Archive for May, 2013

• Morning News: May 3, 2013
  Eddy Elfenbein, May 3rd, 2013 at 7:20 am

  RBS Drops After Operating Profit Misses Estimates

  Slovakia Set to Meet Budget-Deficit Ceiling, EU Forecasts

  EU Lowers Forecast as Euro Area Heads For Two-Year Slump

  Bangladesh Fears an Exodus of Apparel Firms

  JPMorgan Caught in Swirl of Regulatory Woes

  American Auto Industry Has Best Performance in 20 Years

  Dish’s Charlie Ergen on Sprint Offer: We’re Not Going to Lose

  Verizon Says Will Not Pay A Premium For Vodafone Stake

  Visa’s Fiscal 2nd-Quarter Results Beat Estimates, Shares Gain

  Intel CEO-Designate Krzanich Plans Faster Shift to Mobile

  GM’s 1Q Profits Of $865M Beat Analysts’ Expectations

  Westpac Posts $3.5 Billion Profit

  New York Preserves Weapon Against Wall Street In Case Of Ex-AIG Chief

  Jeff Carter: Entrepreneurial Hammers in Search of Nails

  Phil Pearlman: Facebook Will Remain Patient Before Monetizing Instagram

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• Jobless Claims Fall to a Five-Year Low
  Eddy Elfenbein, May 2nd, 2013 at 12:47 pm

  Tomorrow is the big April jobs report but we got an important piece of data this morning. The government reported that first-time jobless claims fell to 324,000. That’s the lowest number since January 2008. Economists were expecting 345,000.

  The consensus for tomorrow’s non-farm payroll is a gain of 145,000. We got a sneak preview yesterday when ADP, the private payroll firm, reported a gain of 119,000 jobs for April.

  

  The stock market is up cautiously today. The S&P 500 hit an intra-day high of 1,597.86 which is just above the high from Tuesday, which was also the close that day. Shares of AFLAC ($AFL) finally broke through $55 per share. Bed Bath & Beyond ($BBBY) is getting very close to hitting $70 per share. The home furnisher has had an impressive run. Two months ago, BBBY was below $57.

  Yesterday, Ford ($F) reported an impressive 18% sales gain for April. The Fusion continues to be a big hit for them. The stock got as high as $13.78 yesterday although it pulled back late in the day.

• Morning News: May 2, 2013
  Eddy Elfenbein, May 2nd, 2013 at 7:39 am

  Here Comes The Most Anticipated ECB Rate Decision In A Long Time

  JGBs Mostly Rise, Underpinned By BOJ Bond-Buying Operations

  China Cyberspies Outwit U.S. Stealing Military Secrets

  China Data Confirm Slowdown in Factories

  Philippines Beats Indonesia to S&P Investment Grade Rating

  Some Retailers Rethink Role in Bangladesh

  Fed Open to Expanding QE as It Counters Talk of Tapering

  Facebook’s Mobile Business Expands In First Quarter

  Merck Cuts Profit Forecast as Buyback Boosted $15 Billion

  BMW Sticks to 2013 Target After Earnings Exceed Estimates

  Siemens Cuts Full-Year Forecast Amid Train, Energy Charges

  Demise of Coda Automotive Means Lonelier Electric-Car Owners

  Shell Chief Executive Peter Voser To Leave In Surprise Move

  Howard Lindzon: We Didn’t Know What We Had…Stock Market Edition

  Jeff Miller: April Employment Report Preview

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• Today’s Fed Statement
  Eddy Elfenbein, May 1st, 2013 at 2:01 pm

  Here’s today’s Fed statement:

  Information received since the Federal Open Market Committee met in March suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown some improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth (shots fired at Congress! – Eddy). Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

  Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

  To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

  The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

  To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

  Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

• April ISM = 50.7
  Eddy Elfenbein, May 1st, 2013 at 10:12 am

  The ISM for April was 50.7 which is down from 51.3 for March. Economists were expecting 50.8. For the 46th month in a row, the ISM has been 49.9 or better.

  

• WEX Inc. Reports Earnings of 98 Cents per Share
  Eddy Elfenbein, May 1st, 2013 at 10:01 am

  WEX Inc. ($WEX) reported first-quarter earnings of 98 cents per share which was two cents better than estimates. Revenue rose 18% to $165.4 million.

  “We kicked off 2013 with first quarter revenue and adjusted net income exceeding our guidance, increasing 18% and 8%, respectively, over last year driven by strong transaction growth, exceptional credit loss performance and investments in our business to support future growth,” said Michael E. Dubyak, WEX chairman and chief executive officer. “Year to date we have made strides in executing on all fronts of our multi-pronged strategy. We advanced our international presence within Asia-Pac, Brazil and Europe as a result of investments in WEX Travel, our virtual payment solution for the travel industry, and further diversified our business all while expanding our Americas Fleet business with some marquee wins. With positive momentum in the business and a robust pipeline of opportunities, we have also positioned WEX for future success as we leverage our investments in our burgeoning growth platforms.”

  For Q2, WEX expects earnings to range between 98 cents and $1.05 per share. For the entire year, the company sees earnings ranging between $4.20 to $4.35 per share. Wall Street had been expecting $4.46 per share. The stock is off 7% this morning.

• Morning News: May 1, 2013
  Eddy Elfenbein, May 1st, 2013 at 7:39 am

  China’s Manufacturing PMI Drops in April

  Chinese Way of Doing Business: In Cash We Trust

  We Now Know That An Anti-Corruption Drive In China Helped Cause The Crash In Commodities

  Slovenian Credit Lowered to Junk by Moody’s as Bond Sale Delayed

  Fed Seen Slowing Stimulus With QE Cut by End of This Year

  Consumer Confidence Jumps as U.S. Home Values Climb

  Pfizer 1st-Quarter Profit, Sales Miss Estimates as Lipitor Pressure Continues

  New York Times Leads Major Newspapers With 18% Circulation Gain

  IBM Assures Shareholders of Profit Goals After Earnings Stumble

  Merck First-Quarter Sales Disappoint

  To Satisfy Its Investors, Cash-Rich Apple Borrows Money

  Yahoo Scraps Deal for French Video Site

  Yahoo’s Mayer Offers Paid 16-Week Leave After Birth of Child

  Marc Chandler: Enrico Letta’s Italy

  Cullen Roche: NYSE Margin Debt Approaches All-Time High

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