3/27/2020
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I’m Just a ‘Stimulus’ Bill
U.S. stock futures are pointing sharply lower this morning following a steep rally sparked by increasing expectations of massive fiscal stimulus. The S&P 500 (SPX) rallied more than 6% on Thursday after the Senate passed a $2 trillion economic stimulus bill aimed at mitigating the economic damage from the coronavirus outbreak. A massive spike in weekly jobless claims could not halt the market’s run higher on Thursday. The Labor Department reported that jobless benefit claims had soared to 3.28 million last week, easily eclipsing the previous record of 695,000.
We may not have brick and mortar, but we still have Yoga
Lululemon (LULU) reported earnings of $2.28 per share which beat the analyst consensus estimate of $2.24. It was over a 23% increase over earnings for $1.85 per share from the same period last year on sales of $1.4 billion. As with many companies are announcing, they did not give any financial projections for the year, citing the coronavirus pandemic. However, they have opened all but one of its retail locations in China, while retail locations in North America, Europe and elsewhere around the world remained closed. Meanwhile, retail giant Gap (GPS), the parent of Gap, Old Navy and Banana Republic pulled its full-year forecast that it had issued earlier this month and also suspended its dividend, as all its stores are closed due to the coronavirus outbreak.
Market Movers and Shakers(as of this writing)
S&P 500 futures (/ES) -3.3%, near 2520
U.S. Crude Oil futures (/CL) -3.5%, near $21.75 a barrel
CBOE Volatility Index (VIX) +13.00%, near 69
U.S. Gold Futures (/GC) -1%, near $1643 an ounce
Lululemon (LULU) -3.5%, near $193.00 after earnings release
Gap (GPS) -3.0%, near $8.25 after suspending its dividend
Major Economic Reports:
7:30 am CT – Personal Income and Outlays
9:00 am CT – Consumer Sentiment
12:00 am Ct – Baker-Hughes Rig Count
Notable Earnings:
Friday:
A.M. – SCWX
P.M. – N/A
Monday:
A.M. – CALM, CYD, GRWG
P.M. – CSSE, EVSI, HSON, RH
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3/26/2020
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Getting our groove back
U.S. Equities (/ES) were finally able to lock in back-to-back winning sessions yesterday for the first time over this tumultuous month of March despite a late afternoon retreat. The much awaited Senate vote finally passed on a $2 Trillion stimulus package after much delay which still needs to clear both the house and the President likely by the end of the week although little resistance is expected. Deaths attributed to the Coronavirus just passed 1,000 domestically as the epidemic curve still isn’t due to peak for yet another 2-3 weeks. The CBOE Volatility Index (VIX) has started to show signs of contracting near 60 which is encouraging considering the spike in the 80 range earlier in the month.
Tough Job!
Initial jobless claims just shot to a record 3.3 million over the course of the last week as much of the nation’s economy remains at a virtual standstill. The retail and hospitality sectors were the hardest hit with several states still in lockdown amid “shelter in place” restrictions. Equity Futures (/ES) saw earlier losses erased after the report as the unsurprising spike came to light. Small businesses are desperate to tap into a government loan facility which is part of the stimulus bill in an attempt to help employees return to work. Full employment was seen as recently as 4 weeks ago before the drastic change in course with hopes of a snap-back reversal once the pandemic is finally under control. Lululemon (LULU) is scheduled to report after the close today as a possible retail gauge to determine how online sales are helping to compensate for several brick-and-mortar store closings.
Pre-Market Movers and Shakers (as of this writing)
S&P 500 futures (/ES) -0.5%, near 2453
U.S. Crude Oil futures (/CL) -3.4%, near $23.66 a barrel
CBOE Volatility Index (VIX) -3.8%, near 61.83
U.S. Gold Futures (/GC) +1.2%, near 1,652
Major Economic Reports:
7:30 am CT – Jobless Claims
7:30 am CT – Corporate Profits
7:30 am CT – GDP
7:30 am – International Trade in Goods
9:30 am CT – EIA Natural Gas Report
3:30 pm CT – Fed Balance Sheet
3:30 pm CT – Money Supply
Notable Earnings:
Thursday:
A.M. – CSIQ, ERJ, FDS, LX, SIG, TITN, VIOT, WOR
P.M.– AFYA, GME, GTBIF, HTHT, LULU, SAIC, SPWH
Friday:
A.M. – SCWX
P.M. – N/A
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3/25/2020
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Do We Have a Deal?
A deal has reportedly been reached between Senators from both sides of the aisle and the White House to initiate a $2 trillion stimulus package to help bolster the U.S. economy, while the country combats the coronavirus outbreak. The package includes $350 billion to help small businesses, $500 billion in loan guarantees, and direct payment of $1,200 to those that are not high earners. The bill is expected to be voted on by the Senate later today, before moving on to the House of Representatives, and eventually on to President Trump’s desk for his signature.
Off and Jogging
Athletic wear giant, Nike (NKE) reported earnings after the close yesterday, beating sales expectations for its February quarter, despite downward pressure on its earnings from the impact of the coronavirus outbreak. The company reported third quarter revenue of $10.1 billion, which came in above analyst estimates of $9.8 billion. Shares of NKE were almost 10% higher in the pre-market.
Market Movers and Shakers (as of this writing)
S&P 500 futures (/ES) 0.2%, near 2443
U.S. Crude Oil futures (/CL) -1.8% near $23.60 a barrel
CBOE Volatility Index (VIX) +2.5%, near 63.20
U.S. Gold Futures (/GC) -1%, near $1642 an ounce
Major Economic Reports:
6:00 am CT – MBA Mortgage Applications
7:30 am CT – Durable Goods Orders
8:00 am CT – FHFA House Price Index
9:00 am CT – State Street Investor Confidence Index
9:30 am CT – EIA Petroleum Status Report
Notable Earnings:
Wednesday:
A.M. – CXRXF, ESLT, PAYX, TIGR, WGO
P.M. – FUL, MU, RKDA, SCVL, STON, WLMS
Thursday:
A.M. – CSIQ, ERJ, FDS, LX, SIG, TITN, VIOT, WOR
P.M.– AFYA, GME, GTBIF, HTHT, LULU, SAIC, SPWH
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3/24/2020
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It seems like we are so close
U.S. stock futures (/ES) are posting sharp gains this morning on expectations that leaders in Capitol Hill will iron out their differences and finally come up with a stimulus bill to cushion the economic blow of the COVID-19 pandemic. Senator Charles Schumer and Treasury Secretary Mnuchin are getting closer on the detiails of the $2 trillion stimulus bill. Negotiations on the bill are set to continue being hashed out this morning. Today's market moves follows yet another volatile day on Monday as investors resorted back to pessimism following 100 deaths in a single day which pushed most of the major indexes to a new multiyear low as the procedural vote in the Senate failed for the second time in 24 hours. Currently, S&P 500 futures (/ES) are up 4.90%, which is near ‘limit up’(5%) status, becoming a much too common theme in today’s market.
No Dividend for You
As the Coronavirus crisis continues, companies are suspending dividends and stock-buybacks. Department-store chain Nordstrom (JWN) said earlier this week that it is suspending share repurchases and its quarterly dividend starting in its fiscal second quarter. Airbus SE (EADSF) and Royal Dutch Shell (RDS/A) joined in the scramble of companies slashing costs, shelving buybacks, or cutting dividends and asking banks to extend credit. U.S. automaker Ford Motor (F) said that it was suspending its dividend to try to preserve its dwindling cash pile while mining giant Freeport-McMoRan (FCX) announced that it was cutting its dividend as well. More are expected over the coming days as companies struggle to keep operations fully funded.
Market Movers and Shakers (as of this writing)
S&P 500 futures (/ES) +4.90%, near 2327
U.S. Crude Oil futures (/CL) +3.65%, near $24.20 a barrel
CBOE Volatility Index (VIX) -11.2%, near 54.70
U.S. Gold Futures (/GC) +6.8%, near $1670 an ounce
Major Economic Reports:
7:55 am CT – Redbook
9:00 am CT – New Home Sales
9:00 am CT – Richmond Fed Manufacturing Index
Notable Earnings:
Tuesday:
A.M. – CMCM, INFO, NEOG, QIWI
P.M. – AIR, BRP, GO, HOME, NKE, NOAH, OPGN, PUMP, SCS, SNX
Wednesday:
A.M. – CXRXF, ESLT, PAYX, TIGR, WGO
P.M. – FUL, MU, RKDA, SCVL, STON, WLMS
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3/23/2020
The Week Ahead
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Another Wild Ride
Oil prices (/CL) quickly reversed course this morning after posting its worst weekly performance since 1991 on Friday. Crude jumped 4% after the Federal Reserve gave the nod to aggressive asset purchases in a desperate attempt to steady markets. Simultaneously, treasury yields plummeted as the 10-year dove below 0.7% off the same announcement. Various asset classes continued to see wild swings over the weekend as a stalemate in congress over a much-needed stimulus package forced a limit-down scenario yesterday for equity futures before a 3% surge occurred moments ago ahead of the open. With a final vote now postponed until noon, investors will be closely watching developments as the Federal Government jumps into action.
No Guidance
More companies are throwing their annual guidance out the window as the art of forecasting revenue becomes a futile quest with store closures and “shelter in place” scenarios extending throughout the country. John Deere (DE) is the latest company to withdraw its 2020 forecast as some manufacturing operations are being temporarily shuttered. Best Buy (BBY) also pulled its guidance over the weekend at the same time suspending its aggressive share buyback program. The electronics retailer will be limiting its store access by only fulfilling curbside orders for the foreseeable future which will likely put a damper on earnings potential over the next quarter.
Pre-Market Movers and Shakers (as of this writing)
S&P 500 futures (/ES) +1.97%, near 2333.50
U.S. Crude Oil futures (/CL) +1.9%, near $23.06 a barrel
CBOE Volatility Index (VIX) -3.74% near 63.71
U.S. Gold Futures (/GC) +2.59%, near $1,522
Major Earnings for the Upcoming Week (3/23-3/27):
Monday:
7:30 am CT – Chicago Fed National Activity Index
2:00 pm CT – Treasury International Capital
Tuesday:
7:55 am CT – Redbook
9:00 am CT – New Home Sales
9:00 am CT – Richmond Fed Manufacturing Index
Wednesday:
6:00 am CT – MBA Mortgage Applications
7:30 am CT – Durable Goods Orders
8:00 am CT – FHFA House Price Index
9:00 am CT – State Street Investor Confidence Index
9:30 am CT – EIA Petroleum Status Report
Thursday:
7:30 am CT – Jobless Claims
7:30 am CT – Corporate Profits
7:30 am CT – GDP
7:30 am – International Trade in Goods
9:30 am CT – EIA Natural Gas Report
3:30 pm CT – Fed Balance Sheet
3:30 pm CT – Money Supply
Friday:
9:00 am CT – Personal Income and Outlays
9:00 am CT – Consumer Sentiment
12:00 am Ct – Baker-Hughes Rig Count
Major Earnings for the Upcoming Week (3/23-3/27):
Monday:
A.M. – BWAY, SY
P.M. – RAVN
Tuesday:
A.M. – CMCM, INFO, NEOG, QIWI
P.M. – AIR, BRP, GO, HOME, NKE, NOAH, OPGN, PUMP, SCS, SNX
Wednesday:
A.M. – CXRXF, ESLT, PAYX, TIGR, WGO
P.M. – FUL, MU, RKDA, SCVL, STON, WLMS
Thursday:
A.M. – CSIQ, ERJ, FDS, LX, SIG, TITN, VIOT, WOR
P.M.– AFYA, GME, GTBIF, HTHT, LULU, SAIC, SPWH
Friday:
A.M. – SCWX
P.M. – N/A
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**BOLD above indicates important and potential market-moving news and information
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