In the past couple days, I have heard a number of analysts commenting on how the American markets follow the Shanghai Index very closely. Yesterday, the Shanghai index traded down over 4%. The American market…up! The same was true on Wednesday, as well.
All of Asia was lifted on Thursday as those markets rebounded from heavy losses. The American markets, however, have no need to rebound, so will we still be guided higher on China and Europe’s movement higher?
My belief is that we can throw this out the window. Today, it is all about jobless claims and how they come in as investors are being extremely fickle about their optimism vs. pessimism. If the jobless claims are strong then continued upward movement is most likely the path to take, whereas, a higher than expected number could signal that unemployment is not abating at the rate economists and investors want it to dwindle. That news could send the markets plummeting. We will know that answer at 8:30 AM, and it should turn the futures one way or another, which as of 7:45 AM are slightly higher with the Dow up almost 20 points. The futures, though, look cautious as investors want to see these numbers come in at 8:30.
In other news, Sear’s announced earnings this morning that were much worse than expected, earning an EPS of -0.17 versus expectations of 0.35. Additionally, the company missed revenue targets by $200 million. The company cited the housing crisis and recession as a major hit to the company. Sear’s shares were down over 11% in pre-market trading as of 8:00 AM. On the other hand, the market received beats from Heinz, Buckle, and Suntech Power.
In one major upgrade, Allied Capital Corp. received the nod from Keefe, Bruyette & Woods Inc. The financial analyst for KBW commented that ALD had reach agreements to restructure its debt. This is a big move in the right direction for the company. ALD is up over 6% in morning trading. Duetsche Bank threw Regions Financial (RF), my stock sell of the week, a downgrade because they believe the stock is overvalued due to its recent run up.
Definitely some mixed news coming in this morning, and it appears most of our direction will come from the jobless claims report at 8:30 AM.
Buy Pick of the Day:
Short Sale of the Day: JC Penney Co. Inc. (JCP)
JC Penney seems to be a…
