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Stocks Climb Toward Highs As Earnings Roll In

Yesterday, stocks advanced for the 6th day heading towards previous highs as earnings roll in. With little economic news on the calendar, there was little to worry traders currently. The S&P closed inches shy of a record high, while the Dow Jones…

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Yesterday, stocks advanced for the 6th day heading towards previous highs as earnings roll in. With little economic news on the calendar, there was little to worry traders currently. The S&P closed inches shy of a record high, while the Dow Jones Industrial Average did set a new high. The NASDAQ fell slightly as technology got weighed down by rising interest rates.

The volatility and downward momentum of just a few weeks ago seems like a long-lost nightmare. The trend is clearly upward, although a test of the 50-dma is still in order to confirm the recent break above resistance.

What To Watch Today

Economy

  • 8:30 a.m. ET: Initial jobless claimsweek ended Oct. 16 (297,000 expected, 293,000 during prior week)
  • 8:30 a.m. ET: Continuing claims, week ended Oct. 9 (2.548 million expected, 2.593 million during prior week)
  • 8:30 a.m. ET: Philadelphia Fed Business Outlook, October (25.0 expected, 30.7 in September)
  • 10:00 a.m. ET: Leading Index, September (0.4% expected, 0.9% in August)
  • 10:00 a.m. ET: Existing Home Sales, September (6.09 million expected, 5.88 million in August)

Earnings

Pre-market

  • 6:00 a.m. ET: Danaher (DHRto report adjusted earnings of $2.16 per share on revenue of $7.03 billion
  • 6:00 a.m. ET: Dow Inc. (DOW) to report adjusted earnings of $2.56. per share on revenue of $14.25 billion
  • 6:00 a.m. ET: Alaska Air Group (ALK) to report adjusted earnings of $1.36 per share on revenue of $1.94 billion
  • 6:30 a.m. ET: Valero Energy (VLOto report adjusted earnings of 94 cents per share on revenue of $25.13 billion
  • 6:30 a.m. ET: AT&T (Tto report adjusted earnings of 79 cents per share on revenue of $40.48 billion
  • 6:45 a.m. ET: Quest Diagnostics (DGXto report adjusted earnings of $2.88 per share on revenue of $2.45 billion
  • 6:45 a.m. ET: Southwest Airlines (LUVto report adjusted losses of 26 cents per share on revenue of $4.64 billion
  • 7:00 a.m. ET: American Air Lines (AAL) to report adjusted losses of $1.03 per share on revenue of $8.94 billion
  • 7:00 a.m. ET: Pool Corp. (POOLto report adjusted earnings of $3.84 per share on revenue of $1.37 billion
  • 8:00 a.m. ET: Union Pacific (UNP) to report adjusted earnings of $2.48 per share on revenue of $5.39 billion

Post-market

  • 4:00 p.m. ET: Intel (INTCto report adjusted earnings of $1.11 per share on revenue of $18.36 billion
  • 4:05 p.m. ET: Whirlpool (WHRto report adjusted earnings of $6.12 per share on r revenue of $386.20 million
  • 4:10 p.m. ET: Chipotle Mexican Grill (CMG) to report adjusted earnings of $6.35 per share on revenue of $1.94 billion

Bitcoin ETF Sets Record Climbing To $1 Billion In AUM In 2-Days

Amazing….and yes, there is no speculation in the market.

A Rally To 4800?

Heading into year-end, if the market continues its current advance, consolidation, advance profile from earlier this year, the current year-end target could be as much as 4800.

While that is a very bullish outlook, it is likely much of the upside has already gotten priced in. With inflationary pressures rising, the threat of a Fed taper, and weaker economic growth, further gains could become more challenging.

However, this year has been a year of “bullish exuberance,” so we aren’t ruling out the possibility of a sharp advance into year-end in hopes of a stronger 2022.

Verizon (VZ) Earnings

VZ reported third-quarter GAAP EPS well above consensus at $1.55 versus expectations of $1.35. Revenue was $32.9B (+4.4% YoY), which missed estimates of $33.2B. Wireless retail net adds surprised to the upside with 699K net adds versus 566K expected.

Guidance for FY21 adjusted EPS was raised to $5.35-$5.40 from $5.25-$5.35. The new range is well above the consensus estimate of $5.29. Management also narrowed FY21 guidance to a 4% increase in total wireless revenue from the previous range of 3.5%-4%. VZ is trading 2.1% higher this morning following the results. We hold a 1.5% position in the Equity Model.

NextEra Energy (NEE) Earnings

NEE reported third-quarter GAAP EPS of $0.23, which missed analyst estimates of $0.71. Adjusted EPS did beat estimates, however, at $0.71 versus expectations of $0.67. Revenue came in short of consensus at $4.4B (-8.8% YoY) versus expectations of $5.4B.

Guidance for FY21 adjusted EPS remains unchanged at $2.40-$2.54, with the mid-point slightly below the consensus of $2.52. NEE expects adjusted EPS growth of 6%-8% from FY21 in 2022 and 2023. NEE is trading 2.3% higher this morning after the release. We hold a 2% position in the Equity Model.

Abbott Labs (ABT) Earnings

ABT reported third-quarter GAAP EPS of $1.17, which beat analyst estimates of $0.67. Revenue of $10.9B (+22.8% YoY) also beat the consensus of $9.56B. Revenue growth was driven, in part, by strong results in COVID-19 testing products. Excluding COVID-19 related testing products, organic sales grew 11.7% versus the third quarter of 2019.

Guidance for FY21 GAAP EPS was set to $3.55-$3.65, while FY21 adjusted EPS guidance was boosted to $5.00-$5.10 from a prior range of $4.30-$4.50. This compares to a consensus estimate of $4.45. Following the positive results and guidance, the stock is trading 3.9% higher this morning. We hold a 2% position in the Equity Model.

Why Stocks and Bonds Do Not Agree

Tweet Of The Day

Stocks Should Be 40% Lower

In an upcoming article, I am discussing the chart below which shows the decomposition of the S&P index returns over the last decade. From the article:

  • 21% from multiple expansion,
  • 31.4% from earnings,
  • 7.1% from dividends, and
  • 40.5% from share buybacks.

“In other words, in the absence of share repurchases the stock market would not be pushing record highs of 4600, but rather levels closer to 2700.

To put that into context, the high water mark for the S&P 500 in October 2007 was 1556. In October 2021, after 14-years, the market would be 2700 without share buybacks. Such would mean that stocks returned a total of about 3% annually or 42% in total over that 14-year period.

Before you scoff at a 3% annualized return, such would equate to an economy growing at 2% with a roughly 1-2% dividend yield. Such would align with historical norms going back to 1900.”

Paltry Growth Forecast

The Atlanta Fed GDPNow forecast for Q3 economic growth fell to 0.5%, down from 1.2%. The chart below shows how each major subcomponent contributed to the forecast. Increasing private inventories, adding 2.1%, is keeping the GDP forecast above zero. Typically accounting for two-thirds of GDP, Consumer Spending is only contributing 0.31% to the forecast, well off the 2.70% rate in August.

Industrial Production

In Monday’s Industrial Production report, Industrial Production fell 1.3%, and the lesser followed capacity utilization fell from 76.4% to 75.2%. The data is a little surprising given the shortage of goods available to the public. At first blush, one would think factories would be running at maximum capacity and production rising rapidly. Unfortunately, manufacturers face the same problem as their consumers, a shortage of goods needed to produce products. For example, it is well documented most auto manufacturers are cutting production due to a chip shortage. The graph below shows capacity utilization for the auto industry is at recession levels of 55%. It was running between 70-80% before the pandemic and had prior peaks over 90%. Auto manufacturing contributes about 3% to GDP.

The post Stocks Climb Toward Highs As Earnings Roll In appeared first on RIA.

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TJ Maxx and Marshalls follow Costco and Target on upcoming closures

Many of these stores have information customers need to know.

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U.S. consumers have come to increasingly rely on the near ubiquity of convenience stores and big-box retailers. 

Many of us depend on these stores being open practically all day, every day, even during some of the biggest holidays. After all, Black Friday beckons retail stores to open just hours after a Thanksgiving Day dinner in hopes of attracting huge crowds of shoppers in search of early holiday sales. 

Related: Walmart announces more store closures for 2024

And it's largely true that before the covid pandemic most of our favorite stores were open all the time. Practically nothing — from inclement weather to bad news to holidays — could shut down a major operation like Walmart  (WMT)  or Target  (TGT)

Then the pandemic hit, and it turned everything we thought we knew about retail operations upside down. 

Everything from grocery stores to shopping malls shut down in an effort to contain potential spread. And when they finally reopened to the public, different stores took different precautionary measures. Some monitored how many shoppers were inside at once, while others implemented foot-traffic rules dictating where one could enter and exit an aisle. And almost every one of them mandated wearing masks at one point or another. 

Though these safety measures seem like a distant memory, one relic from the early 2020s remains firmly a part of our new American retail life. 

A woman in a face mask shopping in the HomeGoods kitchen aisle.

Jeff Greenberg/Getty Images

Store closures announced for spring 2024

Many retailers have learned to adapt after a volatile start to this third decade, and in many ways this requires serving customers better and treating employees better to retain a workforce. 

In some cases, the changes also reflect a change in shopping behavior, as more customers order online and leave more breathing room for brick-and-mortar operations. This also means more time for employees. 

Thanks to this, big retailers have recently changed how they operate, especially during holiday hours, with Walmart recently saying it would close during Thanksgiving to give employees more time to spend with loved ones.

"I am delighted to share that once again, we'll be closing our doors for Thanksgiving this year," Walmart U.S. CEO John Furner told associates in a video posted to Twitter in November. "Thanksgiving is such a special day during a very busy season. We want you to spend that day at home with family and loved ones." 

Other retailers have now followed suit, with Costco  (COST) , Aldi, and Target all saying they would close their doors for 24 hours on Easter Sunday, March 31. 

Now, the stores that operate under TJX Cos.  (TJX)  will also shut down during the holiday, including HomeGoods, TJ Maxx and Marshalls

Though it closed on Thanksgiving, Walmart says it will remain open for shoppers on Easter. 

Here's a list of stores that are closing for Easter 2024: 

  • Target
  • Costco
  • Aldi
  • TJ Maxx
  • Marshalls
  • HomeGoods
  • Publix
  • Macy's
  • Best Buy
  • Apple
  • ACE Hardware

Others are expected to remain open, including:

  • Walmart
  • Ikea
  • Petco
  • Home Depot

Most of the stores closing on Sunday will reopen for regular business hours on Monday. 

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Gates-backed PhIII study tuberculosis vaccine study gets underway

A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.
The Bill & Melinda Gates…

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A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.

The Bill & Melinda Gates Medical Research Institute (MRI) will test a tuberculosis vaccine’s ability to prevent latent infections from causing potentially deadly lung disease. Last summer the nonprofit said it would foot $400 million of the estimated $550 million cost of running the 20,000-person Phase III trial.

It’s a pivotal moment for a vaccine whose origins date back 25 years when scientists identified two proteins that triggered strong immunity to the bacterium that causes tuberculosis. A fusion of those proteins, paired with the tree bark-derived adjuvant that helps power GSK’s shingles shot, comprise the so-called M72 vaccine.

Thomas Scriba

After decades of failures in the field, the vaccine impressed scientists in 2018 when GSK found that it was 54% efficacious at preventing lung disease in a 3,600-person Phase IIb study.

But the Big Pharma decided that a full-blown trial was too expensive to conduct on its own. Gates MRI stepped in to license the vaccine in early 2020, right before the Covid pandemic shifted global vaccine priorities towards the coronavirus, further stalling the tuberculosis shot.

“There’s been frustration that it’s taken so long to get this trial up and running,” Thomas Scriba, deputy director of immunology for the South African Tuberculosis Vaccine Initiative, told Endpoints News last summer.

At last, the vaccine is getting a chance to prove itself in a bigger study. If successful, it could lead to the first new shot for tuberculosis in over a century.

Emilio Emini, CEO of the Gates MRI, told Endpoints that the initial results may come in roughly four to six years. “Hopefully this will galvanize a refocus on TB,” he said. “It’s been ignored for many, many years. We can’t ignore it anymore.”

A substantial impact

Even though an existing vaccine helps protect babies and children against severe tuberculosis, the bacterium responsible for the disease still causes roughly 10 million new cases and 500,000 deaths each year.

Emilio Emini

By vaccinating adolescents and adults who test positive for infections but don’t have symptoms of lung disease, the Gates MRI hopes the shot will help prevent mild infections from becoming severe ones, curtail transmission of the bug, which is predominantly driven by people with lung disease, and reduce deaths.

“The impact would be substantial,” Emini said. But he cautioned that the biology behind mild and severe diseases is still mysterious. “The reality is that no one really knows what keeps it under control.”

The study, which will take place at 60 sites across seven countries, will include some people who are not infected with tuberculosis to ensure that the vaccine is safe in that broader population.

“Having to pre-test everybody is not going to make the vaccine easy to deliver,” Emini said. If the vaccine is ultimately approved, it will likely be used in targeted communities with high tuberculosis, rather than across a whole country, he added. “In practice, you would immunize everybody in those populations.”

Emini described the Gates MRI’s rights to the vaccine as “close to a worldwide license.” GSK retained rights to commercialize the vaccine in certain countries but declined to specify which ones.

A spokesperson for GSK said that the company “has around 30 assets under development specifically for global health … none of which are expected to generate significant return on investment.”

“It is not sustainable or practical in the longer term for GSK to deliver all of these alone. So we continue to work on M72, but in partnership with others,” the spokesperson added.

If the shot works, Emini said that the Gates MRI will sublicense it to a manufacturer that will be responsible for making and marketing the vaccine. The details are still being worked out, he noted.

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Choosing over the counter drugs for COVID 19? It’s complicated

COVID-19 illness may include symptoms such as a sore throat, fever, cough and fatigue. In January, the United States Centers for Disease Control and Prevention…

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COVID-19 illness may include symptoms such as a sore throat, fever, cough and fatigue. In January, the United States Centers for Disease Control and Prevention (CDC) issued its most recent guidelines for the use of over the counter (OTC) drugs for COVID-19. Specifically, its guidelines state that most people with COVID-19 have mild illness and can recover at home while treating symptoms with OTC medicines such as acetaminophen (Tylenol) or ibuprofen (Motrin, Advil). 

Credit: Florida Atlantic University

COVID-19 illness may include symptoms such as a sore throat, fever, cough and fatigue. In January, the United States Centers for Disease Control and Prevention (CDC) issued its most recent guidelines for the use of over the counter (OTC) drugs for COVID-19. Specifically, its guidelines state that most people with COVID-19 have mild illness and can recover at home while treating symptoms with OTC medicines such as acetaminophen (Tylenol) or ibuprofen (Motrin, Advil). 

Researchers from Florida Atlantic University’s Schmidt College of Medicine and academic colleagues say it’s more complicated. They suggest that selecting an OTC medication to alleviate mild symptoms of COVID-19 should be based on the entire benefit-to-risk profile of the patient. Moreover, they say clinical decisions should be made by the health care provider for each of his or her patients.

In a review, published in The American Journal of Medicine, researchers take a closer look at both the potential benefits and risks of acetaminophen, non-steroidal anti-inflammatory drugs (NSAIDs) – such as ibuprofen, as well as aspirin for the selection of OTC drugs to treat mild symptoms of COVID-19.

Traditional nonspecific NSAIDs such as the shorter acting ibuprofen and longer acting naproxen have been used to treat COVID-19. These widely used OTC drugs reversibly and non-specifically inhibit both cyclooxygenase enzyme isoforms. This results in systematic reduction in the synthesis of prostaglandins resulting in anti-inflammatory and fever-reducing effects. The researchers caution, however, that both ibuprofen and naproxen have similar but greater side effect profiles than aspirin, such as gastroenteritis and peptic ulcers.

Acetaminophen is one of the most frequently used OTC drugs in the U.S. and worldwide as a treatment for fever, allergic symptoms, headaches, myalgia, symptoms of the common cold, and most recently COVID-19. Acetaminophen was originally marketed as an alternative to aspirin for treatment of mild to moderate pain based on reduced mucosal gastrointestinal side effects. The authors caution that even at daily doses of 4,000 milligrams per day, generally accepted as safe for adults, acetaminophen can be toxic to the liver and may result in the onset of acute liver failure. In the U.S., acetaminophen is the leading reason for calls to Poison Control Centers with more than 100,000 cases per year. These circumstances account for more than 2,600 hospitalizations and 450 deaths in the U.S. due to acute liver failure. 

Aspirin, or acetylsalicylic acid, inhibits the production of prostaglandins, which are responsible for mediating pain, inflammation and fever. The authors say that the beneficial effects of aspirin include anti-platelet, analgesic, antipyretic or anti-fever and anti-inflammatory properties. Aspirin is rapidly absorbed when taken orally and has a half-life of around four hours, after which it is mostly metabolized by the kidneys.

The researchers note that the anti-inflammatory benefits of aspirin should provide symptomatic relief of fever and body aches in COVID-19. They underscore, however, that health providers should view these in the context of the increased risks of bleeding, principally gastrointestinal. Further, COVID-19 itself may already predispose individuals to bleeding as well as to clotting abnormalities.

“We believe that health care providers should make individual clinical judgments for each of his or her patients in the selection of OTC drugs to treat symptoms of COVID-19. This judgement should be based on the entire benefit to risk profile of the patient,” said Charles H. Hennekens, M.D., Dr.PH, senior author, first Sir Richard Doll Professor and senior academic advisor in FAU’s Schmidt College of Medicine. “It is our belief that the individual health care provider knows far more about each of his or her patients than anyone, including expert members of guideline committees.”

The authors conclude that when the totality of evidence is complete, health care providers can make the most rational individual clinical judgements for their patients and policymakers for the health of the general public.

The authors believe that, at present, the totality of evidence is incomplete and requires reliable evidence from large- scale randomized trials designed a priori to do so, which is necessary to develop rational guidelines. They also believe that any guidelines should provide only guidance to health care providers. Currently, these considerations pose new clinical challenges for health care providers in prescribing OTC drugs to treat COVID-19. 

“The astute and judicious individual clinical decision making of health care providers for each individual patient based on all these considerations has the potential to do far more good than harm. Finally, guidelines should provide guidance to individual health care providers,” said Hennekens.

Study co-authors are Gage Collamore, a second-year medical student; Mark J. DiCorcia, Ph.D., an associate professor and associate dean for educational affairs and admissions; Yash Nagpal, a second-year medical student; and Larry Fiedler, M.D., a board certified gastroenterologist and an affiliate associate professor, all within FAU’s Schmidt College of Medicine; Michael A. Garone, M.D., a board-certified gastroenterologist and clinical assistant professor at George Washington University Hospital; and David L. DeMets, Ph.D., emeritus Halperin Professor and founding chair of biostatistics and informatics; and Dennis G. Maki, M.D., the Ovid O. Meyer Professor of Medicine; both at the University of Wisconsin School of Medicine and Public Health.

Hennekens and Maki served for two years as lieutenant commanders in the U.S. Public Health Service as epidemic intelligence service (EIS) officers with the CDC. They served under Alexander D. Langmuir, M.D., who created the EIS and directed the epidemiology program at the CDC, as well as Donald A. Henderson, M.D., chief of the Virus Disease Surveillance Program at the CDC. Langmuir and Henderson made significant contributions to the eradication of polio and smallpox using widespread vaccinations and public health strategies of proven benefit and had extraordinary collaborations with local, state, federal and international health authorities.   

– FAU –

About the Charles E. Schmidt College of Medicine:

FAU’s Charles E. Schmidt College of Medicine is one of approximately 157 accredited medical schools in the U.S. The college was launched in 2010, when the Florida Board of Governors made a landmark decision authorizing FAU to award the M.D. degree. After receiving approval from the Florida legislature and the governor, it became the 134th allopathic medical school in North America. With more than 70 full and part-time faculty and more than 1,300 affiliate faculty, the college matriculates 64 medical students each year and has been nationally recognized for its innovative curriculum. To further FAU’s commitment to increase much needed medical residency positions in Palm Beach County and to ensure that the region will continue to have an adequate and well-trained physician workforce, the FAU Charles E. Schmidt College of Medicine Consortium for Graduate Medical Education (GME) was formed in fall 2011 with five leading hospitals in Palm Beach County. The Consortium currently has five Accreditation Council for Graduate Medical Education (ACGME) accredited residencies including internal medicine, surgery, emergency medicine, psychiatry, and neurology.

 

About Florida Atlantic University:
Florida Atlantic University, established in 1961, officially opened its doors in 1964 as the fifth public university in Florida. Today, the University serves more than 30,000 undergraduate and graduate students across six campuses located along the southeast Florida coast. In recent years, the University has doubled its research expenditures and outpaced its peers in student achievement rates. Through the coexistence of access and excellence, FAU embodies an innovative model where traditional achievement gaps vanish. FAU is designated a Hispanic-serving institution, ranked as a top public university by U.S. News & World Report and a High Research Activity institution by the Carnegie Foundation for the Advancement of Teaching. For more information, visit www.fau.edu.


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