Morning News: January 29, 2021
Posted by Eddy Elfenbein on January 29th, 2021 at 7:02 am

U.S. Oil Industry Seeks Unusual Alliance with Farm Belt to Fight Biden Electric Vehicle Agenda

G.M. Will Sell Only Zero-Emission Vehicles by 2035

How Wall Street Gains from ‘Populist’ Trading Movement

The GameStop Reckoning Was a Long Time Coming

Robinhood, in Need of Cash, Raises $1 Billion From Its Investors

Bitcoin Jumps Above $38,000 as Musk Adds It to Twitter Profile

Dogecoin Soars 370% as Reddit Group Works to Send the Cryptocurrency ‘To The Moon’

Facebook Stock Falls as Zuckerberg Calls Out Apple

SolarWinds Attackers Hit Strategic Targets: Cyber and Tech Firms

New Billionaire Mints Fortune From Humble Lockers

Cullen Roche: Three Things I Think I Think – GAMESTONK!

Michael Batnick: Is this Legal?

Ben Carlson: How Does the GameStop Saga End?

Jeff Carter: Retail Abandons GameStop ($GME)

Joshua Brown: Who the F*** Is Handling Comms For Robinhood LOL

Howard Lindzon: Former GoDaddy CEO Scott Wagner Joins Me on Panic with Friends to Discuss the Domain Industry and Digital Real Estate

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Earnings from Danaher and Sherwin-Williams
Posted by Eddy Elfenbein on January 28th, 2021 at 11:20 am

We had two more earnings reports this morning. Let’s start with Danaher (DHR). The company reported Q4 earnings of $2.08 per share. That beat Wall Street’s forecast of $1.87 per share. For the full year, Danaher made $6.31 per share on revenues of $22.3 billion.

For Q1, Danaher sees revenue growth “in the mid to high-teens range.” For all of 2021, the company expects revenue growth “in the low-double digit range.”

Rainer M. Blair, President and CEO, said, “For the full year 2020, we achieved nearly 10% core revenue growth including Cytiva, strong margin expansion, and more than $5 billion of free cash flow.”

Also this morning, Sherwin-Williams (SHW) reported Q4 earnings of $5.09 per share. Wall Street had been expecting $4.85 per share. For the year, Sherwin made $24.58 per share.

Commenting on the financial results, John G. Morikis , Chairman and Chief Executive Officer, said, “We finished the year strong in the fourth quarter driven by 9% U.S. and Canada same store sales growth, continued North American DIY growth and growth in all industrial end markets. My deepest thanks goes to our 61,000 employees who delivered outstanding results in what was an extremely challenging and unpredictable year. For the full year, we delivered record sales, EBITDA and EPS, and we generated over $3.4 billion in net operating cash, which enabled us to return over $2.9 billion to shareholders via dividends and share repurchases. Each of our segments delivered improved segment profit and margin in 2020.

For Q1, Sherwin expects that “sales will increase high single digits.” For the whole year, the company expects “sales to increase mid-to-high single digits.”

Sherwin sees full-year earnings ranging between $26.40 and $27.20 per share.

GDP and Initial Claims
Posted by Eddy Elfenbein on January 28th, 2021 at 11:04 am

We had two more economic reports this morning. First, the government said that fourth-quarter GDP grew in real terms by 4%. The estimate was for 4.3%.

For the year, the US economy shrank by 3.5%. That made it the worst year for economic growth in 74 years.

The initial claims report was for 847,000. That’s down from last week’s total of 914,000.

Still, the latest claims report showed that the total of Americans receiving unemployment benefits actually rose, jumping to 18.28 million, an increase of 2.29 million from the prior week. That increase is related to the latest fiscal package passed in December, which included extended benefits for displaced workers.

The bounce in consumer spending that had revived job and economic growth through the summer and fall has shown signs of fatigue, as household spending declined for the first time in seven months in November.

That slowdown, thought to be a function of colder weather and record-setting Covid cases, has led to a string of higher-than-expected jobless claims and stagnant unemployment figures.

Morning News: January 28, 2021
Posted by Eddy Elfenbein on January 28th, 2021 at 7:03 am

U.S. Economy Likely Logged Its Weakest Performance in 74 Years in 2020

Fed Leaves Interest Rates Near Zero as Economic Recovery Slows

‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game

GameStop Resumes Rally After Reddit Forum Briefly Goes Private

The Hedge Fund Point72 Has Suffered a Nearly 15% Loss Amid the GameStop Frenzy on Wall Street

Big Tech Is Trying to Innovate Beyond the Black Rectangle Dead End

Apple Logs Record Quarterly Smartphone Shipments, Huawei in Freefall

Toyota Overtakes Volkswagen as World’s Biggest Automaker

Tesla Slumps 8% After First Results as a Blue Chip Disappoint

In the Race for Investment Dollars, Cars Are Pulling Ahead

Pandemic Piles On Already Reeling Boeing, Leading To Nearly $12 Billion Loss In 2020

Howard Lindzon: Curb Your Exuberance …A New Show By Larry David

Ben Carlson: What In the World is Going On in the Market Right Now?

Michael Batnick: Animal Spirits: It’s Very Different this Time

Joshua Brown: Hedge Fund “Idea Dinner” With 2 Million Guests & Connect the Dots, Man

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Stryker Earns $2.81 per Share
Posted by Eddy Elfenbein on January 27th, 2021 at 4:20 pm

After the closing bell, Stryker (SYK) reported fiscal Q4 earnings of $2.81 per share. That’s a very good number. It beat estimates of $2.55 per share, and it’s a 12.9% increase over last year’s Q4.

For the quarter, net sales increased 3.2% to $4.3 billion although organic sales were down 1.1%.

For the year, Stryker’s EPS fell 10.0% to $7.43. Stryker still maintains some impressive performance numbers. For example, last year’s operating income margin was 24.4%.

For 2021, Stryker sees earnings ranging between $8.80 and $9.20 per share. Wall Street had been expecting $9.13 per share.

As we recover from the pandemic, we expect 2021 organic net sales growth to be in the range of 8% to 10% from 2019, as this is a more normal baseline given the variability throughout 2020, and expect adjusted net earnings per diluted share(2) to be in the range of $8.80 to $9.20. This includes the previously announced 10 cents of dilution driven by the acquisition of Wright Medical for the full year. Consistent with the pricing environment experienced in both 2019 and 2020, we expect continued unfavorable price reductions of approximately 1% in 2021. If foreign currency exchange rates hold near current levels, we expect EPS will be modestly favorable for the full year. This guidance assumes an ongoing recovery in our key geographies leading to more normalized elective procedure levels during the second quarter of 2021. We will not be providing quarterly guidance.

Today’s Fed Statement
Posted by Eddy Elfenbein on January 27th, 2021 at 2:01 pm

Here’s the latest Fed statement. No rate change.

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic. Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

Abbott Labs Earns $1.45 per Share for Q4
Posted by Eddy Elfenbein on January 27th, 2021 at 8:55 am

This morning, Abbott Labs (ABT) reported Q4 earnings of $1.45 per share. That beat Wall Street’s forecast by 10 cents per share.

For the year, Abbott earned $3.65 per share. That’s pretty impressive. Last January, Abbott give an earnings range for 2020 of $3.55 to $3.65 per share, so they hit the top end.

Additionally, the company sees earnings for 2021 of at least $5 per share. That’s earnings growth of 35%. Wall Street had only been expecting $4.37 per share.

For the quarter, Abbott had sales of $10.7 billion. That includes $2.4 billion of COVID-19 diagnostic testing-related sales. Organic sales grew by 28.4%. In Q4, Abbott delivered more than 300 million COVID-19 diagnostics tests.

Morning News: January 27, 2021
Posted by Eddy Elfenbein on January 27th, 2021 at 7:06 am

Fed on Hold As Officials Weigh Pandemic Against Vaccines, Fiscal Support

Renewed Demand for Treasurys Quells Fears of Rising Rates—for Now

The Covid-19 Pandemic Has Added $19.5 Trillion to Global Debt

Pfizer-BioNTech to Make 125 Million New Vaccine Doses in First-Ever Licensing Deal

GameStop Extends Meteoric Surge; Melvin Reportedly Closes Short

They Found a Way to Limit Big Tech’s Power: Using the Design of Bitcoin

Wall Street Expects Near-Record iPhone Sales Despite Delay, Shut Apple Stores

How to Pay for College (and Not Lose Your Shirt)

Walgreens Poaches Starbucks Executive Rosalind Brewer for CEO

Nick Maggiulli: Let Them Vote

Cullen Roche: Three Things I Think I Think – Civil WHAT?

Howard Lindzon: Gamestop Monday….WTF Happened?

Joshua Brown: 8th Inning for SPACs and IPOs, Tesla Echo Bubbles, Blockchain Collectibles, Reddit vs Hedge Funds

Michael Batnick: Reflexivity Everywhere

Ben Carlson: For Better or For Worse, This is a Young Person’s Market Right Now

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Silgan Holdings Earns 60 Cents per Share
Posted by Eddy Elfenbein on January 26th, 2021 at 6:11 pm

After the closing bell, Silgan Holdings (SLGN) reported fiscal Q4 net income of 60 cents per share. That’s an impressive number. Wall Street had been expecting 53 cents per share.

For the full year, Silgan made $3.06 per share. That’s up 42% over last year. It’s also well above Silgan’s earlier estimate of $2.92 to $2.97 per share (which itself was an increase over the prior estimate).

Cash flow from operations rose 19% to $602.5 million. Silgan had free cash flow of $383.5 million. Q4 net sales rose 17.0% to $1.23 billion.

Silgan has a bold forecast for this year.

“While 2020 presented us all with so many challenges, it also provided the Company with the opportunity to showcase the essential nature of our products, the strength and commitment of our team and the power of our performance-based culture, as the Company delivered record adjusted net income per diluted share of $3.06, a 41.7 percent increase over prior year adjusted earnings, and record free cash flow of $383.5 million,” said Tony Allott, Chairman and CEO. “Strong demand for our shelf-stable metal food packaging and our health and hygiene products sustained throughout the year, leading us to expect continued strong volumes in 2021. Therefore, we estimate adjusted net income per diluted share for 2021 for the Company to be in a range of $3.30 to $3.45, a 10.3 percent improvement over the record prior year period at the midpoint of this range. We also expect to continue to generate significant free cash flow of approximately $380 million in 2021, making acquisitions or other value creating uses of our cash an additional near-term opportunity,” concluded Mr. Allott.

So Silgan sees earnings this year between $3.30 and $3.45 per share.

Home Prices Surge at Fastest Pace in Six Years
Posted by Eddy Elfenbein on January 26th, 2021 at 11:34 am

The GameStop Saga continues. Today, shares of the videogame company are up above $86 per share. That’s still below yesterday’s intra-day high of $159.

The shares are somewhat volatile. Over Friday and Monday, 370 million shares of GME were traded. The float is 47 million.

Things are much calmer in the rest of the market. The S&P 500 broke out to another all-time high this morning. The index has been as high as 3,870.90 but it’s currently just barely negative.

This morning’s Case-Shiller report said that home prices rose by 9.5% in November. That’s one of the highest gains on record.

Prices nationally rose 9.5% in November, compared with November 2019, according to the S&P CoreLogic Case-Shiller Home Price Indices. That is the strongest annual growth rate in over six years, and a significantly stronger gain than in October, when prices were up 8.4%. It also ranks as one of the largest annual gains in the more than 30-year history of the index.

The 10-city composite annual increase in prices was 8.8%, up from 7.6% in October. The 20-city composite showed a 9.1% year-over-year gain, up from 8.0% in the previous month. Detroit was excluded, however, because of continued data reporting issues due to the pandemic.

“Recent data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “This may represent a true secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway. Future data will be required to address that question.”

Our first Buy List earnings report, Silgan Holdings (SLGN), is due out after today’s close. Wall Street expects 53 cents per share.