Rover's Weekly Market Brief - 1/8/2016

January 8, 2016 |

Indices

Dow Jones: 16,344.06 (-6.2%)

NASDAQ: 4643.63 (-7.3%)

S&P 500: 1922.03 (-6.0%)

Commodities

Gold: 1,103.30 (+2.6%)

Copper: 201.65 (-2.9%)

Coffee: 119.00 (-6.1%)

Economy

The US trade balance (deficit) for November, 2015 fell 4.9% to $42.4 billion from $44.6 billion in October, 2015 because of a high import decline (-1.7%) and a small export drop (-0.9%). Year to date, the trade deficit has increased 5.5% from the same period in 2014 as result of a stronger dollar, falling oil prices and a slowdown in China.

Crude Oil fell 10.8% this week to close at $33.06 per barrel despite rising geopolitical tensions in the Middle East. Commercial crude oil inventories (excluding the Strategic Petroleum Reserve) fell 1% to 482.3 million barrels in the week ended January 1 from 487.4 million the previous week. However, the national average retail regular gasoline price fell 0.3% to $2.028 from $2.034 per gallon the preceding week.

Initial unemployment claims fell 3.6% last week to 277,000 from 287,000 the previous week while continuing claims rose by 25,000 to 2,230,000. The four week moving average for new claims is also down this week breaking its two-month rally. Overall, both continued claims and initial claims have declined significantly their highs at the beginning of 2015.

Markets

Sonic Corp. (NASDAQ: SONC) recorded a 4.3% increase in total revenue and a 23.5% increase in net income YoY for Q1 2016. Diluted EPS rose 33.3% to $0.33 from $0.18 the same quarter last year. Company drive-in sales rose 3.7% while franchise drive-in sales increased 5.5%.

RPM International (NYSE: RPM) reported a revenue increase of 7.9% while net income went up 13.9% YoY. Diluted earnings per share for Q2 2016 rose 19.2% to $0.62 from $0.52 the same quarter last year. The revenue growth was driven by a 164.8% rise in specialty sales (mainly from acquisitions in the specialty segment) while industrial sales fell 5.8%.

Walgreens' (NASDAQ: WBA) revenue for Q1 2016 grew 48.5% while net income increased 30.6% YoY. Diluted earnings per share increased 13.5% to $1.01 from $0.89 the same quarter last year. Comparable sales for the retail pharmacy USA segment increased 5.8% compared to 2.2% and 3.1% for the retail pharmacy international and pharmaceutical wholesale segments, respectively.

Monsanto (NYSE: MON) reported a 22.7% decline in net sales for Q1 2016. Net income dropped 204.1% whereas diluted EPS decreased 212% to -$0.52 from $0.50 same quarter last year. The two business segments—seed & genomics and agricultural productivity—both recorded declines in sales with 13.7% and 34.4% respectively.

Looking Ahead

Next week will see the big financial houses post their earnings results. Given rising rates, their prospects look positive but maybe checked by defaults.

Monday Tuesday Wednesday Thursday Friday
Alcoa (AA) CSX (CSX) Clarcor (CLC) JP Morgan (JPM) Wells Fargo (WFC)
A Schulman (SHLM) IHS (IHS) Fulton (FULT) Intel (INTC) Blackrock (BLK)

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