Morning Watch, August 28
Email This Article
Print This Article
Digg This
Delicious
SubscribeMOST POPULAR ARTICLES
- Options Corner: Using Options to Trade Volatile Markets
- Kaeppel's Corner: Take a Ride into the (Dis)comfort Zone
- Outside the Box: The Virtue of Risk Management
- Lessons from My Grandmother, Part III: Taking Charge of Your Life
- Hot Shots: "Sell-e-brate Dow 8K?"
- Option Watch: Nov 18 - Fizzling Option Forecast?
- Tech World: American Superconductor Going Strong
- Closing Wrap-Up, November 19
- Closing Wrap-Up, November 18
- Closing Wrap-Up, November 20
- Kaeppel's Corner: Take a Ride into the (Dis)comfort Zone
- Options Corner: Using Options to Trade Volatile Markets
- Lessons from My Grandmother, Part III: Taking Charge of Your Life
- Tech World: American Superconductor Going Strong
- Kaeppel’s Corner: The Most Important Word for Investors in 2008
- Analytical Toolbox: Market Outlook & Classic Timing
- Analytical Toolbox: Market Outlook—Now What?
- Closing Wrap-Up, November 13
- Mind Matters: Anger
- Option Watch: Nov 18 - Fizzling Option Forecast?
- Growth Stock Swing Option: Nov 20, 2008
- Analytical Toolbox: Market Outlook & Classic Timing
- Midday Action: November 20
- Hot Shots: "Sell-e-brate Dow 8K?"
- Kaeppel's Corner: Take a Ride into the (Dis)comfort Zone
- Outside the Box: The Virtue of Risk Management
- Midday Action: November 19
- Option Watch: Nov 18 - Fizzling Option Forecast?
- Tech World: American Superconductor Going Strong
- Midday Action: November 18
SPONSORED LINKS
August 28, 2008
GDP report provides boost to stocks, but higher oil prices could keep gains to a minimum. Tropical Storm Gustav is getting plenty of attention as the storm heads toward the Gulf Coast, bringing back memories of Hurricane Katrina. Retailer stocks Sears (SHLD) and Tiffany (TIF) reported mixed earnings and auto makers could suffer Thursday following bearish comments from Toyota (TM). The major market indices have been consolidating the past few weeks, which has created a descending triangle on the Dow ($INDU).
Second quarter GDP was revised higher to growth of 3.3 percent from the initial 1.9 percent. This was much stronger than estimates for a revision to 2.7 percent. Upward revisions to exports and durables consumption were the major reason for stronger growth. The GDP price index was revised slightly higher to 1.2 percent, but the core PCE remained at 2.1 percent. This is good news, but Fed leaders have stated that they expect growth to ease in the third quarter and heading into 2009.
Oil prices moved above $120 this morning on concerns about Tropical Storm Gustav. The storm is heading toward the Gulf Coast and is expected to intensify to possible a level 3 hurricane. Not only does this impact crude prices, but it raises concerns about how the storm might impact the area hit by Hurricane Katrina three years ago.
In earnings news, Sears reported that revenues fell for the fourth straight quarter. Same store sales fell 6.7 percent and earnings fell 82 percent from the year ago period. EPS came in at 21-cents, missing estimates substantially with analysts looking for profits of 33-cents. Ironically, the stock is up nearly two percent in early trading at $88.50. However, the stock is down sharply from its 52-week high of $152.91.
Shares of TIF are up nearly 10 percent after the high end retailer reported strong earnings. TIF profits nearly doubled and the company raised its outlook for the year. Despite strong gains this morning, TIF shares are trading $14 below their 52-week high with the stock near $43.50 in early trading.
It is no secret that domestic car makers have really struggled due to high energy prices and a tough economy. However, foreign car makers are struggling as well with TM cutting its sales forecast. The company noted that demand for large vehicles has hurt its outlook with TM now seeing sales of 9.7 million vehicles in 2009, down from prior forecasts for 10.4 million. TM shares are down about 1.5 percent to $88.
Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Jody's Forum
© Copyright 1995-2008 Optionetics. All rights reserved. This material is for personal use only. Republication and re-dissemination, including posting to newsgroups, is expressly prohibited without the prior written consent of Optionetics. Optionetics is a registered trademark of Optionetics, Inc.