Mar 25, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

News From China And The Recent Moves In The US Dollar Index

Posted: 25 Mar 2010 05:11 PM PDT

In the March 12-th commentary we’ve discussed the influence that China might have on the precious metals market and since the feedback was very positive, we decided to provide you with a follow-up.

April 15th is the date to watch. That’s when the U.S. Treasury Department is mandated by law to issue a report identifying nations that “manipulate the rate of exchange between their currency and the United States dollar for purposes of …gaining unfair competitive advantage in … [visit site to read more]


Why The President’s Next Big Thing Should Be Jobs

Posted: 25 Mar 2010 04:03 PM PDT

Few presidents get a second honeymoon of their own making. (George W. got one when terrorists attacked the United States). Barack Obama's victory on health care reform has breathed new life into his administration, recharged the Democratic base, and given the rest of America a sense of someone who fights for average working people.
 
The question now is: What does he do with his second honeymoon?
 
Some say it should be used to enact financial reform. Most Americans despise Wall … [visit site to read more]

Cartoon: Loser Pays…

Posted: 25 Mar 2010 04:01 PM PDT

Source: Eric Allie, March 23, … [visit site to read more]

Toyota Reorganizing Japan Ops

Posted: 25 Mar 2010 03:46 PM PDT

Toyota Motor Corp. (NYSE:TM) plans to reorganize its Japanese production facilities at group companies for the first time by the end of the decade. The restructuring aims to avoid the backlash from its string of global automotive recalls by boosting productivity, lowering costs and ensuring quality.

Toyota manufactures vehicles at 18 plants in Japan, four of which are its own and the rest are facilities operated by its subsidiaries, including Daihatsu Motor Co., Hino Motors Ltd. and Toyota Auto … [visit site to read more]

Earnings Estimate Scorecard: LSI

Posted: 25 Mar 2010 03:27 PM PDT

LSI Ups Guidance

LSI Corporation (NYSE:LSI) recently updated its outlook for the first quarter of 2010. The company now expects revenues between $620 million and $640 million, up from the previous guidance of around $590 – $620 million.

The revised guidance reflects greater-than-anticipated strength in the recovery of enterprise IT spending during the first quarter.

LSI Corporation designs, develops, and markets complex high-performance semiconductors and storage systems. The company provides … [visit site to read more]

European Central Bank President: IMF Aid “Very, Very Bad”

Posted: 25 Mar 2010 03:15 PM PDT

There have been reports in the past that the dire straits of the euro are really no different from the challenges faced by the states within America's borders. Today, we'd have to disagree.
For a variety of reasons we've covered here before, the euro's been dragging close to ten-month lows. Today, it found new reason to sink as ECB President Jean-Claude Trichet indicated that financing support from outside of the euro area, including the IMF, is "very, very bad."
According to … [visit site to read more]

Jacobs’ Growing Order Book

Posted: 25 Mar 2010 03:08 PM PDT

Jacobs Engineering Group Inc. (NYSE:JEC) has received a five year contract from the City of Killeen, Texas to provide professional services for the Killeen-Fort Hood Regional Airport and Robert Gray Army Airfield. However, the value and the terms of the contract have not been disclosed.

According to the contract, Jacobs will provide professional services for FAA (Federal Aviation Administration) Grant and PFC (Passenger Facility Charge) funded projects at the Killeen-Fort Hood Regional Airport … [visit site to read more]

Big Mac Index Says Chinese Renminbi Is Grossly Undervalued

Posted: 25 Mar 2010 03:01 PM PDT

A picture speaks a thousand words … at least when considering the external value of the Chinese renminbi as measured by the Big Mac Index.
For those not familiar with the Big Mac Index, it is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and supposedly provides a test of the extent to which market exchange rates result in goods costing the same in different countries. According to The Economist, it “seeks to make … [visit site to read more]

Government Funded Businesses: Going Where The Money Is

Posted: 25 Mar 2010 03:00 PM PDT

It's always been true, over and over, that corruption is always at its maximum at the end of long booms powered by an expansion of money.
In the old days, before America lost its collective mind and allowed a fiat currency, government spending was pretty much fixed because the money supply was fixed by the relatively-unchanging supply of gold.
Nowadays, however, the government gave the absurd and incompetent Federal Reserve the right to allow banks to create as much money as anyone … [visit site to read more]

JPMorgan May Enjoy A Tax Refund

Posted: 25 Mar 2010 02:50 PM PDT

JPMorgan Chase & Co. (NYSE:JPM) is approaching a deal that would allow it to enjoy $1.4 billion in tax refunds, according to a Wall Street Journal report.

The tax refund may come from a clause in the economic stimulus bill. The law allows companies to apply losses from 2008 or 2009 for tax refunds against taxes paid in the previous five years, instead of the prior two years.

In order to extend the jobless benefits, the corporate-tax-refund approach was included in the economic stimulus bill … [visit site to read more]

Red Hat Falls After Outperforming

Posted: 25 Mar 2010 02:34 PM PDT

Red Hat, Inc.'s (NYSE:RHT) fourth-quarter earnings of 19 cents per share (after adjusting for stock-based compensation, amortization of intangibles and litigation expenses) beat the Zacks Consensus Estimate of 12 cents on increased revenue, particularly from subscriptions. EPS was above the company's guidance of 15 – 16 cents.

EPS also increased by four cents from 15 cents reported in the year-ago quarter due to higher other income, which was $4.4 million for the quarter, compared to a loss … [visit site to read more]

Just When You Thought It Was Safe To Go Back In The Water…

Posted: 25 Mar 2010 02:19 PM PDT

With the Dubai news and the Greek/Eurozone crisis seemingly winding down, investors might have thought that it was time to take on risk again. Then this story from the WSJ came across my desk:

Just when you thought it was safe to go back into the … [visit site to read more]

Geely To Close Volvo Deal Soon

Posted: 25 Mar 2010 02:16 PM PDT

China's Zhejiang Geely Holding Group has revealed that it will finalize its deal to acquire the Swedish brand Volvo from Ford Motor Co. (NYSE:F) by the end of this month.

Geely is eager to tap China’s high-growth auto market by acquiring modern, innovative technologies from the Swedish brand to upgrade its car lineup. The automaker expects a robust growth for China’s auto industry in 2010. In this situation, upgrading the product lineup would no doubt land the automaker in a favorable market … [visit site to read more]

Go Beyond Traditional Emerging Markets With Egypt And Its ETFs

Posted: 25 Mar 2010 02:01 PM PDT

As investors continue to turn to international markets for diversification, a hedge against the dollar and amplified rates of return, ETF provider, Van Eck Global has taken it a step further by offering the first ever exchange traded fund which gives country specific exposure to Egypt.

The Market Vectors Egypt Index ETF (EGPT), gives investors exposure to small, mid and large cap Egyptian stocks.  It holds 28 different stocks which are publicly traded companies that are both domiciled and … [visit site to read more]

Daily ETF Roundup: UNG Sinks, XLY Rises

Posted: 25 Mar 2010 02:01 PM PDT

Equity markets finished the day flat as continued worries about the euro zone weighed on the global economy despite good news out of the technology sector. Several prominent names in the technology and technology retail segments posted encouraging outlooks for the second quarter, including chip maker Qualcomm and retailer Best Buy. "Today is all about earnings, and the comments from Qualcomm and Best Buy have been very positive," said James Meyer, chief investment officer at Tower Bridge … [visit site to read more]

Paychex Sales Dip, Outlook Dull

Posted: 25 Mar 2010 02:00 PM PDT

Paychex Inc. (NASDAQ:PAYX) reported third quarter 2010 EPS of 34 cents per share, in-line with the Zacks Consensus estimate.

Revenue

The company reported third quarter 2010 revenue of $507.8 million, a decrease of 4% from $528.6 million for the same period last year. This can be attributed to the decline in the Payroll service revenue segments, compared to the year-ago quarter.

As per revenue segments, Payroll service revenue was $358.3 million in the third quarter, down 6.0% compared to the same … [visit site to read more]

US Debt: A Bigger Threat Than Terrorism?

Posted: 25 Mar 2010 02:00 PM PDT

Public opinion polls are a dime a dozen. But put a few of them together, and an interesting picture starts to emerge…
Let's start with the one that hits like a two-by-four: 79% of Americans polled by Fox News and Opinion Dynamics believe it's possible the US economy could "collapse." Republican, Democrat, independent – doesn't matter, the majorities are overwhelming.
The same poll reveals 65% of Americans believe the national debt poses a bigger threat to the nation's future … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: AXP, BBY, CAG

Posted: 25 Mar 2010 01:57 PM PDT

The latest in news, commentary, and information on what’s moving the US equities markets. Wath this broadcast LIVE at 4:00 pm EST daily at “http://www.nyx.com/marketmonitor” … [visit site to read more]

Earnings Estimate Scorecard: MCHP

Posted: 25 Mar 2010 01:41 PM PDT

Last week, Microchip Technologies (NASDAQ:MCHP) raised its outlook for the fourth quarter of fiscal 2010. The company now expects sales to be up 8% sequentially compared to the previous guidance of 3% – 7%. The revised guidance implies a revenue guidance of $270.1 million.

Microchip earlier demonstrated solid growth in the third quarter, driven by strength across all three product lines − Microcontrollers, Analogs and Serial EEPROMs. Earnings per share are now estimated at 42 cents, up from the … [visit site to read more]

Gentiva Upped To Outperform

Posted: 25 Mar 2010 01:20 PM PDT

Recently, we upgraded our recommendation on Gentiva Health Services Inc. (NASDAQ:GTIV) to Outperform with a price target of $34. We upgrade the stock because of the strong financial results delivered in the fourth quarter of 2009 and the solid fundamentals of the company.

Gentiva is a leading provider of home health services in most parts of the United States and a provider of hospice services in south-east United States. Gentiva provides a single source for skilled nursing; physical, occupational, … [visit site to read more]

With High Unemployment And Budget Deficits Will The IMF Call Inflation The Answer?

Posted: 25 Mar 2010 01:10 PM PDT

IMF economist Olivier Blanchard offers the idea that central banks should let inflation grow to four percent in general. He believes this can help fight crises in the future because it leaves more room for interest rate adjustments in times of need. Unfortunately, his theory could already have policy implications for today's crisis…
According to Reuters:
"Bundesbank chief and arch inflation hawk Axel Weber led the retort in a series of newspaper articles and speeches that sharply … [visit site to read more]

AT&T To Kick-off 3G Femtocell

Posted: 25 Mar 2010 01:09 PM PDT

AT&T (NYSE:T) will finally start the nationwide commercial roll-out of its much-awaited 3G femtocell (mini base station) product. The device (dubbed "3G MicroCell”), which is the first of its kind in the US, will reach markets across the country in mid-April 2010. AT&T has been conducting field trials of 3G MicroCell in several test markets since September 2009 and test lauched the product in selected markets.

Femtocell is a mini cell tower which connects to the service provider's … [visit site to read more]

Welcome To Debt Saturation

Posted: 25 Mar 2010 01:03 PM PDT

Following the latest US Flow of Funds Accounts report, Nathan Martin of the FedUpUSA blog produced a fascinating chart. As shown below, it is constructed by dividing the change in GDP by the change in debt. It shows how much productivity is gained by infusing $1 of debt into the U.S. debt-backed money system.
Martin explains the graph as follows: “Back in the early 1960s a dollar of new debt added almost a dollar to the nation’s output of goods and services. As more debt entered the … [visit site to read more]

Capital Waves: Five Major Asset Classes Driving Fast, Massive Profits

Posted: 25 Mar 2010 12:54 PM PDT

Thursday, March 25, 2010: Issue #1224
Back when oil traded at a record high of $145 a barrel – and was expected to go higher – I concluded that the forces at play were speculative, not fundamental. The market was driven by institutional money looking to diversify away from stocks. I argued that these forces were temporary, meaning that oil prices were actually set to fall.
These "forces" are called "capital waves" – and they create some of the biggest trading opportunities today. … [visit site to read more]

So When Will Housing Come Back?

Posted: 25 Mar 2010 12:52 PM PDT

Yesterday we got news that New Home Sales had fallen to their second all-time record low (since the data started in 1963) in a row.  With other areas of the economy clearly on the mend (at least for now) the question arises: when will housing come back?

I want to focus on new home sales, not existing home sales, because new home sales directly contribute to economic growth, while existing home sales have only an indirect effect. The U.S. is a much larger place now than it was back in … [visit site to read more]

Joy Global Downgraded To Neutral

Posted: 25 Mar 2010 12:49 PM PDT

We are downgrading Joy Global Inc. (NASDAQ:JOYG) shares to Neutral from Outperform, reflecting forecast of limited revenue upside in 2010. The company reported EPS of $0.73 per share, topping the Zacks Consensus Estimate of $0.64, primarily driven by an improved commodities market and better orders during the quarter.

While new order bookings in the first quarter improved 22%, revenues declined 3% year-over-year to $729 million, driven by a 12% decline in the Underground Mining Machinery (UMM) … [visit site to read more]

Don’t Lose Sleep Over Intermezzo

Posted: 25 Mar 2010 12:30 PM PDT

On January 20, 2010, Transcept Pharmaceuticals (TSPT) management met with the U.S. FDA to discuss the complete response letter issued October 28, 2009 on Intermezzo. The letter brought up issues on potential inadvertent re-dosing in a single night and inadvertent dosing with less than four hours of bedtime remaining.  The FDA also requested additional data demonstrating that Intermezzo, when taken as directed in the middle of the night, would not present an unacceptable risk of next day … [visit site to read more]

Sonic’s Q2 Down, Stock Rebounds

Posted: 25 Mar 2010 12:30 PM PDT

Sonic Corp. (NASDAQ:SONC) reported fiscal 2010 second-quarter results after the closing bell on Tuesday. The company swung to a net loss of $642,000 million, or a penny per share, from a net income of $8.6 million, or 18 cents in the year-ago quarter.

The result also came in behind the Zacks Consensus Estimate for a profit of 2 cents. The surprise loss led to a more than 2% decline in Sonic's share price on Wednesday during regular trading hours on the Nasdaq, but has since rebounded roughly 5% … [visit site to read more]

Unicom Meets But Profit Tanks

Posted: 25 Mar 2010 12:13 PM PDT

China Unicom (NYSE:CHU) has announced 2009 results with reported earnings per ADS of 59 cents matching the Zacks Consensus Estimate. However, net income plunged 73% year-over-year to RMB9.56 billion (US$1.4 billion).

This significant year-over-year decline in profitability is partly due to sustained erosion in fixed-line voice revenues. Moreover, the prior year's net profit was boosted by one-time gains from the sale of the carrier's CDMA wireless business to rival China Telecom (NYSE:CHA) as … [visit site to read more]

Consent Decree Likely For GENZ

Posted: 25 Mar 2010 12:10 PM PDT

Just when Genzyme Corp. (NASDAQ:GENZ) was slowly making some progress in addressing its manufacturing issues, the company announced that the US Food and Drug Administration (FDA) intends to take enforcement action related to the company's manufacturing facility at Allston Landing.

The FDA has decided to adopt this course so as to ensure that the products manufactured at the Allston Landing manufacturing facility are made in compliance with good manufacturing practice regulations.

It is quite … [visit site to read more]

Understanding Your Credit Profile

Posted: 25 Mar 2010 12:01 PM PDT

Michael Hallett is a mortgage consultant with Dominion Lending in Langley, British Columbia, Canada

Having an admittedly greater thirst for investing related knowledge and concepts, we have neglected to dig deeper into some of the more personal finance related topics including the various aspects of mortgages and the importance of credit history. We hope to rectify this oversight going forward beginning with the article below that has been authored by Michael Hallett, a mortgage … [visit site to read more]

Krugman’s Hoover History

Posted: 25 Mar 2010 12:00 PM PDT

At his popular New York Times blog, Paul Krugman is at it again, offering a very misleading analysis of deficit spending. Without technically lying, Krugman perpetuates the myth that Herbert Hoover insisted on budget austerity in the midst of the Great Depression. Then Krugman interprets a chart with adjectives that show his eyes can only see what his Keynesian theory will allow.
Bad Hoover History
Krugman writes,
More than a year ago I coined a phrase that seems to have made its way into the … [visit site to read more]

Arch’s $3B Investment In ADA-ES

Posted: 25 Mar 2010 11:57 AM PDT

Arch Coal Inc. (NYSE:ACI) has announced plans to invest $3 billion in ADA-ES Inc. (NASDAQ:ADES) to fund near-term growth opportunities. As the first step, Arch purchased 143,885 shares of ADA for $1.0 million.
 
The remaining $2.0 million of Arch's investment is a consideration for an exclusive license to use ADA's technology to reduce emissions for Arch-mined coal to produce electricity. The license is currently being negotiated to define the royalty structure and is expected to be finalized … [visit site to read more]

Treasury Plans To Sell Citi Stake

Posted: 25 Mar 2010 10:36 AM PDT

The U.S. Treasury may sell its 27% stake in Citigroup Inc. (NYSE:C) through a preset trading plan, according to a Bloomberg report. This program may be announced as early as next month. 

The plan would bind the government into a schedule of selling its shares. Instructions would be issued by the Treasury on the number of shares to be sold, the timing of the sale and the price. Such efforts are meant to abolish any concern that the sales are based on non-public information. 

Citi has … [visit site to read more]

Government Authorities Are Looking Out For Themselves – As Should Everyone

Posted: 25 Mar 2010 10:30 AM PDT

"China in Midst of 'Greatest Bubble in History'", Bloomberg told readers on March 17, 2010. That was the opinion of certain experts interviewed by the news service. One expert held the opposite view: "'People making comments about bubbles possibly don't have all the facts,' HSBC Holdings Plc Chief Executive Officer Michael Georghegan said in Shanghai today. Regulators are in control of the banking industry, and have the ability to curb lending as needed, he said."
Aside from … [visit site to read more]
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