Archive for January, 2014

  • Morning News: January 10, 2014
    , January 10th, 2014 at 6:29 am

    European Central Bank Ready For ‘Decisive Action’ To Aid Economy

    Covered Bond Shock Forces Denmark to Devise Plan B for Banks

    Skagen Says Ignore Wall Street, Bet on Emerging Markets

    China Exports to Face Tough 2014 as Yuan Climbs

    Japanese Begin to Question Protections Given to Homegrown Rice

    Warren Says She Expects Yellen Will Boost Fed’s Bank Oversight

    New Mortgage Rules Aim to Protect Home Buyers, Owners

    Retailers of All Stripes Sing Holiday Blues

    Gartner Says Worldwide PC Shipments Declined 6.9 Percent in Fourth Quarter of 2013

    Alcoa Posts $2.3-Billion Loss in Fourth Quarter on Write-Downs

    Infosys Q3 surprises D-Street; Five Factors That Could Make Infosys Stock Rally

    Is Uber’s Surge-Pricing an Example of High-Tech Gouging?

    Overstock Accepts Bitcoin Now – But Doesn’t Keep Them

    Edward Harrison: Why T-Mobile’s John Legere Will Continue to Shake Up the Telecom Industry

    Joshua Brown: Chart o’ the Day: A Technical Case for European Stocks

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  • We Need to See Some Heroic Entrepreneurs in the Movies
    , January 9th, 2014 at 6:01 pm

    The 86th Oscar nominations come out next week, and the early buzz is that “The Wolf of Wall Street” will be among the favorites for best picture, best director (Martin Scorsese) and best actor (Leonardo DiCaprio in the title role). Businessmen are usually villains in a Hollywood script. Rarely do we see entrepreneurs glorified in film. But as I look over my extensive data base of market history (as you may have noticed, I use history as a hook in GrowthMail), I visualize three movie script ideas from a century ago this week:

    Three Movie Script Ideas from 100 Years Ago This Week

    On Monday morning, January 5, 1914, an army of assembly line workers walked to their posts in Henry Ford’s Model T factory and found out that their pay envelope has doubled overnight, to $5 per day. What’s more, their day had been shortened to eight hours. Pinch me! I’m dreaming! A classic “robber baron” figured out that it was good business to treat his workers well. This way, he could insure that his best workers would not run to the competition with their best new ideas.

    On Tuesday, January 6, 1914, Charles E. Merrill hung out a shingle on 7 Wall Street, “Charles E. Merrill & Co: Operations Department.” The sign lied: There was no company, only him, and no money, or Operations. His dream was to bring stock market investing to the masses, not just the well-heeled patricians of established wealth. Six months later, Edmund Lynch joined him, only to be told that the stock market would be closed “indefinitely” (for five months, as it turned out).

    On Wednesday, January 7, 1914, the first steamboat passed through the new Panama Canal. It was a French crane boat called the Alexandre La Valley. For the previous 50 years, visionaries had dreamed of a route linking the Atlantic and Pacific, but it took a few bold men with grit – President Theodore Roosevelt, Army engineer George Washington Goethals and Army Doctor Walter Reed – to make this massive project possible, linking the world’s oceans for commerce.

    Alas, none of these movies have been made, or will likely ever be made. When it comes to movies about making cars, “Tucker: A Man and His Dream” (1988), my favorite pro-business film, lost $4.3 million, while Oliver Stone’s assault on corruption in “Wall Street” (1987) tripled its costs in box office receipts.

    As for the Panama Canal, I wonder if Dreamworks has enough special effects to make the danger and daring of that project as impressive as it was in fact. Read David McCullough’s 1977 award-winning book, “The Path between the Seas: The Creation of the Panama Canal, 1870-1914” to see what I mean. This year, the big dig continues, as the Canal widens to 180 feet (from 110) and deepens to 60 feet (from 42 feet) in depth, all in order to accommodate ships of up to 1200 feet in length, up from today’s 964 feet.

    This leaves us with Charlie Merrill – the ideal hero for a populist movie about Wall Street’s marriage with Main Street. Mr. Merrill brought investing to the masses, starting 100 years ago, but it was a rocky road. Fortunately, a new book could serve as a guide for scriptwriters. It’s called “Catching Lightning in a Bottle: How Merrill Lynch Revolutionized the Financial World,” by Winthrop H. Smith, Jr., son of the last-named partner in the firm’s eventual name: “Merrill, Lynch, Pierce, Fenner and Smith.” The book has a sad ending, since Merrill lost its way in recent years, but its first 85 years deliver an inspiring tale.

    Charlie Merrill’s Passion Can Still Work for the Average Investor

    Charlie Merrill brought several innovations to Wall Street. One was to be customer-centered, by paying associates a salary instead of a commission; another was to broaden the reach of stock market investing to the common man; and a third goal was to reflect core values, etched into concrete in their headquarters building: “Client focus. Respect for the individual. Teamwork. Responsible citizenship. Integrity.”

    The firm grew large, but its beginnings could not have been smaller. Charles E. Merrill, born October 19, 1885, in the suburbs of Jacksonville, Florida, arrived in Manhattan just as the Panic of 1907 began. He found and lost a number of jobs before 1914, when he set up shop on Wall Street. It was an uphill battle from the beginning. First, he borrowed $10 to take a businessman to lunch in order to offer 20% of his new (then worthless) company, in exchange for a $2 million capital loan. Along the way, Merrill always had a keen eye for value. For instance, he launched and ran the grocery chain, Safeway, in 1928, since he thought stocks had become too overvalued. In effect, he sat out the disastrous 1930s. He only returned to the brokerage business when Winthrop Smith, Sr., persuaded him to return in 1940. Merrill would only do so if the company committed to an advertising campaign to bring stock market investing to the masses.

    The 1940s marked the optimum decade for buying stocks, but most Americans avoided stocks like the plague. In 1949, the Dow was still mired below 200 (50% below its 1929 peak, 20 years earlier). A 1949 Federal Reserve Board survey found that 69% of U.S. families with incomes over $3,000 a year were opposed to investing in stocks. Another 1949 survey found that 90% of the richest residents of St. Paul Minnesota had never purchased a share of stock in their lifetime. When most Americans heard the word “stock,” they thought of Chicago’s stockyards, not Wall Street’s brokerage firms. Merrill changed that.

    Merrill bemoaned the fact that Americans spent $9 billion a year on cars but just $540 million on stocks, so Merrill – more than anyone else – turned the tide of public sentiment. His 1949 newspaper ads targeted women who’d “like to know more about investments.” (Merrill always had a way with the ladies!) With that single ad, he lured 30,000 into an eight-week course, despite widespread fears over the dangers of stock market investing. Later, he invited both husbands and wives to the same forum, so that both would be involved with their family’s financial future. His seminars advocated dollar-cost averaging of as little as $40 per month. Merrill also set up tents at agricultural fairs and converted buses into “stock-mobiles.”

    As a result of Merrill’s efforts, the number of individual shareholders began to soar in the 1950s, growing by 10% a year, reaching 8.6 million in 1956, when Merrill died, He was “bullish on America” to the end.

    The theme of the movie I have in mind is captured in The Economist’s review of Smith’s new book: “When Finance was for the 99%.” Imagine a world in which only the stuffed-shirt rich invest in stocks. Along comes a kid with an “Occupy Wall Street” mentality. He sets up a kiosk in the middle of Grand Central Station, showing off a stream of stock price to passing commuters. (Yes, Charlie did that!) By luring working stiffs to his stock seminars, he lifted some of the 99% to the ranks of the top 10%.

    Former SEC chairman Arthur Levitt has said that Merrill Lynch was the only Wall Street firm with a “soul,” by which he undoubtedly meant its 10-word credo. But Win Smith, Jr., said the company began to lose its soul in the late 1990s, particularly after 9/11, when the board and CEO Stanley O’Neal began investing heavily in risky subprime debt, closing international operations, and firing 24,000 associates.

    There is a happy ending. Two of Winthrop Smith Jr’s nephews work at Bank of America Merrill Lynch and say they were taught the old ways of putting customers first. That would make for a great final reel.

    Another Great Pro-Business Film Idea from 125 Years Ago This Week

    Not all businesses succeed, of course. As 1889 dawned, world-famous author Mark Twain touted, and invested in, a revolutionary new automatic typewriter called the Paige Compositor, while a Census clerk, a former engineering professor, fiddled with some punched cards in order to streamline the 1890 Census.

    Here are the facts: On Saturday, January 5, 1889, Mark Twain wrote in his diary: “EUREKA! I have seen a line of movable type, spaced and justified by machinery!” He invested his life savings in the Paige Compositor, a machine that he said would make older inventions – like the phone or locomotives – “mere toys, simplicities.” Twain invested $300,000 to take over full ownership of the firm, which was under the scientific direction of James W. Paige, whom Twain called “a Shakespeare of mechanical invention.”

    Before we check on the success of the Paige Compositor, let us switch frames to the workshop of Herman Hollerith. On Tuesday, January 8, 1889 – 125 years ago tomorrow – Hollerith was granted a patent for his electric tabulating machine – something like a punched-card calculator. The Hollerith system was first used to count heads in the Census of 1890. Hollerith then formed the Tabulating Machine Co., which in 1911 became the Computing Tabulating Recording Company, which, starting in 1914, Thomas Watson turned into International Business Machines (IBM), one of the greatest corporations of the 20th Century.

    Meanwhile, the Paige Compositor proved to be too temperamental to handle rough print shop work. The more rough-and-ready Linotype won the race to commercial dominance in type-setting. Mark Twain was driven into bankruptcy in 1894 after losing $300,000. The good news is that he had to go back to writing for a living. In 1894, he wrote “Pudd’nhead Wilson,” which includes these painful investment lessons:

    “Behold, the fool saith, ‘Put not all thine eggs in the one basket’ – which is but a matter of saying, ‘Scatter your money and your attention’; but the wise man saith, ‘Put all your eggs in the one basket and – WATCH THAT BASKET.”

    “October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”

    “The holy passion of Friendship is of so sweet and steady and loyal and enduring a nature that it will last through a whole lifetime, if not asked to lend money.” – All quotes are from “Pudd’nhead Wilson,” 1894.

    – Gary Alexander
    Navellier Marketmail

  • Ford Raises Dividend By 25%
    , January 9th, 2014 at 10:31 am

    Good news from Ford ($F). The automaker sweetened its dividend by 25%. The quarterly dividend will rise from 10 cents to 12.5 cents per share. That’s 50 cents on the year.

    Ford said its dividend increase reflects strong 2013 performance and its plans going forward and is consistent with the company’s One Ford goal of delivering profitable growth for all stakeholders.

    “Our capital strategy continues to be focused on financing our One Ford plan, further strengthening our balance sheet and providing attractive returns to our shareholders,” said Bob Shanks, chief financial officer, Ford Motor Company. “This increase in the dividend provides our shareholders with a regular, growing dividend that we believe is sustainable over an economic or business cycle.”

    Through the first three quarters of 2013, Ford increased its liquidity position by $3 billion and has extended to 14 the number of consecutive quarters of positive Automotive operating-related cash flow.

    Two years ago, Ford restored its dividend at five cents. Last year, they doubled it to ten cents, and now we’re at 12.5 cents. The stock closed yesterday at $15.54, so the new dividend works out to a yield of 3.22%. Shares of Ford are currently up about 2% today.

  • Details from BBBY’s Earnings Call
    , January 9th, 2014 at 9:41 am

    I wanted to share some details from Bed Bath & Beyond’s ($BBBY) conference call. To recap, their Q3 earnings-per-share rose 8.7% while their sales rose by 6%. Breaking down their sales increase, 78% came from comp store sales and 2% came from new stores. BBBY’s gross margins fell a bit due to inventory acquisition costs, shoppers using more and larger coupons and a shift towards lower margin goods. Expenses for selling, general and administrative dropped a bit partially thanks to lower payroll costs.

    What the market is focused on today isn’t so much the third-quarter results but rather the lower guidance for Q4. A few things to point out. Last year’s fourth-quarter was 14 weeks, while this year’s is 13 weeks. Also, the data ranges are a bit off so the comparisons aren’t exactly apples to apples.

    The company listed several planning assumptions that factor into their earnings forecast for Q4. I’ll summarize the important parts. BBBY sees comp store sales rising by 2% to 4%, instead of the earlier projection of 3.5% to 5.5%. Net sales are expected to fall by -3.9% to -5.7%. Again, that’s with one less week of sales. The company estimates that adjusting for the missing week, Q4 sales growth is expected to range from -0.3% to +1.6%.

    Bed Bath & Beyond lowered their Q4 guidance range by ten cents per share, from $1.70 – $1.77 per share to $1.60 – $1.67 per share. Their full-year range drops from $4.88 – $5.01 per share to $4.79 – $4.86 per share.

    The company added some thoughts on the coming fiscal year (Feb 2014 to Feb 2015):

    Turning to fiscal 2014. While we are in the progress of completing our annual budget, our preliminary planning assumptions include the following. One, we anticipate opening approximately 30 stores across all our concepts. We anticipate the mix of store openings to be relatively consistent with fiscal 2013. Two, we expect to continue our program of renovating or repositioning stores within markets when appropriate.

    Three, our operations will continue to be entirely funded from internally generated sources. Four, as previously discussed, we anticipate completing the current share repurchase program by the end of fiscal 2015. Five, we expect continuing variability in our quarterly tax rates. We will provide further information related to the fiscal first quarter and full year 2014 on our next quarterly conference call on April 9, 2014.

    Before concluding this afternoon’s call, a few additional comments relative to our recently concluded fiscal third quarter. Our balance sheet and cash flows remain strong. We ended the fiscal third quarter with cash and cash equivalents and investment securities of approximately $781 million.

    The stock is currently down about 11% this morning.

  • Morning News: January 9, 2014
    , January 9th, 2014 at 6:35 am

    Draghi Raids Bankers in Rush to Hire 1,000 for Europe Supervisor

    U.K. Trade Deficit Narrows as Exports to EU Nations Increase

    China’s Answer to Amazon, Alibaba, Bans Bitcoin

    China Auto Sales Up Nearly 14% in 2013

    India to Seek Foreign Investment in Giant, Creaking Rail Network

    Hunt for Kazakh Bank’s Missing Billions Leads to Riviera

    The Big Issues Facing Fed Chair Janet Yellen

    Holiday Season Sales Rise But Foot Traffic Slides

    Tesco, M&S and Morrison Sales Disappoint

    Watson Is Moving To NYC: IBM Announces $1 Billion Group Based On Jeopardy Ace Computer

    Rupert Murdoch’s 21st Century Fox to Drop Australian Listing

    BlackRock Agrees to Stop Pursuing Nonpublic Views

    P. Diddy and Diageo Buy Tequila Brand DeLeon

    Jeff Carter: Advice on How To Build An Innovative Business-Don’t Become A Suit

    Jeff Miller: The Most Expensive “Free” Advice – 2014 Update

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  • Bed Bath & Beyond Cuts Guidance
    , January 8th, 2014 at 5:06 pm

    After the closing bell, Bed Bath & Beyond (BBBY) released a very disappointing earnings report. For the third quarter (Sep-Oct-Nov), the home furnishings company earned $1.12 per share. That was three cents below Wall Street’s forecast.

    The company had said they expected Q3 to range between $1.11 and $1.16 per share. So technically, BBBY hit their own guidance, but the Street was expecting more (and so was I).

    Net sales rose 6% from last year’s third quarter. Comparable store sales, which is a key metric for retailers, rose by 1.3%. Honestly, that’s not that great.

    So far this year, BBBY has earned $3.20 per share for the first three quarters. That’s a nice increase over the $2.89 per share from the same period last year.

    Now for the bad news. Bed Bath & Beyond cut their Q4 guidance. I was afraid this might happen. The previous range was $1.70 to $1.77. Now it’s $1.60 to $1.67 per share — so 10 cents at both ends. That lowers the full-year range from $4.88 – $5.01 per share to $4.79 – $4.86 per share. I had been expecting the company to clear $5 per share for the year. For some context, last year, BBBY earned $4.56 per share.

    The stock is getting pounded in the after-hours market. It’s currently down $6.63 or 8.32%. This is ugly, but I urge you to not get rattled. This has happened to Bed Bath & Beyond a few times before. In fact, it’s been much worse before — and each time, the stock has come back.

    Here are the sales and earnings figures for the past few quarters:

    Quarter Sales Gross Profit Operating Profit Net Profit EPS
    May-99 $356,633 $146,214 $28,015 $17,883 $0.06
    Aug-99 $451,715 $185,570 $53,580 $33,247 $0.12
    Nov-00 $480,145 $196,784 $50,607 $31,707 $0.11
    Feb-00 $569,012 $238,233 $77,138 $48,392 $0.17
    May-00 $459,163 $187,293 $36,339 $23,364 $0.08
    Aug-00 $589,381 $241,284 $70,009 $43,578 $0.15
    Nov-01 $602,004 $246,080 $64,592 $40,665 $0.14
    Feb-01 $746,107 $311,802 $101,898 $64,315 $0.22
    May-01 $575,833 $234,959 $45,602 $30,007 $0.10
    Aug-01 $713,636 $291,342 $84,672 $53,954 $0.18
    Nov-02 $759,438 $311,030 $83,749 $52,964 $0.18
    Feb-02 $879,055 $370,235 $132,077 $82,674 $0.28
    May-02 $776,798 $318,362 $72,701 $46,299 $0.15
    Aug-02 $903,044 $370,335 $119,687 $75,459 $0.25
    Nov-03 $936,030 $386,224 $119,228 $75,112 $0.25
    Feb-03 $1,049,292 $443,626 $168,441 $105,309 $0.35
    May-03 $893,868 $367,180 $90,450 $57,508 $0.19
    Aug-03 $1,111,445 $459,145 $155,867 $97,208 $0.32
    Nov-04 $1,174,740 $486,987 $161,459 $100,506 $0.33
    Feb-04 $1,297,928 $563,352 $231,567 $144,248 $0.47
    May-04 $1,100,917 $456,774 $128,707 $82,049 $0.27
    Aug-04 $1,273,960 $530,829 $189,108 $120,008 $0.39
    Nov-05 $1,305,155 $548,152 $190,978 $121,927 $0.40
    Feb-05 $1,467,646 $650,546 $283,621 $180,980 $0.59
    May-05 $1,244,421 $520,781 $150,884 $98,903 $0.33
    Aug-05 $1,431,182 $601,784 $217,877 $141,402 $0.47
    Nov-06 $1,448,680 $615,363 $205,493 $134,620 $0.45
    Feb-06 $1,685,279 $747,820 $304,917 $197,922 $0.67
    May-06 $1,395,963 $590,098 $148,750 $100,431 $0.35
    Aug-06 $1,607,239 $678,249 $219,622 $145,535 $0.51
    Nov-07 $1,619,240 $704,073 $211,134 $142,436 $0.50
    Feb-07 $1,994,987 $862,982 $309,895 $205,842 $0.72
    May-07 $1,553,293 $646,109 $154,391 $104,647 $0.38
    Aug-07 $1,767,716 $732,158 $211,037 $147,008 $0.55
    Nov-08 $1,794,747 $747,866 $203,152 $138,232 $0.52
    Feb-08 $1,933,186 $799,098 $259,442 $172,921 $0.66
    May-08 $1,648,491 $656,000 $118,819 $76,777 $0.30
    Aug-08 $1,853,892 $739,321 $187,421 $119,268 $0.46
    Nov-08 $1,782,683 $692,857 $136,374 $87,700 $0.34
    Feb-09 $1,923,274 $785,058 $231,282 $141,378 $0.55
    May-09 $1,694,340 $666,818 $142,304 $87,172 $0.34
    Aug-09 $1,914,909 $773,393 $222,031 $135,531 $0.52
    Nov-09 $1,975,465 $812,412 $245,611 $151,288 $0.58
    Feb-10 $2,244,079 $955,496 $370,741 $226,042 $0.86
    May-10 $1,923,051 $775,036 $225,394 $137,553 $0.52
    Aug-10 $2,136,730 $874,918 $296,902 $181,755 $0.70
    Nov-10 $2,193,755 $896,508 $305,110 $188,574 $0.74
    Feb-11 $2,504,967 $1,076,467 $461,052 $283,451 $1.12
    May-11 $2,109,951 $857,572 $288,948 $180,578 $0.72
    Aug-11 $2,314,064 $950,999 $371,636 $229,372 $0.93
    Nov-11 $2,343,561 $958,693 $357,020 $228,544 $0.95
    Feb-12 $2,732,314 $1,163,669 $550,765 $351,043 $1.48
    May-12 $2,218,292 $887,199 $313,398 $206,836 $0.89
    Aug-12 $2,593,015 $1,032,669 $365,137 $224,330 $0.98
    Nov-12 $2,701,801 $1,074,010 $361,649 $232,750 $1.03
    Feb-13 $3,401,477 $1,394,877 $598,034 $373,872 $1.68
    May-13 $2,612,140 $1,032,971 $323,101 $202,490 $0.93
    Aug-13 $2,823,672 $1,113,484 $389,766 $249,304 $1.16
    Nov-13 $2,864,837 $1,121,690 $374,647 $227,197 $1.12

  • The Fed Did Discuss Adjusting the Evans Rule
    , January 8th, 2014 at 2:38 pm

    This morning, I laid out my thoughts on the Fed changing or even ditching the Evans Rule (the threshold of 6.5% unemployment before raising short-term interest rates). It turns out, they did discuss this issue in December:

    Participants also considered the potential for clarifying or strengthening the Committee’s forward guidance for the federal funds rate.

    In general, participants who favored amending the forward guidance saw a need to more fully communicate how, if the unemployment rate threshold was reached first, the Committee would likely set monetary policy after that threshold was crossed.

    A number of participants pointed out that the federal funds rate paths underlying the economic forecasts that they prepared for this meeting, as well as expectations for the funds rate path priced into financial markets, were consistent with the view that the Committee would not raise the federal funds rate until well after the time that the threshold was crossed. (Yep, that seems very much the case. – Eddy)

    A few participants discussed the potential advantages and disadvantages of using medians of the projections of the federal funds rate from the SEP as a means of communicating the likely path of short-term interest rates.

    Some worried that, if the Committee began to reduce asset purchases, market expectations might shift, and they wanted to reinforce the forward guidance to mitigate the risks of an undesired tightening of financial conditions that could have adverse effects on the economy.

    In light of their concern that inflation might continue to run well below the Committee’s longer-run objective, several participants saw the need to clearly convey that inflation remains an important consideration in adjusting the target funds rate.

    Participants debated the advantages and disadvantages of lowering the unemployment rate threshold provided in the forward guidance.

    In the view of the few participants who advocated such a change, a lower threshold would be a clear signal of the Committee’s intentions and was an appropriate adjustment in light of recent labor market and inflation trends. (I agree.)

    In contrast, a few others expressed concern that any change in the threshold might be confusing and could undermine the credibility of the Committee’s forward guidance. (But your credibility will also be hurt if you don’t adhere to your previous guidance.)

    Most were inclined to retain the current thresholds for the unemployment and inflation rates and to instead provide qualitative guidance regarding the Committee’s likely behavior after a threshold was crossed.

    So no change for now, but it’s on the radar. That’s a good thing.

  • Riverbed Gets $19 Offer
    , January 8th, 2014 at 2:27 pm

    Last February, shares of Riverbed Technology ($RVBD) got smashed. In March, I highlighted Riverbed when it had fallen below $15 per share. I said “the shares have dropped down to a good price.”

    RVBD bounced around for much of last year but started to catch fire in late October. The stock closed yesterday at $17.85. Today brought word that Paul Singer, a prominent hedge fund manager, is offering $19 per share for RVBD.

    “We believe in the quality of Riverbed’s assets,” Jesse Cohn, an Elliott portfolio manager wrote in a letter to Riverbed’s board of directors. “However, Riverbed’s valuation has been impaired by slowing growth in its core WAN optimization market and by significant investments in both acquisitions and operating expenses undertaken to diversify away from the core WAN optimization business.”

    Elliott Associates first took a stake in Riverbed in September and by November the New York-based activist hedge fund had disclosed a 10.4% stake in the company, causing the company’s stock to rise. Elliott has said it believes the company is “significantly undervalued.”

    The stock zoomed higher today. The market, apparently, expects more, perhaps a counteroffer. RVBD is currently at $19.83 per share.

    big.chart01082014a

  • Today’s Fed Minutes
    , January 8th, 2014 at 2:23 pm

    The Fed minutes report never tells us who said what. Instead, we’re treated to a stream of indefinite pronouns (“some” members said this, “a few” said that)

    Here’s the unaudited count of appearances in today’s Fed minutes:

    Some – 11*
    Most – 10
    A few – 8
    Several – 6**
    Many – 6
    A number of – 5
    One – 5
    A couple of – 4
    Almost all – 2
    All – 1
    A majority of – 1

    *Includes one “some other”
    ** Includes one “several others”

  • ADP Report = 238,000 Jobs
    , January 8th, 2014 at 10:51 am

    Wall Street is intensely focused on this Friday’s jobs report. The last few reports have been pretty good, and investors are curious if we’ll see more of the same. We got a sneak peak today when ADP, the private payroll firm, said that 238,000 net new jobs were added to the economy last month. That’s not bad, but I hasten to add that ADP isn’t always the best forecaster of what the government will say. For Friday, the consensus on the Street is for a gain of 195,000 jobs.

    Turning to our Buy List, Ford Motor ($F), is getting a nice lift today after Alan Mulally said that he won’t be taking the CEO spot at Microsoft ($MSFT), another Buy List stock. I thought this was pretty obvious, but there were folks who thought it was a done deal. Shares of Ford got as high as $15.71 today.

    Later today, the Fed will release the minutes from its last meeting. This is the meeting at which the Fed finally decided to taper its bond purchases. I’m curious about what the discussion was. (Remember that Fed minutes are a nice lesson is the use of indefinite pronouns—“some” said, “many” said, “a few” dissented from that.)

    Not much else is going on. After today’s close, Bed Bath & Beyond ($BBBY) will report its fiscal Q3 earnings. The company has told us to expect earnings to range between $1.11 and $1.16 per share. They’ve also said that earnings for the current quarter, which is not quite halfway done, will range between $1.70 and $1.77 per share. It will be interesting to see if they adjust that forecast.