The Morning Look

Stock Market Overview:

Stock futures are up mildly as investors digest Monday-Wednesday’s steep selloff. Oil prices and other commodities remain under severe pressure and remain in focus. The Federal Reserve is scheduled to meet next Wednesday and investors believe they will raise rates by a quarter point. The Fed has been telling us they are going to raise rates all year and when push comes to shove, they do nothing. We’ll see if anything changes next week.

Gary’s Thoughts: Deterioration continues. Markets remain sloppy in a month where markets are “supposed” to be positive. As far as the Fed, we will cross that rickety bridge when we get there.

Economic Data is light today: Gary’s Thoughts: Nothing earthshaking!

• Weekly Jobless claims will be released at 8:30am
• Import and Export Prices
• Bloomberg Consumer Comfort Index at 9:45am
• EIA Natural Gas Report 10:30am
• Fed Balance Sheet at 4:30
• Money Supply at 4:30

Highlights Of The Day:

• Trump Surges: Trump Poll Numbers Surging After Controversial Statements:
  Gary’s Thoughts: If Trump was videoed running over puppies, his numbers would go up. Teflon anyone?

• Retail Trouble: Men’s Warehouse ($MW) is down over 21% in the premarket after reporting another horrible quarter. The stock has been plunging for months and is down a whopping 80% from its June 2015 high of 66.18. The stock warned that it may miss its yearly forecast due to continued weakness from its newly acquired Jos. A Bank stores. Jos A. Bank comparable sales plunged -35.1% in Q4 through the first week of December y/y.
  Gary’s Thoughts: Retail remains less-than-stellar. Men’s Warehouse decided to follow in JC Penney’s footsteps. You are seeing that outcome.

• Oil Rout Continues: Chevron Corp ($CVX) – The energy giant is down slightly after it cut its budget by 24% in 2016. Oil prices have been in a virtual free-fall and continue to hurt oil stocks. Reuters notes the dramatic cutback in spending is likely to be echoed by other oil majors who will soon release spending plans, with rival ConocoPhillips set to release its 2016 budget later today.
  Gary’s Thoughts: There is going to be a lot more where this came from. Expect layoffs, lower capex and everything that happens when commodity prices plunge a lot more than anyone could ever fathom.

• Yum Brands ($YUM) — The parent company of Taco Bell, KFC, Pizza Hut and other brands, said said same-restaurant sales in China fell about 3% in November. The company also said same-store sales fell 1% percent at KFC outlets and 9% at Pizza Hut restaurants. The firm holds its investor day Thursday in Texas and will be discussing a possible separation into two independent publicly traded companies.
  Gary’s Thoughts: Restaurants are retail. Retail is soft. China is suspect.

• Facebook At Work ($FB) – The social media company is planning to launch a professional version of the popular social network site, a company executive told Reuters. The service, Facebook at Work, began beta-testing in January. Facebook plans to charge “a few dollars per month per user” for premium services such as analytics and customer support, a company spokeswoman said. The service will compete with LinkedIn ($LNKD).
  Gary’s Thoughts: Facebook is smart. They have the eyes so go after the competition. Smart move and suspect we will be hearing a lot more about this going forward. Could be huge!