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Todd Harrison: The Turnaround Tuesday Quarterback

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It's not just about Greece.

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Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO.

It's a busy morning given missed estimates.  Freeport (FCX), Caterpillar (CAT), Proctor (PG) Microsoft (MSFT) and Dupont (DD) all fell short, as did Snowmaggeddon 2015, if you consider 18 inches (and still going) a disappointment.

The Buzz team did a great job of assimilating the news this morning; some highlights:

Procter & Gamble (PG) said it expects currency volatility to reduce 2015 sales by 5% and profits by 12%.

Durable Goods Orders (Dec) FALLS -3.4% vs 0.3% expected, prior revised down to -2.1% from -0.7%

The relatively slow growth in the world economy and continued weakness in commodity prices-particularly oil, copper, coal and iron ore-are expected to be negative for (Caterpillar) sales.  Current oil prices are a significant headwind for Energy & Transportation and negative for our construction business in the oil producing regions of the world.

FCX is taking aggressive actions to reduce or defer capital expenditures and other costs and has initiated efforts to obtain third-party funding for a significant portion of its oil and gas capital expenditures to maintain financial strength and flexibility in response to recent sharp declines in oil prices. In addition, FCX is monitoring copper markets and will be responsive to market conditions. As a first step, FCX has reduced budgeted 2015 capital expenditures, exploration and other costs by a total of $2 billion.

Currently, a fair amount of forecasters and by extension Federal Reserve policymakers believe that the strength in the US dollar is due to speculative flows over the strength in the US economy. Because of that, the Fed's reaction function may be to pre-emptively tighten policy by hiking rates to prevent any excess in the US. As we know, that would be a very harmful ordeal for the financial system because the shortage of dollars would become even more pronounced, and as we can already see, for the economy. That is something I would keep on your radar for the FOMC meeting tomorrow.


There are, of course, other things happening in the world.

Zion Bank (ZION) is "bolstering the allowance for credit losses in the fourth quarter," a process that was expected  to start in March.

The posturing continues between the IMF and Greece as the deadlines below progress.

    Feb 11 Greek parliament vote of confidence (to take place within fifteen days from the date the new cabinet is sworn in).
    Feb 28 Greece bailout extension expires.
    Mar 05 ECB Governing Council meeting in Cyprus; ECB Draghi press conference.
    Mar 13 S&P to publish rating update on Greece.
    Mar 27 Moody's may publish rating update on Greece.

There's the increasingly fragile situation in Ukraine as Mariupol comes into play.

And there is the growing fragmentation in Europe, which is either a cause or effect of everything happening across the pond, along with some newfound analogies to the financial crisis, a topic we covered some five years ago.

Tonight we'll hear from Apple (AAPL), which will color the tech tape going forward, along with a host of other companies.

Finally, in chart land, below please find the latest Hungry Alligator for a little long-term perspective.

Good luck today.

R.P.

Click to enlarge


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Twitter: @todd_harrison

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