Archive for 2011

• Becton Dickinson Beats and Guides Higher
  Eddy Elfenbein, August 2nd, 2011 at 10:17 am

  Great earnings from Becton Dickinson ($BDX). The company reported adjusted earnings of $1.51 per share which was eight cents more than Wall Street was expecting. Becton also raised its full-year EPS guidance range from $5.55 to $5.65, to $5.65 to $5.78. Wall Street’s estimate was $5.62 per share.

  The company earned $343 million, or $1.53 a share, in the second quarter, higher than year-earlier earnings of $306.9 million, or $1.29 a share.

  Income from continuing operations in the latest quarter was $1.51 a share; analysts surveyed by Thomson Reuters were expecting the company to earn $1.43 a share.

  Revenue rose 10% to $2.01 billion, above analysts’ estimates of $1.99 billion.

  “Gross margin expansion reflecting favorable product mix has offset some of the headwinds we have been facing as a result of a challenging macroeconomic environment and increased raw material costs,” said Chairman and CEO Edward Ludwig, in a statement Tuesday.

  Becton Dickinson said 2011 revenue is expected to be at the higher end of its previously estimated range of 5% to 6% from fiscal 2010 because of the effects of a favorable currency.

• S&P 500 Breaks 200-DMA
  Eddy Elfenbein, August 2nd, 2011 at 10:01 am

  After bouncing off the 200-day moving average twice in June, the index has now broken below it.

  

  It’s interesting that the market is slightly higher than the June bounces but it’s the 200-DMA that’s come up.

• Morning News: August 2, 2011
  Eddy Elfenbein, August 2nd, 2011 at 8:24 am

  Pearls, Finer but Still Cheap, Flow From China

  India’s Widening Iron Ore Scandal Hurts Stocks

  Italy Under Fire in Widening Euro Debt Crisis

  Global Growth, Debt Fears Grip Currency Markets

  Debt Deal Puts U.S. on Austerity Path as Economy Falters

  U.S. Stock Futures Down as Economic Fears Remain

  Manufacturing Growth Hits Lowest Level in 2 Years

  Ford to Recall 1.1 Million Pickups for Gas Tank Problem

  Toyota Raises Profit Outlook on Quake Recovery as Hyundai Gains

  Pfizer’s Adjusted Profit Beats Estimates

  General Growth Quarterly FFO Declines After Lower Lease Termination Income

  British Banking Giant Barclays Reports Profit Plunge and Job Cuts

  Japanese Brewer Kirin Pays $2.5 Billion to Buy Stake in Brazil’s Schincariol

  Fresenius to Buy U.S. Dialysis Chains

  Brian Shannon: Stock Trading Ideas for 8/2/11

  Jeff Miller: Weighing the Week Ahead: Looking Past the Debt Ceiling Issue

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• The Lost Decade
  Eddy Elfenbein, August 1st, 2011 at 12:58 pm

  Here’s a look at the total return of the S&P 500 adjusted for inflation. We’re still below the peaks from 2000 and 2007. In fact, we’re less than 5% higher than where we were 13 years ago.

  

  Note that the July CPI report isn’t out yet so I assumed 0% inflation for the last data point.

• July ISM = 50.9
  Eddy Elfenbein, August 1st, 2011 at 10:30 am

  The July ISM index dropped to 50.9. The index is down nearly 10 points in the last three months.

  

  Whenever the ISM drops to 44.4 or less, the odds of a recession jump much higher. We’re still above the danger zone. The ISM has fallen between 50.0 and 51.0 a total of 49 times. Only three of those readings come during official recessions.

  Here’s a look at total months and months in a recession by different ISM readings:

  From::	To:	Months	Mos in Recession
  70 more		6	0
  65	69.9	30	0
  60	64.9	83	3
  55	59.9	186	3
  50	54.9	214	9
  45	49.9	136	25
  40	44.9	56	33
  35	39.9	39	36
  Under 35		13	13

  During the 10-year expansion from April 1991 to March 2001, the ISM came in at today’s reading or less 46 times, yet none was a recession.

• The First Day of the Month
  Eddy Elfenbein, August 1st, 2011 at 10:03 am

  The S&P 500 has risen on the first day of the month for 23 of the last 28 months.

  Going back to November of 2009, more than half of the S&P 500’s gain has come on the first day of the month.

  

  The market was up earlier today but we just slipped into the red.

• Warren Buffett on Gold
  Eddy Elfenbein, August 1st, 2011 at 9:05 am

  He sums it up well:

  “They take it out of the ground in South Africa, ship it to the Federal Reserve, where they put it back in the ground,” Buffett said in answer to a question about commodities on April 30 at Berkshire Hathaway’s annual meeting in Omaha, Nebraska. “If you were watching from Mars you might think it’s a little peculiar.”

• S&P 500 Looks to Open Higher
  Eddy Elfenbein, August 1st, 2011 at 8:57 am

  Thanks to the resolution, or apparent resolution, of the debt ceiling debate, the market looks to open higher this morning. The futures market indicates that the S&P 500 will open more than 1% higher today. I would expect that financial stocks will do especially well. Of course, we’re only gaining what we recently lost.

  I’ll be very curious to see what the ISM report for July has to say. The last few reports haven’t been encouraging. The report is due out at 10 am.

  Interestingly, I just noticed that the joint venture between Warren Buffett’s Berkshire Hathaway and Leucadia National ($LUK) is in the market for an acquisition. As they say, buy when others are fearful.

• Morning News: August 1, 2011
  Eddy Elfenbein, August 1st, 2011 at 7:09 am

  China Central Bank Says Inflation Fight a Policy Priority

  IMF, Romania Agree on Second Installment of 480 Million Euros

  Europe, Asian Factory Growth Stalls in July

  Obama and Leaders Reach Debt Deal

  Debt-Limit Deal to Get Congress Vote Today

  US Stock Futures Higher On US Debt Deal Agreement; Gold Slides

  U.S. Auto Sales Stall, Casting Doubt on Rebound

  HSBC Sheds 30,000 Jobs, Posts Surprise Profit Rise

  Allstate Posts $620 Million Loss, First in Two Years, on Tornado Expenses

  Honda 1Q Profit Drops In Post-Quake Funk, But Lifts FY Outlook

  NT Express Profit Down As Losses Outside Europe Rise

  GE to Sell SeaCo Venture for $1.05 Billion

  EADS to Purchase Vizada for $960 Million

  Joshua Brown: The Deal

  Paul Kedrosky: The Springboard of the Neolithic Demographic Transition

  Man Disguised as Spongebob Squarepants Robs Florida 7-11; No One Injured

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• The 7-1/2 Year TIPs Yield is Negative
  Eddy Elfenbein, July 29th, 2011 at 2:03 pm

  Wow! Check out the yield on the Treasury Inflation Protected security that’s due in January 2019. In February, it yielded 1%. Now the yield is slightly negative.