Trader Talk

Investors Shun U.S. Stocks Even As Indices Hit New Highs

China's Shanghai Index up 2.7 percent as Chinese PMI was stronger than expected. U.S. ISM will be released at 10 Am ET.

And that's the point: with earnings season just about over, it is economic news that will be the driver for the next couple of months. Nonfarm payrolls for October on Friday is the most important statistic.


1) Ford up 9 percent pre-open, reported much stronger than expected earnings: $0.26 ex-items, versus consensus of a loss of $0.12.

They generated $1.3 billion in positive cash flow, far better than expected. North America was particularly strong on better volume and pricing. They appear to be increasing market share.

They are now expecting positive cash flow in the fourth quarter and expect 2011 to be "solidly profitable" (they had previously said 2011 would be "breakeven or better").

CEO Alan Mulally will be on the air with our Phil Lebeau at 12:10 ET today.

2) CIT down by about half (from $0.72 to $0.38) pre-open on their prepackaged bankruptcy filing, word of which had already leaked out on Friday.

3) Humana's Q3 earnings topped estimates ($1.78 vs. $1.77 est.) amid a lower-than-expected rise in revenues (up 8.0 percent vs. up 9.3 percent est.). Medicare Advantage membership jumped 11 percent, which offset a 4-percent decline in its commercial plan membership.

The health insurer sees "substantial" growth next year - which will be good for revenues (greater premiums) but bad for earnings as reduced government Medicare subsidies are expected (higher costs). 2010 earnings guidance is disappointing ($5.05-$5.25 vs.$5.36 est.).

4) Clorox reported better-than-expected Q1 earnings ($1.18 vs. $0.95 est.) on a notable rise in margins (up nearly 5 percentage points from last year) Sales were inline with expectations as volumes rose 1 percent.

The consumer goods maker raises full-year earnings of $4.05-$4.20 vs. $4.18 est., but sees revenues growing just 1 percent to 2 percent, slightly below estimates of 2.2 percent growth.

5) Dean Foods Q3 earnings beat estimates by a penny, but saw its top line results fall short of estimates ($2.77 billion vs. $2.94 billion est.) due to lower milk prices. However, the dairy distributor sees prices of milk moving higher during the current quarter and expects that trend to continue into 2010.

The company raises sees Q4 earnings to be at least $0.36, below estimates of $0.39.

6) Bob Kelly, CEO of Bank of New York/Mellon, reportedly turned down the Bank of America CEO job. Rochdale's Dick Bove echoed the sentiments of most traders: " What I do not understand is why the Board of Directors or the government would believe that an outsider with a good job would go to Bank of America where his pay would be restricted and he would be forced to submit to bullying by the banking regulators."



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