Futures for the leading indexes are up very slightly this morning, ahead of the first trading session following the resignation of a Pope in the history of stock markets.
On the rise are shares of US Airways (LCC), up about 2% after the New York Times said this morning that the company and American Airlines parent AMR (AAMRQ) “appeared likely to announce a merger this week.”
Falling are shares of Charles Schwab (SCHW), down just over 2%. Analysts at Citigroup today cut their rating for Schwab’s stock to Sell, said Dow Jones Newswires:
Comparing Schwab to a biotech stock, Citi downgrades the brokerage to sell and cuts estimates while saying it doesn’t “see the blockbuster drug in the pipeline to justify the premium” the stock has been trading at. It’s jumped 18% this year amid the uptick in Treasury yields and euphoria surrounding individual investors supposedly returning to stocks. Nevermind Citi saying SCHW has among the highest multiples in financials, broker-dealer stocks have peaked in 1Q or early 2Q each of the past 4 years, so the seasonal trend isn’t good for SCHW, either.
A stock that seems to have benefitted from analysts’ views today is Nike (NKE), which is up 2% following an upgrade at JPMorgan. After a meeting with Nike management, the analysts raised their rating to Buy and increased their target price 28% to $64.
The Wall Street Journal has a slightly worrying story this morning aboutfalling confidence among business leaders:
Sixty-three S&P companies have lowered their forecasts for first-quarter earnings, according to FactSet Research, while 17 have raised them, the largest disparity since the firm began tracking the data in 2006.Many executives see shrinking economies in Europe. Closer to home, they worry about hesitant U.S. customers, chilled by continued Washington gridlock.
In a sign of executive caution, a Wall Street Journal survey of 50 S&P companies found they plan to increase investment this year by 2%, signaling a dearth of big growth opportunities. Through the first nine months of 2012, S&P companies boosted investment 8%, following a 20% increase in 2011.
So, lower earnings outlook and less capital expenditure in the months ahead. Not a good sign, is it?
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