% on Tuesday.
Traders expect the euro will continue a downward bias as fears over Greece’s sovereign debt crisis continue to chip away at the European common currency. Unions are balking against austerity measures to reduce Greece’s annual budget deficit. Greek unions staged a one-day strike on Wednesday.
The greenback had gained on Tuesday against most major currencies other than the Japanese yen, on concerns about the pace and sustainability of the global recovery after a drop in German business confidence and lower consumer sentiment in the U.S. were reported.
Investors Cautious as Greece Rattles Markets
In Earnings, Economy, Financial Crisis on February 8, 2010 at 3:17 pmInvestors remain cautious as U.S. stocks opened lower then turned higher this morning on fears that a bailout of debt-laden Greece might create a domino effect in Europe. Fears of sovereign debt defaults in Europe kept the U.S. dollar near a seven-month high on Monday as investors stepped away from risk assets.
Economic news is light while earnings season continues strongly for the fourth quarter of 2009 with almost 470 companies scheduled to report this week.
Market Review
In overseas equity markets on Monday, major Asian markets closed lower. Japan’s Nikkei 225 index fell 1.1 percent today while China’s Shanghai Shenzen index dropped 0.1 percent. Hong Kong’s Hang Seng was lower by 0.6 percent.
European equity markets were higher on Monday. The German DAX index rose 0.9percent. Britain’s Footsie 100 index edged up 0.2 percent.
U.S. stocks are mixed in Monday morning action. Dow Industrials index components Industrials DuPont ($DD) and Alcoa ($AA) opened lower, but popped back into positive territory quickly. JPMorgan ($JPM) and Merck ($MRK) also dropped sharply and bounced up a bit, but are still in negative territory. The Dow is trading up about 12 points around the 10,025 level, or +0.16% while the S&P 500 index is trading up 4.04 points around the 1,070 level, higher by 0.34% at mid-morning.
Oil futures are marginally higher (+0.6%), with the March contract at about $71.60 a barrel this morning.
The price of spot gold also edged up (+0.4%) mid-morning, trading at $1,070 an ounce.
In foreign exchange markets, fears of a sovereign default in Greece are keeping the U.S. dollar near its seven-month high against the euro, despite weakening on Monday. The euro fell to $1.362 on Monday morning before recovering to 1.37. The DXY index is at 80.19, off 0.6 percent from Friday’s high of 80.683. The dollar remains a safe haven play with the debt crisis in Europe.
Greece Rattles World Markets
European ministers gathering for a G-7 meeting in Iqaluit, a town just south of the Arctic circle in north-eastern Canada over the weekend, indicated they will ensure Greece sticks to a fiscal austerity plan. Observers said Europe needs to go further than words if it is to restore investors concerned about debt problems in Greece and other fiscally weak euro currency zone countries.
World stock markets dropped to three-month lows on Friday on concerns that Greece may require a bailout by other European nations and destabilizing the euro zone. The euro hit to its lowest level since May 2009 against the U.S. dollar.
Euro monetary nations Greece, Spain and Portugal face growing pressure to demonstrate they can bring their exorbitant public debt under control. Greece only accounts for 3 per cent of Europe’s “euro” monetary-zone economy, the largest in the world. But investors are fearful the situation in Greece might spread to other, larger countries creating a currency crisis and throwing the economy into a tailspin.
Economic Preview
On the economic front, market moving news in the U.S. will be slower than in previous weeks.
International trade data for the month of December will be released on Wednesday. Economists expect the U.S. trade deficit fell from $36.4 billion in November to $35 billion in December.
Another potential market moving release on Wednesday will be the Treasury Department’s budget deficit for January. Expectations are for $60 billion in red ink.
On Friday, the University of Michigan Survey of Consumer sentiment is expected to rise to 74.8 in February. It would be a slight increase from January’s reading of 74.4. A higher index value means consumers are more confident and more likely to spend income, boosting economic growth.
In other economic news, U.S. Fed Chairman Ben Bernanke will testify before the House of Representatives Financial Services Committee on Wednesday, February 10 to talk about how the Federal Reserve Bank intends to wind down its balance sheet.
Earnings Preview
This week will see nearly 470 companies reporting earnings.
Drug chain company CVS Caremark ($CVS) barely beat analyst estimates in their fourth quarter 2009 earnings report on Monday morning. The company announced 79 cents per share in earnings, excluding special items, compared to street estimates of 78 cents per share.
Toymaker Hasbro ($HAS) beat the street badly for the fourth quarter, driven by an increase in sales of Transformers, Tonka, and Playskool toys. Hasbro earned $1.09 per share. Wall Street estimates were for 81 cents per share in profit.
On Tuesday, media and entertainment giant Walt Disney ($DIS) will release earnings. The company is scheduled to report fourth-quarter results after the market closes on Thursday. Current consensus estimates are 39 cents per share.
Also on Tuesday, Coca-Cola ($KO) is expected to announce 66 cents per share in profits and Baidu ($BIDU) is expected to announce $1.68 per share in profits.
On Wednesday, Prudential ($PRU) is scheduled to report results. Analysts are calling for earnings of $1.11 per share.
Also on Wednesday, French drug maker Sanofi-Aventis ($SNY), maker of blockbuster blood thinner Plavix, will announce fourth quarter results for 2009. Analysts are expecting the company to report earnings per share of $2.12.
Reporting on Thursday is soft drink giant Pepsico ($PEP). Consensus estimates call for profits of 90 cents per share. Fast food retailer Chipotle ($CMG) will also report earnings on Thursday. Analysts expect 79 cents a share for Chipotle in the fourth quarter.
Other companies reporting earnings this week include Lincoln National ($LNC), Biogen Idec ($BIIB), Sprint Nextel ($S), Allstate ($ALL), New York Times ($NYT), ArcelorMittal ($MT), Torchmark ($TMK), Sun Life Financial ($SLF), World Wrestling Entertainment ($WWE), and Lorillard ($LO).
February 2010 Economic Release Calendar
In Economy on February 7, 2010 at 1:51 am|
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S&P 500 & Risk Appetite Rise: Can It Last?
In Economy on February 2, 2010 at 6:26 pmThe S&P 500 and global indices were all higher yesterday and edging up today. Investors viewed strong manufacturing data released yesterday as a signal that the U.S. economic recovery is sustainable The data builds on analyst predictions that earnings will increase sharply this year.
The Institute for Supply Management’s main monthly index jumped to 58.4 from 54.9 last month, the highest level since August 2004.
This was much higher than the 55.5 economists were expecting. Values over 50 in the index indicate manufacturing production is expanding.
The manufacturing data, combined with strong earnings reports over the past few days, created visions of economic recovery in the minds of investors. The result was a boost in risk appetite for investors who piled into equity and commodity markets yesterday and today.
Is Economic Growth Sustainable?
In less visible economic news yesterday, the government reported that income was higher by 0.4 percent in December and personal consumption expenditures rose 0.2 percent month-over-month. The personal saving rate moved higher by 0.3 percentage points to 4.8 percent in December, up from 4.5 percent in November. Consumer spending was up 4.0 percent, while income was up 0.5 percent.
An interesting chart from an article written by Michael Panzner at “The Big Picture” web site provides a more bearish perspective for the economy by comparing current income, spending, and savings data with data during the recession in the early 1980s.
Given these data, it is difficult to see how consumer demand regains a strong pace amid a stagnant job market and a rising personal saving rate.
Another chart useful for determining the strength of the economy is provided by Donald Marron in a recent article. The chart shows that inventory replenishment accounted for 3.4 percentage points of the total 5.7 percent GDP growth in the fourth quarter of 2009. Inventory rebuilds equaled about 60 percent of total economic growth for the quarter—a pace unlikely to be repeated for Q1 2010.
Based on the trends illustrated in the two charts above, the stage is being set for a new overhang of inventory and much slower economic growth. Inventory rebuilds are likely to slow in Q1 2010 given tepid consumer spending growth and rising saving.
Earnings Forecasts Help Drive Stock Market Higher
Despite the bearish economic scenario painted by the data, Wall Street analysts are predicting a V-shaped economic recovery for 2010 and 2011. Last week, industry analysts projected overall S&P 500 earnings will increase 28.9 percent from $60.98 per share in 2009 to $78.62 for 2010. In 2011, the analysts project an increase of 21 percent to $95.10. A reference point assuming a 14x price/earnings ratio implies the S&P 500 index should be at 1,331 a year from now, a 21 percent increase from current 1,100 S&P 500 index levels.
These optimistic projections are based on recently released fourth quarter 2009 earnings. Here are a few examples.
Amazon.com’s ($AMZN) fourth quarter earnings jumped 71 percent over last year for the fourth quarter due to strong holiday season sales. It also beat the street by 18 percent. The company earned $384 million, or 85 cents per share, versus $225 million, or 52 cents per share in the same quarter a year ago. Analysts were expecting 72 cents a share.
Microsoft ($MSFT) profits beat consensus analyst estimates by 25 percent, jumping 60 percent from last year in its most recent fiscal quarter due to a rebound in personal computer sales and higher sales of its Windows 7 operating system. Profits for the quarter wesr $6.7 billion, or 74 cents per share, versus $4.17 billion, or 47 cents per share for the same quarter of 2008. The consensus estimate was for 59 cents per share in earnings.
Exxon Mobil’s ($XOM) fourth-quarter net beat consensus estimates despite income falling 23 percent to $6.05 billion, or $1.27 a share, from $7.82 billion, or $1.54 a share in the year-ago period. Wall Street expected profits of $1.17 a share.
Chocolate candy manufacturer Hershey ($HSY) reported a 54 percent increase in profits for the fourth quarter and raised its dividend amid a strong growth outlook for 2010. The company earned 63 cents a share in the fourth quarter, excluding special items, up from 36 cents a share for the fourth quarter of 2008. Analysts were expecting earnings of 60 cents a share.
Friday Employment Situation Report is Critical
As a result, Friday’s employment report for the week will be important for stocks. The unemployment rate was 10.0 percent in December and economists are expecting a 10.1 percent rate for January. Economists expect average hourly earnings to grow 0.2 percent and the average workweek to stay level at 33.2 hours.
If the jobs report shows strong improvement in hiring and lower unemployment, consumers could gain more confidence, boosting consumption and drawing down inventories in the first quarter of 2010. In this case, analyst earnings projections might be on target. Any deterioration from economist’s expectations on employment, average hourly earnings, or the average workweek and the markets could begin a sustained downward drop.
Conclusion
Markets go up and markets go down. Right now, there are considerable economic headwinds that the equity markets must overcome during 2010 if they are to meet analyst expectations. Market sentiment for February could rise or fall on Friday’s employment situation report. Stay tuned.
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(NASDAQ:AMZN)
(NASDAQ:MSFT)
(NYSE:XOM)
(NASDAQ:ADP)
(NYSE:HSY)
