Stocks took a breather the day after the S&P 500 set a new all-time closing high, slumping slightly on various earnings results that were a mixed bag.
Google parent, Alphabet (GOOG), started the dour mood after the close on Monday by missing EPS estimates by a wide margin. General Motors (GM) was another big name that fell short, reporting $1.20 per share against analyst estimates for $1.31. There were plenty of smaller firms reporting solid or neutral results for the third quarter, but the large caps dominated the news flow.
Drops on the main indices were contained, not unusual following a healthy upsurge. Waiting upon the Federal Reserve's FOMC policy decision announcement Wednesday afternoon (2.00 pm ET), trading was muted but not depressing.
When the market opens Wednesday, earnings reports will already have been released for some other big names, including Yum! Brands (YUM), General Electric (GE), and Sotheby's (BID).
Apple (AAPL), Starbucks (SBUX), and Facebook (FB) report after the close.
In between earnings releases and calls, the Fed will provide most of the excitement on Wednesday.
At the Close, Tuesday, October 29, 2019:
Dow Jones Industrial Average: 27,071.42, -19.30 (-0.07%)
NASDAQ: 8,276.85, -49.13 (-0.59%)
S&P 500: 3,036.89, -2.53 (-0.08%)
NYSE Composite: 13,209.63, +23.20 (+0.18%)
Showing posts with label Yum Brands. Show all posts
Showing posts with label Yum Brands. Show all posts
Wednesday, October 30, 2019
Tuesday, February 5, 2013
Europe, Ratings Agencies In Focus as Markets Zig-Zag
Editor's Note: Our regrets and apologies to readers for missing our regularly-scheduled post after the close on Monday. There were negotiations from which we could not extricate ourselves in a timely manner.
Stocks took a dive on Monday, but rebounded sharply on Turnaround Tuesday, raising the indices nicely, but not back to levels seen before Monday's decline.
In the news on Monday was Europe (remember them?), once again rearing its ugly, socialist head over stories emanating from Spain over alleged corruption in the government of Prime Minister Mariano Rajoy (no, really?), which the Spanish PM has denied. While there's little doubt that corruption exists in all levels of government worldwide, especially at the sovereign or federal level, proving such becomes a task not for the feint of heart, as there are vested interests which will defend their salaries, positions and perks like maddened pit bulls.
Italy was also in the news Monday, as fraud and conspiracy charges are being levied against the world's oldest bank, Banca Monte dei Paschi di Siena, and are slowly but surely finding their way to the top of government, eventually to land in the lap of Prime Minister Mario Monti.
National elections are slated for February 24-25, with former Premier Silvio Berlusconi, 76, gaining on front-runner Pier Luigi Bersani. Unemployment and rampant waves of criminality are among major issues in Italy.
On the US home front, the Justice Department finally found some level of damming evidence over which to bring charges against Standard & Poor's. The rating agency is alleged with fraud over their ratings of sub-prime loans in the 2004-06 period, helping bring about the 2008-09 market crash and financial panic. The government is seeking $5 billion in damages.
While the DoJ has reportedly combed through two million pages of emails and internal documents, the real reason for the agency to now bring charges is that - after four months of negotiations with the firm - it wants and needs the money that fines will bring to the federal coffers. Besides that, statues of limitations on fraud are expiring quickly, prompting action. It's a shame this is happening so late in the game and also that the banks which originated and packaged the faulty loans aren't being prosecuted as well.
There was a rush of earnings news, mostly positive, though YUM Brands (YUM) was hard hit on Tuesday even though the company beat on both the top and bottom lines. At the heart of the company's issues is KFC, and tainted chicken sold though their Chinese outlets. The government is continuing its probe of the company which guided forward flat earnings due to the issues arising from the problematic cluckers. KFC is highly profitable in China. More than 40% of YUM's profits come from China.
Dow 13,979.30, +99.22(0.71%)
NASDAQ 3,171.58, +40.41(1.29%)
S&P 500 1,511.29, +15.58(1.04%)
NYSE Composite 8,920.13, +67.31(0.76%)
NASDAQ Volume 2,150,602,500
NYSE Volume 3,859,714,750
Combined NYSE & NASDAQ Advance - Decline: 4674-1828
Combined NYSE & NASDAQ New highs - New lows: 386-22
WTI crude oil: 96.64, +0.47
Gold: 1,673.50, -2.90
Silver: 31.88, +0.159
Stocks took a dive on Monday, but rebounded sharply on Turnaround Tuesday, raising the indices nicely, but not back to levels seen before Monday's decline.
In the news on Monday was Europe (remember them?), once again rearing its ugly, socialist head over stories emanating from Spain over alleged corruption in the government of Prime Minister Mariano Rajoy (no, really?), which the Spanish PM has denied. While there's little doubt that corruption exists in all levels of government worldwide, especially at the sovereign or federal level, proving such becomes a task not for the feint of heart, as there are vested interests which will defend their salaries, positions and perks like maddened pit bulls.
Italy was also in the news Monday, as fraud and conspiracy charges are being levied against the world's oldest bank, Banca Monte dei Paschi di Siena, and are slowly but surely finding their way to the top of government, eventually to land in the lap of Prime Minister Mario Monti.
National elections are slated for February 24-25, with former Premier Silvio Berlusconi, 76, gaining on front-runner Pier Luigi Bersani. Unemployment and rampant waves of criminality are among major issues in Italy.
On the US home front, the Justice Department finally found some level of damming evidence over which to bring charges against Standard & Poor's. The rating agency is alleged with fraud over their ratings of sub-prime loans in the 2004-06 period, helping bring about the 2008-09 market crash and financial panic. The government is seeking $5 billion in damages.
While the DoJ has reportedly combed through two million pages of emails and internal documents, the real reason for the agency to now bring charges is that - after four months of negotiations with the firm - it wants and needs the money that fines will bring to the federal coffers. Besides that, statues of limitations on fraud are expiring quickly, prompting action. It's a shame this is happening so late in the game and also that the banks which originated and packaged the faulty loans aren't being prosecuted as well.
There was a rush of earnings news, mostly positive, though YUM Brands (YUM) was hard hit on Tuesday even though the company beat on both the top and bottom lines. At the heart of the company's issues is KFC, and tainted chicken sold though their Chinese outlets. The government is continuing its probe of the company which guided forward flat earnings due to the issues arising from the problematic cluckers. KFC is highly profitable in China. More than 40% of YUM's profits come from China.
Dow 13,979.30, +99.22(0.71%)
NASDAQ 3,171.58, +40.41(1.29%)
S&P 500 1,511.29, +15.58(1.04%)
NYSE Composite 8,920.13, +67.31(0.76%)
NASDAQ Volume 2,150,602,500
NYSE Volume 3,859,714,750
Combined NYSE & NASDAQ Advance - Decline: 4674-1828
Combined NYSE & NASDAQ New highs - New lows: 386-22
WTI crude oil: 96.64, +0.47
Gold: 1,673.50, -2.90
Silver: 31.88, +0.159
Tuesday, July 13, 2010
All Aboard! CSX Prompts 6th Straight Day of Gains
This is what earnings season is all about.
Investors and traders have waited patiently through two months of severe selling for days in which stocks could outshine a slew of negative economic reports, and it appears - for some, at least - that the waiting is finally paying off.
Stocks surged for the 6th straight session after rail operator, CXS reported strong earnings after Monday's close, citing net income gains of 36% in the second quarter, beating analysts' expectations. Revenue grew 22% to just below $2.7 billion.
Despite the strong report, shares of CSX were lower by about 1.5% on Tuesday, but the upbeat sentiment associated with the company, which hauls coal and countless other raw materials, parts and integrated supplies across the United States, gave traders confidence to bid a wide array of stocks higher.
Dow 10,363.02, +146.75 (1.44%)
NASDAQ 2,242.03, +43.67 (1.99%)
S&P 500 1,095.34, +16.59 (1.54%)
NYSE Composite 6,907.78, +113.30 (1.67%)
Gains were solid across all of the indices and internals were in line with the headline numbers. Advancing issues pummeled decliners, 5486-1025 (5:1), and new highs soared past new lows, 179-48. Volume, however, was not particularly strong, as reticence among potential stock purchasers remained high.
NASDAQ Volume 2,140,849,750
NYSE Volume 5,288,201,500
Commodities trended mostly higher on the day. Crude oil, on the August futures contract, rose $2.20, to $77.15. Gold gained $14.80, to $1,213.30, while silver was up 34 cents, to $18.24.
Announcements after the close on Tuesday were forthcoming from two important companies in vastly different sectors: Intel (INTC) and Yum Brands (YUM).
Intel achieved a smashing success in the second quarter, the best ever in the company's 41-year history, with gross revenue of $10.8 billion, 67% gross margins, operating Income of $4.0 billion, net Income of $2.9 billion and EPS at 51 cents.
The results were well ahead of Street estimates, and completely overturned year-over-year results. For instance, the 51 cent EPS was 183% better than the second quarter of 2009. The company also was very positive about the remainder of the year, with growth expected across all business units.
Stock players were impressed, as shares rose more than 5% in after-hours trading.
When YUM Brands (YUM), owners of KFC, Taco Bell and Pizza Hut, reported second quarter results, sentiment turned decidedly negative. The company beat analyst estimates narrowly, posting EPS of 58 cents, 3 cents better than the 55 cents anticipated, but revised its full-year forecast to $2.43 a share, with Wall Street expectations at $2.48.
This sent the stock tumbling more than 3% in after-hours trading.
These two bellwether stocks demonstrate the cross-currents in the markets quite adequately. While general economic reports - especially those concerning housing and employment - remain a drag on the economy, companies insist that they are lean and profitable, as shown by the results from YUM Brands and Intel.
What is a conundrum for many, however, is the multiple, or PE at which specific companies are trading. Across the S&P 500, the current cumulative PE is about 15, historically high. Intel is right on that number, including this quarter, at 14.45. YUM's trailing PE (using the most recent past four quarters) is an astronomical 19.22.
In other words, it would take 19 years to recoup an investment in YUM Brands based on earnings per share, and just shy of 15 to break even in Intel. In an economic environment beset with an overburden of debt still growing (government) and some being worked off in the private sector, investors may not feel comfortable with such high multiples. That will keep sentiment on the negative side until these multiples come down to levels more in line with the reality of a slow-growing economy. Something in the neighborhood of 9-12 might be suitable, perhaps even lower.
In the small business world, which is arguably more risky, companies rarely sell for more than six times earnings. More often than not, companies sell for three to four times annual earnings, as small business owners seek minimization of risk and quickly recoup their capital. The big business world of Wall Street, operating on a far loftier basis, may be overpriced by a wide degree. Small investors will not stay put in longer term equities with questionable outcomes.
A return to more reasonable valuations would send stocks into a tailspin, though, following on the deflationary backdrop which has been the dominant trend for the past two to three years, a severe correction, on a valuation basis, may be forthcoming.
Investors and traders have waited patiently through two months of severe selling for days in which stocks could outshine a slew of negative economic reports, and it appears - for some, at least - that the waiting is finally paying off.
Stocks surged for the 6th straight session after rail operator, CXS reported strong earnings after Monday's close, citing net income gains of 36% in the second quarter, beating analysts' expectations. Revenue grew 22% to just below $2.7 billion.
Despite the strong report, shares of CSX were lower by about 1.5% on Tuesday, but the upbeat sentiment associated with the company, which hauls coal and countless other raw materials, parts and integrated supplies across the United States, gave traders confidence to bid a wide array of stocks higher.
Dow 10,363.02, +146.75 (1.44%)
NASDAQ 2,242.03, +43.67 (1.99%)
S&P 500 1,095.34, +16.59 (1.54%)
NYSE Composite 6,907.78, +113.30 (1.67%)
Gains were solid across all of the indices and internals were in line with the headline numbers. Advancing issues pummeled decliners, 5486-1025 (5:1), and new highs soared past new lows, 179-48. Volume, however, was not particularly strong, as reticence among potential stock purchasers remained high.
NASDAQ Volume 2,140,849,750
NYSE Volume 5,288,201,500
Commodities trended mostly higher on the day. Crude oil, on the August futures contract, rose $2.20, to $77.15. Gold gained $14.80, to $1,213.30, while silver was up 34 cents, to $18.24.
Announcements after the close on Tuesday were forthcoming from two important companies in vastly different sectors: Intel (INTC) and Yum Brands (YUM).
Intel achieved a smashing success in the second quarter, the best ever in the company's 41-year history, with gross revenue of $10.8 billion, 67% gross margins, operating Income of $4.0 billion, net Income of $2.9 billion and EPS at 51 cents.
The results were well ahead of Street estimates, and completely overturned year-over-year results. For instance, the 51 cent EPS was 183% better than the second quarter of 2009. The company also was very positive about the remainder of the year, with growth expected across all business units.
Stock players were impressed, as shares rose more than 5% in after-hours trading.
When YUM Brands (YUM), owners of KFC, Taco Bell and Pizza Hut, reported second quarter results, sentiment turned decidedly negative. The company beat analyst estimates narrowly, posting EPS of 58 cents, 3 cents better than the 55 cents anticipated, but revised its full-year forecast to $2.43 a share, with Wall Street expectations at $2.48.
This sent the stock tumbling more than 3% in after-hours trading.
These two bellwether stocks demonstrate the cross-currents in the markets quite adequately. While general economic reports - especially those concerning housing and employment - remain a drag on the economy, companies insist that they are lean and profitable, as shown by the results from YUM Brands and Intel.
What is a conundrum for many, however, is the multiple, or PE at which specific companies are trading. Across the S&P 500, the current cumulative PE is about 15, historically high. Intel is right on that number, including this quarter, at 14.45. YUM's trailing PE (using the most recent past four quarters) is an astronomical 19.22.
In other words, it would take 19 years to recoup an investment in YUM Brands based on earnings per share, and just shy of 15 to break even in Intel. In an economic environment beset with an overburden of debt still growing (government) and some being worked off in the private sector, investors may not feel comfortable with such high multiples. That will keep sentiment on the negative side until these multiples come down to levels more in line with the reality of a slow-growing economy. Something in the neighborhood of 9-12 might be suitable, perhaps even lower.
In the small business world, which is arguably more risky, companies rarely sell for more than six times earnings. More often than not, companies sell for three to four times annual earnings, as small business owners seek minimization of risk and quickly recoup their capital. The big business world of Wall Street, operating on a far loftier basis, may be overpriced by a wide degree. Small investors will not stay put in longer term equities with questionable outcomes.
A return to more reasonable valuations would send stocks into a tailspin, though, following on the deflationary backdrop which has been the dominant trend for the past two to three years, a severe correction, on a valuation basis, may be forthcoming.
Tuesday, July 14, 2009
It Was Another Sucker Rally
Answering the question posed on Monday, the suckers are about to be reeled in.
After Meredith Whitney singlehandedly boosted the Dow by 185 points - the best performance in 6 weeks - with her call for an ever-higher, ever-growing Goldman Sachs, Tuesday's follow-through was nothing more than a gaping, loud yawn which could be heard booming down the canyons of Wall Street all the way to the beaches at Del Mar.
Action was spotty and choppy as the indices see-sawed across the break-even line. Eventually, some brave bulls hung in until the final bell, but the sentiment was far from universal. In fact, Goldman Sachs, which reported better-than-expected earnings for the second quarter, and was up 7 points Monday, finished the day up a very modest 22 cents.
Dow 8,359.49, +27.81 (0.33%)
Nasdaq 1,799.73, +6.52 (0.36%)
S&P 500 905.84, +4.79 (0.53%)
NYSE Composite 5,805.58, +44.21 (0.77%)
Although advances were broad-based with winners getting past losers, 4054-2274, new lows retained their edge over new highs, 59-56, and volume was pretty much confined to the boys at Goldman and JP Morgan plus a few hedge funds in New Canaan, CT. Everyone else, it seems, is where they should be: on vacation.
NYSE Volume 978,933,000
Nasdaq Volume 1,890,954,000
On a happier note, Bernie Madoff began serving his 150-year prison sentence at the Butner Federal Correctional Complex, in Durham, North Carolina, today. Bernie will be in good company. The prison also houses John Rigas, the Aldephia Communications scoundrel among other tax cheats, forgers and scammers. I case you want to check on Bernie's well-being, he can be found under prison number 61727-054, at the federal prison system's web site.
Commodity traders apparently aren't sold on either recovery or recession, as prices stalled out on Tuesday. Oil fell 17 cents, to $59.52, gold gained 30 cents, to $922.80, while silver tacked on 7 cents, to $12.86. Most other commodities were traded within small ranges.
The Bureau of Labor statistics released the Producer Price Index for June, showing a 1.8% seasonally-adjusted gain over May, which is a little bit misleading since the finished goods prices declined 4.6% over the past year. While the 1.6% gain in one month may be alarming to some, most of the veterans on Wall Street realize we're in a bit of deflation, so the number didn't engender more "inflation" talk.
After the close, Yum Brands (YUM) and Intel (INTC) both issued 2nd quarter results that beat the street. The rally could have been merely taking a breather, though investors may also be getting pickier with earnings increases slim.
After Meredith Whitney singlehandedly boosted the Dow by 185 points - the best performance in 6 weeks - with her call for an ever-higher, ever-growing Goldman Sachs, Tuesday's follow-through was nothing more than a gaping, loud yawn which could be heard booming down the canyons of Wall Street all the way to the beaches at Del Mar.
Action was spotty and choppy as the indices see-sawed across the break-even line. Eventually, some brave bulls hung in until the final bell, but the sentiment was far from universal. In fact, Goldman Sachs, which reported better-than-expected earnings for the second quarter, and was up 7 points Monday, finished the day up a very modest 22 cents.
Dow 8,359.49, +27.81 (0.33%)
Nasdaq 1,799.73, +6.52 (0.36%)
S&P 500 905.84, +4.79 (0.53%)
NYSE Composite 5,805.58, +44.21 (0.77%)
Although advances were broad-based with winners getting past losers, 4054-2274, new lows retained their edge over new highs, 59-56, and volume was pretty much confined to the boys at Goldman and JP Morgan plus a few hedge funds in New Canaan, CT. Everyone else, it seems, is where they should be: on vacation.
NYSE Volume 978,933,000
Nasdaq Volume 1,890,954,000
On a happier note, Bernie Madoff began serving his 150-year prison sentence at the Butner Federal Correctional Complex, in Durham, North Carolina, today. Bernie will be in good company. The prison also houses John Rigas, the Aldephia Communications scoundrel among other tax cheats, forgers and scammers. I case you want to check on Bernie's well-being, he can be found under prison number 61727-054, at the federal prison system's web site.
Commodity traders apparently aren't sold on either recovery or recession, as prices stalled out on Tuesday. Oil fell 17 cents, to $59.52, gold gained 30 cents, to $922.80, while silver tacked on 7 cents, to $12.86. Most other commodities were traded within small ranges.
The Bureau of Labor statistics released the Producer Price Index for June, showing a 1.8% seasonally-adjusted gain over May, which is a little bit misleading since the finished goods prices declined 4.6% over the past year. While the 1.6% gain in one month may be alarming to some, most of the veterans on Wall Street realize we're in a bit of deflation, so the number didn't engender more "inflation" talk.
After the close, Yum Brands (YUM) and Intel (INTC) both issued 2nd quarter results that beat the street. The rally could have been merely taking a breather, though investors may also be getting pickier with earnings increases slim.
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