Today's the Day

U.S. GDP numbers came out this morning and showed that growth picked up to 3.5% annually from 2% annually in the previous quarter. That helped picked the futures up off their lows. Oil prices jumped yesterday as the Saudi’s caught everyone off guard by saying they that they would further reduce production after saying the day before that they were fine with prices and production levels.

Time Warner, Flextronics, and Alcan all met or exceeded forecasts while Allstate posted weaker earnings. But the major news today is the Fed’s decision on interest rates. It looks like nothing much will happen until the rate is released at 2:15pm. As I said yesterday, the Fed is widely expected to leave rates unchanged and the market will be focusing on the accompanying statement for any clues as to where the fed thinks rates will be going in the future.

Here’s hoping for Good News.

Waiting for the Fed

Some good news for the markets as both 3M and Proctor and Gamble posted good earnings. Will this be enough to drive the markets higher? I think today will be a somewhat flat day as everyone waits to see what the Fed is going to do with interest rates tomorrow. The current thinking is that the Fed will hold the line on rates.

The Fed has, in the past, talked of the economy being stronger than they thought so there is a slight danger that they may do something stupid an raise. Actually the chance is probably a little larger because you can always count on senile old men to do something stupid, especially on the highways. But I think that they should lower by a ¼ point as there have already been a number of companies forecasting weaker growth for the next few quarters. Too bad that the Fed would rather push the US into a recession rather than have a vibrant economy with 4 or 5% inflation. For some strange reason the Fed would rather see people unemployed and no inflation. I don’t understand why since they make so much money that 4 or 5% inflation really wouldn’t be a problem for them.

Oh well, the bottom line on today is to expect a flat day as the market waits for the Fed rate announcement tomorrow at 2:15pm.

Hold On. It's Gonna be an Interesting Week

This week promises to be an interesting week with a number of major earnings and economic reports due out and another Fed meeting. There were also a number of deals announced this morning that will hopefully get the markets moving in an upward direction. Among them:

Merrill Lynch is buying First Republic Bank for $1.8 Billion.

Abitibi Consolidated is combining with Bowater in a merger of equals.

And US Airways is willing to increase its takeover offer for Delta Airlines by $1 billion.

Looks like the tone has been set for an interesting week. I’ll keep you posted throughout the week.

Anyone's Guess

It seems as though earnings reports are alternating between beating, hitting and missing forecasts. Yesterday Microsoft beat forecast (although those were lower than last year) and guided higher. Also beating forecasts was Dow component Honeywell. The other Dow component that reported results yesterday was Caterpillar and they missed their forecasts. Finally Amgen also missed its forecast yesterday. So far this earnings season 69% of companies reporting beat forecasts while 15% matched forecasts. Only 16% of companies missed their forecasts but you would never know it by the way the market has performed over the last few days.

Oil seems to be creeping back up to the $55/barrel range which isn’t very good. I know all the gas stations have been only to happy to raise their prices over the last week. Well here’s hoping for some milder weather and lower prices. My wallet is enjoying the break and looking for more.

What’s going on today in the markets is anyone’s guess. Where they start may not be where they finish. All I can say is that today will certainly be interesting.

The Good, the Bad and the Ford

More good news from the tech sector as Ebay, Qualcomm and Nokia all posted better than forecast earnings. Ebay even raised their outlook for the next quarter and the full year. They also announced the buyback of $1- billion in stock. Chip maker Qualcomm also posted better than expected earnings and raised their guidance. Expect Nasdaq to do well today.

The blue chippers may not fair as well on the NYSE as Ford reported a record loss of $12.7 Billion, that’s right BILLION loss for the quarter. Boy if I lost even half that my bank would have me shot. Ford got stuck with a high reliance on trucks when high gas prices hit and sent consumers running to buy smaller cars. Although the margins are high on trucks, you can’t realize the profits unless you sell the trucks. It will be interesting to see what Wall Street thinks of all this.

Yahoo for Yahoo!

Yahoo and Sun Microsystems both advanced in the after hours market yesterday and helped push up Nasdaq futures this morning. Looks like we’re in for a positive open on Nasdaq. Yahoo posted numbers that beat Wall Street’s expectations. The stock initially dropped but in their conference call Yahoo reassured Wall Street that their new search tool will boost revenue at the end of the year. Perhaps this is the year where Yahoo steps out from under Google’s shadow.

During Bush’s state of the union address yesterday he called on Americans to reduce their gas consumption by 20% over the next ten years. Could this be the reason that oil is lower this morning by 56 cents? I think not. But it will be interesting to watch the inventory report due out at 10:30 am Eastern time this morning.

Overall it looks to be a positive day today and I hope to see a continuation of the modest gains in the stocks I’m holding today (CLRK and WIRE).

Another Dull Day?

It doesn’t look good for technology this morning with Alcatel-Lucent forecasting a drop in their fourth quarter earnings. Texas Instruments posted earnings that beat forecasts but also guided lower for the next quarter.

Oil was also higher crossing $53 to trade at $53.35, largely based on the recent forecast for colder weather in the northeast and the new OPEC quotas taking effect. I don’t expect the price of crude to remain above $50 because demand has fallen and supply has risen. There are also quite a few non OPEC countries supplying oil that are not subject to the OPEC quotas and they show no signs of reducing production.

GAP’s CEO Paul Pressler resigned after he had been unable to halt the slide in sales. GAP’s chairman will take over as CEO until a suitable replacement can be found.

DuPont and United Technologies both reported earnings that beat the street. At this point we can expect the broader market to be flat to slightly higher.

We need a couple of major companies to post some stellar earnings to kick start the rally that we saw before Christmas. Maybe people are waiting until after G.W.’s State of the Union address to decide whether they’re buying or not. God I feel sorry for those poor people down south having to put up with another two more years of Bush. What an embarrassment and pathetic president he turned out to be. But then again the Americans did elect him.

An Apple a Day?

Yesterday Apple released its earnings. It announced its first ever $1-Billion profit quarter. Profits were $1.14 per share beating the 78 cents that analysts were looking for and the 65 cents it earned in the year before. Income was up 77% from the same period a year earlier. All this is fabulous news for Apple so the stock should be vaulting ahead this morning, right?

Wrong! Apple was down 1.2% in overnight trading. Why is that you ask? Well the stock market is quite a fickle place to be. You can post the most stellar quarter setting records all around yet still the market sees something it doesn’t like. In Apple’s case it looks like future guidance for the next quarter and lower ipod growth rates. People buy stocks based on the company’s potential for future earnings so some short sighted analysts look at things like the next quarter and lower ipod growth rates and think that Apple will earn less money in the future. But each time this happens Jobs proves everyone wrong. He will do it again with the iphone and itv. For with Jobs at the helm it’s always a good time to buy Apple.

Back in the Saddle Again

Well I’m back after a much needed holiday. I managed to blow my Christmas budget out of the water again this year so I need a nice Spring rally to help defer the cost of Christmas. Well looks like the holidays weren’t very good for the stocks that I’m holding. CLRK is currently sitting at $19.35 while WIRE is a disappointing $21.59. CLRK is our long term investment so we can expect to ride out some ups and downs but WIRE needs to get moving or we should look at selling it and putting our profit to better use. WIRE is set t begin a share buy back program and to send out some dividends.

In the business news, the mild weather that we’ve been having in the north east has reduced the demand for heating oil and driven inventories up. As inventories go up the price of oil drops. Looks like the TD’s call of a $55/barrel oil price was right on the money. OPEC is starting to get worried but I don’t think that they can do enough to stop the slide of oil to the hight 30’s low 40’s. As we’ve seen before as oil drops the markets rise and my wallet is happier on both fronts.