SKY News Summary 07-30-09
Government indicators continue to show stabilization, though little improvement. The companies we follow continue to find ways to cut costs through improved efficiencies and increase future earnings through research and development.
Danaher Corporation announced that Philip W. Knisely, Executive Vice President, will retire from Danaher effective the end of 2009.
http://www.danaher.com/news/news_detail.asp?key=343
Roche made all sorts of announcements. First, a Phase III study showed Lucentis (ranibizumab injection) improved vision in patients with swelling in the retina (macular edema) due to central retinal vein occlusion (RVO). This is the second study showing good results. Second, the European commission approved a broader label for Avastin, allowing the drug to be combined with docetaxel for the first-line treatment of advanced (metastatic) breast cancer. Third, MabThera received a positive opinion in Europe for treating patients whose chronic lymphocytic leukaemia returned.
http://www.roche.com/media/media_releases/med-cor-2009-07-30.htm
http://www.roche.com/media/media_releases/med-cor-2009-07-29.htm
http://www.roche.com/media/media_releases/med-cor-2009-07-24b.htm
Yahoo! and Microsoft announced an agreement under which Microsoft will power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ search advertisers. “Microsoft Chief Executive Officer Steve Ballmer said the agreement will provide Microsoft’s search engine, Bing, the scale necessary to more effectively compete, attracting more users and advertisers, which in turn will lead to more relevant ads and search results.” The term of the agreement is 10 years in which Microsoft will integrate Yahoo! search technologies into its existing web search platforms and Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! expects operating income of approximately $500 million and capital expenditure savings of approximately $200 million.
http://www.microsoft.com/Presspass/press/2009/jul09/07-29release.mspx
Earnings Releases:
Chicago Bridge 2Q ‘09
http://b2icontent.irpass.cc/1705%2F96643.pdf?AWSAccessKeyId=1Y51NDPSZK99KT3F8VG2&Expires=1248978595&Signature=B0Sb5VUFG7BOMfz2EVVHnN%2FYmeE%3D
ConocoPhillips 2Q ‘09
http://www.conocophillips.com/NR/rdonlyres/70ABD8A2-6BD4-4691-9C55-D8428C6020E4/0/EarningsReleaseQ209final_external3.pdf
Exxon 2Q ‘09
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjMwMzc0MHxDaGlsZElEPTM0NTgyNnxUeXBlPTI=&t=1
Praxair 2Q ‘09
http://www.praxair.com/praxair.nsf/0/3D3F3D1B689D247D8525760100765A37?OpenDocument
The Census Bureau announced that durable goods in June decreased $4.1 billion or 2.5 percent. Excluding transportation, new orders increased 1.1 percent. Excluding defense, new orders decreased 0.7 percent. Inventories of manufactured durable goods in June, down six consecutive months, decreased $3.0 billion or 0.9 percent to $318.8 billion. This followed a 1.1 percent May decrease.
http://www.census.gov/indicator/www/m3/
The Mortgage Bankers Association announced that for the week ending July 24, 2009 Purchase Index remained unchanged from one week earlier at 262.0. The Refinance Index decreased 10.9 percent to 1862.1 from 2089.7 the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 5.36 percent from 5.31 percent, with points decreasing to 0.93 from 1.18 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
http://www.mbaa.org/NewsandMedia/PressCenter/69747.htm
The Fed’s Beige Book suggests that economic activity continued to be weak. Residential real estate markets stayed soft in most Districts, although many noted some signs of improvement. Commercial real estate however weakened further in recent months in two-thirds of the Districts and remained slow in the others. http://www.federalreserve.gov/FOMC/Beigebook/2009/20090729/default.htm
The Labor Department reported that, for the week ending July 25 initial claims were 584,000, an increase of 25,000 from the previous week’s revised figure of 559,000. Continuing claims for the week ending July 18 was 6,197,000, a decrease of 54,000 from the preceding week’s revised level of 6,251,000, but this may reflect an expiration of benefits rather than new employment.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
Sources: Labor Department, Federal Reserve, MBA, Census Bureau, Shell, Praxair, Exxon, Conoco, Chicago Bridge, Microsoft, Roche, and Danaher websites.
SKY News Summary 07-28-09
A few more companies (CBI, Conoco, Exxon, Praxair, Shell, and T. Rowe) will release earnings this week. If they show stronger earnings, their numbers could reinforce the good news from new home sales that came out on Monday and give a lift to the market despite the negativity of the Conference Board’s consumer confidence index released Tuesday. Durables orders for June will be released on Wednesday and the Bureau of Economic Analysis will release the advance number for GDP on Friday.
The Securities and Exchange Commission announced new rules and actions applying to short sales. First, Rule 204, requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale. Second, the SEC will post short sale volume and transactions on the internet. Third, the Commission will hold a public roundtable on September 30 to discuss securities lending, pre-borrowing, and additional short sale disclosures. “The roundtable will consider, among other topics, the potential impact of a program requiring short sellers to pre-borrow their securities, possibly on a pilot basis, and adding a short sale indicator to the tapes to which transactions are reported for exchange-listed securities.”
http://www.sec.gov/news/press/2009/2009-172.htm
New home sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000 units. “The big gain in home sales last month was reflected in three out of four regions and helped shrink the inventory of new homes for sale to its lowest level in years,” said NAHB Chief Economist David Crowe. “Even so, the pace of home sales in June 2009 was still more than 21 percent off the pace of sales in the same month last year, so we still have quite a way to go. The concern now is that complicating factors – particularly job losses, appraisal issues that are torpedoing more than a quarter of new-home sales, and the impending expiration of the first-time buyer tax credit – threaten to stifle the positive momentum.” New-home sales rose by 29.2 percent in the Northeast, 43.1 percent in the Midwest, and 22.6 percent in the West in June. However, sales dropped by 5.3 percent in the South, which is the country’s largest housing market.
http://www.nahb.org/news_details.aspx?sectionID=0&newsID=9511
http://www.census.gov/const/newressales.pdf
Retail sales rose 1.0 percent in the July 25 week. Year-over-year retail sales declined 0.5 percent vs. the prior week’s 0.3 percent drop. ICSC-Goldman said higher traffic offset low inventories and lack of clearance items.
http://www.nasdaq.com/asp/econodayframe.asp?
page=http://anasdaq.econoday.com/byweek.asp?cust=nasdaq
The Conference Board’s consumer confidence index dropped 2.7 points to 46.6 in July due mainly to a weak outlook for the jobs market.
http://www.google.com/hostednews/ap/article/ALeqM5gNiyJ905Ho0Ur96V2TQhsBX19lGwD99NIJHO0
Sources: AP, Census Bureau, NASDAQ, NAHB, and SEC websites
SKY News Summary 07-23-09
Earnings releases
AT&T
http://www.att.com/Investor/Financial/Earning_Info/docs/2Q_09_slide_c.pdf
Boeing
http://www.boeing.com/companyoffices/financial/2009q2/2009q2.pdf
ITW
http://investor.itw.com/phoenix.zhtml?c=71064&p=irol-newsArticle&ID=1309903&highlight=
Kimberly-Clark
http://investor.kimberly-clark.com/releasedetail.cfm?ReleaseID=398429
Roche
http://www.roche.com/irp2q09e.pdf
Pepsi
http://phx.corporate-ir.net/phoenix.zhtml?c=78265&p=irol-newsArticle&ID=1309840&highlight=
Fifth Third
http://ir.53.com/phoenix.zhtml?c=72735&p=irol-newsArticle&ID=1310520&highlight=
Phillip Morris Int’l
http://www.ups.com/pressroom/us/press_releases/press_release/Press+Releases/Homepage+Press+Releases/ci.UPS+Announces+2Q+Results.syndication
Initial jobless claims for the week ending July 18th rose by 30,000 to 554,000. Lower initial claims in the past few weeks have been explained by “earlier-than-usual summer layoffs of autoworkers.” To understand the relationship between summer layoffs and initial claims, one has to understand the model used by the Department of Labor to derive initial claims, called the Business Birth/Death model. The model expects temporary layoffs of autoworkers in July and August. But because of the bankruptcy proceedings, many of these layoffs occurred in May and June. This means that the encouraging numbers we have seen in the past few weeks are not accurate and will continue to be inaccurate through July. Also, in recent years, the Bureau of Labor Statistics has significantly changed the model for job adjustments in July. In 2005 and 2006 the BLS subtracted 76,000 and 57,000 jobs in July. In 2007 and 2008, the BLS added 21,000 and 26,000 jobs respectively to its model.
http://www.dol.gov/opa/media/press/eta/ui/current.htmhttp://www.bls.gov/opub/mlr/2006/05/art4full.pdf
http://www.bls.gov/ces/cesbdtech.htm
http://www.bls.gov/web/cesbd.htm
Sources:American Express, AT&T Boeing, Danaher, ITW Kimberly-Clark, Lilly, Roche, Pepsi, Fifth Third, UPS, Phillip Morris, Microsoft, and BLS websites
SKY News Summary 07-21-09
Citi 2Q ’09 earnings slides can be found at:
http://www.citigroup.com/citi/fin/data/p090717a.pdf?ieNocache=110
Coke 2Q ’09 results
http://www.thecoca-colacompany.com/presscenter/nr_20090721_corporate_second_qtr_earnings.html
GE 2Q ’09 presentation:
http://www.ge.com/pdf/investors/events/07172009/ge_webcast_presentation_07172009.pdf
Halliburton 2Q ’09 webcast
http://webcastingplayer.corporate-ir.net/player/playerHOST.aspx?c=67605&EventId=2216934&StreamId=1312455&IndexId=&TIK={1a362847-5641-48b7-b141-1db644991289}&RGS=3
IBM 2Q ’09 slides
http://www.ibm.com/investor/sharedv3/auditorium.phtml?/investor/2q09/webcastini
Intel 2Q ’09 earnings press release
http://www.intc.com/releasedetail.cfm?ReleaseID=396473
J&J 2Q ’09 press release
http://www.investor.jnj.com/releasedetail.cfm?ReleaseID=396250
J&J pipeline chart
http://files.shareholder.com/downloads/JNJ/571307519×0x305406/9102aa4a-d8af-45ba-bbbc-22d13a7f0095/Q22009pipeline.pdf
J&J sales
http://files.shareholder.com/downloads/JNJ/571307519×0x305402/c09f1afc-3855-49a7-8434-ef68d1861d32/SKPFQ209.pdf
http://files.shareholder.com/downloads/JNJ/571307519×0x305400/db2c3697-b2de-4cbd-a073-b44caae6a0fa/SSDQ209.pdf
Johnson Controls 3Q slides
http://www.johnsoncontrols.com/publish/etc/medialib/jci/corporate/investors/2009.Par.84911.File.tmp/Johnson%20Controls%20Q309%20Presentation.pdf
Merck 2Q ’09 earnings release
http://www.merck.com/finance/reportsother.html
TI 2Q ’09 earnings release
http://www.ti.com/corp/docs/investor/nongaap2q09.shtml
http://investor.ti.com/releasedetail.cfm?ReleaseID=397795
UTC 2Q ’09 slides
http://www.utc.com/utc/Static%20files/Investor_Relations/2009_q2_earnings.pdf
Walgreens 2Q ‘09
http://news.walgreens.com/article_display.cfm?article_id=5197
Exelon announced that it will not seek to acquire NRG Energy stock at a fixed exchange ratio of 0.545 of a share of Exelon common stock for each share of NRG common stock.
The Exelon announcement came after negative proxy vote results announced at the NRG annual meeting.
http://www.exeloncorp.com/aboutus/news/pressrelease/corporate/090721-Exelon+Terminates+Offer+to+Acquire+NRG.htm
The Wall Street Journal reported that the FDA decided a Medtronic heart valve that can be implanted without open-heart surgery met study goals for safety and effectiveness, and is scheduled to be reviewed tomorrow by the FDA’s circulatory-system devices panel. The panel of outside medical experts will vote on whether the device should be granted a humanitarian device exemption or be approved for use in 4,000 or fewer patients annually. The agency is concerned that stents that are part of the heart valve fractured in 18% of patients in the study.
http://online.wsj.com/article/SB124813555175566973.html
The Conference Board’s Index of Leading Indicators was up a sizeable 0.7% in June (the third straight month of increases) due to improved “interest rate spread, building permits, stock prices, weekly initial claims (inverted), average weekly manufacturing hours, index of supplier deliveries (vendor performance), and manufacturers’ new orders for consumer goods and materials. The negative contributors – beginning with the largest negative contributor – were real money supply, manufacturers’ new orders for nondefense capital goods, and index of consumer expectations.”
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1
Sources: Coke, Exelon, GE, J&J, Johnson Controls, Merck, TI, Intel. Walgreens, IBM, Halliburton, Citi, UTC, Conference Board, The Wall Street Journal websites.
SKY News Summary 07-16-09
Before the financial crisis occurred, we were focused on the global opportunities for business. We may have been distracted by unemployment and financial meltdowns, but our companies have quietly pursued their global endeavors, and, now that the dust is beginning to settle, we can see their accomplishments.
Halliburton has been awarded a two-year contract extension by StatoilHydro to provide fluids systems for multiple fields, and valued at approximately $450 million.
http://www.halliburton.com/public/news/pubsdata/press_release/2009/corpnws_071509.html
ExxonMobil Libya has started drilling the first deepwater exploration well in Libya. The well is being drilled offshore in the Sirte Basin, northeast of the city of Misrata, in the Libyan Mediterranean Sea.
http://www.businesswire.com/portal/site/exxonmobil/index.jsp?ndmViewId=news_view&ndmConfigId=1001106&newsId=20090716005556&newsLang=en
EDS, an HP company, announced a new seven-year, $90 million technology management agreement with three Chile-based financial services firms. The three companies, Nexus, Redbanc and Transbank, which deliver services to banks in Chile, will work with EDS to consolidate their five data centers.
http://www.hp.com/hpinfo/newsroom/press/2009/090714a.html
Intel’s 2Q earnings were much better than expected. Revenue reached $8.0 Billion an increase of 12% over 1Q. Non-GAAP Net Income was $1.0 Billion. On a GAAP-basis, there was an operating loss of $12 million, a net loss of $398 million and a loss per share of 7 cents.
http://www.intel.com/pressroom/archive/releases/20090714corp.htm?iid=pr1_releasepri_20090714r
Boeing will lay off 250 employees as a result of the government’s reduction of the ballistic missile system. “The president’s budget request for 2010 being considered by Congress includes a significant reduction in program funding from the 2009 levels, and Boeing is not able to support the current work force with such a substantial reduction in funding.”
http://boeing.mediaroom.com/index.php?s=43&item=749
Microsoft has posted some wonderful basic science lectures which are available at:
http://research.microsoft.com/apps/tools/tuva/index.html
Karl Rove made reference to this blog yesterday in the WSJ. One is able to add one’s ideas and add to the required reading list of Keith Hennessy who was just nominated to the Financial Crisis Inquiry Commission.
http://keithhennessey.com/2009/07/16/fcic/
The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending July 10, 2009. The Refinance Index increased 17.7 percent to 2009.4 from 1707.7 the previous week and the seasonally adjusted Purchase Index decreased 9.4 percent to 258.8 from 285.6 one week earlier. The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.05 percent from 5.34 percent, with points decreasing to 1.12 from 1.13 (including the origination fee). Housing starts for June will be announced by the Census Bureau tomorrow at:
http://www.census.gov/const/www/newresconstindex.html
http://www.mbaa.org/NewsandMedia/PressCenter/69638.htm
The Bureau of Labor reported that the consumer price index for all urban consumers (CPI-U) increased 0.9 percent in June before seasonal adjustment. On a seasonally adjusted basis, the CPI-U increased 0.7 percent after rising 0.1 percent in May. The increase was due to the gasoline index, which rose 17.3 percent in June and accounted for over 80 percent of the increase in the “all items” index. (The CPI-U is used by the Federal Government to calculate adjustments to the principal values of Treasury Inflation-Protected Securities, also known as TIPS.)
http://www.bls.gov/news.release/cpi.nr0.htm
The Federal Reserve announced that industrial production decreased 0.4 percent in June after a drop of 1.2 percent in May. Much of the decline came from decreased production of motor vehicles and parts. For the second quarter as a whole, output fell at an annual rate of 11.6 percent, a more moderate contraction than in the first quarter, when output fell 19.1 percent.
http://www.federalreserve.gov/releases/g17/Current/default.htm
The Department of Labor reported that for the week ending July 11, initial unemployment claims dropped 47,000 to 522,000. Continuing claims dropped by 642,000 during the week ending July 4 to 6,273,000.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
The Philadelphia Fed released this month’s Business Outlook Survey results and although still negative, they showed signs of hope. Firms reporting decreases in activity (31 percent) outnumbered those reporting increases (23 percent). But the current new orders index was (at -2.2) the highest it’s been in 10 months. Firms continue to report employment losses and declines in work hours. The current employment index declined to -25.3, from an already weak reading of -21.8.
http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2009/bos0709.cfm
Sources: Philadelphia Fed, Department of Labor, Federal Reserve, Mortgage Bankers Association, Keith Hennessy’s blog, Intel, Microsoft, ExxonMobil, Boeing, Halliburton websites.
SKY News Summary 07-14-09
Daiichi Sankyo and Eli Lilly announced that the U.S. Food and Drug Administration approved Effient (prasugrel) tablets for the reduction of thrombotic cardiovascular events (including stent thrombosis) in patients with acute coronary syndromes who are managed with an artery-opening procedure known as percutaneous coronary intervention (PCI). PCI usually includes the placement of a stent to help keep the artery open. Effient (pronounced Ef-fee-ent) helps keep blood platelets from sticking together to form clots, which can block an artery.
http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=395752
Praxair will supply SANYO Electric’s new manufacturing facility in Salem, Oregon, with bulk argon and nitrogen. SANYO Electric will be manufacturing solar ingots and wafers beginning October 2009 with a production capacity of approximately 70 MW.
http://www.praxair.com/praxair.nsf/AllContent/621CE9A35C1B1CE1852575EF004D748B?OpenDocument
UBS has received approval from the Capital Market Authority (CMA) to begin its securities business in the Kingdom of Saudi Arabia. UBS Saudi Arabia plans to service government, corporate and individual clients covering wealth management, investment banking, fixed income sales and execution, and institutional asset management.
http://www.ubs.com/1/e/investors/releases?newsId=169416
Philip Morris International announced it will purchase privately owned Colombian cigarette manufacturer, Productora Tabacalera de Colombia, Protabaco Ltda. for $452 million. Protabaco is the second largest tobacco company in Colombia, with an estimated 2008 volume of 6.1 billion cigarettes and an approximate market share of 31.8%. The Company reported net revenues of approximately $107.6 million in 2008.
http://investors.philipmorrisinternational.com/phoenix.zhtml?c=146476&p=irol-newsArticle&ID=1306422&highlight=
The Bureau of Labor Statistics reported that The Producer Price Index for Finished Goods rose 1.8 percent in June following increases of 0.2 percent in May and 0.3 percent in April. The increase was largely due to an increase of 6.6 percent in energy goods
http://www.bls.gov/news.release/ppi.nr0.htm
Sources: Lilly, Praxair, UBS, PMI, Bureau of Labor Statistics websites
SKY News Summary 07-09-09
Citi made some key executive changes today. Edward “Ned” Kelly, previously Chief Financial Officer, will become Vice Chairman of Citigroup. John Gerspach, previously the Controller and Chief Accounting Officer of Citi, will assume the role of Chief Financial Officer. Eugene M. McQuade will join Citi as Chief Executive Officer for Citibank, N.A. Mr. McQuade was Vice Chairman of Merrill Lynch. Previously, he was the President and Chief Operating Officer of Freddie Mac and served as President of Bank of America Corporation. Bill Rhodes will continue as Senior Vice Chairman of Citigroup and Citibank, but will not be Chairman and CEO of Citibank, N.A.
http://www.citigroup.com/citi/press/2009/090709a.htm
Merck will pay Portola Pharmaceuticals an initial fee of $50 million with additional cash payments totaling up to $420 million for the development and commercialization of betrixaban, “an investigational oral Factor Xa inhibitor anticoagulant currently in Phase II clinical development for the prevention of stroke in patients with atrial fibrillation.”
http://www.merck.com/newsroom/press_releases/research_and_development/2009_0709.html
The Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 3, 2009, showed the seasonally adjusted Purchase Index increasing a healthy 6.7 percent to 285.6 from 267.7 one week earlier. The Refinance Index increased 15.2 percent to 1707.7 from 1482.2 the previous week. The average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 5.34 percent, with points increasing to 1.13 from 1.12 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
http://www.mbaa.org/NewsandMedia/PressCenter/69534.htm
Consumer credit decreased at an annual rate of 1-1/2 percent in May 2009. Revolving credit decreased at an annual rate of 3-3/4 percent, and nonrevolving credit decreased at an annual rate of 1/4 percent. Interesting historical data may be found at:
http://www.federalreserve.gov/releases/g19/Current/
ICSC index said U.S. chain store sales for June 2009 were down 5.1 percent on a year-over-year, same-store basis. “Although June sales continued their very weak performance that has persisted since December 2008, there were some signs of improvement beneath the surface with a handful of teen and value retailers posting surprisingly healthy gains,” said Michael P. Niemira, chief economist and director of research for ICSC. “These nascent signs of improvement are important since history suggests that consumer spending typically starts off sluggish prior to significant improvement,” he added.
http://www.icsc.org/srch/apps/newsdsp.php?storyid=2516®ion=main
The Department of Labor announced good news. For the week ending July 4, the advance figure for seasonally adjusted initial claims was 565,000, a decrease of 52,000 from the previous week’s revised figure of 617,000 and the lowest level since the beginning of the year. However, the advance number for continuing claims during the week ending June 27 was 6,883,000, an increase of 159,000 from the preceding week’s revised level of 6,724,000, and a new high.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
Federal Reserve Governor Elizabeth A. Duke spoke at the Minority Depository Institutions National Conference in Chicago yesterday. She made some comments that may impact commercial real estate, saying: “…But there may be some slight changes in focus. For example, examiners have for several years been paying significant attention to commercial real estate concentrations, encouraging banks to improve their management-reporting, stress-testing, and other credit-administration practices as their concentrations have increased in magnitude. Now, as examiners are seeing more and more loans secured by real estate projects that are not performing as expected, they are looking for bankers to have realistic views and to have considered the effect a change in a project’s performance has on the value of its collateral. In some cases, an examiner may encourage a banker to obtain an updated valuation or appraisal of a project’s supporting collateral.
In view of the strains on bank deposits in the wake of last year’s bank failures and the difficulty that many banks are having in raising capital, examiners will also be redoubling their efforts at assessing liquidity and capital planning. Some liquidity and capital plans that banks had been relying on proved inadequate last year; others clearly were not sufficiently developed to address the range of contingencies that banks can face in a volatile market environment.”
http://www.federalreserve.gov/newsevents/speech/duke20090709a.htm
Sources: Citi, Merck, Federal Reserve, Department of Labor, ICSC, Mortgage Bankers Association websites.
SKY News Summary 07-07-09
A historical look at the number of bank closures since 1990 is available at:
http://www.fdic.gov/bank/statistical/stats/2009mar/fdic.html
The “failed banks” list may be found at:
http://www.fdic.gov/bank/individual/failed/banklist.html
An article in the Wall Street Journal noted that the U.S. government is disputing UBS’ claim that the government could get information on U.S. taxpayers with accounts at UBS through other means. The Justice Department has asked UBS for the names of the 52,000 accounts that are supposedly harboring taxable funds, and UBS is asking a federal judge in Miami to force the U.S. government to disclose what information it already possesses.
http://online.wsj.com/article/BT-CO-20090707-710169.html?mod=wsjcrmain
Switzerland will contribute $5 million to the International Monetary Fund’s Trust Fund for Anti-Money Laundering and Combating the Financing of Terrorism. Mr. Portugal, Deputy Managing Director, issued the following statement:
“The international community has made the fight against money laundering and terrorist financing a priority. The multi-donor trust fund will contribute to the strengthening of global AML/CFT regimes by improving national systems. Robust AML/CFT regimes are an important pillar of the international regulatory and supervisory system and part of the current efforts to strengthen the global financial framework.”
“The IMF is pleased that Switzerland has decided to contribute US$5 million to this initiative and, following a decision by the Steering Committee, will chair the committee in 2009. Switzerland is already one of the largest donors to the IMF’s capacity building program and its participation in the trust fund will further strengthen our partnership.”
http://www.imf.org/external/np/sec/pr/2009/pr09256.htm
Boeing will acquire Vought Aircraft Industries’ plant in South Carolina, where Vought makes and assembles parts of the 787 aft fuselage sections, for $580 million. This transaction is anticipated to close in the third quarter.
http://boeing.mediaroom.com/index.php?s=43&item=737
Boeing also announced an order from Turkish airline SunExpress for six Next-Generation 737-800s. The order is worth approximately $460 million. Earlier this year, Boeing announced performance changes to the Next-Generation 737 that will reduce fuel consumption by 2 percent by 2011 through a combination of airframe and engine improvements.
http://boeing.mediaroom.com/index.php?s=43&item=736
PepsiCo and Pepsi Bottling Group announced that they will invest $1 billion in Russia over three years, bringing their total investment to $4 billion. The funds will expand manufacturing and distribution capacity and involve new snacks. PepsiCo is already the largest private user of potatoes grown in Russia.
http://phx.corporate-ir.net/phoenix.zhtml?c=78265&p=irol-newsArticle&ID=1304443&highlight
IBM and the city of Venice are promoting a program called TagMyLagoon. Using a new free wi-fi network provided by Venice throughout the city, visitors with a wi-fi enabled mobile device can download the application, take a picture of a place of historical interest with their mobile phone, and TagMyLagoon will automatically enable the system to provide contextual information and prompts to the visitor.
http://www-03.ibm.com/press/us/en/pressrelease/27926.wss
Sources: IBM, Pepsi, Boeing, IMF, Wall Street Journal, and FDIC websites.
SKY News Summary 07-02-09
Exelon increased its offer to acquire NRG by 12.4 percent over the initial exchange offer. The new offer reflects the value of NRG’s recent acquisition of the Reliant Energy retail business. “Exelon’s more detailed analysis of NRG’s structure, cost platform and operations assumes that the company would not only absorb NRG but also integrate and transform it. This approach, plant benchmarking, and application of Exelon’s management model to NRG’s assets yielded an estimated present value of $3.6 billion to $4.0 billion in operational synergies from areas including corporate/IT, fossil and nuclear fleet, trading, development, and retail operations. It reflects a 30 percent reduction in NRG’s O&M expense, which is consistent with prior power sector transactions and reflects Exelon’s track record of delivering cost reductions.”
http://www.exeloncorp.com/aboutus/news/pressrelease/corporate/090702_Exelon+Increases+Offer+to+Acquire+NRG+Energy+by+12.4+Percent.htm
Praxair Surface Technologies acquired Sermatech International Holdings from Arsenal Capital Partners, a New-York-based private equity firm. Sermatech is a global supplier of protective coatings and advanced processes used on industrial and aviation gas turbines and serves the aerospace, defense, power generation and oil and gas markets. http://www.praxair.com/praxair.nsf/AllContent/56038158DEA0C00E852575E600535929?OpenDocument
Carrier and Watsco will form Carrier Enterprise LLC, a joint venture to distribute Carrier, Bryant, Payne and Totaline residential and light commercial heating, ventilating and air-conditioning (HVAC) products in the U.S. sunbelt region. Watsco owns 60 percent of the venture and Carrier 40 percent.
http://www.utc.com/utc/News/News_Details/2009/2009-07-01a.html?page=1&year=0
Fifth Third Bancorp and Advent International announced a joint venture transaction for Fifth Third’s processing business. Advent is purchasing an approximate 51% interest in Fifth Third’s merchant acquiring and financial institutions businesses, valued at approximately $2.35 billion. Fifth Third will retain a 49% interest in the venture, and will also retain its credit card issuing business, which includes retail credit card and commercial multi-card services. Fifth Third will recognize a pre-tax gain of approximately $1.7 billion.
http://ir.53.com/phoenix.zhtml?c=72735&p=irol-newsArticle&ID=1303517&highlight=
T. Rowe Price launched a new U.S. Large-Cap Core Fund of 50 to 75 companies, managed by Jeff Rottinghaus. The minimum initial investment in both the U.S. Large-Cap Core Fund (TRULX) and the U.S. Large-Cap Core Fund—Advisor Class (PAULX) is $2,500 or $1,000 for retirement plans or gifts or transfers to minors (UGMA/UTMA) accounts.
http://corporate.troweprice.com/ccw/home/ourCompany/pressReleases/pressRelease.do
Philip Morris International announced that it will purchase Swedish Match South Africa for $222 million. SMSA is the market leader in the South African pipe tobacco and snuff categories, which represent an estimated 31% of total tobacco consumption. In 2008, SMSA reported net revenues of ZAR 687 million. Its principal brands include Boxer, Best Blend and Taxi.
http://investors.philipmorrisinternational.com/phoenix.zhtml?c=146476&p=irol-newsArticle&ID=1304129&highlight=
Johnson & Johnson announced that it will acquire substantially all of the assets and rights of Elan related to its Alzheimer’s Immunotherapy Program and invest $1 billion in Elan in exchange for newly issued American Depositary Receipts (ADRs) of Elan which will represent 18.4% of Elan’s outstanding ordinary shares. In consideration for the transfer of these rights and assets, Elan will receive a 49.9% equity interest in the newly formed Johnson & Johnson company that will acquire the AIP Program. Elan will be entitled to a 49.9% share of the profits and certain royalty payments upon the commercialization of products under a collaboration with Wyeth. Johnson & Johnson, through its affiliate, will assume and continue Elan’s activities with Wyeth under the AIP Program and will initially commit up to $500 million to continue the development and launch activities of bapineuzumab, a potential first-in-class treatment that is being evaluated for slowing the progression of Alzheimer’s disease, as well as other compounds. Bapineuzumab, administered intravenously once every three months, is currently in Phase 3 clinical trials.
http://www.jnj.com/connect/news/all/20090702_080000
The Federal Trade Commission published final rules and guidelines relating to credit bureaus and other consumer reporting agencies, effective date of July 1, 2010. Under the rules, entities that furnish information about consumers to consumer reporting agencies generally must include a consumer’s credit limit in the information provided. Also, if a consumer believes his or her credit report includes inaccurate information, the consumer may submit a dispute directly to the entity that provided the information to the consumer reporting agency, and that entity must investigate the dispute. The rules do not change a consumer’s ability to submit a dispute to a consumer reporting agency or a furnisher’s duty to investigate a dispute referred by a reporting agency.
http://www.federalreserve.gov/newsevents/press/bcreg/20090702a.htm
The Department of Labor reported that nonfarm payroll jobs dropped by 467,000 jobs in June, but the unemployment rate stayed at 9.5 percent. Since the start of the recession in December 2007, the number of unemployed has increased by 7.2 million, and the unemployment rate has risen by 4.6 percent. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 433,000 over the month to 4.4 million. Job losses from April to June averaged 436,000 per month, compared with losses averaging 670,000 per month from November to March. Since the recession began, employment in motor vehicles and parts has declined by 335,000, or about one-third. In June, employment in construction fell by 79,000, and employment in the professional and business services industry declined by 118,000 in June. This industry has shed 1.5 million jobs since the recession began. Health care employment increased by 21,000 in June. Job gains in health care have averaged 21,000 per month thus far in 2009, down from an average of 30,000 per month during 2008.
http://www.bls.gov/news.release/empsit.nr0.htm
http://www.adpemploymentreport.com/
Also according to the Department of Labor, initial jobless claims continued to improve. In the week ending June 27, initial claims amounted to 614,000, a decrease of 16,000 from the previous week’s figure of 630,000. The 4-week moving average was 615,250, a decrease of 2,750 from the previous week’s revised average of 618,000.
http://www.dol.gov/opa/media/press/eta/ui/eta20090759.htm
The Census Bureau reported that new orders for manufactured goods in May, up three of the last four months, increased $4.1 billion or 1.2 percent to $347.9 billion. Excluding transportation, new orders increased 0.8 percent. Inventories, down nine consecutive months, decreased $3.2 billion or 0.6 percent to $513.3 billion. Inventories of manufactured nondurable goods, up following eight consecutive monthly decreases,increased slightly to $191.2 billion driven by petroleum and coal products, up $0.7 billion or 3.0 percent to $25.2 billion.
http://www.census.gov/indicator/www/m3/prel/pdf/s-i-o.pdf
The Mortgage Bankers Association released its Purchase Index, which decreased 4.5 percent for the week ending June 26, 2009 to 267.7 from 280.3 one week earlier. The Refinance Index is at its lowest level since November 2008.
http://www.mortgagebankers.org/NewsandMedia/PressCenter/69498.htm
The Census Bureau announced today that construction spending during May 2009 was 0.9 percent below April’s spending of $972.5 billion, and is 11.6 percent below May 2008’s estimate of $1,090.7 billion. Hardest hit was residential construction, which was 3.4 percent below the April estimate of $248.8 billion. Educational construction was 0.5 percent above April’s estimate of $90.8 billion.
http://www.census.gov/const/C30/release.pdf
If all these numbers are a blur to you, check out the article by Lawrence Yun, NAR Chief Economist, on the National Association of Realtors’ website. He uses arrows.
http://www.realtor.org/research/reinsights/forecast
You can find an interesting discussion on commodities at:
http://www2.standardandpoors.com/spf/pdf/index/CommodityPerspective-June09_Final.pdf
Sources: Standard and Poor’s, Census Bureau, Department of Labor, National Association of Realtors, Mortgage Bankers Association, Federal Reserve, J&J, PMI, T. Rowe, Fifth Third, UTC, Praxair, and Exelon websites.