Merck, Medarex, and Massachusetts Biologic Labs (part of the University of Massachusetts Medical School) signed a licensing agreement for a drug that treats an infectious diarrhea disease Clostridium difficile infection (CDI), that affects the elderly in hospitals or long-term care facilities. The Centers for Disease Control and Prevention has projected that there will be as many as 750,000 cases of CDI per year by 2010.
Applied Materials has received the 2008 Supplier Excellence Award from Texas Instruments for the outstanding contributions of Applied’s service group. The award is Applied’s fifth for service and ninth for the overall company since 1994. Applied was involved in TI’s equipment relocation project which was initiated to optimize capital assets and boost manufacturing capacity.
UBS has agreed to sell its Brazilian financial services business, UBS Pactual, for approximately USD 2.5 billion to BTG Investments, headed by André Esteves. The transaction will strengthen UBS’s BIS Tier 1 ratio by approximately 60 basis points and will result in a small loss.
Treasury Secretary Timothy Geithner spoke before The Economic Club of Washington today. His remarks included some information that I had not been able to find. Specifically, he said that “The International Monetary Fund now expects the world economy to decline this year for the first time in more than six decades. The 1.3% decline forecast by the IMF represents a sharp deterioration from the roughly 4% annual rate at which the world economy normally would be expected to grow….we and the other nations in the G-20 agreed during our Summit meeting in London earlier this month to muster an unprecedented, cooperative program of fiscal stimulus . The IMF estimates that our combined efforts add up to a $5 trillion dollar fiscal boost over the three years ending in 2010 and will raise global output by four percent over where it would otherwise have been….During our London Summit, we and our G-20 partners agreed that we will make more than $1 trillion in financial resources available to support global growth and trade. Much of that total will go to the emerging and developing countries, which as recently as the fall of last year accounted for fully 42% of all U.S. exports…In the years leading up to the crisis, U.S. exports of goods and services grew in real terms at an annual rate of almost nine percent, nearly triple that of the overall economy. But by the end of last year, our exports were declining at a rate of almost 25 percent per year, the sharpest decline since the end of the Second World War.”
The Mortgage Bankers Association purchase index fell 4.2 percent the week of April 17 to 253.0. The refinance index, however, was up 7.7 percent to 6,540.7 and refinance applications comprised 80 percent of all applications.
Roche announced the results of the first phase III trial evaluating the use of Avastin and chemotherapy for the treatment of colon cancer immediately following surgery compared to chemotherapy alone. The study found that the drug did not reduce the risk of the colon cancer. “We remain fully committed to the ongoing Avastin adjuvant programs in
early-stage colon, breast and lung cancers,” said William M.Burns, CEO of Roche’s Pharmaceuticals Division.
Sources: UBS, Bureau of Labor Statistics, Federal Reserve, Bureau of Economic Analysis, Department of Labor, Conference Board, Treasury, Census Bureau, Applied Materials, Roche, and Merck websites
The Bureau of Labor Statistics reported the Consumer Price Index increased 0.1 percent in March, on a seasonally adjusted basis after rising 0.4 percent in February. The decrease was due to a downturn in the energy index, which declined 3.0 percent in March after rising 3.3 percent the previous month. The index for all items less food and energy increased 0.2 percent for the third month in a row. An 11.0 percent increase in the index for tobacco and smoking products accounted for over sixty percent of the March rise, with a 0.6 percent increase in the new vehicles index also contributing. The index for all items less food and energy has risen 1.8 percent over the past year.
The Department of the Treasury released Treasury International Capital data for February 2009. Net foreign purchases of long-term securities were $22.0 billion which is almost a $60 billion improvement from the month before. Net foreign purchases of long-term U.S. securities were $20.8 billion. Of this, net purchases by private foreign investors were $25.9 billion, and net purchases by foreign official institutions were negative $5.1 billion. U.S. residents sold a net $1.2 billion of long-term foreign securities. Foreign demand for short-term U.S. securities showed an outflow of $97.0 billion, which was an improvement from January’s record low of $146.8 billion.
The National Association of Home Builders/Wells Fargo Housing Market Index, which measures builder confidence in building new, “single-family homes rose five points in April to the highest level since October 2008. This gain was the largest one-month increase recorded since May of 2003, and brings the HMI out of single-digit territory for the first time in six months – to 14. Every component of the HMI reflected the boost, with the biggest gain recorded for sales expectations in the next six months.
The HMI also rose in every region in April, with an eight-point gain to 16 in the Northeast, a six-point gain to 14 in the Midwest, a five-point gain to 17 in the South and a 4-point gain to 9 in the West.”
The U.S. Census announced that housing starts for March dropped 10.8% from the month before. (The drop came mainly from a reduction of housing starts in the multifamily component). Year-over-year, the figure was down 48.4%. February’s housing starts number had increased 17.2%.
According to the Federal Reserve, “industrial production fell 1.5 percent in March after a similar decrease in February. For the first quarter as a whole, output dropped at an annual rate of 20.0 percent, the largest quarterly decrease of the current contraction. At 97.4 percent of its 2002 average, output in March fell to its lowest level since December 1998 and was nearly 13 percent below its year-earlier level. Production in manufacturing moved down 1.7 percent in March and has registered five consecutive quarterly decreases. Broad-based declines in production continued; one exception was the output of motor vehicles and parts, which advanced slightly in March but remained well below its year-earlier level. Outside of manufacturing, the output of mines fell 3.2 percent in March, as oil and gas well drilling continued to drop.” The capacity utilization rate for total industry fell further to 69.3 percent, from 70.3 percent in February.
Reports available in the Federal Reserve Banks’ beige book indicate that overall economic activity contracted further. However, five of the twelve Districts showed a slowdown in the pace of decline. Manufacturing activity weakened across a broad range of industries in most Districts. Retail spending remained weak. Residential real estate markets also continued to be weak. Nonresidential real estate conditions continued to deteriorate. Employment continued to decline in many industries.
Walgreens opened its newest distribution center in Windsor, Conn., where 30 percent of the workforce is made up of people with disabilities. This massive, 700,000 square foot facility not only can fit 12 football fields inside its walls, but will serve hundreds of Walgreens stores throughout the Northeast. The center is expected to be 20 percent more efficient than the company’s previous generation of DCs and has some of the most innovative logistics systems in the distribution industry. This location and the Walgreens facility in Anderson, S.C., are now the models for every future Walgreens DC. It’s the company’s goal to fill 10 percent of its distribution center production jobs with people with disabilities.
Sources: NASDAQ, Census, Bureau of Labor Statistics, The Federal Reserve, The National Association of Home Builders, the Treasury, and Walgreens websites.
The Bureau of Labor Statistics released the Producer Price Index for Finished Goods for March. The index decreased 1.2 percent in March, following a 0.1 percent advance in February and a 0.8 percent increase in January. Energy was down 5.5 percent in March after rising 1.3 percent in the preceding month. Gasoline, the main contributor to the decrease, fell 13.1 percent in March, while heating oil fell 13.2 percent. Prices for finished consumer goods less foods and energy increased 0.1 percent following a 0.4 percent advance in February.
The Census Bureau announced advance estimates of retail sales for March. Retail and food services sales for March, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $344.4 billion, a decrease of 1.1 percent from February and down 9.4 percent year-over-year. The largest declines were in electronics & appliances which dropped 5.9, motor vehicles which dropped 2.3 percent, and other retailers, down 2.2 percent.
However, according to NASDAQ, the ICSC-Goldman’s retail report for the week ending April 11 shows a 0.8 percent increase a year-over-year decrease of -0.4 percent. You will remember that retail sales for two weeks in March showed back-to-back -1.4 percent rates.
The Census Bureau also announced advance estimates of manufacturing and trade inventories and sales. Inventories were estimated at an end-of-month level of $1,421.3 billion, down 1.3 percent from January 2009 and down 3.5 percent from February 2008.
Sales were estimated at $994.9 billion, up 0.2 percent from January 2009, but down 13.0 percent from February 2008. The Inventories/Sales Ratio improved slightly in February to 1.43. The February 2008 ratio was 1.29.
Danaher’s subsidiary, Jacobs Vehicle Systems, in Bloomfield, CT is celebrating its 4 millionth brake engine this month. “Engine braking technology has evolved over the last 48 years from an add-on for large diesel truck engines to a device now fitted to all sizes of commercial vehicle diesels bringing more control and financial benefits to truck owners around the globe”, said Bob Perkins, Vice President of Marketing at Jacobs Vehicle Systems.
Centocor Ortho Biotech, a subsidiary of Johnson & Johnson, and Schering-Plough Corporation announced that Health Canada has granted approval of SIMPONI as a once-monthly, subcutaneous therapy for the treatment of moderately to severely active rheumatoid arthritis, active psoriatic arthritis, and active ankylosing spondylitis. SIMPONI is the first biologic therapy to be approved concurrently in three distinct rheumatologic diseases. Schering-Plough anticipates that the medication will become available in Canada in the second half of 2009. Centocor Ortho Biotech developed and discovered SIMPONI and has exclusive marketing rights to the product in the United States. Following regulatory approvals, Schering-Plough will assume exclusive marketing rights outside the United States except in Japan, Indonesia and Taiwan, where SIMPONI will be co-marketed by Mitsubishi Tanabe Pharma Corporation and Janssen Pharmaceutical Kabushiki Kaisha; Hong Kong, where SIMPONI will be exclusively marketed by Janssen-Cilag; and China, where SIMPONI will be exclusively marketed by Xian-Janssen.
Johnson Controls-Saft will build its first U.S. cell manufacturing facility for lithium-ion hybrid batteries at its existing Johnson Controls facility in Holland, Michigan. ‘”Battery technology is strategically important to the future of the U.S. automotive industry and the economy at large,” said Alex Molinaroli, president of Power Solutions for Johnson Controls. “Our first U.S. plant will bring about 500 jobs to Michigan, and many additional jobs through suppliers and the businesses these employees will support. It is a key element of our broader strategy and commitment to the hybrid vehicle industry in North America.” Johnson Controls-Saft is a leading global provider of hybrid battery systems. The company opened the world’s first lithium-ion manufacturing facility for hybrid electric vehicles in 2008 in Nersac, France, where it is currently in production for the Mercedes S-Class hybrid, which will be available to consumers later this year. Additionally, Johnson Controls-Saft will supply the lithium-ion hybrid battery system for the BMW 7 Series ActiveHybrid available in 2010, Azure Dynamic’s Balance Hybrid Electric for commercial vehicles available in 2010, and Ford’s first plug-in hybrid electric vehicle available in 2012’.
Praxair Distribution Inc., a subsidiary of Praxair, has acquired Alabama Welding Supply of Dolomite, Ala., Fowler Brothers of Birmingham, Ala., and Service Gas Supply, Inc. of Midlothian, Texas. Distribution’s Southern Region. “We continue to execute our strategy of acquiring high quality distribution businesses that fit our portfolio while maintaining our strict return criteria,” said George Ristevski, president of Praxair Distribution. http://www.praxair.com/praxair.nsf/AllContent/C5F305989EE268FF852575910063205B?OpenDocument
Spectra Energy announced it has entered into a definitive agreement with Atlas Pipeline Partners, to acquire NOARK Pipeline System, for $300 million in cash. The primary asset to be acquired is Ozark Gas Transmission, a 565-mile, Federal Energy Regulatory Commission regulated interstate natural gas transmission pipeline system that extends from southeast Oklahoma through Arkansas into southeast Missouri. For the year ended December 31, 2008, NOARK generated earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $46 million.
IBM announced that The Hokkoku Bank in Japan will use IBM’s cloud computing service for an additional six years and eight months. “In the new agreement, IBM Japan will provide flexible central processing unit (CPU) and software resources based on The Hokkoku Bank’s business needs through data center and mainframe hosting services. The support by IBM Japan will help The Hokkoku Bank further optimize its IT investments and operational efficiencies. The Hokkoku Bank is a member of the “TSUBASA Project” which is a system sharing alliance with Chiba Bank, Daishi Bank, Chugoku Bank and Iyo Bank. IBM Japan has supported the project through the standardization of administrative work by using a standard business platform for banking as well as developing the call center systems, and will continue contributing to the project’s success through the new outsourcing contract. The new agreement was signed in March 2009 and follows the original ten-year contract signed in December 2000.”
Sources: NASDAQ, Census, Bureau of Labor Statistics, Praxair, IBM, Johnson Controls J&J, and Danaher websites.
February’s job openings rate was 2.2 percent, unchanged from January, according to the Bureau of Labor Statistics. At 3.0 million in February, monthly openings were down 1.6 million, or 35 percent, since the high point in August 2007. The job openings rate rose significantly over the year only in the federal government.
The ICSC-Goldman reports that store sales improved in the April 4 week, up 0.6 percent from the prior week, but remain weak year-on-year at -0.3 percent.
The Federal Reserve released its consumer credit numbers. Consumer credit decreased at an annual rate of 3-1/2 percent in February, while revolving credit decreased at an annual rate of 9-3/4 percent, and nonrevolving credit increased at an annual rate of 1/4 percent.
EDS, owned by HP, announced that it is now an IT vendor for Alliant, the IT acquisition arm of the Federal government. The company is now one of 59 companies that compete for up to $50 billion in IT contracts for all government agencies. Alliant replaces the GSA Millennia and Applications ‘N Support for Widely-diverse End user Requirements (ANSWER) contracts, which EDS has previously participated in.
For those interested in sun flare-ups, Scientific America has a great article which points out that, “We currently find ourselves in a solar minimum, a period of reduced solar activity, and a deep one at that. Last year was the second-quietest sunspot year of the past century, as the sun was blank on 72.7 percent of the days. But this year is on pace to be even quieter—through the first three months of 2009 the sun was blank on 86.7 percent of the days.”
Dr. Graeme Sweeney, Executive VP, Future Fuels and CO2, Shell, initiated a chat on Biofuels today. He notes in his opening remarks that “3 billion energy consumers will be added to the world’s population during the first half of this century. And those people would like access to electricity and personal transport. The second hard truth is that energy supplies – from all sources – will struggle to keep up with demand. So we will need rapid growth in renewables and nuclear alongside continued dependence on fossil fuels such as oil, gas and coal.”
Sources: Wall Street Journal, Scientific America, HP, Federal Reserve, NASDAQ and Bureau of Labor Statistic websites.
Numbers released in the past few days by various federal agencies, give us a good picture of our economy’s direction. The rise in oil prices (reflected in the Bureau of Labor Statistic’s Import Price Index for March) is expected to pass through to other prices and ease deflationary concerns. The plunge in the Census Bureau’s February’s International Deficit Index showed a significant reduction in consumer spending on imports, while the Bureau’s domestic Wholesale Trade number showed inventories fell as sales for domestic goods increased. Perhaps efforts to reduce domestic inventories are succeeding. Housing numbers released by The Mortgage Bankers Association seem to point to a bottoming in that arena. The Jobless Claims report issued by the Department of Labor shows little relief from the labor force contraction.
Import Price Index for MarchThe U.S. Import Price Index rose 0.5 percent in March, according to the Bureau of Labor Statistics. A 10.5 percent increase in import petroleum prices more than offset a 0.7 percent decline in the price index for nonpetroleum imports. In contrast, export prices fell in March, decreasing 0.6 percent. Agricultural export prices decreased 21.8 percent over the past year, the largest annual decrease since the index was first published in March 1985.
International Deficit Index
The U.S. Census Bureau announced that total February exports of $126.8 billion and imports of $152.7 billion resulted in a goods and services deficit of $26.0 billion, down from $36.2 billion in January, revised. February exports rose 1.6 percent or $2.0 billion over January exports of $124.7 billion. The rise in exports was led by increases for consumer goods and automotive. February imports dropped 5.1 percent, or $8.2 billion from January imports of $160.9 billion. The January to February change in imports of goods reflected decreases especially in industrial supplies and materials which decreased $3.6 billion, capital goods which decreased $1.9 billion, and consumer goods which decreased $1.4 billion.
The U.S. Census Bureau announced that February sales of wholesalers were $319.7 billion, up 0.6 percent from the revised January level. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were up 3.7 percent. Total inventories of wholesalers, were $419.3 billion at the end of February, down 1.5 percent from the revised January level. End-of-month inventories of durable goods were down 2.4 percent from last month. Inventories of motor vehicle and motor vehicle parts and supplies were down 7.9 percent from last month and inventories of furniture and home furnishings were down 3.0 percent. The February inventories/sales ratio for wholesalers was 1.31. The February 2008 ratio was 1.14.
The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending April 3, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 1250.6, an increase of 4.7 percent on a seasonally adjusted basis from 1194.4 one week earlier. The Refinance Index increased 3.2 percent to 6813.5 from 6600.1 the previous week.
The Department of Labor reported that Jobless Claims in the week ending April 4, were 654,000, a decrease of 20,000 from the previous week’s revised figure of 674,000. However, continuing claims, in data for the March 28 week, rose 95,000 to a record level of 5.840 million. The largest increases in initial claims for the week ending March 28 were in Kentucky (+5,029), Michigan (+4,428), Illinois (+3,498), Ohio (+3,000), and Tennessee (+2,718), while the largest decreases were in California (-7,057), Pennsylvania (-3,302), Missouri (-2,193), Kansas (-1,726), and Minnesota (-1,559).
The minutes of the March 17-18 FOMC meeting make for interesting reading. In summary, the Fed lowered their projections for 2009 and don’t expect a recovery until early 2010. Unemployment projections were increased significantly. “Participants did not interpret the uptick in housing starts in February as the beginning of a new trend, but some noted that there was only limited scope for housing activity to fall further. Nonetheless, large inventories of unsold homes relative to sales and the prospect of a continued high level of distressed sales would continue to hold down residential investment in the near term.”
Kimberly-Clark Corporation announced the national launch of Scott Naturals, bath tissue, towels, napkins and flushable wipes that have environmental benefits, at a competitive price. “Scott Naturals bath tissue, towels and napkins contain a blend of recycled and virgin fiber – 40 percent recycled fiber in bath tissue, 60 percent in towels, and 80 percent in napkins. The balance of recycled and virgin fibers in these products, enable them to perform comparably to competitors’ branded offerings and outperform 100 percent recycled fiber tissue products in market today.”
Merck and Cardiome Pharma announced a collaboration and license agreement for the development and commercialization of vernakalant, an investigational candidate for the treatment of atrial fibrillation. “This agreement underscores Merck’s ongoing commitment to the research and development of new cardiovascular drugs,” said Luciano Rossetti M.D., senior vice president and franchise head, Atherosclerosis and Cardiovascular, Merck Research Laboratories. “Vernakalant is an important addition to our broad portfolio of products and candidates that target multiple aspects of heart disease.” In December 2007, the Cardiovascular and Renal Drugs Advisory Committee recommended that the FDA approve vernakalant (IV) for rapid conversion of atrial fibrillation. In August 2008, the FDA issued an Approvable action letter requesting additional information.
Praxair has been awarded a hydrogen contract by Shell Oil Company to supply high-purity pipeline hydrogen to Shell’s Deer Park, Texas, refinery for the production of ultra-low sulfur motor fuels. The 340,000-barrels-per-day Shell-operated refinery at Deer Park is the sixth largest in the United States.
UPS Freight, the heavy freight arm of UPS announced it would offer door-to-door service to and from Mexico, complete with UPS customs brokerage capabilities and single invoicing for all services between the United States, Canada and Mexico. “UPS technology provides visibility for shipments coming into Mexico, enabling the identification of goods as soon as they enter the UPS network. That helps expedite clearance at the border since the customs paperwork is readied in advance of a shipment’s actual arrival at the border. UPS Customs Brokerage prepares shipment classification, inspections, customs documentation preparation and collection of applicable duties and fees.”
IBM unveiled a prototype of the world’s fastest automated options trading system. By enabling rapid, intelligent analysis of live streaming data from a practically unlimited number of sources, IBM delivered astoundingly low latency — the time between when data is received and when it’s acted upon — far surpassing the performance of traditional trading systems. The more messages a system can process, the more decisions can be made; hence, the more valuable the system. In testing, the system was found to be capable of handling data at 21 times the speed of Options Price Reporting Authority (OPRA), the world’s single largest market data feed, while maintaining ultra low end-to-end latencies.
Sources: IBM, UPS, Kimberly-Clark, Praxair, Merck, Federal Reserve, NASDAQ, MBAA, Census, Bureau of Labor Statistics websites.
According to the Wall Street Journal, in March, U.S. car sales totaled 857,735 cars and light trucks, down 37% from a year earlier, but up from the 688,909 vehicles sold in February. In fact, sales volume was the highest since September. Part of the rise could be due to incentives, which averaged $3,169 per vehicle sold in March. Ford’s economist, Emily Kolinski Morris, points to the recent stabilization in consumer confidence, increased housing starts in February, rising used car prices and a return of fleet buyers in saying, “…we have been seeing some encouraging signs in recent weeks that the pace of economic decline could be moderating,” However, she continues, “…credit conditions, auto industry restructuring risk and consumer psychology all seem likely to have some part in generating industry sales outcome that is worse than any model based on historical performance would have predicted.”
The Bureau of Labor released its unemployment numbers. The national unemployment rate in February (not seasonally adjusted) was 8.9 percent, compared to 5.2 percent last year at this time.
There was positive news from the Census Bureau. New orders for manufactured goods in February increased 1.8 percent to $352.2 billion. (This follows a 3.5 percent decrease in January). Excluding transportation, new orders increased 1.6 percent.
GE and Intel announced that they will jointly market and develop a care management tool designed for healthcare professionals who manage patients with chronic conditions and who live at home. “The market for telehealth and home health monitoring is predicted to grow from $3 billion in 2009 to an estimated $7.7 billion by 2012.” GE and Intel will invest $250 million over the next five years for the research and product development.
Roche announced its new product, which detects methicillin-resistant Staphylococcus aureus is available for clinical use in the European Union. “As more guidelines recommend or require aggressive screening, it is important that healthcare professionals have access to fast, reliable products that can help improve medical outcomes,” said Daniel O’Day Head of Roche Molecular Diagnostics. “This new test will aid infection control programs, and ultimately result in better patient care.”
Walgreens reported March sales of $5,458,900,000, an increase of 6.8 percent from $5,109,698,000 for the same month in 2008. Sales in comparable stores (those open at least a year) rose 1.5 percent. March pharmacy sales increased 10.2 percent, Comparable pharmacy sales were negatively impacted by 2.8 percentage points due to generic drug introductions in the last 12 months. Total prescriptions filled at comparable stores increased 4.9 percent in March. Pharmacy sales accounted for 66.6 percent of total sales for the month. Calendar day shifts had a positive impact on the month, as pharmacy patients fill more prescriptions during the week than on weekends. This year, March had one more weekday compared to March 2008.
According to the Wall Street Journal, but not confirmed by IBM, IBM has cut its takeover price for Sun Microsystems to between $9 and $10 a share. Legal experts said the deal will face close antitrust scrutiny in the market for server computers sold globally to corporations and governments. After a deal, the combined companies would account for 42% of total server market revenue.
The Financial Stability Forum, a group of U.S. and foreign bank regulators, announced that it supports a capital floor for banks, referring to it as a “supplementary non-risk based measure to contain bank leverage.” The announcement coincides with the G20 summit which has, in the past, pressured the Forum to formulate global financial regulation. U.S. and foreign regulators agreed that no major changes to capital requirements will take place in this economic climate, when capital is so difficult to obtain.
The Financial Accounting Standards Board revised the mark-to-market rules allowing companies to determine the fair value of their assets and avoid excessive impairment charges on investment losses. The FASB revision takes effect in the second quarter, but not retroactively.
Sources: Walgreens, Wall Street Journal, Roche, GE, Census, Bureau of Labor, NASDAQ websites.
On March 24, a Pinellas County jury ruled in favor of Philip Morris USA in one of the first tobacco lawsuits following a 2006 Florida Supreme Court decision allowing only former class members to file individual lawsuits. “Approximately 4,000 claims, or roughly half of those filed in the wake of the Florida Supreme Court’s decision in the Engle case, are pending in federal court and have been put on hold pending a federal appeals court review of the constitutional issues that arise from allowing the plaintiff to rely on prior Engle jury findings.”
Today, The U.S. Supreme Court dismissed Philip Morris USA’s appeal of a $79.5 million smoker award which has grown to more than $150 million with interest and would be paid to Mayola Williams, whose husband died of lung cancer in 1997.
Industrial and Commercial Bank of China and American Express addressed plans for the potential sale of ICBC shares held by American Express. “The lock-up period for the shares held by American Express will expire in two equal installments on April 28, 2009 and October 20, 2009. ICBC has been issuing American Express branded consumer and commercial cards in China since 2004. By the end of 2008, the number of co-brand cards issued exceeded 600,000. The companies plan to expand their cooperation in various areas including credit card products development, marketing, risk management, customer service, and staff training.”
CB&I was awarded a contract to build refrigerated LPG storage tanks in Ecuador. The contract is worth $50 million and should be completed next year.
Cisco is opening a new office and internet data center in Bahrain in order to attract foreign investment and improve the government’s infrastructure.
Johnson Controls will restructure, incurring a pre-tax charge of $200 – $215 million in its 2009 second quarter, in order to “further align its cost structure with global automotive market conditions.”
A privately-held company called Cadila Pharmaceuticals of India, sponsored the study of 2,053-patients which showed that a new “polypill” could reduce heart disease by 60 percent and stroke by 50 percent. The polypill is comprised of low doses of three blood-pressure drugs from different classes — thiazide, atenolol and ramipril — as well as the statin cholesterol-lowering drug Zocor and aspirin. Many of these heart drugs have lost patent protection and are available as generics. The study was presented at the American College of Cardiology scientific meeting in Orlando.
Praxair China has signed a new contract to supply liquid nitrogen to Chery Automobile, one of the leading automobile manufacturers and a major exporter of Chinese cars. Liquid nitrogen is used during the heat treating process for the manufacture of automotive parts. http://www.praxair.com/praxair.nsf/AllContent/B2D43570BDF2F1EE85257589006EA563?OpenDocument
Walgreens will withdraw 44 of its pharmacies (60 percent of the company’s total Medicaid business in the state) from State of Washington’s Medicaid program due to a new Medicaid reimbursement rule set to take effect on April 1, under which the State of Washington will significantly reduce the price it will pay for brand name medications. ‘Kermit Crawford, Walgreens senior vice president of pharmacy, said, “We have made the decision to stop filling Medicaid prescriptions in these pharmacies after long and careful deliberations. Walgreens is the market leader in Washington and provides cost-effective pharmacy service across the state. We have thousands of loyal patients who appreciate and trust our pharmacists, and we are absolutely committed to patient care.
“The fact remains that the state could fill its Medicaid budget gap in a number of other ways. As an example, independent and chain pharmacies have identified as much as $90 million in potential savings through more effective medication management. These are sound alternatives to payment cuts to pharmacies.”’
Fifth Third Bancorp has made its first dividend payment to the U.S. Department of the Treasury under the Treasury’s Capital Purchase Program (CPP). The payment, which totaled $42.6 million, is the initial dividend payment from the Bank’s sale of approximately $3.4 billion in preferred shares to the U.S. Treasury. Fifth Third issued 136,320 shares of Fixed Rate Cumulative Perpetual Stock, Series F to the Treasury on December 31, 2008.
Lawrence Yun, NAR Chief Economist, reported in the March 2009 issue of Real Estate Insights, that “the current home price is the lowest since March 2003, but we
should careful in reading the data. The high prevalence of distressed home sales and of those in the lower price range has skewed the median price markedly lower than under normal market conditions. Distressed sales, as defined as foreclosed properties
or those requiring lender mediated short sales, account for about 45 percent of all sales. The inventory of distressed properties is much lower – about 25 percent of listings. This indicates that buyers are fighting over deeply discounted prices associated with distressed properties. Our internal preliminary analysis suggests that non-distressed properties are holding their value much better.” He continues that “rising affordability has been associated with rising home sales even in times of recession because about 90 percent of the workforce would still have jobs. Assuming 20 percent of the households with jobs are filled with anxiety about losing those jobs, that still puts us as 70 percent of the workforce with stable employment who can respond to housing incentives. But the home buying process requires several months, from Internet searches for homes, to visiting open houses, to finding the mortgage, to conducting a home inspection, and a myriad of other related activities. Therefore, the kick from the stimulus will not show up in the data until at least May, for which the data will be reported in June/July.”
For the week of March 28, chain store sales were up 1.1 percent week-on-week and down only 0.2 percent year-on-year, the best results of 2009, even though Easter falls three weeks later this year. For the full month sales are down 1 percent.
The Conference Board’s consumer confidence index grew slightly to 26.0 for March from February’s record low of 25.0. January’s number was 37.4. “Based on the latest jobless claims numbers, the unemployment rate is still trending upward and likely is keeping confidence low.”
Sources: Walgreens, Praxair, Johnson Control, Cisco, NASDAQ, Altria, Bloomberg, American Express, CBI, Reuters, Fifth Third, National Association of Realtors websites.
The Producer Price Index grew 0.1 percent in February according to the Bureau of Labor Statistics. This rise followed a 0.8 percent increase in January and a 1.9 percent decline in December. The index for crude materials dropped 4.5 percent following a 2.9-percent decrease in January.
Export prices declined slightly by 0.1 percent in February due mostly to a 1.7 percent drop in agricultural prices. Export prices grew by 0.5 percent in January but declined in each of the previous five months.
The Census Bureau announced that February’s building permits rose 3.0 percent over January, but the number was 44.2 percent below February 2008. February’s single-family permits rose 11.0 percent over January. Housing starts in February rose 22.2 percent over January, but the number is still 47.3 percent below February 2008.
Same-store sales for the week of March 14 were 0.1 percent lower than the prior week due to cold, wet weather. March numbers may be down as Easter falls in April this year.
Boeing completed the first test flight of the Air Force’s third C-130 Avionics modernization Program aircraft on Jan. 17, three weeks ahead of schedule.
Cisco will host a webcast this evening for the financial community with a corresponding slide presentation to discuss the company’s recently announced Unified Computing System.
Neville Isdell, Coca-Cola’s Chairman made an interesting speech before the Council on Foreign Relations on March 6, 2009. He says, in part, that “business must catch up to these changes and embrace a new model of “Connected Capitalism.” It is a way of building your business, so it is fully engaged with society. It will require rewarding shareowners and being entirely legally compliant, just as we’ve done in the past — or as most of us have done in the past — but it requires business leaders to make four critical connections:
1. Connect your business to the communities that you serve.
2. Connect your business with civil society and governments to address relevant large
3. Connect your philanthropy — your sustainability agenda — with the core of your
business, not tangential, but related to the core of your business
4. And finally connect your business with the values of your own employees.”
ExxonMobil announced that it has decided to build a technology center in Shanghai, China, saying that “Over the next 10 years, we expect roughly 60 percent of the world’s petrochemical growth to occur in Asia, and we are rapidly expanding our manufacturing footprint through major capacity additions in Fujian, China and Singapore.”
GE Transportation announced that it has signed a contract valued at more than $60 million with Trenitalia, the operation company of the Italian State Railways, for the design, supply and installation of 400 train protection systems. The system monitors the actual speed of the train, guaranteeing that the maximum speed limit is not violated. The system is able to activate the train’s braking system. Trenitalia serves more than one million passengers per day.
Johnson Controls announced that it has completed its previously announced public offering of 6.50% convertible senior notes due 2012. The Company also announced that the underwriters partially exercised their option to purchase additional equity units to cover over-allotments, resulting in a total sale of $450 million aggregate stated amount of equity units, and fully exercised their option to purchase additional notes to cover over-allotments, resulting in a total sale of $402.5 million in aggregate principal amount of notes.
Praxair China has signed a contract with Huizhou BYD Electronics to supply liquid nitrogen for its light-emitting diodes (LED) manufacturing facility. “This is an important contract with one of the fastest growing LED manufacturers in China and we anticipate additional business with BYD and others in the electronics industry,” said David Chow, president of Praxair China.
Roche today announced that it has signed an agreement to acquire 100% of Innovatis, a privately held company based in Bielefeld, Germany. “Innovatis is a leading provider of automated cell analysis solutions, especially focusing on cell counting, viability testing, and cell function analysis in research, as well as bioproduction. The purchase price for this transaction is 15 million Euros. “This acquisition is a further step in our strategy to strengthen our position as a complete solution provider in the cell analysis research market,” said Dr. Jürgen Schwiezer, CEO Division Roche Diagnostics. “Innovatis’ technology will complement the existing Roche cell analysis portfolio and is synergistic to the xCELLigence technology launched in 2008.”
Walgreens announced that Steven A. Davis, chairman and chief executive officer of Bob Evans Farms has been elected to its board of directors. Prior to joining Bob Evans, Mr. Davis worked for Pizza Hut in 1993, and was with Kraft Foods for nine years.
Sources: Walgreens, Roche, Praxair, Johnson Control, GE, Exxon, Coca-Cola, Boeing, Cisco, NASDAQ, Census, BLS websites.