The consumer sector is looking almost robust, especially given additional payroll taxes.
Retail and food services sales for February, were $421.4 billion, an increase of 1.1 percent from the previous month and 4.6 percent above February 2012. Total sales for the December 2012 through February 2013 period were up 4.5 percent from the same period a year ago. The big mover was auto sales which were up 8.8 percent from last year. But even ex-auto, retail sales were up 3.9 percent year-over-year. Furniture sales decreased by 1.6 percent in February, while gas station sales climbed 5 percent (3.6 percent year-over-year).
CBI has been awarded a contract by SK gas, South Korea’s largest importer and distributor of liquefied petroleum gas (LPG), for the license and engineering design of a propane dehydrogenation (PDH) unit to be built in Ulsan, Korea. Startup is expected in 2016.
Time Warner launched a new TWC TV platform: TWC TV for Roku Streaming Players.
The platform will offer the same live TV line-up found on the TWC TV apps for Apple iOS, Android and PC browsers. The Roku 1.0 product is similar to TWC’s first Apple iOS product in that it is focused on live TV.
The EPA has recognized PepsiCo with a 2013 ENERGY STAR Partner of the Year – Sustained Excellence Award for their continued leadership in protecting our environment through superior energy efficiency. PepsiCo will be honored for the 8th consecutive year for its long-term commitment to energy efficiency. After more than a decade, the cumulative effects of PepsiCo’s resource conservation program have resulted in an improvement in energy efficiency of more than 30%. Further, PepsiCo avoided the emissions of over 490,000 metric tons of greenhouse gasses in 2012, which is equivalent to the energy consumption of over 40,000 American single-family homes and over 90,000 passenger vehicles.
Sources: Census and company websites
The Northeast is holding down the National Association Home Builders Housing Market index. The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fairor poor. The survey also asks builders to rate traffic of prospective buyers as high to very high,average or low to very low. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The three-month moving average was well above 50 in the West (at 55) and was close to 50 is the Midwest (48) and the South (47). The Northeast trailed the nation rising three points to 39. The Association blames the weakness in builder confidence on job uncertainties and limited consumer access to mortgage credit as well as rising building costs and limited availability of labor.
PNC has made some management changes: The Board elected President William S. Demchak as director and announced that he will succeed Chairman James E. Rohr as chief executive officer. PNC expects Demchak to become president and chief executive officer and Rohr to assume the new position of executive chairman effective at the Annual Meeting of Shareholders on April 23, 2013.
Kimberly-Clark today announced the launch of CERVICOOL Cooled Radiofrequency (RF) System, to help relieve back pain. Cervical pain is the third most common pain in the spine with more than 44 million patients afflicted annually and more than 200,000 patients turning to cervical injections for pain relief each year.
Siemens Earnings Presentation for the beginning of 2013
Emerson Network Power, a business of Emerson will combine the capabilities of its TrellisTM platform with IBM IT service management software to significantly optimize the management of data center resources. This integrated data center infrastructure management solution will deliver increased energy and operational efficiency and improved IT service delivery. DCIM is an essential component for businesses that have high quality of service demands for information technologies and need to scale quickly. An estimated $450 million market today, DCIM is expected to grow to $1.7 billion by 2016, according to industry analyst firm Gartner.
Sources: National Association of Home Builders and company websites.
Exxon and Shell unveiled significant new production plans. Exxon expects to recover more than 700 million barrels of oil from its new off-shore structure in the Hebron oil field off the Canadian province of Newfoundland and Labrador. The capital cost for the project, which is expected to begin oil production around the end of 2017, is estimated at $14 billion. Shell and Southern Liquefaction Company, a unit of El Paso Pipeline plan to form a limited liability company to develop a natural gas liquefaction at Elba Island LNG Terminal, near Savannah, Ga. The total project is expected to have liquefaction capacity of 350 million cubic feet of gas per day. In June 2012, the Elba Island terminal received approval from the U.S. Department of Energy to export up to 500 Mmcfd of LNG to Free Trade Agreement countries
Merck gets FDA approval for OXYTROL FOR WOMEN, the First Over-the-Counter Treatment for Overactive Bladder in Women
Halliburton 4Q’12 earnings
ITW 4Q’12 earnings
Intel’s full-year earnings report
J&J 4Q’12 and full-year earnings report
Kimberly-Clark 4Q’12 and full-year earnings report
M&T Bank 4Q’12 and full-year earnings report
McDonald’s 4Q’12 and full-year earnings report
Nucor 4Q’12 and full-year earnings report
PNC full-year earnings
Praxair full-year earnings
P&G 2Q earnings
Siemans Q1 FY 2013 analyst call
T.Rowe Price Q4 ‘12
TI 4Q’12 and full-year earnings report
UTC 4Q’12 and full-year earnings report
WPP 3Q ‘12
Sources: Company websites
Unemployment claims continue to improve. In the week ending January 19, initial claims was 330,000, decreasing by 5,000 from the previous week. The 4-week moving average decreased by 8,250 to 351,750, the lowest level since 2008.
Existing-home sales decreased 1.0 percent in December mainly because supply at the lower end of the market is severely constrained. The preliminary annual total for existing-home sales in 2012 was 4.65 million, up 9.2 percent from 4.26 million in 2011. It was the highest volume since 2007 when it reached 5.03 million and the strongest increase since 2004. Total housing inventory at the end of December fell 8.5 percent and is the lowest housing supply since May of 2005. The median existing-home price in 2012 was $176,600, up 6.3 percent from $166,100 in 2011, and was the strongest annual price gain since 2005 when the median price rose 12.4 percent.
General Mills Fiscal 2013 2Q results
BHP Billiton announced that copper in concentrate production at Escondida increased by 70% in the second half of December 2012. Total Escondida copper production is on track to increase by 20% in the 2013 financial year.
Chevron announced that its subsidiary, Chevron Morocco Exploration Ltd, signed petroleum agreements with Morocco’s Office National Des Hydrocarbures Et Des Mines for three offshore areas.Chevron Morocco Exploration Ltd has a 75 percent working interest in the three areas, with the Office National Des Hydrocarbures Et Des Mines holding the remaining 25 percent.
CBI announced that it has been awarded a contract in excess of US$175 million by DONG Oil Pipe A/S for the engineering, procurement and construction services of the DO Hejre Crude Stabilization Project at the DONG Oil Pipe Oil Terminal in Fredericia, Denmark.
Sources: Company websites, National Association of Realtors and The Department of Labor website.
One piece of good news that we have not heard much about, is that retail sales for December were $415.7 billion, an increase of 0.5 percent from November and 4.7 percent above December 2011. Total sales for the 12 months of 2012 were up 5.2 percent. Total sales for the October through December 2012 period were up 4.2 percent from the same period a year ago.
The ADP report for December employment shows significant growth in payrolls which bodes well for tomorrow’s employment report.
The ISM manufacturing report was flat for the month of December. The headline composite reading of 50.7 (breakeven is 50) is just barely above November’s reading of 49.5. Private construction pulled back in December.
3M Library Systems and Polaris Library Systems cooperated on a online catalog for the Baltimore County Public Library. Patrons at participating libraries can browse both physical and digital collections in just one catalog. This integrated service allows patrons to discover, check out and place holds on eBooks without ever leaving the Polaris library catalog.
Chevron Corporation announced further drilling success in the Exmouth Plateau area of the Carnarvon Basin, a premier hydrocarbon basin.
Becton, Dickinson and Company announced that it has completed its acquisition of Safety Syringes, Inc., a privately held California-based company that specializes in the development of anti-needlestick devices for prefilled syringes.
Gilead Sciences and YM BioSciences announced that the companies have signed a definitive agreement under which Gilead will acquire YM for U.S.$2.95 per share in cash. Gilead plans to fund the acquisition with cash on hand. The transaction is expected to close in the first quarter of 2013. YM’s lead drug candidate, CYT387, is an orally-administered, once-daily, selective inhibitor of the Janus kinase (JAK) family, specifically JAK1 and JAK2. The JAK enzymes have been implicated in a number of disorders including myeloproliferative diseases, inflammatory disorders and certain cancers. YM has reported positive results from a Phase 1/2 clinical trial of CYT387 in 166 patients with myelofibrosis, a life-threatening myeloproliferative disease. Pending completion of the acquisition, Gilead intends to initiate a pivotal Phase 3 clinical trial of CYT387 in myelofibrosis in the second half of 2013.
Sources: Gilead, BD, Chevron, 3M, ISM, and ADP websites
The economy is moving forward, and barring any fiscal cliff, shows signs that it will continue to improve. Housing and GDP are particularly strong, while employment numbers seem to swing back and forth.
Existing-home sales rose a whopping 5.9 percent in November and are 14.5 percent higher than November 2011. Inventory is relatively low supply which could pressure on future home prices. According to Lawrence Yun , NAR chief economist, “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation. With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes. The national median existing-home price for all housing types was $180,600 in November, up 10.1 percent from November 2011. Listed inventory is 22.5 percent below a year ago when there was a 7.1-month supply.
According to the Department of Labor, in the week ending December 15, the advance figure for seasonally adjusted initial jobless claims increased by 17,000 from the previous week’s revised figure of 344,000. The 4-week moving average was 367,750, a decrease of 13,750 from the previous week’s unrevised average of 381,500.
The third GDP estimate for the third quarter shows personal consumption expenditures (PCE) is now improving, and imports is now showing a downturn. The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, private inventory investment, federal government spending, residential fixed investment, and exports that were partly offset by a negative contribution from nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
Sources: DOL, Realtor.org, and BEA websites
Unemployment seems to be improving. The weekly unemployment claims for the week ending December 1 dropped by 25,000, while the November Jobs report from the Labor Department surprised analysts, coming in at 7.7 percent.
The figure for initial claims was 370,000, a decrease of 25,000 from the previous week’s revised figure of 395,000. This is the third consecutive week of declines and makes up for the spike in claims occurring after Hurricane Sandy. The November Jobs report was also positive, with the unemployment rate edging down to 7.7 percent, although the number of people unemployed, 12.0 million, was basically unchanged.
Average hourly earnings rose by 4 cents to $23.63 which, over the past 12 months, equates to an average hourly earnings increase of 1.7 percent. The average workweek for private employees remained at 34.4 hours in November. The manufacturing workweek edged up by 0.1 hour to 40.6 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private payrolls rose 0.1 hour to 33.7 hours.
Lilly reported that the company decreased water intake by 32 percent and waste to landfill by 66 percent compared to 2007 and improved energy efficiency by 17 percent, compared to 2007, while reducing corresponding greenhouse gas emissions by 16 percent.
McDonalds announced that Jeff Stratton, currently Global Chief Restaurant Officer, will succeed Jan Fields as president of McDonald’s USA, effective December 1. Fields will be leaving after more than 35 years with the company.The Board of Directors named Executive Vice President and Global Chief Restaurant Officer Jeff Stratton to succeed Fields.
Fortune article on Medtronic’s CEO Omar Ishrak
Nestle has completed its acquisition of Pfizer Nutrition for USD 11.85 billion. It was announced that 4,500 Pfizer Nutrition employees join Nestlé, is underway and that the regulatory process has been concluded in most markets.
Sources: DOL, and company websites.
Real Gross Domestic Product for the third quarter of 2012 was revised to 2.7 percent, compared to 1.3 percent in the second quarter. While the increase appears to be on the right track, careful investigation of the reasons for the increase paints a different picture. Real federal government consumption expenditures increased 9.5 percent, and national defense increased 12.9 percent, whereas inventory investment rose only 0.77 percent, and personal consumption expenditures increased 1.4 percent.
In the week ending November 24, initial unemployment claims was 393,000, a decrease of 23,000 from the previous week. The 4-week moving average was 405,250, an increase of 7,500. However, Hurricane Sandy has affected these figures, but no one knows by how much. The November jobs numbers, including ADP’s estimates are eagerly anticipated
Hurricane Sandy has had some effect on this week’s indicators. New home construction was down significantly in the Northeast in October but may rise in November given that homes that have to be totally rebuilt will be categorized as new home construction. Overall, we are seeing a healthy trend in new home starts.
Privately-owned housing starts in October were at 3.6 percent above the revised September estimate of 863,000 and is 41.9 percent above the October 2011 rate of 630,000.
The Coca-Cola Company has announced a new five-year system investment of $1.3 billion in Chile from 2012 to 2016, including $200 million recently invested to construct a new Coca-Cola Andina bottling plant in Renca, which officially opened yesterday.
Diageo plc, United Breweries (Holdings) Limited and United Spirits Limited announced agreements under which Diageo would acquire a 27.4% stake in USL, the leading spirits company in India. The consideration will be INR 1440 per share and the total consideration would be INR 57,254 million (approximately £660 million).
ExxonMobil announced the election of Ursula M. Burns to its board of directors, effective November 27, 2012. Ms. Burns is chairman and chief executive officer of Xerox Corporation.
United Technologies Corp. announced that its Pratt & Whitney unit will expand manufacturing capabilities at the company’s West Palm Beach facility. Pratt & Whitney plans to invest more than $63 million to construct and equip a new building and make improvements to existing space at the facility. Construction is expected to begin in the first half of 2013.
Spectra Energy Corp announced it has closed its previously announced acquisition of a one-third interest in the Sand Hills and Southern Hills pipelines, both of which currently are under construction by DCP Midstream, LLC (DCP Midstream), a 50/50 joint venture between Spectra Energy and Phillips 66. Spectra Energy, Phillips 66, and DCP Midstream each own a one-third interest in the two pipelines – and will equally fund the remaining capital expenditures through completion. The aggregate investment by Spectra Energy in the two pipeline projects is expected to be approximately $700-800 million.
Sources: Census, and company websites.