Q3 Reports and Company Results

Wall Street is about to say ' Bye Bye Rally '. Today investors disappointed with BofA, GE and IBM Q3 results. These results gave investors a reason to retreat after pushing the Dow of 10.000.

Bank of America reported a third-quarter loss of 26 cents per share, which was worse than the loss of 21 cents per share. BofA also fell behind expectations on revenue, reporting $26 billion for the third quarter, compared forecast of $27.6 billion. BofA shares fell nearly %6.

General Electric reported earnings of 28 cents per share, which was higher than expected, and revenue of $37.8 billion, which was lower than forecast. Analysts had expected GE to report third-quarter EPS of 20 cents and revenue of $39.5 billion. Investors were disappointed as most of the profit gains came from cost-cutting efforts. GE's stock slipped nearly %5.

But Google's upbeat outlook provides some strength. Google said Thursday the worst of the recession has passed, as it reported quarterly profit and sales that rose from year-earlier results and easily trounced Wall Street's forecasts.

So we are looking for future and waiting situation before new year. Markets will finish rally that easy? I dont think so.

( Source : http://money.cnn.com )

Turkcell : 52 Week High

Turkcell ( NYSE:TKC ), is a provider of mobile services in Turkey, has reached 52 week high on Wall Street. Turkcell shares were about nearly $9.50 when crisis has started. But after that period, shares rebound as a result of company's strong financial position.

The biggest Turkish mobile services provider made important investments, e.g. 3G, in Turkey and user base shows slight growth. Especially Turkcell's mobile internet users increased 59% in 2 years from 12 million to 19.1 million.

( Graph by cnbc.com )

In U.S, if share reaches to 52 week high it means crisis is over and company is looking to future. Turkcell is one of a few companies which could get to this situation on Wall Street. Turkcell has 16.04B mkt cap and Div/yield 0.81/4.44.

I think investors will be interesting Turkcell shares closely also in new year.

Giants Give Profit ' a Pulse ' ?

From Bloomberg:

Goldman Sachs, JP Morgan and Intel may this quarter lead companies worldwide to the first profit increases in more than two years, ending the longest earnings recession on record.

Buoyed by finance and semiconductors, profits at the world’s biggest companies are projected to grow 63 percent in the final three months of 2009, snapping nine straight quarterly declines.

Anaylsts think profits Q4 earnings will more than double from a year ago. For the third quarter, the largest financial companies will likely report higher earnings than a year ago. Morgan Stanley is expected to post the first gain from continuing operations in a year, while Citi's operating loss is expected to shrink, according to analysts.

Analysts also expect Wal-Mart to post a 15 percent gain in fourth-quarter net income. Japan's three automakers may report lower earnings as a stronger yen offset gains from government incentives in the U.S., Europe and Japan.

So im just waiting to see if Dow could reach 10.000 till new year. But i think it will only try that last chance before second shock of markets.

Two Straight Weekly Declines Finish?

Today U.S stocks rose and rebounding from two straight weekly declines. Goldman recommended large banks and investors speculated service industries stabilized. The dollar fell versus the euro, crude oil slipped and treasuries gained.

A team of Credit Suisse Group AG strategists wrote : “Tactical indicators at current levels would normally lead us to downgrade equities, but their signals are less meaningful at this stage in the cycle.”

Microsoft' CEO Steven Ballmer said today in London the next few years will be the “best yet” for the information- technology industry. And MS shares advances to $25.

Also JPMorgan climbed 1.3 percent to $42.42. Wells Fargo gained 4.7 percent to $27.52. Goldman Sachs raised its rating on large U.S. banks to “attractive,” citing the outlook for earnings. The firm also upgraded Wells Fargo to “buy” from “neutral.”

So this week has started with shine.

Morgan Posts Q4 Report

Morgan Stanley reported a much wider-than-expected quarterly loss as the credit crisis generated more writedowns and slashed fees from investment banking and brokerage. Morgan posted a net loss of $2.3 billion, or $2.24 a share, during the fourth quarter. Including results from discontinued operations, the company said it lost $2.34 a share.

Morgan Stanley, which dropped 70 percent on the New York Stock Exchange this year, jumped 18 percent yesterday after Goldman Sachs's loss was smaller than some analysts estimated and the Federal Reserve said it would cut the main U.S. interest rate to as low as zero and buy debt to help combat the recession. The stock fell to $15.35 in New York from $16.13 yesterday.

From Bloomberg;

Morgan Stanley today reported fourth-quarter mortgage- related losses of $1.2 billion, which were more than offset by net revenue of $2.7 billion from the widening of Morgan Stanley's credit spreads. The firm had mark-to-market losses of $1.7 billion on leveraged loans and leveraged-loan commitments, and writedowns of $800 million on securities in the firm's subsidiary banks. Those losses were offset by gains of $1.1 billion related to debt hedges.

The company also booked $1.8 billion in investment losses during the quarter from real-estate funds and other principal investments.

Morgan Stanley said last month it was cutting 10 percent of the jobs in the institutional securities division and 9 percent of the positions in asset management to help offset lower revenue. The company also said it was hiring two Wachovia Corp. executives to build a new consumer banking division as part of an effort to attract deposits.

FED Cuts Rates

FED cut the main U.S. interest rate to as low as zero for the first time and shifted its focus to the amount and type of debt it buys, seeking to revive credit and end the longest slump in a quarter- century.

The surprise move to lower its target for the benchmark federal funds rate from one percent puts the Fed in uncharted territory. Financial markets had expected the Fed to lower rates by no more than three-quarters of a point, to 0.25 percent.

There are some concerns that taking the fed funds rate so close to zero leaves the Fed with little room for additional moves if the economy does not start to show signs of improvement soon.

But the Fed said in a statement that it is looking at different steps it can take to stimulate the economy and keep market rates low, including the purchases of long-term U.S. Treasury notes. The Fed also said it will consider other, yet to be disclosed moves as well.

Markets soar after decision and christmas rally maybe started.

Economic Calendar of the Week

The week ahead for Wall Street ;

Monday: The December NY Empire State index, a regional reading on manufacturing, is expected to improve modestly to a reading of minus 27 from a reading of minus 25 in November. The two-day Federal Reserve policy meeting begins.

Tuesday: Goldman Sachs and Best Buy report earnings before the start of trade. Economic reports are due on housing and consumer inflation. The Federal Reserve's policy-setting meeting concludes, with a decision on interest rates due.

Wednesday: Morgan Stanley reports quarterly earnings before the start of trade.

Thursday: In the early morning, FexEx is expected to report quarterly earnings.

A pair of economic reports are due shortly after the start of trade. The Philadelphia Fed index, the Philly counterpart to Monday's New York manufacturing index, is expected to have dipped to negative 40 from negative 39.3 in the previous month.

The index of leading economic indicators (LEI) is expected to have decreased by 0.5% in November after dropping by 0.8% in the previous month.

After the close of trade, Oracle is expected to report earnings of 34 cents per share, up from 31 cents a share a year ago.

Friday: The December "triple witching" day, a quarterly event when stock options, equity index options and equity index futures are all expiring simultaneously.

Retail Sales Fall

Retail sales fell for the fifth straight month in November as mounting job losses last month curbed consumers' ability and willingness to spend money in stores. The Commerce Department said Friday that retail sales fell 1.8% last month, compared with a revised 2.9% drop in October, the worst monthly sales on record. October sales were originally reported to have tumbled 2.8%.

Sales excluding autos and auto parts fell 1.6% in November, compared to a revised 2.4% drop in October. Ex-auto sales were originally reported to have fallen 2.2% in October.

The Census Bureau reports that retail sales collapsed in October:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $355.7 billion, a decrease of 1.8 percent from the previous month and 7.4 percent below November 2007. Total sales for the September through November 2008 period were down 4.5 percent from the same period a year ago. The September to October 2008 percent change was revised from -2.8 percent to -2.9 percent.

The following graph shows the year-over-year change in nominal and real retail sales since 1993.

Click on graph for larger image

( Graph link : http://calculated.blogspot.com )







To calculate the real change, the monthly PCE price index from the BEA was used (November PCE prices was estimated as the same as October).

Retail sales are a key portion of consumer spending and real retail sales have fallen off a cliff.