Saturday, January 4, 2014

Earning's Season Kickoff - Review & Preview

Earnings season gets underway this week along with the New Year & first quarter.  I highlighted a few of the names we will be watching closely below on the calendar. Alcoa $AA reports and leads the way as usual, last quarter it was removed from the Dow and then blew-out positive numbers ironically. Monsanto $MON had a strong day Friday and reports this week with the $GIS news. If they miss by chance and stay positive Ill be looking long. $BBBY also made a move Friday with their earnings coming this week. On-line education company Apollo Group $APOL reports - this stock can really move after reporting. It typically moves its group members as well ie: $COCO & $CECO....
Wishing you a profitable 1st quarter earnings seasons and a profitable 2014. Like us on Facebook for daily insight and commentary at  
Happy New Year and thanks for checking....Tim_K

REVIEW & PREVIEW -- Barron's Jan 4 at 00:09

Last Week
   Dow Industrials            16469.99     -8.42
   Dow Global Index             311.18     -1.57
   10-Year Treasury Bonds         3.00     +0.00

They Said What?
With the economy improving and stocks routinely hitting new highs, we asked:
What could be the biggest surprise of 2014?

Mark Bloomfiel
President, American Council for Capital Formation   An unexpected event shocks financial markets, causing a drop of almost 1,000 points in the Dow. The president and Congress respond with a long-term, binding deficit-reduction plan, including pro-growth tax reform.
Jack Ablin
Chief investment officer, BMO Private Bank  The biggest outside risk is that crude prices tumble, sending Russia, Brazil, and the Middle East into an economic tailspin. Brent crude could fall
below $80.

Mark Lehmann
President, JMP Securities  Investors will be surprised by the continued health of the IPO market, the continued rise of the S&P 500 toward 2,000, and a newfound bipartisan tone in D.C.
Nicholas Consonery
Senior analyst, Eurasia Group The Chinese government will move more aggressively on financial reform than many expect. Instead of using the banks as distribution mechanisms for internal development, as they have done in the past, China's senior leaders are more likely to focus on alleviating local-government indebtedness and financial weakness in the commercial banks.
Pause That Refreshes
      After closing higher for several sessions and racking up double-digit
gains for the year, stocks took a breather, opening the first day of trading for
2014 in negative territory. Stocks ended mostly flat Friday; trading was thin as
a winter storm slammed the Northeast. The Dow Jones Industrial closed the week
at 16,469.99.
      Fiat's Drive Buy
      Fiat will get full control of Chrysler Group in a $4.35 billion deal,
clearing the way for consolidation of the auto makers. The deal values Chrysler
at just over $10 billion and will shut down Chrysler's proposed initial public
      Flat Tire Deal
      Cooper Tire & Rubber ended its $35-a-share merger deal with India's
Apollo Tyres, claiming Apollo's lenders refused to extend their financing
commitments beyond Dec. 31. Investors seemed to say good riddance to the $2.5
billion deal, which would have been the largest Indian takeover of a U.S.
company, by bidding up shares of both Cooper and Apollo after Monday's
      Autos Still in Fast Lane
      Sales of automobiles skidded a bit in December on bad weather, say Ford
and General Motors, but overall industry sales should still end 2013 at their
highest level in six years. Nissan led the pace with an 11% gain. Analysts
expect full-year sales to hit 15.6 million when all numbers are in.
      Stepping Into Crocs
      Some customers might be tired of Crocs' holey, colorful clogs, but
private- equity funds are stepping into the troubled shoemaker in a big way.
Blackstone Group is paying $200 million for a 13% stake and two board seats,
and Steven Cohen's SAC Capital Advisors has taken a 5% stake.
      States' Minimum Effort
      Amid an intensifying debate over income inequality, 13 states, including
New York and Rhode Island, raised the minimum wage as of Jan. 1. The moves bring
to 21 the number of states with hourly wages above the federal level of $7.25.
The increase amounts to less than 15 cents an hour in most cases.
      Growing Weed
      The world's first state-licensed marijuana retailers opened in Colorado
last Wednesday, drawing long lines of locals and tourists. The state estimates
these pot shops could ultimately generate annual sales of $578 million.
      Cloud Over Olympics
      Russian President Vladimir Putin ordered tightened security after two
suicide blasts in less than 24 hours killed at least 34 people in the city of
Volgograd. Sochi, where Russia will host the Winter Olympics in less than six
weeks, is less than 400 miles from Volgograd.
      Martha and Macy's Settle
      Martha Stewart Living Omnimedia stock surged last Thursday after the home-
products maker settled its lawsuit with Macy's, which objected to Martha's deal
to sell Martha Stewart-branded products at J.C. Penney. The settlement won't
affect earnings of either company.
      In Brief
      -- Bill de Blasio was sworn in as mayor of New York on New Year's Day.
      -- Former Soviet republic Latvia became the 18th member of the euro zone.
      -- Revlon will end operations in China.
      -- Carl Icahn has reportedly purchased 30 million to 40 million shares of
Hertz Global Holdings.
      He Said:
      "I am certain that we will fiercely and consistently continue the fight
against terrorists until their complete annihilation."
      Vladimir Putin, after the bombings in Volgograd.
      The Numbers
      The volume and activity in U.S. initial public offerings in 2013 was the
highest since 2007, according to Dealogic.
      -- $61.8 billion: volume of initial public offerings last year, compared
with $65.4 billion in 2007.
      -- 31%: the uptick in volume from 2012.
      -- 17%: average one-day pop for IPO shares in 2013, up from 13% last year.
      -- $2.9 billion: the largest IPO, by oil-and-gas company Plains GP
      This Week

Coming U.S. Auctions

                            YIELDS (%)
Day                     When        Last
                        Issued*     Auction

$28.0 bil   3-month     0.056       0.065
$26.0 bil   6-month     0.086       0.090
$23.0 bil   1-year      0.132       0.135
$30.0 bil   3-year      0.779       0.631
$21.0 bil   9-yr 10-mos 2.993       2.657
$13.0 bil   29-yr 10-mos3.924       3.758

* As of Friday afternoon.

      Glitch in Techland
      Missing: Next Big Thing
      Just days after all those New Year's resolutions to unplug, 150,000 gadget
lovers will converge on Las Vegas this week for CES, the tech industry's annual
      More than in recent years, tech fans are looking for the next big thing.
Smartphones and tablets are still popular, but their explosive growth is in the
rearview mirror. Expect technology companies to hawk wearable devices, wireless
audio, home-automation, and 3-D printing systems. Yet, with no sure bet -- and
no promises from Apple -- excitement has waned.
      The tech-spending outlook has dipped, according to the Consumer
Electronics Association, which runs CES. The group's Index of Consumer
Technology Expectations fell by 2.7 points in December, to 90.2, that month's
lowest reading since 2009. Shawn DuBravac, CEA's chief economist, says that some
of the falloff resulted from an early start to holiday sales. But it also partly
reflects the maturation of the market for tablets, the industry's redeemer of
      At the beginning of 2011, just 10% of U.S. households owned a tablet,
notes DuBravac. That has shot up to 45%; smartphones are now at 65%. The surge
could steal from 2014's success. Six months ago, CEA estimated that U.S. sales
of consumer electronics would rise 4.5% this year to $212 billion.
      The group plans to revise the figures at CES. Says DuBravac: "Growth will
still be positive, though slightly less than we had projected six months ago."
      Maybe there's something to those resolutions, after all.
      -- Alexander Eule
      Week's Highlight
      Friday 10: Economists mostly expect another solid month of net job gains,
suggesting continued economic recovery.

   Monday 6
      -- The Senate is expected to confirm Janet Yellen's nomination as head of
the Federal Reserve.
      -- Institute for Supply Management (ISM) releases December
nonmanufacturing index, which focuses on the services sector. The median
forecast calls for a rise to 54.5 from a previous 53.9, suggesting expansion
remains intact.
      -- Economists expect a 1.7% uptick in durable-goods orders for November.
      -- Treasury Secretary Jacob Lew visits France, Germany, and Portugal for
economic talks.
      Tuesday 7
      -- The Commerce Department releases November international trade data.
Most analysts are looking for the deficit to narrow to about $40 billion from
October's $40.6 billion.
      -- Ford Motor will unveil a hybrid car that uses a solar panel in the roof
at the CES consumer electronics and technologies trade show in Las Vegas.
      -- Obama will press for reinstatement of jobless benefits at a White House
      -- Federal Trade Commission is expected to unveil an initiative against
misleading weight-loss-product ads.
      -- Nortel Networksasks bankruptcy court to approve what it calls a
"milestone" in its long-running liquidation.
      -- Apollo Education Group reports fiscal first-quarter results.
      -- Germany's Federal Labor Agency releases December jobless figures.
      Wednesday 8
      -- The Fed releases minutes of its Dec. 17-18 meeting, where officials
decided to start tapering. Details could reveal the potential pace of tapering
over the first half of 2014, points out senior economist Russell Price, of
Ameriprise Financial.
      -- Bank of England holds monetary-policy committee meeting.
      -- Payroll-processor ADP announces payroll data for December.
      -- The Fed releases November consumer-credit data.
      -- Texas Industries and Monsanto report quarterly results.
      -- Organization for Prohibition of Chemical Weapons will meet in the
Netherlands to review progress on destruction of Syrian chemical weapons.
      Thursday 9
      -- Economists are looking for 330,000 initial jobless claims for the week
ended Jan. 4, down from 339,000.
      -- Challenger, Gray & Christmas reports job-cuts data for December.
      -- Selected chain retailers release December sales comparisons.
      -- Kicking off fourth-quarter earnings season, aluminum giant Alcoa is
expected to report five cents a share for the fourth quarter, down slightly
from six cents a year earlier.
      -- European Central Bank's governing council meets to set monetary policy
for the euro zone. No change is expected.
     -- Economists estimate jobless rate remained at 7.0% in December. They
expect the Labor Department to report that total nonfarm payrolls rose by
195,000, compared with the 203,000 pace recorded in November.
      -- Commerce releases wholesale trade inventories for November.
      -- California introduces its budget for the coming year.

Coming Earnings
 Day                    Quarter  Consensus   Year   Ticker
                                  Estimate    Ago
Park Electrochemical      3Q       $0.28    $0.25    PKE
ZEP                       1Q        0.15     0.20    ZEP
Sonic                     1Q        0.13     0.11    SONC
Helen of Troy             3Q        1.08     1.18    HELE
Schulman (A.)             1Q        0.47     0.50    SHLM
AZZ                       3Q        0.74     0.60    AZZ
Calavo Growers            4Q        0.38     0.42    CVGW
Apollo Education          1Q        0.90     1.22    APOL
Micron Technology         1Q        0.44    -0.27    MU
Commercial Metals         1Q        0.24     0.15    CMC
Texas Ind                 2Q       -0.24    -0.40    TXI
Monsanto                  1Q        0.64     0.62    MON
Ruby Tuesday              2Q       -0.26    -0.07    RT
Bed Bath  &  Beyond       3Q        1.15     1.03    BBBY
MSC Industrl Direct       1Q        0.95     1.01    MSM
Constellation Brands      3Q        0.91     0.63    STZ
RPM Int'l                 2Q        0.45     0.40    RPM
Unifirst                  1Q        1.62     1.54    UNF
WD-40                     1Q        0.72     0.69    WDFC
Global Payments           2Q        1.02     0.93    GPN
VOXX Int'l                3Q        0.50     0.56    VOXX
SYNNEX                    4Q        1.18     1.16    SNX
Alcoa                     4Q        0.05     0.06    AA
Acuity Brands             1Q        0.84     0.69    AYI
Supervalu                 3Q        0.13     0.03    SVU
Family Dollar Stores      1Q        0.69     0.69    FDO
(Earnings are diluted and report dates are tentative. All forecasts
and historical numbers exclude extraordinary items by accounting definitions.)
Source: Thomson First Call

Economic Calendar Consensus Estimate

Day   Time
                                                 Consesus Est  Last Period
M   10:00   November Factory Orders                 1.7%       r-0.5%
T    8:30   November International Trade         -$40.0 bil   -$40.6 bil
W    3:00   November Consumer Credit              $14.5 bil    $18.2 bil
F    8:30   December Unemployment Rate              7.0%         7.0%
     8:30   December Nonfarm Payrolls             196,000      203,000
    10:00   November Wholesale Inventories          0.4%         1.4%
Unless otherwise indicated, times are Eastern. a-Advanced; f-Final; p-
      Preliminary; r-Revised
Source: Bloomberg/FactSet


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