Good morning. Happy Thursday.
Gap, gap, gap. Everyday the market gaps – they certainly provide trading opps for day traders but they frustrated the heck out of swing traders.
Today’s gap will be to the downside. The market has done well the last two days. The intraday action has been choppy, but in each case, the market rallied into the close.
Today will start on a down note. Nas 100 futures are down 20.25 (1.73%) to trade at 1135.75 and SPX futures are down 13.25 (1.55%) to trade at 855.25.
The foreign markets are mixed. In Asia/Pacific, Japan, Seoul and Taiwan are down more than 1% while China and Indonesia are up more than 1%. India closed up 5.5%.
In Europe, Amsterdam, Oslo and Italy are down at least 1.3% while Austria is up 2.25%. France is down a little…Germany up a little….London down almost 1%.
The European Central Bank today cuts its refinancing rate by 75 bpo to 2.50%, which was a bit less than market hopes for a 100 bp rate cut. The Bank of England today cut its benchmark base rate by 100 bp to 2.00%, which was in line with market expectations. Sweden’s central bank today cut its benchmark interest rate by 175 bp to 2.00% to address economic weakness as the bank forecasts a decline of -0.5% in Swedens’ GDP rate in 2009 after modest +0.9% growth in 2008. New Zealand today cut its benchmark interest rate by 150 bp today and Indonesia cut its benchmark rate for the first time in a year.
Yesterday…
UBS (UBS) said global stocks will withstand a full-blown recession and surge in 2009 with the SPX moving up to 1,300 by the end of the year.
Retailers did well due to the ComScore news sales over the internet on Monday surged 15% – second biggest on record.
Home builders did well on news there was a 112% surge in weekly mortgage app as the yield on a 30-year fixed-rate mortgage tumbled to a 3-1/2 year low of 5.47%.
Challenger job cuts for Nov surged to a 7-year high.
Nov AVP employment declined more than expected – to a 7-year high.
November ISM non-manufacturing index experienced a larger-than-expected contraction – lowest level since the index was created in July 1997.
The Fed’s Beige Book stated the US economy weakened across all regions since mid-Oct as it became tougher to get loans and demand for credit continued to shrink.
Today…
New jobless claims drop unexpectedly while the number of people collecting unemployment insurance reached a 26-year high.
Luxury home builder Toll Brothers (TOL) said its fiscal Q4 loss narrowed slightly as they took fewer write-downs on land values. They then warned fiscal 2009 revenue will fall significantly below 2008 levels but declined to give an exact forecast for 2009 due to an uncertain economic environment.
Switzerland’s second-largest bank Credit Suisse (CS) cut 5,300 jobs worldwide (11% of their work force) as another billion-dollar loss quarter looms.
Pork producer Smithfield Foods (SFD) reported a 76% drop in fiscal Q2 earnings due to high feed costs linked to skyrocketing grain prices.
Mobile phone maker Nokia (NOK) downgraded its Q4 market outlook for the second time saying the slowdown in the industry was bigger than expected.
TJX (TJX) which operates TJ Maxx and Marshalls stores, said November same-store sales dropped 12%, mostly hurt by declining foreign currency exchange rates. The drop would have only been 6% without exchange rate issue.
AT&T (T), the nation’s largest telecom company, is cutting 12,000 jobs or 4% of its work force due to the economic downturn.
Nissan (NSANY) is recalling 430,000 vehicles worldwide – some with faulty braking lamps and others with ill-connected cables that could stall the engine.
Saks’ (SKS) rating was cut by Standard & Poor’s.
Dillards (DDS) same-store November sales dropped 9%.
Fred’s (FRED) same-store sales fell 1.8%.
Wal-Mart (WMT) same-store sales rose 3.4%.
Children’s clothing retailers The Children’s Place (PLCE) reported same-store sales decreased 7%.
Mothers Work (MWRK) same-store rose 0.6%.
Pacific Sunwear (PSUN) same-store fell 10%.
Limited Brands (LTD) same-store fell 12%
Honda (HMC) is cutting jobs in UK and Japan because demand for new cars is plunging.
Williams Sonoma (WSM) reported a fiscal Q3 loss, boosted its fiscal 2008 earnings forecast slightly and maintained its Q4 outlook.
Chemicals maker, DuPont (DD) is cutting 2,500 jobs and trimming 4,000 contractors.
Merck (MRK) issued 2009 guidance below analyst consensus.
Energy equipment supplier American Superconductor (AMSC) reaffirmed its fiscal 2008 outlook but gave a 2009 revenue outlook below expectations.
Capital One (COF) is buying Chevy Chase Bank for $520 million in cash and stock.
Gold is down 1.26% and silver down 3.32%.
Crude oil down 1.14 to trade at 46.65. This is a 4-year low.
—————————————————————————————-
| UPGRADES | IIVI, ALTH, RRI, NILE, AMZN, YRCW, MUR, RHT, SNPS, AMAT |
| DOWNGRADES | RCRC, JAS, FMCN, CREL, SSCC, POL, ARJ, HOTT, IACI, ADBE, KLAC |
—————————————————————————————-
| EARNINGS | |
| before the open | STST, BRLI, CMN, CUB, FLOW, GRB, JTX, KFY, LAYN, MOV, PPC, SAFM, SIRO, SFD, TOL, UTIW, WSM |
| during trading | none |
| after the close | CHP, CAE, CMTL, GMTN, GIII, GES, HRLY, IPSU, LQDT, LAVA, NOVL, NX, SWHC, TK, ULTA, WIND |
—————————————————————————————-
ECONOMIC RELEASES
8:30 Initial Jobless Claims
10:00 Factory Orders
—————————————————————————————-