November 9, 2012
COVIDIEN PLC (COV): Free Stock Analysis
PENNEY (JC) INC (JCP): Free Stock Analysis
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(Note: This is Mark Vickery, substituting for Sheraz Mian
while he is away.)
After a long week of big news affecting the U.S. markets -- from
the results of the General Election to Hurricane Sandy and the
follow-up Nor-easter to a 3.3+% sell-off in the Dow over the past
2 trading days -- Friday's markets come in on a relatively quiet
background. Futures are still down ahead of the market open,
which looks as if it may cap a disappointing weak of trading.
Because we will have no changing of the guard in the White House,
instead of considering where strengths in industries may be
expected to change going forward, focus has been on the major
issues that remain. Namely, the Fiscal Cliff. The importance of
ramifications of going over said cliff has been greatly
heightened. Not until Congress convenes will we know to what
extent Washington plans to do to fix it. Until there is some
ground gained in obtaining a bipartisan solution, expect the
markets to be doubtful about getting there.
This morning, U.S. import prices rose one-half of 1% in October,
more than expected and exports were unchanged for the month. But
oil import prices were down, minus which import prices were up
just 0.3%. This indicates only modest inflation weighing on the
economy at present.
The Department of Agriculture has released a report indicating
better-than-expected crops in corn, soybeans and wheat, better
than expectations of a fifth straight month of a cut in
production. This indicates that commodity prices are expected to
come down somewhat, another relative relief from inflation
OK, but still: we're currently undergoing the worst trading week
in the markets since June. But a major sell-off due to fears
about the Fiscal Cliff (and bets on Mitt Romney winning the
presidency) may indicate a good entry point for investors with
their eyes on good stocks they've considered a bit too expensive.
But where to buy-in? After all, nobody rings a bell at the
Finally, in the back-stretch of earnings season,
) shares are down over 9% this morning after a horrid EPS miss
and a 26% plummet in same-store sales. Ahead of holiday season,
JCPenney looks to be in very, very rough shape, helping
illustrate some of the profound disappointment this earnings
season overall. We see healthcare products maker
) beating expectations in its fiscal 4th quarter, even though
year-over-year revenues were down.