Michael Fowlkes
Bucharest, Romania - http://www.investorsobserver.com
Michael Fowlkes is an options analyst and writer at Investors Observer.
Americans relying more heavily on their credit cards
Credit cards ... the little plastic cards in your wallet that are so convenient to rely on when you are strapped for cash. While the convenience of having cards definitely makes it easier to buy items when you are running low on cash, the flip side is that credit card debt can drown the typical household, and statistics are showing that Americans are pulling out their cards more than before.One of the reasons why credit card usage has been on the rise is the fact that homeowners are having a harder time using home equity to get a cash infusion into their accounts. As a result, they are looking to borrow money from somewhere, and more times than not, they are turning to credit cards.
The evil with credit cards is that once you start to use them to pay for your basic necessities like food and gas, you find that in the months to come you still can't afford your basic needs but in addition, your monthly bills are racking up like crazy due to your credit card expenses. It's a scary cycle that many families find themselves trapped in.
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Oil gushes through the $125 mark!
I know that last thing you probably wanted to hear this morning was that oil prices moved even higher, but that is exactly what is taking place, as oil rose as high as $125.98 and is currently trading at $125.60.Leading the charge today is the weak dollar as investors continue to seek refuge from the falling U.S. currency in commodities -- most notably, oil. The dollar has fallen today against the euro, the British pound, and the Japanese yen. The euro was sitting at $1.5404 last night, but has moved higher today, up to a current price of $1.5466.
The market is also concerned about the upcoming peak driving season for Americans. With the season getting under way, oil prices will definitely continue to rise, and if gasoline stockpiles continue to fall, you can be sure that gasoline prices are also going to keep moving higher over the next couple of months. Will we see national averages of $4 or greater? I don't think so, but at the current rate prices are moving, nothing is out of the question right now.
Continue reading Oil gushes through the $125 mark!
Flying just got a little more expensive
In reaction to surging fuel costs, several major airlines announced today that they were raising their fares in order to recoup some of their rapidly increasing flying costs.The increase this time around is $20 and effects passengers traveling on UAL Corporation (NASDAQ: UAUA), Delta Air Lines, Inc. (NYSE: DAL), and AMR Corporation (NYSE: AMR)'s American Airlines. The $20 jump in prices will be added to the airline's fuel surcharges, and consequently, these charges are now running at $130 round trip on most flights that you will book through the airlines.
The current rate hike was first initiated by Delta, and marks the second time in just over a week that the airline has been forced to raise fares in order to combat record high fuel costs. Times are definitely tough for airlines, and they are doing everything they can to combat fuel prices, but regardless of the rate increases most analysts are still expecting to see huge losses this year from most, if not all, airline carriers.
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Crocs (CROX) shares soar after first quarter results
This afternoon Crocs, Inc (NASDAQ: CROX) reported its first quarter numbers, and the stock is soaring in after-hours trading -- despite missing Wall Street estimates by a penny.Going into this afternoon's report, analysts were expecting to see the company show earnings of 10 cents a share, but the company failed to miss that estimate, by posting 9 cents a share for its most recent quarter. Despite missing by a penny, the stock has been moving up strongly in after-hours trading, with investors so far pushing shares up a bit over 14%?
Doesn't sound right, does it? The recent market has been punishing stocks that have missed estimates, so why is CROX shooting to the upside?
Continue reading Crocs (CROX) shares soar after first quarter results
Finally some good housing news
If you are like me, you are probably getting pretty tired of reading bad housing news day after day, so today it is nice to bring you some good news on the housing market, as mortgage applications rose last week for the first time in three weeks.According to the Mortgage Bankers Association, the week ended May 2 saw a 15.6% jump in the association's index of mortgage applications. The index takes into account both new purchase as well as refinance loans.
It is a good sign for the housing market, which is entering into its peak buying season. Perhaps this is the moment we have been waiting for, when buyers are finally ready to come back into the market and sweep up some heavily discounted houses. Home prices have been steadily falling for the past year, but signs are starting to point to a possible stabilizing early in 2009.
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Crocs first quarter earnings preview
It wasn't that long ago that Wall Street was in love with Crocs, Inc (NASDAQ: CROX), the maker of the trendy slippers that took the world by storm last year. After going on a tear for most of 2007, the stock started to break down last November, and has been in a tail spin for the past 5 months.The company is going to be reporting its first quarter numbers tomorrow after the market close, and all signs are pointing to yet another troublesome quarter for the company. Earnings.com is showing Wall Street estimates of 10 cents a share, but that number does not really hold too much water after the company announced a much weaker forecast last month in its preliminary release.
Last month, CROX shocked Wall Street when it said that it expected to see a 5 cent per share loss in the quarter, and revenues falling somewhere between $195 and $200 million. After that news came out, the already troubled stock took a serious nose dive, and gave up around 40% of its value.
Continue reading Crocs first quarter earnings preview
Take-Two Interactive (TTWO) upset that Grand Theft Auto ads got jacked
One of the most brand recognizable names in the world of video games has to be Grand Theft Auto. With its most recent release, Grand Theft Auto 4, the video game maker Take-Two Interactive (NASDAQ: TTWO) is already dealing with controversy after the city of Chicago "jacked" ads that the company purchased to advertise its newest game release.
Since the first installment of Grand Theft Auto, the game has been one of most discussed video games on the market, largely due to its high level of violence. Video game junkies love it, while parents cringe at the thought of their kids playing the game. The game definitely deals with some seriously taboo subjects; car-jacking, prostitution, cop shootings, drive by shootings, and drunk driving to name a few. But is this really enough to justify the city of Chicago pulling paid ads for the game?
Leading up the current release of Grand Theft Auto 4, Take-Two paid Chicago a reported $300,000 to place ads for the video game on the sides of buses and transit displays for a six week period starting on April 22. After the local Chicago news questioned the city's decision to run the ads, they were quickly pulled. The report questioned the taste of the ads, given the violence that has escalated recently in the city.
Continue reading Take-Two Interactive (TTWO) upset that Grand Theft Auto ads got jacked
Oil moves past $122
Oil continues its charge today, with prices rising above $122. At noon, oil is at $122.21, up $2.21.
The bulls have definitely had plenty of reason to continue to push prices higher this week. Concerns over supplies and the weak U.S. dollar continue to lead headlines, adding a boost to the current record high prices. Unfortunately for consumers at the gasoline pumps, higher oil will probably continue to prop up gasoline prices.
In an already uncertain market, any sort of rumors over supplies will always lead to higher prices, and that is definitely playing a part in the current market. Fresh concerns are flowing out of Iraq after Kurdish rebels threatened to start running suicide operations against American interests in the country. Iran is (as always) in the minds of traders as the country continues to defy the United Nations over its nuclear program.
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Sara Lee (SLE) gets hit by volatile commodity prices
Shares of consumer goods giant Sara Lee (NYSE: SLE) have been taking a beating today after the company failed to meet analyst estimates for its fiscal third quarter.At first glance, it looked like a fantastic quarter for the company, as profit rose by a remarkable 82%, but things start to look less than rosy once we take a closer look. Analysts had been expecting to see the company show earnings during the quarter of 24 cents a share, and were disappointed to see the company come in below this, with only 22 cents a share.
This is the second quarter in a row in which the company posted weaker than expected earnings, and is quickly erasing the progress that the stock has been making since the beginning of March.
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Starbucks (SBUX) posts weak earnings, but in line with expectations
As I discussed in my earnings preview last night, Wall Street was expecting a weak quarter from Starbucks (NASDAQ: SBUX) this afternoon, and that is exactly what it was served up.Shortly after the market closed today, Starbucks released its fiscal second quarter earnings figures, and the company posted earnings for the quarter of 15 cents per share, which was in line with analyst estimates. The company reported that its second quarter profit numbers were down 28% year-over-year, as the company continued to struggle in the current financial environment.
The income figures were definitely nothing to cheer about. During its second quarter last year, the company had net income of $150.8 million, but that number was slashed this quarter, as the beloved coffee chain was only able to come through with $108.7 million. Revenues actually were higher this year, rising 12% in the quarter on a year over year basis, still they came in slightly below expectations. Analysts had been hoping to see revenues of $2.55 billion, while the actual number was a bit shy of this, at $2.5 billion.
Continue reading Starbucks (SBUX) posts weak earnings, but in line with expectations
Starbucks (SBUX) second quarter earnings preview
Tomorrow afternoon, Starbucks (NASDAQ: SBUX) will be joining the earnings parade when it reports its second quarter numbers.
The last time that the company reported earnings was on January 30, when the company beat analyst expectations by a penny, posting 29 cents a share. But that was still not enough to get buyers enthusiastic about the stock.
Shares have fallen around 13% since then. This time around, analysts are looking for the company to show earnings of 15 cents a share.
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Radioshack (RSH) lower on lackluster earnings
Shares of electronics retailer Radioshack (NYSE: RSH) are trading lower in premarket trading after putting up less than impressive earnings this morning.The company was able to slightly come in above analyst estimates, with 30 cents per share compared to the forecast 29 cents per share, but the rest of the report left much to be desired. Compared to its first period last year, earnings were down slightly, as the company was able to show earnings of 31 cents a share last year. Revenue was also lower, by 4.4%.
One area that analysts always look at in judging a company's performance is same-store sales. Radioshack was weak in this area as well, posting a drop of 4% year-over-year. The company blamed this decline on lower demand for its Sprint post-paid wireless contracts and related accessories. Excluding this weak part of its business, Radioshack stated that it would have actually seen a 0.7% increase in its same-store sales.
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Goodyear Tire (GT) rolls in with a profit
Shares of tire maker Goodyear Tire and Rubber (NYSE: GT) are trading up nicely in the premarket after the Akron, Ohio based company posted a profit of 60 cents a share for its first quarter, easily surpassing analyst estimates.During its first quarter last year, the company posted a $174 million dollar loss, or -94 cents a share, and going into today's earnings report Wall Street had been looking to see the company show Q1 earnings of 47 cents. So with the actual numbers, Goodyear is looking for a good day in today's action. Excluding one-time items, the company stated that it had earned 67 cents per share.
Currently the stock has moved up 4.5% in premarket trading following its earnings release.
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Ford (F) drives home a profit
American auto maker Ford Motor Co. (NYSE: F) reported its first quarter earnings this morning, and surprised Wall Street by posting a profit during the quarter.Going into today's earnings announcement, analysts had been expecting the company to show a loss of 16 cents per share, but the nation's second largest auto maker surprised everyone by earning $100 million, or 5 cents per share, during the quarter. This is a nice rebound from the same period last year when the struggling auto maker had a loss of $282 million, or 15 cents a share.
The good news is that the company had a great performance in its European and South American markets. The bad news is that car and truck sales slumped once again in the weak U.S. market, hurt by the current economic slowdown.
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Apple (AAPL) reports strong earnings, but weak EPS forecast
Tech giant Apple Inc. (NASDAQ: AAPL) reported its fiscal second quarter numbers this afternoon, easily beating out Wall Street estimates for the quarter.Analysts had been expecting the company to report earnings of $1.07 a share, and the company actually reported earnings of $1.16 for its most recent quarter. Sales came in way above estimates as well, with a reported $7.51 billion, exceeding the $6.964 billion analysts had been looking for.
Today's report should help wipe any concerns that the current economic slowdown in America is negatively affecting the company's business.
Continue reading Apple (AAPL) reports strong earnings, but weak EPS forecast
How Washington can cut gas prices fast -- and why it won't
Oil prices and Fed policy: A solution is not as easy as it seems!
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