This is a bit silly:
Also, very predictable as I had said in our Live Member Chat Room at 9:59 am:
“Dollar up at 107 from 106 and a bit yesterday is a big drag on the indexes so nothing alarming about being down a bit as long as our levels hold. On /ES, we’d LIKE to see 4,000 but we MUST hold the 50 dma, which is 3,920 at the moment. If we’re over the 50 dma, it begins to curve up and that initiates the long march back to the 200 dma at 4,350, which is about the strong bounce line at 4,320 (and will be by the time we get there).“
I’m not going to pat myself on the back for calling yesterday’s bottom on the nose. I will, however, pat myself on the back for inventing the 5% Rule™ – which called the bottom on the nose 6 months ago!
All that’s happening since then is that the S&P 500 (and the other indexes) as simply obeying their trading range 10% below (and hopefully above) the 4,000 line – which is where we determined the fair value of the S&P to be at this point in time. We would adjust the chart if the macro data changed but we’re not going to be panicked out of positions by simple gyrations within our range. “Show me the Recession” – as my friend Cuba Gooding Jr likes to say….
We had some downbeat earnings reports yesterday but there WERE profits, not losses. Last night, we had beats from BXP, BYD, CMG, CB, ENPH, MDLZ, SKX, TXN, V and WH with an 0.06 miss from MSFT but that was still making $2.23 per $252 share for the quarter with revenues up 12.4% from last year – GROWTH, not Recession.
This morning we have beats from ALKS, AEP, ADP, BSX, BMY, CCJ, CME, GRMN, GD, GPC, HES, HLT, HUM, KHC, OTIS, OC, PDS, WM but BA missed, BG missed, INVZ missed, SHW missed, SPOT missed, TMUS missed… It continues to be a stock-pickers market and our job is to identify the sectors and stocks that can grow – even in this rough environment – not to just give up when things get difficult.
It’s all about the Fed today at 2pm – I THINK they will stick to an 0.75 hike but the outlook is more important than what they do at this meeting – we’ll have to see.
Durable goods came in miles better than forecast by the economic doom patrol we’ve been subjected to all month had predicted. They said it would be -0.2% and it was, in fact, +1.9% and, not only that, but GM just told us they have Billions of Dollars of unsold inventory waiting for parts to be delivered – that’s big numbers down the road as well.
WHR was good yesterday, OTIS, TXN and V all beat – good signs for this report.
Good Morning.
Pihl . Logging in – yes in now…. but all of yesterday… could not post and was not able to log in….
Sorry about that, I’ll get Bill to take a look.
Phil / Thanks
Andy / Logging In. Have not been able to log in or post anything since Monday…. Can you please look into this?
But you are in now?
Good morning!
V’s profits up 32% is very impressive.
Visa fiscal Q3 earnings top consensus as cardholders hit the road and spend
SA NewsYesterday, 4:21 PM35 Comments
Visa (NYSE:V) fiscal Q3 earnings flew past Wall Street expectations as cardholders resumed traveling and brought their credit and debit cards with them. Its shares are gaining 1.1% in Tuesday after-hours trading.
“Consumers are back on the road, visiting various corners of the world, resulting in cross-border travel volume surpassing 2019 levels for the first time since the pandemic began in early 2020,” said Chairman and CEO Alfred F. Kelly, Jr.
The economic outlook is “unclear,” he said, “but we remain confident in our ability to execute with discipline and expand Visa’s role at the center of money movement.”
Net revenue for the quarter ended June 30, 2022 was $7.28B, vs. consensus of $7.07B, and up from $7.19B in fiscal Q2 and from $6.13B in the year-ago quarter.
Q3 non-GAAP EPS of $1.98, easily topped average analyst estimate of $1.75, and increased from $1.79 in the prior quarter and $1.49 in the year-ago period.
Payments volume rose 12% Y/Y in constant dollars with cross-border volume up 40% and processed transactions up 16%.
Visa Inc. (V) Q3 total payments volume of $2.94T, fell slightly short of the Visible Alpha consensus of $2.95T, increased from $2.78T in Q2.
Q3 total operating expenses of $3.13B climbed from $2.39B in Q2 and $2.07B in Q3 2021.
Conference call at 5:00 PM ET.
To some extent, people are dipping into their credit carts to pay bills but Total Payments ($2.94Tn) is not out of control – up 12% from last year. If salaries are up 6% (and they are at least), then people aren’t that far behind – so far.
And prices do rise ahead of wages and then we get raises and then prices rise again and we get raises again – it’s been so long since we’ve had inflation that people forget how it works!
S&P 500 ETFs have fared well during recent rate hike days. Does the trend continue?
SPY +1.19%
Now!
The S&P 500 (SP500) along with its benchmark tracking exchange traded funds tend to fare well on days that Jerome Powell and the Federal Reserve decide to raise rates.
History has shown since the Fed started raising rates back in mid-March the S&P is down roughly 10%, but the index itself actually gained 1.5% or more on each of the three Fed days.
On the first 25 basis point hike day the S&P moved up 2.2%, the second 50 basis point hike resulted in a +3% move for the index, and the latest 75 basis point hike resulted in a +1.5% move in the S&P 500.
With that being understood, ETFs that mirror the price movements of the index such as the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV), and Vanguard 500 Index Fund (NYSEARCA:VOO) may be primed for higher moves if history repeats itself.
As the market opened up on Wednesday the S&P 500 has gained 1.1% early on helping to further the trend.
KHC not responding well to earnings – not sure why?
As you can see, I’m sure this is silly.
The housing pullback is killing SHW. I guess people generally paint their house when they sell it or just bought it.
Sherwin-Williams slashes full-year earnings guidance; shares -12%
SHW -10.28%
Jul. 27, 2022 9:28 AM ET
1 Comment
Sherwin-Williams (NYSE:SHW) -12.3% pre-market after missing Wall Street estimates for Q2 adjusted earnings and revenues while also cutting full-year earnings guidance.
Q2 net income fell to $577.9M, or $2.21/share, from $648.6M, or $2.42/share in the year-earlier quarter, and revenues rose 9% to $5.87B but came in short of analyst expectations for ~$6B.
Q2 net sales by segment: Americas Group +8.1% Y/Y to $3.34B, Performance Coatings Group +15% to $1.79B, Consumer Brands Group +0.9% to $737.9M.
Citing the shortfall in Q2 results, demand pressures in Europe, China and the North American do-it-yourself market, and surging inflation, Sherwin-Williams (SHW) now forecasts FY 2022 adjusted EPS of $8.50-$8.80, down from prior guidance of $9.25-$9.65 and below $9.38 analyst consensus estimate, and sees full-year revenues rising by high-single to low-double digit percentage, compared with its prior outlook for a 10% Y/Y increase, or ~$21.8B consensus.
For Q3, the company forecasts revenues rising by low to mid-teens percentage, compared with previous guidance for an 11% Y/Y increase, or $5.72B consensus.
Sherwin-Williams (SHW) will implement a 10% price increase across the Americas on September 6, “with significant additional pricing actions being taken in our other two operating segments,” CEO John Morikis said.
KHC is down 8% despite a beat AND raised guidance – people are strange…
Kraft Heinz carries past second quarter estimates, raises full-year forecasts
KHC -8.02%
Jul. 27, 2022 9:12 AM ET
4 Comments
Consumer staples standby Kraft Heinz (NASDAQ:KHC) notched a beat on top and bottom lines for the second quarter, encouraging the company to raise its guidance for 2022.
For the second quarter, the parent company of Oscar Mayer, Grey Poupon, and more reported non-GAAP EPS of $0.70 and $6.55B in revenue, beating analyst estimates by two cents and $190M, respectively. The company credited a 12.4% increase in prices for buoying results amid a 0.9% decline in net sales.
“We delivered yet another quarter of strong results as we continue to successfully navigate near-term headwinds, enabled by further advancements of our long-term strategy,” CEO Miguel Patricio said. “Though the environment remains fluid, we are better able to anticipate dynamic conditions, adapt to this constantly changing environment, and demonstrate our resiliency against new challenges.”
He cited new price increases and efficiency improvements as specific methods by which the company intends to “demonstrate resilience.”
Moving forward, the company raised expectations for organic net sales to a high-single-digit percentage increase versus the prior year period, as compared to a mid-single-digit percentage increase that was expected prior. Management maintained adjusted EBITDA guidance in the range of $5.8B to $6B.
Elsewhere, year-to date free cash flow fell to $353M, down 78% versus the prior year period due to “higher cash tax payments on divestitures in 2022 related to the Cheese Transaction, higher cash outflows for inventories primarily related to stock rebuilding and increased input costs” among other minor impacts.
Shares declined 1.16% shortly before Wednesday’s market open.
https://charts2.finviz.com/chart.ashx?t=khc%20&ty=c&ta=1&p=d&s=l
Is there a seminar today? first time I could log in in a week! Just wondering as hitting the road.
Yes, I am doing a webinar today.
Thanks. Set up the link so I can get it on the cell, hopefully.
KHC – so on the put side, we will be short 10 2023 $35 puts and short 10 2024 $35 puts?
Correct. Keep in mind only 6 months to go on 2023 and they can be rolled to 2025 $30s so not worried and not going to pay $2.70 all premium to buy them back either.
A lot of insurers are bailing on Florida into hurricane season – people are scrambling to find companies that will cover them. I guess, given the potential for disaster this year coupled with inflation, the insurers would rather fold up shop than get crap for raising rates 30-40%.
OTIS spun out of UTX in 2020 – it was my favorite part of UTX. Clearly they get hit buy slowdowns in CRE:
Otis Worldwide cuts full-year earnings, sales growth guidance after mixed Q2
OTIS +3.58%
Jul. 27, 2022 8:58 AM ET
Otis Worldwide (NYSE:OTIS) +0.4% pre-market on Wednesday after beating Q2 adjusted earnings estimates but lowering full-year guidance for earnings and organic sales growth.
Q2 net income edged lower to $321M from $326M in the year-earlier quarter, operating profit margin slipped to 14% from 15.2%, and net sales fell 5.8% Y/Y to $3.49B, as a 0.4% increase in organic sales was more than offset by a 5.3% headwind from foreign exchange.
Otis (OTIS) lowered full-year guidance for EPS of $3.17-$3.21, below $3.22 analyst consensus estimate and down from its prior outlook of $3.22-$3.27, and for adjusted net sales to decline by 2%-3% to $13.6B-$13.8B, below $14.1B consensus and down from an earlier forecast for adjusted net sales of $14.1B-$14.3B.
The company also said it now expects organic sales to rise by 2.5%-3.5% in 2022, after previously guiding for growth of 3%-4%; full-year free cash flow is expected to come in at ~$1.6B.
“Otis completed a strong first half, delivering a solid second quarter with record New Equipment orders and the best maintenance portfolio growth in over a decade,” Chair, CEO and President Judy Marks said.
Durable goods orders unexpectedly rise in June, led by transportation equipment
Jul. 27, 2022 8:32 AM ET
2 Comments
Retail Inventories rise 2% in June
Jul. 27, 2022 8:32 AM ET
Phil-My sister has two rentals in a retirement community she lives in and her premiums were each raised 400. over last year. Her Homestead premium WAS NOT raised, however. So they re hitting the investors. Shes’ in Venice area. However, I am in No Wisc and my premiums on both properties were raised about the same. I’m with USAA and have not had one claim for home, auto for over 30 years and it makes no difference.
Andy informs me we’ll have the link up at about noon for the Webinar at 1pm.
Nas 12,400!
The Dollar is still up so it’s not due to that, which is good because it means this isn’t a rally based on expectations of the Fed suddenly being more doveish.
/SI good for another go at $18.50. Clearly it does not pay to be greedy.
Oil happy about the report:
/RB rolled over to the next month.
/NG is simply insane to bet on.
EIA inventory report – Crude inventory draws more than estimates
CL1:COM +2.51%
Jul. 27, 2022 10:52 AM ET
2 Comments
That’s a big draw, no wonder they are happy.
Insurance/Pirate – Despite the claims that “the science isn’t settled” the same people who own the insurance companies are forecasting major increases in natural disasters due to climate change – starting with more and stronger hurricanes and tornadoes. Flooding is also an issue as no water in one place means too much water somewhere else.
They are talking about adding Category 6 to the hurricane system – that would be winds above 175mph – that’s like a Sci-Fi movie – shouldn’t happen in real life!
They are expecting 17 named storms this year – up to Q! I think that’s a low estimate based on how warm the water is and the amount of seaweed I see at the beach (more when it’s warm).
A lot of rich people self-insure things like homes and cars. They can replace them if they have to and most people end up paying as much for the insurance as they would to replace the home or car over time. After all, that’s all the insurance company is doing – taking your money and investing it against the arbitrage of actual damage. Worth the risk if you can afford it.
Hello all. Thank you for your patience with the new site. We have some glitches that are to be expected and we would appreciate you directing your questions and or concerns to support@philstockworld.com
Here is the link to today’s webinar
https://attendee.gotowebinar.com/register/8599042271501391116
Hi Andy,
The email address <a href="mailto:support@philstockworld.com” target=”_blank”>support@philstockworld.com doesn’t work. I got an error ” 550: 5.1.1 <support@philstockworld.com>: Recipient address rejected: User unknown in relay recipient table”
I sent a few e-mails to andy@philstockworld.com but a billing issue. Could you please check the e-mail or give me a call to resolve this issue? Thanks.
I emailed to support@philstockworld.com and got:
Address not foundYour message wasn’t delivered to support@philstockworld.com because the address couldn’t be found, or is unable to receive mail.
The response from the remote server was:
550 5.1.1 <support@philstockworld.com>: Recipient address rejected: User unknown in relay recipient table
Also emailed admin@philstockworld.com (which worked).
Andy / Webinar
The Webinar link doesn’t work for me.
Webinar , please try again , not working for me either
Webinar not working for me. Also webinar not on YouTube for last 2 weeks.
Webinar link not working here either!
Markets loving that Powell said 0.75% was a very large hike and maybe not needed next time and they will be data-dependent moving forward. Worst-case is essentially off the table.
He topped it off by saying he doesn’t see a Recession ahead.
Of course he didn’t see inflation ahead either.
Could not have been better for the market.
Sorry Webinar link had trouble – seemed to be a lot of people on somehow.
What a day but now META and NFLX disappoint.
WBA, After many of my negative comments on this company in the past, showing a personal loss of more than 12K and the final comments of an other trading site I follow, I don’t want to print the man’s complete comments but here the final:
I concluded last October’s update thusly: “Patience has its limits, but I’m willing to hang on to WBA a bit longer to see exactly how the company intends to make good on its promises.” Given this recent development, I don’t see how the company will be able to keep its promises in the foreseeable future so I am removing Walgreens Boots Alliance from the PF Growth Portfolio.
So in deed contrary to others believe, I think we are beating a dead horse here.
They just beat top and bottom line and I’d say ready to break up over $40 but I know you’ve never been happy with them so I’m not going to try to talk you out of selling.
https://charts2.finviz.com/chart.ashx?t=wba%20&ty=c&ta=1&p=d&s=l