Morning News: February 5, 2016
Posted by Eddy Elfenbein on February 5th, 2016 at 7:02 am

World Stocks Drift as Fed Watchers Await US Job Data

German Factory Orders Fall as Export Slowdown Cools Confidence

Brazil’s Recession Is Crashing Its Biggest Party

Obama’s Seriously Bad Oil Tax For Transportation Infrastructure: The Hypothecation Violation

BNP Paribas Walks a Tightrope

China Insurance Purchase Curb Extended to Visa, MasterCard

LinkedIn -27.5% Due to Guidance; Field Sales Growth Expected to Slow, Acquisition Announced

Toyota Stays on Track to Report 3 Trillion Yen in Annual Profit

ArcelorMittal to Raise $3 Billion After Chinese Steel Exports Hit Profits

Volvo Readies For U.S. Slowdown as Fourth-Quarter Profit Just Lags

Monsanto to Focus on Technology as Syngenta Merger Slips Away

Despite Billions in Fresh Cash, Symantec Will Cut Costs and Go Into Debt

Mattel, Hasbro Would Face Rising Antitrust Worry Over Mega Deals

Roger Nusbaum: Taking Ownership of Your Retirement Outcome

Cullen Roche: Why Do Corporations Pay Dividends?

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IBD on Ross Stores
Posted by Eddy Elfenbein on February 4th, 2016 at 4:27 pm

Nice article today on Ross Stores (ROST) from Investor’s Business Daily: Ross Stores: A No-Nonsense Retailer Free From Amazon’s Clutches

It doesn’t have an online shop. It doesn’t promise luxury brands. And its fluorescent lighting and long, uninterrupted racks of merchandise aim in no way to replicate the glossy feel of a Bloomingdale’s or Macy’s.

But Ross Stores (ROST) is widely considered a solid, if not particularly flashy, find as other retailers struggle against the Web tide, and as shoppers increasingly take their business to off-price channels.

“They are so well positioned. They’re one of the best,” Morningstar analyst Bridget Weishaar said of Ross, adding that the off-price industry overall has hit the “sweet spot of pricing and distribution.”

Check out the whole article. They explain how Ross is impervious to Amazon. The store is also safe from weather-related issues that can wreak havoc on the inventories of other retailers.

Snap-on Beats Earnings by Four Cents
Posted by Eddy Elfenbein on February 4th, 2016 at 7:48 am

Snap-on (SNA) earned $2.22 per share for Q4. That was four cents better than estimates. For the year, the company earned $8.10 per share which is up from $7.14 in 2014.

“For full-year 2015, Snap-on achieved organic sales growth of 7.1% and diluted earnings per share increased 13.4%, once again validating Snap-on’s ability to build upon its unique combination of capabilities in serving serious professionals and to successfully navigate our runways for coherent growth and operating improvement,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “Our fourth quarter results, including 3.1% organic sales growth, a 19.1% operating margin before financial services, and a 12.7% increase in diluted earnings per share, represent an encouraging finish to 2015 and demonstrate ongoing progress along these runways while overcoming meaningful and continuing external headwinds. As we enter 2016, we believe that we’ll further strengthen our position with professionals performing critical tasks by enhancing the franchise network, expanding in the vehicle repair garage, extending to critical industries and building in emerging markets. At the same time, we remain committed to taking advantage of the opportunities for ongoing operating improvement through our Snap-on Value Creation Processes in the areas of safety, quality, customer connection and rapid continuous improvement. Finally, our progress in 2015 would not have been possible without the capability and commitment of our franchisees and associates, and I thank them for their dedication and their contributions.”

Morning News: February 4, 2016
Posted by Eddy Elfenbein on February 4th, 2016 at 6:46 am

European Growth Seen as Slower Than Previously Predicted

Six Oil Producers Agree on Emergency Meeting, Iran’s Shana Says

Bond Markets Are Underestimating the Fed, Goldman and Pimco Warn

U.S. Airlines Are Letting Flight Crews Avoid Zika Zones

Credit Suisse Posts First Loss Since 2008, Sees Tough Markets

Royal Dutch Shell’s Profit Down 56% on Slumping Oil Prices

Amazon Plans Hundreds of Brick-and-Mortar Bookstores, Mall CEO Says

Sharp Chooses Foxconn as Preferred Bidder Over Japan Fund

Wells Fargo Agrees to Pay $1.2 Billion to Settle FHA Claims

Emaar Chairman Leads Investor Group Buying Americana Stake

Toshiba Widens Full-Year Net Loss Outlook

GoPro Earnings Plunge After New Camera Fails to Impress

Does a Company Have To Disclose When a Top Executive Has a Serious Medical Problem?

Jeff Miller: The Costly Craving for Explanations

Howard Lindzon: Can the 8-80 Brands and Services Save the Market? …and My Gameplan

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Note on Yesterday’s Market
Posted by Eddy Elfenbein on February 4th, 2016 at 2:30 am

I wanted to touch on yesterday’s market action because it was so unusual. The S&P 500 gained 0.50% on Wednesday but there was a very wide divergence within the market.

The S&P 500 Value stocks gained 1.02% while the Growth stocks gained just 0.01%. The other divergence can be seen among the cyclicals. The Energy stocks in the S&P 500 gained 3.96% while the Materials stocks were up 3.33%. That’s a big gap between them and everyone else.

This is an important point that I stress to investors: different categories of stocks move in different ways. The cyclicals represent one node of the market. Mostly these are Energy and Materials stocks. Industrials are their closest cousins. Not surprisingly, the Industrials did fairly well today with a 1.51% gain.

Here is the matrix I’ve used to describe how the market generally moves. Yesterday was a classic Quadrant I day.

Long-term yields moved slightly higher on Wednesday while short-term yields were largely unchanged. I should add that the Energy and Materials stocks did well yesterday after doing very poorly for the last several months. The Industrials have been underperforming for about 20 months.

Bank Stocks Flat for 20 Years
Posted by Eddy Elfenbein on February 3rd, 2016 at 2:21 pm

Bank stocks have been getting clobbered recently. Shares of Citigroup (C) are down by one-third in the last three months. Shares of the Financial ETF (XLF) are close to a two-year low.

The S&P 500 Bank Index (^BIX) is about where it was 20 years ago. On October 17, 1996, the BIX closed at 192.32. Right now it’s at 193.52.

Morning News: February 3, 2016
Posted by Eddy Elfenbein on February 3rd, 2016 at 7:36 am

China Sets 6.5% to 7% Growth Target, First Range Since 1990s

Eurozone Economy ‘Losing Steam’ Amid Market Turmoil

Putin Prepares to Court Foreign Investors Wary of Past Stumbles

A Warning on Bankruptcy in Puerto Rico’s Debt Crisis

China’s 1.4 Billion Mouths Behind ChemChina’s Syngenta Pursuit

Intel Closes Some Diversity Gaps, but Challenges Remain

A Yahoo Employee-Ranking System Favored by Marissa Mayer Is Challenged in Court

Ford Europe to Cut Jobs in Drive For $200 Million of Savings

Toyota Unit Enters $21.9 Million Settlement Over Alleged Auto Loan Racial Bias

Pfizer Outlook for Little Growth Falls Short of Expectations

Comcast Revenue Beats Street as NBCUniversal, Internet Units Grow

Lowe’s Agrees to Buy Canada’s Rona for $2.3 Billion in Cash

Why Michael Kors Holdings Ltd. Stock Skyrocketed Today

Jeff Carter: Nothing Beats Growth, Nothing

Joshua Brown: The Usual Explainers

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Fiserv Earned $1.00 per Share for Q4
Posted by Eddy Elfenbein on February 2nd, 2016 at 4:10 pm

Fiserv (FISV) just reported Q4 earnings of $1.00 per share. That matches Wall Street’s estimate. Previously, the company had told us to expect Q4 earnings to range between 98 cents and $1.01 per share.

For the year, Fiserv made $3.87 per share which is a 15% increase over the $3.37 in 2014. This is Fiserv’s 30th year in a row of double-digit EPS growth.

“We delivered solid results in 2015 including internal revenue growth within our long-term outlook and our 30th consecutive year of double-digit adjusted earnings per share growth,“ said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “The organization generated record financial performance while delivering value for clients, associates and shareholders.”

For our Buy List, this is our first earnings “non-beat” all season. Until now, all nine reports were beats.

For 2016, Fiserv expects earnings to range between $4.32 and $4.44 per share. That’s an increase of 12% to 15% over the results from 2015. Wall Street had been expecting $4.33 per share.

Ford’s Sales Slipped Last Month
Posted by Eddy Elfenbein on February 2nd, 2016 at 2:25 pm

From USA Today:

Ford Motor’s U.S. sales fell 2.6% in January, compared to a year earlier, as auto industry sales leveled off in a month affected by a mighty storm in the Northeast.

Edmunds.com analysts had projected a 2.4% decline in sales for Ford and a 0.5% decline for the industry.

Following a record year for the industry, a brutal winter storm took a toll on sales in the Northeast in January, though analysts say the effect wasn’t particularly steep.

Ford enjoyed a 4.5% increase in average transaction prices, compared to a year earlier, to $34,504, according to Kelley Blue Book.

The company said its sales decrease was partially attributable to a strong January 2015.

The shares are down to $11.48 today.

Morning News: February 2, 2016
Posted by Eddy Elfenbein on February 2nd, 2016 at 7:15 am

Eurozone Unemployment Edges Down for 15th Month Running

A New Global Oil Deal Could Draw Lessons From 1998

Currency Traders Struggle to Parlay Bad Volatility Into Profit

China’s Latest Measure Against Outflows Caps Insurance Purchases

Alphabet Passes Apple as World’s Most Valuable Company With Google’s Help

BP Cites Low Oil Prices in $3.3 Billion Loss, as Industry Toll Mounts

Yahoo’s Marissa Mayer to Unveil Cost-Cutting Plan

OSI Defies China Court Verdict as Frustrations Grow Over System

Abbott to Acquire Alere, a Maker of Medical Diagnostics Tests

G.E. to Phase Out CFL Bulbs

Oh No Mario: Nintendo Profit Dives as Buyers Await Mobile Games

Affordable Care Act Is Dark Spot For Aetna

Einhorn Under Pressure as Greenlight Shrinks by $3.2 Billion

Roger Nusbaum: January Finishes On An Up Note

Cullen Roche: What Financial News Sources Should You Read?

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