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Thursday, March 3, 2016

(This is Mark Vickery covering for Sheraz Mian.)

Wall Street was a met with a tragedy yesterday when former CEO of Chesapeake Energy (CHK), Aubrey McClendon, died in a high-impact car crash off a 2-lane highway in Oklahoma City. McClendon had been driving well over the speed limit at the moment of the crash, which happened at the wall of an underpass. He was 56.

McClendon was widely considered a pioneer of “fracking,” the innovative hydraulic fracturing method of extractg natural gas from deeply embedded shale pockets far underground. His success at the helm of Chesapeake Energy peaked in 2008, when shares of CHK went north of $60 per share. The company was hit hard after the Great Recession, and its share price has slowly evaporated since that crash.

On Tuesday, McClendon was officially indicted on an antitrust charge by a federal court for conspiring to orchestrating a scheme between two (as-yet unnamed) energy companies. He had stepped down as CEO of Chesapeake in 2013 due to disagreements with its board. Chesapeake shares have suffered mightily since then, and CHK closed Wednesday at $3.41 per share. Chesapeake had registered a Zacks Rank #3 (Hold) as of yesterday, with style scores of Value: C, Growth: D and Momentum: C.

Weekly jobless claims were once again released this Thursday morning, with 278K up a bit from last week’s unchanged read of 272K. Continuing claims were a bit higher than expected at 2.257 million. These numbers do not seem to have pushed the needle in either direction regarding expectations of tomorrow’s non-farm payroll report, which is expected to have garnered roughly 200K jobs in the month of February.

U.S. productivity numbers for the last quarter of 2015 fell 2.2 percent, better than the expected -2.9 percent. This has been revised upward from the earlier look, which registered -3 percent. Labor cost moderation had assisted the improvement, although negative productivity growth s one of the fews negative reads we’ve seen lately in the U.S. economy.

In earnings news, Kroger (KR) missed sales and earnings expectations in its fiscal Q1 2016, and guided in-line for Q2. Kroger shares had been up 16 percent year over year, but have sold off a bit on the earnings news in the early markets. Joy Global (JOYG) also reported weaker-than-expected results for its Q4 this morning.

Mark Vickery
Senior Editor
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