Tuesday, May 19, 2015

Markets drift lower on Greek debt worries

Dow crawled up 13, decliners over advancers 3-2 & NAZ fell 8.  The MLP index was off 2+ to the 445s & the REIT index was down fractionally in the 324s.  Junk bond funds were mixed & Treasuries retreated.  Oil saw major selling. taking it down to the 57s, & gold also pulled back but held above 1200.

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CL.NYM....Crude Oil Jun 15....57.31 Down ...2.12  (3.6%)

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Home Depot, a Dow stock, reported better-than-expected quarterly profit & sales as customers in North America spent more on home repairs after a harsh winter.  The company also raised its full-year sales & profit forecast.  Several northeastern parts of the US experienced heavy snowfall this winter & major cities were hit with snow storms.  HD has a large number of stores in the Northeast.  "We had a stronger than expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market," CEO Craig Menear said.  Same-store sales rose 6.1%, above the forecast which called for a 5.5% rise.  The company raised its EPS forecast for the year ending Feb 2016 to $5.24-$5.27 from $5.11-$5.17.  The revised forecast includes the benefit of a favorable settlement of a tax audit & the impact of stock buybacks this year.  It also increased its full-year sales growth forecast to 4.2-4.8% from 3.5-4.7%.  EPS rose to $1.21 from $1.00 a year earlier.  Revenue rose 6% to $20.89B.  Excluding items, EPS was $1.16, beating the forecast of $1.15 on revenue of $20.81B.  However the stock lost 1.99.  If you would like to learn more about HD, click on this link:

Home Depot's Profit Beats After Harsh Winter

Home Depot (HD)

TJX raised its full-year profit & comparable sales forecast, encouraged by more bargain-hungry shoppers visiting its stores.  TJX sells clothes & home furnishings that are priced 20-60% lower than those at traditional retailers & department stores, a strategy that has attracted price-conscious customers & helped the company gain market share.  The company has also been increasing the number & quality of brands in its stores, & has focused on staying on top of popular trends such as bohemian-inspired tops & skirts & shirt dresses.  It raised its full-year EPS forecast to $3.21-$3.27 on a constant currency basis from $3.17-$3.25 earlier.  Analysts, however, were expecting a EPS of $3.29.  Full-year comparable sales are now expected to grow by 2-3%, up from the prior forecast of 1-2% growth, the company said.  Comparable sales rose 5% in Q1, more than the 3.1% rise predicted.  EPS rose to 69¢, from 64¢ from a year earlier.  Analysts were expecting EPS in Q1 of 66¢.  Revenue rose 5.8% to $6.87B, more than the $6.79B expected.  The stock went up 1.93.  If you would like to learn more about TJX, click on this link:

TJX Raises Full-Year Profit, Comparable Sales Forecast

TJX Companies (TJX)

Today European lenders played down Greek hopes of a swift end to negotiations on an aid agreement & warned talks must speed up before the country runs out of cash.  A sober outlook from Brussels & Berlin contrasted sharply with vigorous optimism displayed in Greece, where top officials from the new gov made a series of public appearances to promise a deal was just days away.  Finance Minister Varoufakis said had said that a deal could arrive in a week, while Prime Minister Tsipras had earlier said talks were in their "final stretch."  But euro zone policymakers said talks were not moving nearly as fast as needed to clinch a deal in a short time.  "More time and effort is needed to bridge the gaps on the remaining open issues. We consider that progress is being made, albeit at a slow pace," a European Commission spokesman said.  The Commission also denied a Greek report that its chief, Jean-Claude Juncker, had offered a compromise proposal to break the impasse in talks, which set a lower primary surplus target in return for tax reforms & tax hikes.  After a meeting in Berlin, the leaders of Germany & France said talks between Greece & its creditors must be accelerated to free up further loans.  "I'd say the talks need to speed up, rather than that they are going too fast, and we hope the relevant forum - the Brussels (negotiating) Group - can make clear progress because the agreement in February was that a program should be set up by the end of May," Chancellor Merkel said.  French President Hollande agreed the talks with Greece needed to be "accelerated", adding:  "We all have the same stance which is that Greece must stay in the euro zone."  Both leaders will meet Tsipras at an EU summit this week, where Greece is pushing for a series of bilateral meetings on the sidelines to help broker a deal before cash runs out.  After staging a small economic recovery last year, Greece has returned to a full-blown crisis since the leftist gov took power in Jan promising to end austerity & unpopular bailout programs.  Without access to debt markets or aid, the gov has found itself locked in difficult negotiations as cash coffers run dry.  Greece is expected to scrape thru payments to gov workers & pensioners this month, but payments of €1.5B to the IMF next month will pose a much bigger challenge.  A payment of about €750M to the IMF last week was only made by emptying a holding account at the Fund.  Labor Minister Panos Skourletis pointed to Jun 5, when Greece's next loan payment to the IMF falls due. as the next crunch point.  "There's a deadline, which is June 5," he told Greek television.  "We all know that if there is no solution, let's say until then, in relation to funding, things will be difficult."  But like the rest of the gov, he remained optimistic a cash-for-reform deal would be struck "in the coming days".  As the talks drag on & uncertainty over Greece's future in the single currency bloc grows, a new poll published yesterday showed most Greeks are unhappy with the gov's negotiating strategy with lenders.

Europe Dampens Greek Hopes of Swift Deal

Once again not much was done in the stock market, while the averages hover near record levels & Dow managed to eke out another record today.  The WMT earnings were glum & it won't be the only report with less than satisfactory results.  The Greek debt mess drones on & even the locals aren't happy dragging out this crisis.

Dow Jones Industrials

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