Morning News: May 11, 2021
Posted by Eddy Elfenbein on May 11th, 2021 at 6:07 am

FANGS and BATS Sell-Off Spooks World Stocks

U.S. Fuel Supplies Tighten As Energy Pipeline Outage Enters Fifth Day

What We Know About the Colonial Pipeline Cyberattack

Biden Defends Unemployment Benefits, Provided Workers Accept Job Offers

New York Wins From Brexit’s $3.3 Trillion Hit to One Key Market

It’s Time For A Supply-Side Resurgence

Ginkgo Said to Agree to $17.5 Billion Merger With Sloan’s SPAC

Australian Company Loses Ugg Trademark Battle

Inside the Secretive Swiss Bank for the World’s Richest People

Elon Musk Sending Dogecoin Into Space After His ‘SNL’ Jokes Smacked It On The Nose

‘There’s No Going Back’: Ireland’s Tourism Trade Prepares to Re-Open for Good

Semiconductor Makers and Users Form A Group to Push for Chip Funding

Howard Lindzon: Momentum Monday – Technology Shmecknology

Michael Batnick: Best to Worst

Ben Carlson: We Need to Build More Houses

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Trex Earns 42 Cents per Share
Posted by Eddy Elfenbein on May 10th, 2021 at 4:15 pm

After the closing bell, Trex (TREX) reported fiscal Q1 earnings of 42 cents per share. That’s up 17% over last year. Sales rose 23% to $246 million. Wall Street had been expecting 38 cents per share.

“Sustained demand for Trex Residential products and accelerated market share gains from wood drove first quarter sales growth, laying the foundation for another year of strong double-digit revenue growth in 2021. At the same time, capacity expansion at our new state-of-the-art manufacturing facility in Virginia is coming on faster than originally anticipated. We now expect all lines in our new plant to be fully operational by the end of May, thirty days ahead of schedule. When completed, our capacity expansion investment will provide approximately 70% more capacity when compared to 2019 volume levels and will give us an important competitive advantage in today’s dynamic composite decking marketplace. The additional capacity further reinforces our position as the industry leader and most efficient manufacturer of high-performance, wood-alternative decking and railing,” said Bryan Fairbanks, President and CEO.

Trex expects Q2 revenue growth of 36%. During the quarter, the company bought back 504,275 shares for $46 million under its stock repurchase program.

For Q2, Trex expects sales of $295 million to $305 million. The midpoint is growth of 36% over last year’s Q2. Wall Street had been expecting $278.06 million.

Trex’s Earnings Are Due Out After the Close
Posted by Eddy Elfenbein on May 10th, 2021 at 11:33 am

The big news for today will be Trex’s (TREX) earnings which are due out after the close.

The Nasdaq has been getting knocked around lately. On Friday, the index snapped an eight-day streak of losing against the S&P 500. But its victory margin on Friday wasn’t that much. The index is back to lagging today. The Nasdaq is very close to dipping below its 50-day.

Last week, Cerner (CERN) beat earnings, approved a new buyback program and raised guidance. The stock promptly dropped 4.7%. Then it rallied. It’s as if the market had a chance to make some second thoughts.

This is a good reminder that sometimes the market is far from rational. Wall Street acts like a mob because that’s what it is.

Morning News: May 10, 2021
Posted by Eddy Elfenbein on May 10th, 2021 at 7:07 am

Stocks Cheer Prospects for Low Rates, Oil Jumps on Pipeline Outage

U.S. Govt, Top Fuel Supplier Work to Secure Pipelines As Closure Enters 4th Day

Biden Turns to Emergency Powers to Counter Colonial Pipeline Disruption

Inflation Brews for U.S. Producers While Services Wages Pick Up

Dogecoin Tumbles After Elon Musk Calls It A ‘Hustle’ on ‘SNL’ Show

What the Dogecoin Army is Saying as the Cryptocurrency’s Tumble Triggers a Bearish Break in the Long-term Trend Line

Underwriters Puzzle Over How to Make Pandemics Insurable Again

BioNTech to Build Covid-19 Vaccine Facility in Singapore By 2023

How Uber and Lyft Are Losing the Race to the Electric Future

UBS Dangles $40,000 Bonuses to Slow Junior Banker Defections

Policymakers Used to Ignore Child Care. Then Came the Pandemic.

Mattel Wants You to Send Back Your Toys When You’re Done With Them

Ben Carlson: How to Lose Money When the Stock Market is at All-Time Highs & Is It Harder For Young People to Get Rich Today?

Michael Batnick: The CAPE Ratio is Very High & Retail Is Staying in the ARKK

Jeff Carter: Closing the Pits

Joshua Brown: Saturday Night Live is the Modern Cay Shoeshine Boy

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April NFP = 266,000
Posted by Eddy Elfenbein on May 7th, 2021 at 8:37 am

The April jobs report is out. The U.S. economy created 266,000 jobs last month. Expectations were for one million.

The jobs number for February was revised higher by 68,000 and March was revised lower by 78,000. The unemployment rate went up 6.1%. Manufacturing lost 18,000 jobs. The labor force participation rate is now 61.7%. Average hourly earnings rose by 0.7%.

Many economists had been expecting an even higher number amid signs that the U.S. economy was roaring back to life.

There was more bad news: March’s originally estimated total of 916,000 was revised down to 770,000, though February saw an upward revision to 536,000 from 468,000.

The battered leisure and hospitality industry saw the biggest hiring gains, adding 331,000 workers though that still left the industry nearly 2.9 million shy of where it was before the pandemic.

The report comes amid robust growth that saw gross domestic product rise at a 6.4% annualized pace in the first quarter, and as many economists see a burst of 10% or more in the second quarter.

Morning News: May 7, 2021
Posted by Eddy Elfenbein on May 7th, 2021 at 7:01 am

Cryptocurrency Investors Should Be Prepared to Lose All Their Money, Bank of England Governor Says

U.S. Economy Likely Created Nearly A Million Jobs in April

Meme Stocks and Archegos: Fed Calls Out Financial Weak Spots

Fed Warns About Potential for ‘Significant Declines’ In Asset Prices as Valuations Climb

Traders Ramp Up Bets on a Hawkish Fed Surprise at Jackson Hole

U.S. SEC Chair Tells Congress He Plans New Rules on Climate Risk, Trading

The Lithium Gold Rush: Inside the Race to Power Electric Vehicles

Climate Adaptation Should Be a Public Good, Not an Asset Class

Millions Are Unemployed. Why Can’t Companies Find Workers?

Walmart Deal Shows Expansion in Telehealth, New Front With Amazon

Adidas Shrugs Off China Boycott Call to Raise Outlook

JPMorgan Memo Warned $875 Million Payment Was Graft Risk

Joshua Brown: Taper Tantrum 2.0 Any Day Now

Howard Lindzon: Measuring Everything in Dogecoin

Michael Batnick: Animal Spirits: Is Art Recession-Proof?

Ben Carlson: 10 Things You Shouldn’t Care About As An Investor

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Two More Earnings Reports
Posted by Eddy Elfenbein on May 6th, 2021 at 10:26 am

We had two earnings reports this morning. Let’s start with Middleby (MIDD). The company reported Q1 earnings of $1.79 per share. That beat Wall Street’s forecast of $1.62 per share.

“We have positive momentum entering 2021 with strong orders and rising backlogs in all three business segments. Profitability across all three business segments increased as well, as we realized the benefits of our operating initiatives while also to moving forward our strategic initiatives with investments in sales, technology and service capabilities. We continue to proactively manage ongoing challenges due to COVID, particularly with supply chain disruption and rising costs, to minimize customer impact. Employee safety remains our top priority and we have kept the precautions at our facilities in place to best protect our workforce,” said Tim FitzGerald, CEO of The Middleby Corporation.

Zoetis (ZTS) reported Q1 earnings of $1.26 per share. That was 23 cents more than expectations. The company also lifted its full-year outlook. Previously Zoetis expected earnings of $4.36 to $4.46 per share. The new guidance is for $4.42 to $4.51 per share.

Jobless Claims Fall Below 500,000
Posted by Eddy Elfenbein on May 6th, 2021 at 10:17 am

We had some good economic news this morning. The initial jobless claims report was “only” 498,000. This is a new pandemic low. Of course, that’s normally a very high number, but in the age of Covid, it’s pretty good.

In fact, 498,000 is closer to previous peaks in other cycles. A little over a year ago, jobless claims peaked at six million. Jobless claims are now lower than they were during any time over the 12 months immediately following the financial crisis (November 2008 to November 2009).

While the jobs market still has a long way to go before it fully heals from the pandemic damage, improvement has accelerated in recent weeks as restrictions on activity continue to be lifted.

Though the pace has eased lately, the U.S. is still vaccinating more than 2 million people a day and soon will have half the population with at least one shot.

The claims decline comes a day before the Labor Department releases its nonfarm payroll count for April. Economists expect that the economy added another 1 million jobs during the month, with hiring likely to be the quickest in the hospitality sector, which sustained the worst of the pandemic-related damage.

However, continuing claims actually ticked higher last week, rising 37,000 to just below 3.7 million. The four-week moving average for claims edged down to 3.68 million, the lowest since March 28, 2020, just as mass layoffs were beginning to combat the spreading coronavirus.

Morning News: May 6, 2021
Posted by Eddy Elfenbein on May 6th, 2021 at 7:01 am

Companies Warn of U.S. Labor Shortages Economists Call Temporary

U.S. Vaccine Patent Shock Roils Pharma as Talks Move to WTO

Moderna Raises 2021 Sales Forecast for COVID-19 Vaccine to $19.2 Billion

The Chip Shortage Keeps Getting Worse. Why Can’t We Just Make More?

Gas and Power Sellers Rack Up Billions in Profit from Texas Freeze

Biden Leans Into Plans to Tax the Rich & Biden’s Audit-the-Rich Target of $700 Billion Seen as Tall Order

Facebook Oversight Board Upholds Social Network’s Ban of Trump

British Political Veteran Steers Facebook’s Trump Decision

Tesla Developing Platform to Allow Car Owners in China Data Access

Why Trouble May Loom for Stock Market if Cathie Wood’s ARK Innovation ETF Fails to Bounce

Cryptocurrency Dogecoin Surges Ahead of Elon Musk’s ‘SNL’ Gig

Space Aged: Bottle of Wine from Space Station Could Sell for $1 Million

Jeff Carter: Inflation, or Is It Inflation?

Michael Batnick: The Real World

Ben Carlson: Animal Spirits: We Should Be In A Bubble

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Earnings from Miller Industries and Ansys
Posted by Eddy Elfenbein on May 5th, 2021 at 4:45 pm

After the closing bell, Miller Industries (MLR) reported fiscal Q1 earnings of 28 cents per share. That’s a drop of 41.5%. Sales fell 3.5% to $169.9 million. No analysts follow the stock.

Also after the close, Ansys (ANSS) reported Q1 earnings of $1.12 per share. That’s an increase of 17% in constant currency over last year’s Q1. Wall Street had been expecting 84 cents per share.

For Q2, Ansys expects earnings to range between $1.43 and $1.67 per share. Wall Street had been expecting $1.57 per share. For revenue, the company expects $415 million to $445 million.

For the whole year, Ansys expects earnings between $6.69 per share and $7.10 per share. Wall Street had been expecting $6.76 per share. Sales are expected between $1.81 billion and $1.875 billion.