Jocelynn Drake (jdrake@sir-inc.com)
8/30/2006 8:12:00 AM
Many of our observations are now available as audio presentations that you can hear on your computer or download from Apple's iTunes Music Store to play on a portable device such as an iPod. To see the full menu of observations, please visit http://www.schaeffersresearch.com/commentary/podcasts/ . Today's Opening View features news from Costco Wholesale.
Futures are flat to slightly higher this morning as investors await the latest revision to the second-quarter Gross Domestic Product. In news around the Street, United Natural Foods (UNFI) reported fourth-quarter earnings of $12.7 million, or 30 cents per share, matching the consensus estimate. Sales for the three-month period climbed 14.1 percent to $619.8 million. Looking ahead, the firm expects a profit of $1.25 to $1.30 per share, excluding items, on revenue of between $2.7 billion and $2.8 billion in fiscal 2007. The Street estimate currently stands at $1.29 per share.
DSW Inc.
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boasted a second-quarter profit of $15.3 million, or 35 cents per share, on sales of $301.3 million. Same-store sales for the quarter rose 2.2 percent. Analysts had predicted a profit of 30 cents per share. The company expects fiscal 2006 earnings of $1.24 to $1.27 per share with same-store sales projected to rise between three percent and five percent. The consensus estimate comes in at $1.25 per share. DSW also reaffirmed plans to open 30 stores in 2006.
Elsewhere, Costco Wholesale
(COST:
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warned that earnings for the fiscal fourth quarter would come in below the consensus estimate due to thinner-than-expected profit margins and an income-tax charge. The retailer expects earnings of 68-71 cents per share for the quarter and $2.23 to $2.26 for the fiscal year ending September 3. The estimates include a one-time income tax charge of three cents per share. Analysts currently expect a profit of 77 cents per share for the quarter and $2.33 for the year. Costco reported August total sales up 11 percent. Same-store sales rose seven percent.
Economic News
The economic calendar remains heavy today, with the release of the revised second-quarter Gross Domestic Product at 8:30 a.m. Eastern time, while the Dallas Federal Reserve President is slated to speak today in Dallas. Meanwhile, the Energy Department will step up at 10:30 a.m. Eastern time to present weekly inventory levels for crude oil, gasoline, and distillates.
Market Statistics
Equity option activity on the CBOE saw 510,886 put contracts traded on Tuesday compared to 699,648 call contracts. The resultant single-session put/call ratio jumped to 0.73, while the 21-day moving average increased to 0.69.
**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**
Overseas Trading
Overseas trading is mostly higher this morning, with 14 of the 19 markets that we follow in positive territory. The cumulative average return on the group stands at a gain of 0.33 percent. In Asia, trading was mixed as traders remained cautious. Technology shares such as Elpida Memory and Toshiba helped to underpin modest gains in the market. By the close, the Japanese Nikkei had shed 0.1 percent while the Hong Kong Hang Seng added 1.2 percent.
Turning to Europe, issues moved higher as technology shares gained ground. Investors also remained focused on earnings reports from French insurance company Scor, stock-exchange operator Euronext, and steelmaker Corus Group. At last check, the French CAC 40 was up 0.4 percent and the German DAX was up 0.3 percent. The London FTSE 100 has added 0.4 percent.
The U.S. Dollar Index (DX/Y – 84.91) dropped 0.38 percent, breaking below support at the 85 level and at its 10-day and 20-day moving averages. The dollar extended losses against the yen and fell versus the euro after the minutes of the last Federal Reserve's interest-rate setting meeting showed the Fed staff presented a new forecast at the closed door meeting, indicating that real gross domestic product would grow below-trend for the next year and a half. In early action, the dollar is mixed, trading lower against only the British pound and the Canadian dollar.
The September futures contract on the 30-year bond (US/U6 – 110'06) increased 3/32 on Tuesday. Overall, Treasury prices reversed losses to close higher yesterday, as traders viewed the minutes of the latest Federal Reserve interest-rate meeting as leaning more toward a pause than a resumption of rate hikes. The minutes from the central bank's August meeting showed policymakers decided to leave rates unchanged because of a new forecast of below-trend growth for the next year and a half. Meanwhile, Treasurys are expected to open unchanged this morning, with investors focused on U.S. second-quarter gross domestic product data, which are slated for release later today.
Commodity Corner
The December gold futures contract (GC/Z6 – 619.10) dropped 0.77 percent on Tuesday, as the contract notched its lowest close since June 29. During the past two sessions, the yellow metal has lost a total of $11.30, or 1.8 percent. December silver climbed one percent, reversing course after reaching a low of $12.02.
The October crude oil contract (CL/V6 – 69.71) dropped 1.3 percent on Tuesday, slipping below the $70-per-barrel mark. In fact, Tuesday marked crude oil's lowest close since April. The commodity dropped as Tropical Storm Ernesto stayed clear of Gulf oil operations. In early trading this morning, the contract has bounced back and edged above the 70 level once again.
Wednesday, August 30, 2006
7:00 a.m. Aug. 25 MBA Refinancing Index (previous: +1.3%)
8:15 a.m. Aug. ADP/Macroeconomic Advisors Employment Estimate (previous: +113K)
8:30 a.m. 2Q GDP, prelim (previous: +2.5%)
8:30 2Q Corp Profits, prelim (previous: +13.8%)
9:00 a.m. Dallas Fed Pres Fisher speaks in Dallas
10:30 a.m. Aug. 25 U.S. Energy Dept Gasoline Stocks (previous: +400,000)
10:30 a.m. Aug. 25 U.S. Energy Dept Crude Oil Stocks (previous: -600,000)
10:30 a.m. Aug. 25 U.S. Energy Dept Distillate Stocks (previous: +2.3M)
Thursday, August 31, 2006
8:30 a.m. July Personal Income (previous: +0.6%)
8:30 a.m. July Personal Spending (previous: +0.4%)
8:30 a.m. Aug. 26 Initial Jobless Claims (previous: -1K)
10:00 a.m. Aug. 19 DJ-BTMU Business Barometer (previous: -0.2%)
10:00 a.m. July Factory Orders (previous: +1.2%)
10:00 a.m. Aug. Chicago PMI (previous: 57.9)
10:00 a.m. July Conference Board Help-Wanted Index (previous: 33)
10:30 a.m. Aug. 25 U.S. Energy Dept Natural Gas Stocks (previous: +57)
11:00 a.m. July Kansas City Fed Mfg Index (previous: 11)
1:00 p.m. St. Louis Fed Pres Poole speaks on "Understanding the Fed" in Dyersburg, Tenn.
4:30 p.m. Aug. 25 Money Supply
N/A Aug. Chain-Store Sales
Friday, September 1, 2006
8:30 a.m. Aug. Non-farm Payrolls (previous: +113K)
8:30 a.m. Aug. Unemployment Rate (previous: 4.8%)
9:40 a.m. Aug. ECRI Inflation Gauge (previous: 124.0)
9:45 a.m. Aug. University Of Michigan Consumer Sentiment Index, final (mid-Aug 78.7; previous: 84.7)
10:00 a.m. Aug. ISM Mfg Index (previous: 54.7)
10:00 a.m. July Construction Spending (previous: +0.4%)
10:00 a.m. July Pending Home Sales (previous: +0.4%)
2:00 p.m. Bond markets close early ahead of Labor Day Holiday
N/A Aug. Auto Sales
Unusual Put and Call Activity:
For an explanation of how to use this information, check out "StreeToolsTM- A Quick Reference Guide"
Earnings calendar with current estimates:
For a complete list of earnings for the week, check out Schaeffer's Looks Ahead.
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