Trader Talk

Pisani: Markets Like Ford — and Obama?

S&P futures were up about 3 points on:

1) President Obama's call for tax cuts and tax credits for small businesses, a focus on jobs and his statement that he is "not interested in punishing banks,"

2) Ben Bernanke's likely survival of a procedural vote in the Senate, and

3) earnings beats from Ford, P&G, Motorola , Nokia, Lockheed Martin and Colgate .


1) Ford's report was stellar: they beat by a wide margin ($0.43 vs. $0.27 consensus, $32.60 billion topline vs. $30.01 billion consensus), and the commentary for 2010 was very positive, including expectations of positive cash flow. Expect analysts to begin revising upward 2010 and 2011 earnings estimates.

2) Lockheed Martin reported earnings above expectations but 2010 EPS guidance of $7.15-$7.35 is still below analyst consensus of $7.41. The key story here is that defense spending will be weaker.

3) Nokia soars 11 percent on heavy volume after Q4 results handily topped estimates on higher margins and stronger than expected demand for its handsets. The world's biggest cell phone maker saw volumes grow 12 percent as it picked up market share particularly for its smartphones and mobile computers.

Rising 36 percent, volumes in China outpaced any other region in the world and now make up 14 percent of total volumes. Putting that in perspective, Nokia shipped 17.6 million units in China vs. just 3.8 million in North America last quarter.

For 2010, Nokia sees operating margin at the low end of its previously-announced target of 12 percent to 14 percent.

4) 3M rises 2 percent pre-open, after the Dow component reported better than expected Q4 earnings ($1.30 vs. $1.21 consensus). Sales grew more than expected as the diversified manufacturer saw gains broadly across all of its divisions.

Looking ahead, 3M boosted its 2010 earnings forecast to $4.90-$5.10, inline with current Street expectations of $5.02.

5) Procter & Gamble is up fractionally in pre-market trading after its Q2 earnings beat estimates ($1.49 vs. $1.42 consensus). Organic sales for the consumer product giant rose 5 percent — at the high end of prior guidance. This was in part due to higher pricing, but mostly from improving volumes, which was led by strong demand for its household products.

For the current year, P&G raised its organic sales growth forecast to up 3 percent to 5 percent. However, earnings guidance for the third quarter ($0.77-$0.82) fell below the consensus estimate of $0.85.

6) Oshkosh jumps 11 percent pre-open as the truckmaker strongly beat earnings estimates ($2.10 vs. $1.00 consensus). Sales soared 83 percent on tremendous sales of its military vehicles (up 242 percent from prior year).

7) The Baltic Dry Index fell 5 percent today, finally catching up with the belief that China's move toward tightening spending will affect dry shipments (iron ore is the primary commodity in dry bulk shipments).

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