Dow jumped up 67, advancers over decliners 3-2 & NAZ added 19. The MLP index was flattish in the 274s & the REIT index fell 1+ to the 353s. Junk bond funds were mixed & Treasuries declined in price. Oil was up pennies in the 51s & gold pulled back 4 to 1285.
AMJ (Alerian MLP Index tracking fund)
General Electric (GE), a Dow stock, slashed its profit forecast as earnings fell far short of expectations, underscoring the severity of the challenges facing the company's new boss. CEO John Flannery is grappling with one of the deepest slumps in the beleaguered manufacturer's history, with hurdles from poor cash flows to slumping power-generation markets. The shares plunged the most in 2 years, extending what already is by far this year's biggest loss in the Dow. The latest results are “completely unacceptable,” Flannery said. “We need to make some major changes with urgency and a depth of purpose.” The cut is the latest step in what is shaping up to be a dramatic repositioning of GE under its new leadership. Flannery this month welcomed a representative of activist investor Trian Fund Management to GE's board & announced several management changes. He is seeking deep cost cuts & has said he will consider all options, including portfolio changes. “Everything is on the table,” Flannery said. “Things will not stay the same at GE.” The new CEO, who will detail his plans to reshape the company at an investor meeting Nov 13, is targeting more than $20B of asset divestitures within 2 years, GE said. Adjusted EPS this year are expected to be $1.05-1.10, down from the previous forecast of $1.60-1.70, GE said. Analysts had anticipated $1.54. The company reported that adjusted profit decreased to 29¢ for Q3, falling well short of the 50¢ estimate. GE hasn't missed estimates by more than ½ a penny in over 9 years. Earnings were hurt by restructuring & impairment charges, as well as a sharp decline in profit in the power-generation division. GE cut $500M in costs during the qtr, bringing the 2017 total to $1.2B, which the company said is ahead of its original plans. Industrial operating cash flow, a major focus for investors, was $1.7B in the qtr, excluding deal taxes & pension plan funding. The company reduced its industrial-cash-flow forecast to $7B after previously saying it could top $12B. GE's liquidity came under scrutiny after the company reported negative $1.6B in industrial operating cash flow in Q1, about $1B worse than the company had anticipated. The measure rebounded modestly in Q2. The stock declined 58¢. If you would like to learn more about GE, click on this link:
club.ino.com/trend/analysis/stock/GE?a_aid=CD3289&a_bid=6ae5b6f7
GE's New CEO Slashes Profit Outlook, Sends Shares Tumbling
The Senate adopted a fiscal 2018 budget resolution that House GOP leaders agreed to accept, a show of unity aimed at speeding consideration of Pres Trump's plan to enact tax cuts. The budget cleared the Senate 51-49, with all Dems & Rep Senator Rand Paul voting against it. “This now allows for the passage of large scale Tax Cuts (and Reform),” Trump tweeted, saying that Paul will vote for tax cuts. Final approval of the measure will unlock a special procedure allowing Reps to pass a subsequent tax code rewrite without Dem support. The House & Senate tax-writing committees plan to release draft legislation by early Nov, which will set off a furious lobbying battle as Reps attempt to enact a bill by the end of the year. House & Senate Reps crafted an amendment to the Senate budget designed to remove the need to spend weeks working to reconcile it with the version already passed by the House. The House would simply vote on the budget that passed the Senate; plans call for holding that vote next week, a House aide said. Senators acknowledged that producing the budget, which took months of work by Budget Chairman Mike Enzi of Wyoming & his staff, is the easiest part of enacting a tax overhaul. "This is a necessary part that hasn’t been easy, but I think we’re going to get there," GOP Senator Lindsey Graham said before the vote. "It’s an uphill task. We're sort of at the bottom of the mountain & we have to keep climbing to the top."
U.S. Senate Adopts Budget, Giving Momentum to Trump's Tax-Cut Plans
P&G (PG), a Dow stock & Dividend Aristocrat, whittled down its portfolio to 60 brands, many of them world-wide popular names, & lopped off several business units to streamline & Peltz's suggestions did not move the needle in terms of what the company was already doing. At an annual general meeting earlier this month, preliminary votes showed that Peltz lost his bid by a slim margin. Peltz has said he would contest the vote & would not concede until an independent arbiter had certified the votes. Today, PG reported higher sales of beauty & home care products, but another weak performance in its grooming business eroded some of that growth. Sales in the grooming business fell more than estimated despite PG cutting prices on tough competition from upstarts like Dollar Shave Club. This tapered sales growth, which just rose 1% to $16.65B in fiscal Q1 & missed expectations of $16.69B. The company, however, said it was maintaining its full-year organic sales & adjusted profit forecast. But it also expects $300M of commodity costs impacts for the year from the hurricanes that battered the southern US. EPS rose to $1.06 per share in Q1. The company saw a bright spot at sales in its beauty business, which rose 5% on the rising demand of ultra-premium SK-II skincare products in China. Strong demand for Tide detergents & Febreze fragrances boosted sales at its Fabric & Home Care business by 2%. Excluding items, EPS was $1.09, beating estimates by a penny. The stock sank 3+. If you would like to learn more about PG, click on this link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6 f7
Earnings continue to come in uneven. Dow stocks GE & PG were not impressive. But tax reform is in the air & that is the overriding consideration for the stock market. Economies in the US & around the globe are doing reasonably well & the bulls have their eyes on 24K for the Dow, just 770 away.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 51.16 | -0.13 | -0.3% |
| GC=F | Gold | 1,283.80 | -6.20 | -0.5% |
General Electric (GE), a Dow stock, slashed its profit forecast as earnings fell far short of expectations, underscoring the severity of the challenges facing the company's new boss. CEO John Flannery is grappling with one of the deepest slumps in the beleaguered manufacturer's history, with hurdles from poor cash flows to slumping power-generation markets. The shares plunged the most in 2 years, extending what already is by far this year's biggest loss in the Dow. The latest results are “completely unacceptable,” Flannery said. “We need to make some major changes with urgency and a depth of purpose.” The cut is the latest step in what is shaping up to be a dramatic repositioning of GE under its new leadership. Flannery this month welcomed a representative of activist investor Trian Fund Management to GE's board & announced several management changes. He is seeking deep cost cuts & has said he will consider all options, including portfolio changes. “Everything is on the table,” Flannery said. “Things will not stay the same at GE.” The new CEO, who will detail his plans to reshape the company at an investor meeting Nov 13, is targeting more than $20B of asset divestitures within 2 years, GE said. Adjusted EPS this year are expected to be $1.05-1.10, down from the previous forecast of $1.60-1.70, GE said. Analysts had anticipated $1.54. The company reported that adjusted profit decreased to 29¢ for Q3, falling well short of the 50¢ estimate. GE hasn't missed estimates by more than ½ a penny in over 9 years. Earnings were hurt by restructuring & impairment charges, as well as a sharp decline in profit in the power-generation division. GE cut $500M in costs during the qtr, bringing the 2017 total to $1.2B, which the company said is ahead of its original plans. Industrial operating cash flow, a major focus for investors, was $1.7B in the qtr, excluding deal taxes & pension plan funding. The company reduced its industrial-cash-flow forecast to $7B after previously saying it could top $12B. GE's liquidity came under scrutiny after the company reported negative $1.6B in industrial operating cash flow in Q1, about $1B worse than the company had anticipated. The measure rebounded modestly in Q2. The stock declined 58¢. If you would like to learn more about GE, click on this link:
club.ino.com/trend/analysis/stock/GE?a_aid=CD3289&a_bid=6ae5b6f7
GE's New CEO Slashes Profit Outlook, Sends Shares Tumbling
The Senate adopted a fiscal 2018 budget resolution that House GOP leaders agreed to accept, a show of unity aimed at speeding consideration of Pres Trump's plan to enact tax cuts. The budget cleared the Senate 51-49, with all Dems & Rep Senator Rand Paul voting against it. “This now allows for the passage of large scale Tax Cuts (and Reform),” Trump tweeted, saying that Paul will vote for tax cuts. Final approval of the measure will unlock a special procedure allowing Reps to pass a subsequent tax code rewrite without Dem support. The House & Senate tax-writing committees plan to release draft legislation by early Nov, which will set off a furious lobbying battle as Reps attempt to enact a bill by the end of the year. House & Senate Reps crafted an amendment to the Senate budget designed to remove the need to spend weeks working to reconcile it with the version already passed by the House. The House would simply vote on the budget that passed the Senate; plans call for holding that vote next week, a House aide said. Senators acknowledged that producing the budget, which took months of work by Budget Chairman Mike Enzi of Wyoming & his staff, is the easiest part of enacting a tax overhaul. "This is a necessary part that hasn’t been easy, but I think we’re going to get there," GOP Senator Lindsey Graham said before the vote. "It’s an uphill task. We're sort of at the bottom of the mountain & we have to keep climbing to the top."
U.S. Senate Adopts Budget, Giving Momentum to Trump's Tax-Cut Plans
P&G (PG), a Dow stock & Dividend Aristocrat, whittled down its portfolio to 60 brands, many of them world-wide popular names, & lopped off several business units to streamline & Peltz's suggestions did not move the needle in terms of what the company was already doing. At an annual general meeting earlier this month, preliminary votes showed that Peltz lost his bid by a slim margin. Peltz has said he would contest the vote & would not concede until an independent arbiter had certified the votes. Today, PG reported higher sales of beauty & home care products, but another weak performance in its grooming business eroded some of that growth. Sales in the grooming business fell more than estimated despite PG cutting prices on tough competition from upstarts like Dollar Shave Club. This tapered sales growth, which just rose 1% to $16.65B in fiscal Q1 & missed expectations of $16.69B. The company, however, said it was maintaining its full-year organic sales & adjusted profit forecast. But it also expects $300M of commodity costs impacts for the year from the hurricanes that battered the southern US. EPS rose to $1.06 per share in Q1. The company saw a bright spot at sales in its beauty business, which rose 5% on the rising demand of ultra-premium SK-II skincare products in China. Strong demand for Tide detergents & Febreze fragrances boosted sales at its Fabric & Home Care business by 2%. Excluding items, EPS was $1.09, beating estimates by a penny. The stock sank 3+. If you would like to learn more about PG, click on this link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6 f7
P&G's quarterly sales drag; Peltz still looms in board battle
Earnings continue to come in uneven. Dow stocks GE & PG were not impressive. But tax reform is in the air & that is the overriding consideration for the stock market. Economies in the US & around the globe are doing reasonably well & the bulls have their eyes on 24K for the Dow, just 770 away.
Dow Jones Industrials
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