SKY News Summary 09-29-09
There are some potentially market-moving numbers are being released this week. The GDP for this month and the Personal Income and Outlays report for August, both from the Department of Commerce and the employment situation report for August from The Department of Labor will be released on Wednesday, Thursday, and Friday respectively. Today’s news focused on the drug companies and their efforts to cash in on flu vaccines.
Johnson & Johnson and Crucell announced a collaborative effort to develop therapies for influenza prevention and treatment. The agreement includes an 18% equity investment in Crucell for an aggregate purchase price of 439 million U.S. dollars. “Under the flu-mAb collaboration, Crucell and Ortho-McNeil-Janssen Pharmaceuticals or its affiliates will share responsibilities to develop a universal flu-mAb product targeting all influenza A strains, including H1N1 strains (which cause seasonal flu and the current pandemic) and the H5N1 or avian strain (‘bird flu’).”
http://www.jnj.com/connect/news/all/20090928_090000
Merck announced that it has entered into an exclusive agreement with CSL Biotherapies, to market and distribute AFLURIA (Influenza Virus Vaccine), CSL’s seasonal influenza (flu) vaccine, in the U.S., for the 2010/2011-2015/2016 flu seasons. CSL and Merck have been partners in vaccine development and marketing since 1980.
http://www.merck.com/newsroom/press_releases/corporate/2009_0928.html
Johnson & Johnson also announced that the FDA has approved ELARA™ (ustekinumab) for the treatment of adult patients 18 years or older with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy. STELARA is a first-in-class human monoclonal antibody that selectively targets the cytokines interleukin-12 (IL-12) and interleukin-23 (IL-23), naturally occurring proteins that are believed to play a role in the development of psoriasis.
http://www.jnj.com/connect/news/all/20090925_150000
Lilly signed a Memorandum of Understanding (MOU) with Academia Sinica, a research institution based in Taiwan, to collaborate in target-based screening for the discovery of new tuberculosis (TB) drugs.
http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=412167
The ICSC-Goldman Sachs chain store sales index for the week ending September 26 rose 0.1% from the prior week and increased by 0.9% year-over-year. Discounters and department stores, showed the most improvement in sales.
http://www.icsc.org/homepage/research_article.php?id=31
The S&P/Case-Shiller Home Price Index showed a third month of increased home sale prices. According to NASDAQ, “the composite-10 index rose 1.7 percent in July on top of a 1.4 percent gain in June and a 0.5 percent gain in May. The composite-20 index, up 1.6 percent in July, shows similar gains. With the exception of Las Vegas, all metro areas show gains or at least flat conditions. Year-on-year rates also improved for a third month, now at minus 12.8 percent for the 10 index and at minus 13.3 percent for the 20.” http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_092955.pdf
http://www.nasdaq.com/asp/econodayframe.asp?page=http://anasdaq.econoday.com/byweek.asp?cust=nasdaq
According to the Conference Board, consumer confidence dropped slightly from 54.5 last month to 53.1 in September. A substantial percent of those surveyed (47.0 percent) indicated that jobs were difficult to find. According to Lynn Franco, Director of The Conference Board Consumer Research Center, “Consumer Confidence, which had improved in August, retreated slightly in September. The Present Situation Index decreased, as consumers viewed both current business conditions and the labor market less favorably than last month. While not as pessimistic as earlier this year, consumers remain quite apprehensive about the short-term outlook and their incomes. With the holiday season quickly approaching, this is not very encouraging news.”
http://www.conference-board.org/economics/ConsumerConfidence.cfm
Boeing announced it has received a $5.4 million contract for integrating a new satellite communication system on the U.S. Air Force B-52 fleet. “The Extremely High Frequency (EHF) system will enable the exchange of information through Family of Advanced Beyond Line-of-Sight Terminals (FAB-T), enabling communication with the B-52 from ground, air and space platforms. The first of three contract increments has been authorized to begin; it includes planning, risk mitigation and development of system requirements. Increment Two will cover the design and installation of the FAB-T communication hardware. Increment Three will integrate the new system into the Global Information Grid. Total contract value is expected to be more than $100 million.”
http://boeing.mediaroom.com/index.php?s=43&item=853
Applied Materials Presentation:
http://www.appliedmaterials.com/investors/assets/09212009_mpinto.pdf
HP presentation:
Sources: JNJ, Boeing, Applied Materials, HP, Conference Board, NASDAQ, S&P, ICSC, Lilly, J&J, Merck websites.
SKY News Summary 09-24-09
Economic indicators continue to give mixed signals.
Good news on employment. In the week ending Sept. 19, the advance figure for initial unemployment claims was 530,000, a decrease of 21,000 from the previous week’s revised figure of 551,000. The 4-week moving average was 553,500, a decrease of 11,000 from the previous week’s revised average of 564,500. Continuing claims during the week ending Sept. 12 was 6,138,000, a decreased 123,000 from the preceding week’s revised level of 6,261,000.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
Not great news for home sales. Existing-home sales in August declined 2.7 percent but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales rose a total of 15.2 percent. The national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.19 percent in August from 5.22 percent in July; the rate was 6.48 percent in August 2008. An NAR practitioner survey shows first-time buyers purchased 30 percent of homes in August, and that distressed homes accounted for 31 percent of transactions. Unsold inventory totals are 16.4 percent lower than a year ago. The national median existing-home price for all housing types was $177,700 in August, down 12.5 percent from August 2008. The median price in the Northeast was $241,100, which is 10.5 percent below a year ago.
http://www.realtor.org/press_room/news_releases/2009/09/ease_four
Boeing announced that it has received two separate contracts from the U.S. Air Force to modernize the service’s fleet of 365 A-10 Thunderbolt II aircraft. The contracts, which have a total value of $4.2 million, consist of several tasks ranging in duration from three to 18 months.
http://boeing.mediaroom.com/index.php?s=43&item=850
Cordis Corporation announced that it has received approval from the FDA for a new, smaller version of the CYPHER Sirolimus-eluting Coronary Stent. The new 2.25 mm CYPHER Stent treats coronary blockages in small vessels which are often difficult to treat.
http://www.investor.jnj.com/releasedetail.cfm?ReleaseID=410475
Sources: JNJ, Boeing, NAR, DOL websites
SKY News Summary 09-22-09
AT&T at Goldman Sachs Communication conference
http://cc.talkpoint.com/gold006/091509a_mg/?entity=9_C13CNXF
CBI at J.P. Morgan Diversified Industries Conference
http://metameetings.com/webcasts/jpmorgan/industries09/archive/wplayer/chicago_bridge_and_iron.html
GE hosted a security analyst day at the GE Global Research Center located in Niskayuna, New York.
http://files.gecompany.com/gecom/investors/events/GRC_Overview_Sept_17_Analyst.pdf
Applied Materials
http://www.appliedmaterials.com/investors/assets/09212009_msplinter.pdfhttp://www.appliedmaterials.com/investors/assets/09212009_mpinto.pdf
http://www.appliedmaterials.com/investors/assets/09212009_gdavis.pdf
Johnson Controls has introduced the Quick Start. The Quick Start feature can be essential for data centers and process applications, where the goal is to protect temperature-sensitive equipment and processes by re-starting the process of cooling as quickly as possible after a power failure. The Quick Start feature can restart the chiller in as little as 25 seconds once power is restored, compared to more than three and a half minutes for a standard 500-ton chiller.
http://www.johnsoncontrols.com/publish/us/en/news.html
Medtronic, announced that more presentations than ever before – at least 25 – on the company’s portfolio of unique transcatheter valves will be presented the world’s annual meeting for interventional cardiologists. Most of the new clinical data at the meeting focuses on the Medtronic CoreValve Percutaneous Aortic Valve System, which is designed to replace a diseased aortic heart valve without open-heart surgery and without surgical removal of the failed valve. Commercially available internationally, the CoreValve system is investigational in the United States.
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1253624274859&lang=en_US
Praxair China has installed its cryogenic heat exchanger system at Shanghai Pharmaceutical.. This is the first liquid nitrogen supply contract that Praxair China has signed that employs Praxair’s patented NCOOL cryogenic heat exchanger system in a pharmaceutical freeze dryer. The NCOOL system is used for precision cooling and temperature control of production lyophilizers, chemical reactors and for other critical fluid cooling applications.
http://www.praxair.com/praxair.nsf/AllContent/8113C547E3D3397F852576380044A225?OpenDocument
Here’s a great article by Art Laffer from the Wall Street Journal:
http://online.wsj.com/article/SB10001424052970203440104574402822202944230.html
The ICSC-Goldman Sachs chain store sales index for the week ending September 19 dropped 2.0% from the prior week, but year-over-year remained positive at 0.6%.
http://www.icsc.org/homepage/research_article.php?id=31
The index of leading economic indicators rose 0.6 percent in August on top of a 0.9 percent rise in July, and 0.8 percent rise in June. Says Ken Goldstein, Economist at The Conference Board: “The LEI has risen for five consecutive months and the coincident economic index has stopped falling. Taken together, this suggests that the recession is bottoming out. These numbers are consistent with the view that after a very severe downturn, a recovery is very near. But, the intensity and pattern of that recovery is more uncertain.”
http://www.conference-board.org/pdf_free/economics/bci/mondaymonday.pdf
“This month’s Business Outlook Survey Indexes for general activity, new orders, and shipments all registered positive readings for the second consecutive month. Indexes for employment, work hours, and the prices received for manufactured goods remained negative, suggesting continued weakness. The survey’s broad indicators of future activity continued to suggest that the region’s manufacturing executives expect business activity to increase over the next six months.”
http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2009/bos0909.cfm
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Sources: Praxair, Medtronic, Johnson Controls, Applied Materials, CBI, GE, AT&T. Philadelphia Fed, ICSC, WSJ websites
SKY News Summary 09-17-09
ITW’s presentation at JP Morgan Diversified Industries Conference:
http://metameetings.com/webcasts/jpmorgan/industries09/archive/fplayer/illinois_tool_works.html
UTC’s presentation at JP Morgan Diversified Industries Conference:
http://www.utc.com/utc/Static%20files/Investor_Relations/2009-09-16_jpmorgan.pdf
Kimberly-Clark’s presentation at Barclay’s Back-to-School Consumer Conference:
http://files.shareholder.com/downloads/KMB/711878925×0x318394/5a789d9e-1eaa-4c49-850e-a2f1ab32515f/KMB%20BTS%202009%20-%20Final%20Presentation.pdf
Citi’s presentation at Barclay’s Global Capital Conference:
http://www.citigroup.com/citi/fin/data/p090916a.pdf?ieNocache=505
Fifth Third at presentation at Barclay’s Global Capital Conference:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzUxNTg3fENoaWxkSUQ9MzQxMzQ2fFR5cGU9MQ==&t=1
The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—decreased to $98.8 billion in the second quarter of 2009, the smallest deficit since the fourth quarter of 2001. The deficit on goods and services decreased to $83.0 billion in the second quarter from $92.4 billion in the first quarter. U.S.-owned assets abroad decreased $41.9 billion in the second quarter, following a decrease of $94.7 billion in the first. U.S. claims on foreigners reported by U.S. banks and securities brokers increased $34.4 billion in the second quarter, following an increase of $89.4 billion in the first. (Examples of these claims are U.S. residents’ deposits at banks abroad and loans by U.S. banks and securities brokers to foreigners.)
http://www.bea.gov/newsreleases/international/transactions/2009/trans209.htm
The Bureau of Labor Statistics reported that on a seasonally adjusted basis, the Consumer Price Index for all Urban Consumers (CPI-U) rose 0.4 percent in August due mainly to a 9.1 percent rise in the gasoline index. The index for all items less food and energy also rose 0.1 percent in August, the second consecutive such increase.
http://www.bls.gov/news.release/cpi.nr0.htm
Initial unemployment claims was 545,000, a decrease of 12,000 from the previous week’s revised figure of 557,000. The 4-week moving average was 563,000, a decrease of 8,750 from the previous week’s revised average of 571,750. Continuing claims during the week ending Sept. 5 was 6,230,000, an increase of 129,000 from the preceding week’s revised level of 6,101,000. The 4-week moving average was 6,180,250, a decrease of 5,500 from the preceding week’s revised average of 6,185,750.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
The Securities and Exchange Commission Chairman announced that University of Texas School of Law Professor Henry T. C. Hu has been named Director of the newly-established Division of Risk, Strategy, and Financial Innovation. The new division combines the Office of Economic Analysis, and the Office of Risk Assessment. The division’s responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovations.
http://www.sec.gov/news/press/2009/2009-199.htm
‘Production of new single-family homes slowed in August as the expiration date of the buyer incentive drew nearer, according to figures released by the U.S. Commerce Department today. While overall housing starts rose 1.5 percent to a seasonally adjusted annual rate of 598,000 units for the month, single-family starts declined 3 percent to a rate of 479,000 units, ending what had been a five-month run of improvements.
“With the $8,000 first-time home buyer tax credit set to expire at the end of November, the window is now basically closed for being able to start a new home that can be completed in time for purchasers to take advantage of that,” said Joe Robson, Chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “Builders are therefore pulling back on new construction at this time. Clearly Congress must act now to extend the tax credit if we are to keep the market moving toward a recovery.”’
http://www.nahb.org/news_details.aspx?sectionID=0&newsID=9700
‘Mortgage bankers made an average profit of over $1,088 on each loan they originated in the first quarter of 2009, according to the Mortgage Bankers Association (MBA). This profit marks a marked improvement over the 4th quarter 2008 results in which average profits were $148 per loan, according to the MBA’s Quarterly Mortgage Bankers Performance Report. This new report measures the performance of independent mortgage bankers and subsidiaries of banks, thrifts and hedge funds.
“It is clear the refinance boom in the first quarter of 2009 contributed greatly to an increase in overall production volumes, allowing production operating expenses per loan to finally drop,” said Marina Walsh, MBA’s Associate Vice President of Industry Analysis. “The average share of refinancings to total originations for these companies jumped to 66 percent in the first quarter, from 42 percent in the previous quarter. As a result, the average production volume for each firm was $213.9 million in the first quarter of 2009 compared to $125.6 million in the fourth quarter of 2008.”
Among the principal findings of the MBA report are:
• 85 percent of the firms in the study posted pre-tax net financial profits in the first quarter 2009. In the fourth quarter 2008, only 53 percent of the companies posted profits.
• Mortgage banking production profits were 54.58 basis points, or $1,088 per loan. These profits show a significant improvement over the previous quarter in which profits averaged 7.10 basis points, or $148 per loan.
• The “net cost to originate” fell to $1,725 per loan in the first quarter 2009, compared to $2,324 per loan in the fourth quarter 2008. The “net cost to originate” includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread.
• Production operating expenses – commissions, compensation, occupancy and equipment, and other production expenses and corporate allocations – dropped to $3,738 per loan in the first quarter 2009, compared to $4,810 per loan in the fourth quarter 2008.
• The average number of retail loans originated per retail sales employee rose to 10.4 loans per month in the first quarter 2009, from 5.3 loans per month in the fourth quarter 2008.
• Net warehousing income, which represents the net interest spread between the mortgage rate on a loan and the interest paid on a warehouse line of credit, continued to pose a challenge for the mortgage bankers in this study. Interest spread dropped to 6.60 basis points in the first quarter 2009, compared to 9.28 basis points in the fourth quarter 2008.
• The servicing shops of these independent mortgage companies and subsidiaries essentially broke even in the first quarter 2009 with net financial losses of $1 per loan serviced. Quarter-by-quarter net operating servicing income (servicing fees, net escrow earnings and ancillary income less direct and indirect expenses) remained at $165 per loan. The direct cost to service averaged $163 per loan.’
http://www.mbaa.org/NewsandMedia/PressCenter/70366.htm
Sources: MBAA, Census, BLS, Citi, Fifth Third, NAHB, SEC, DOL, BLS, BEA, Kimberly-Clark, UTC, ITW websites
SKY News Summary 09-15-09
Applied Materials presentation at Deustchebank:
http://www.appliedmaterials.com/investors/assets/09152009_deustchebank_analyst.pdf
CBI at JP Morgan Diversified Industries Conference:
http://metameetings.com/webcasts/jpmorgan/industries09/archive/wplayer/chicago_bridge_and_iron.html
Medtronic at the Morgan Stanley Global Healthcare Conference:
http://webcastingplayer.corporate-ir.net/player/PlayerHost.aspx?EventId=2400727&StreamId=1360187&TIK={5EB78F64-1761-403E-84ED-682F4C870AEC}&RGS=1
Praxair at Morgan Stanley Global Industrials Unplugged Conference:
Speaker: James S. Sawyer, Executive Vice President and Chief Financial Officer
http://www.praxair.com/praxair.nsf/0/49BC02C6650936208525753500577C6F/$file/Praxair-MorganStanleyIndConf-9-2-09.pdf
Pepsi at Barclay’s Capital Conference:
http://cc.talkpoint.com/barc002/090909a_rb/?entity=32_II2P85V
Roche indicated that 53% of patients with H5N1(avian flu) infection survived when treated with Tamiflu compared with 12% of untreated patients. The rate of death was reduced by 37% in high-risk patients with severe seasonal flu compared with no treatment.
http://www.roche.com/media/media_releases/med-cor-2009-09-13.htm
Eli Lilly announced its goal to significantly reduce its cost structure by the end of 2011.
The company will:
– “ Establish the Development Center of Excellence (COE) to help address the
industry-wide challenge of a drug development process that is
increasingly complex, slow and expensive. The Development COE will
distinguish Lilly from its peers by using one common operating system,
one common set of priorities and a singular focus to streamline the
development of new medicines. The ultimate goal of the Development COE
is to accelerate the launch of important Lilly molecules over the next
decade and bring innovative medicines to patients sooner.
– Organize the company around five global business units: oncology,
diabetes, established markets, emerging markets, and Elanco animal
health, thereby moving from a predominantly functionally-oriented
organization to a business-unit structure.
– Streamline the organization and align corporate and general and
administrative functions to support the business with a focus on
improved quality, strong customer service and reduced costs.
– Reduce the company’s cost structure by $1 billion and lower global
headcount to 35,000 by the end of 2011, excluding strategic sales
additions in high-growth emerging markets and Japan.”
http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=408933
Shell announced that it has partnered with Chevron and ExxonMobil on one of the world’s largest natural gas developments. Chevron will operate the project, with a 50% stake, with participants Shell and ExxonMobil each holding 25% shares. “This is a great milestone for Shell and Australia,” said Malcolm Brinded, Shell’s Executive Director, Upstream International. “The project will nearly double Australia’s liquefied natural gas output and we expect it to be in production for decades to come.” The project will include construction of a liquefied natural gas facility with an annual capacity of around 15 million tons per year on Barrow Island, off Western Australia’s coast. In November 2008, Shell announced a long-term supply agreement with PetroChina for LNG from its share of Gorgon. During the 20-year contract term Shell will sell up to two million tons of LNG per year to PetroChina.
Intel announced a number of organizational changes. First, Intel is consolidating all of its major product divisions into the newly formed Intel Architecture Group (IAG). Second, Intel’s global manufacturing organization, the Technology and Manufacturing Group (TMG), will now report to Andy Bryant, Intel’s chief administrative officer. In addition to micro-architecture planning, microprocessor and chipset development, SOC (system on a chip solutions) and wireless teams will now be six business groups operating under the new IAG umbrella.
http://www.intel.com/pressroom/archive/releases/20090914corp.htm?iid=pr1_releasepri_20090914r
The ICSC-Goldman Sachs chain store sales index for the week ending September 12 was unchanged from the prior week, but on a year-over-year basis was up 1.6%. The year-over-year number was the strongest since September 6, 2008.
http://www.icsc.org/homepage/research_article.php?id=31
The Bureau of Labor Statistics announced that the Producer Price Index for Finished Goods grew 1.7 percent in August, seasonally adjusted. This increase followed a 0.9-percent decline in July and a 1.8-percent advance in June. Over ninety percent of the finished goods increase was the result of higher energy prices, which grew 8.0 percent (gasoline prices, which rose 23.0 percent).
http://www.bls.gov/news.release/ppi.nr0.htm
U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the second quarter of 2009 totaled $53.8 billion, up $19.0 billion from the after-tax profits of $34.8 billion recorded in the first quarter of 2009, but down $46.6 billion from the $100.4 billion after-tax profits recorded in the second quarter of 2008.
http://www2census.gov/econ/qfr/current/qfr_mg.pdf
There is a valuable article by George Ratiu, Research Economist with NAR available at:
http://www.facebook.com/pages/NAR-Research/73888294183#/note.php?note_id=155669362068&ref=mf
Sources: NAR, Census, BLS, ISCS, Intel, Shell, Lilly, Roche, Pepsi, Praxair, Medtronic, CBI, and Applied Materials websites.
SKY News Summary 09-10-09
Employment, housing and retail numbers all showed improvement this week.
Altria’s webcast presentation at Barclay’s Back-to-School-Conference is available at:
http://www.altria.com/download/pdf/Barclays_Presentation_09092009.pdf
Coke’s webcast presentation at Barclay’s Back-to-School-Conference is available at:
http://phx.corporate-ir.net/External.File?
item=UGFyZW50SUQ9MjQwNTI1NXxDaGlsZElEPTM1MDI1MXxUeXBlPTI=&t=1
P&G’s webcast presentation at Barclay’s Back-to-School-Conference is available at:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjQwNzE3MXxDaGlsZElEPTM1MDc2OXxUeXBlPTI=&t=1
The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending September 4, 2009. The seasonally adjusted Purchase Index increased 9.5 percent from one week earlier due mainly to reduced interest rates. This was the largest gain since early April, putting the index at the highest level since the first week of January. The Refinance Index increased 22.5 percent from the previous week, the biggest jump since mid-March. The interest rate for 30-year fixed-rate mortgages decreased to 5.02 percent from 5.15 percent, with points increasing to 1.23 from 1.09 (including the origination fee).
http://www.mortgagebankers.org/NewsandMedia/PressCenter/70293.htm
The ICSC-Goldman Sachs chain store sales index for the week ending September 5 rose by 0.6% from the prior week. On a year-over-year basis, sales were down 0.1%.
http://www.icsc.org/homepage/research_article.php?id=31
Reports from the 12 Federal Reserve Districts indicate that economic activity continued to stabilize in July and August. Relative to the last report, Dallas indicated that economic activity had firmed, while Boston, Cleveland, Philadelphia, Richmond, and San Francisco mentioned signs of improvement. Atlanta, Chicago, Kansas City, Minneapolis, and New York generally described economic activity as stable or showing signs of stabilization; St. Louis remarked that the pace of decline appeared to be moderating. Most Districts noted that the outlook for economic activity among their business contacts remained cautiously positive.
http://www.federalreserve.gov/FOMC/Beigebook/2009/20090909/default.htm
In the week ending Sept. 5, the advance figure for seasonally adjusted initial claims was 550,000, a decrease of 26,000 from the previous week’s revised figure of 576,000. The 4-week moving average was 570,000, a decrease of 2,750 from the previous week’s revised average of 572,750.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
Sources: DOL, Federal Reserve, ICSC, MBA, P&G, Coke, Altria
SKY News Summary 09-08-09
There is very little news coming from our companies the day after Labor Day. The Fed released consumer credit numbers which showed a surprisingly sharp decrease in July given the Cash for Clunkers program was in full swing. Certainly policymakers will consider these numbers as they attempt to encourage consumer spending.
GE, announced that it has been awarded a contract to provide a subsidiary of Exxon Mobil with subsea equipment, including deepwater tree connectors, to drive oil production at the Kizomba Satellites development, in the southeastern Atlantic Ocean.
http://www.genewscenter.com/content/detail.aspx?ReleaseID=8337&NewsAreaID=2
Consumer credit decreased at an annual rate of 10-1/2 percent in July 2009. Revolving credit decreased at an annual rate of 8 percent, and nonrevolving credit decreased at an annual rate of 11-3/4 percent.
http://federalreserve.gov/releases/g19/Current/
The Mortgage Bankers Association’s Council on Ensuring Mortgage Liquidity (which includes representatives from U.S. Bank, Wells Fargo and Bank of America) produced an interesting exit strategy for the government’s role in the home mortgage industry. The Council recommended a new line of mortgage-backed securities. “Each security would have two components: a) a security-level, federal government-guaranteed “wrap” (GG) like that on a GNMA security; which would in turn be backed by b) private, loan-level guarantees from privately owned, government-chartered and regulated mortgage credit-guarantor entities (MCGEs). The GG would be conceptually similar to the Ginnie Mae model and would guarantee timely interest and principal payments to bondholders, would explicitly carry the full faith and credit of the U.S. government and would be supported by a federal insurance fund, fueled by risk-based fees charged for the securities at issuance and on an ongoing basis. The MCGEs would in turn rely on their own capital base as well as risk-retention from originators, issuers and other secondary market entities such as mortgage insurers. Through these programs, the credit risk of the underlying mortgages would be removed from the securities issued, while the interest rate risk would remain with the security investor.”
http://www.mortgagebankers.org/files/News/InternalResource/70212_RecommendationsfortheFutureGovernmentRoleintheCoreSecondaryMortgageMarket.pdf
http://www.mortgagebankers.org/files/Advocacy/2009/FAQsonSecondaryMarketModelProposal.pdf
CNBC’s Squawk box interviewed Michael Berman, who helped draft the proposal.
http://mms.tveyes.com/transcript.asp?PlayClip=true&StationID=155&DateTime=9%2F2%2F2009+8%3A39%3A28+AM&MediaStationID=155
Sources: MBA, CNBC, Federal Reserve, and GE websites.
SKY News Summary 09-03-09
Cost-cutting measures, namely restructuring and layoffs, have resulted in improved productivity numbers as announced today by the BLS. The question of growing revenues is answered by recent acquisitions and sales growth. Danaher and IBM are the perfect examples.
Danaher will accelerate its 2009 restructuring plans, expecting to achieve savings of up to $250 million by eliminating 3,300 positions and 30 facilities. The company also announced that it will acquire the Applied Biosystems Sciex, and Molecular Devices Corporation, a bioresearch and analytical instrumentation company for $1.1 billion. AB SCIEX designs and manufactures mass spectrometers, that identify and quantify specific molecules in complex samples.
http://www.danaher.com/news/news_detail.asp?key=346
http://phx.corporate-ir.net/phoenix.zhtml?c=82105&p=irol-newsArticle&ID=1326786&highlight=
Danaher’s Webcast at Morgan Stanley Global Industrials Unplugged Conference is available at:
http://webcastingplayer.corporate-ir.net/player/playerHOST.aspx?c=82105&EventId=2382970&StreamId=1357866&TIK={1b703eb3-3dee-400c-afc5-6df708f314bb}&RGS=3&IndexId=
IDC reported today that IBM was the top server vendor in 2Q09 with 34.5 percent revenue share, and HP was in second place with 28.5 percent revenue share. IBM gained 1.8 points of share in the quarter.
http://www-03.ibm.com/press/us/en/pressrelease/28300.wss#release
Citi’s stockholders approved three resolutions which “increase the number of authorized shares of Citi’s common stock to 60 billion; eliminate the right of the holders of common stock to vote on any amendment to the restated certificate of incorporation that relates solely to the terms of any series of preferred stock; and authorize (but do not require) the Board of Directors to effect a reverse stock split, at one of seven ratios, at any time prior to June 30, 2010.As a result of the stockholder approval to increase the number of authorized shares of common stock, the warrants to purchase shares of Citi common stock issued on July 23, 2009 to the U.S. government and certain private holders have become null and void. The increase in the authorized shares of common stock also allows Citi to convert the U.S. government and certain private holders’ interim securities to common stock, completing the previously announced share exchange. This mandatory conversion will be effective at the close of business on September 10, 2009, and upon issuance of the common shares, Citi will have approximately 22,880,304,796 shares of common stock outstanding. Upon completion, the U.S. government will own 7,692,307,692 shares, or 33.6% of outstanding shares.”
http://www.citigroup.com/citi/press/2009/090903a.htm
Productivity increased by 6.6 percent in the second quarter of 2009 according to the Bureau of Labor Statistics. This was the largest productivity increase since the third quarter of 2003.
http://www.bls.gov/news.release/prod2.nr0.htm
ICSC reported that August 2009 U.S. comparable-store store sales declined by 2.0% from the same month of 2008, the smallest decrease since September 2008.
http://www.icsc.org/homepage/research_article.php?id=38
Sources: ICSC, Citi, IBM, Danaher and BLS websites.
SKY News Summary 09-01-09
Economic news continues to be mostly positive with some regional desparity while company news focuses on restructuring and sales growth.
AT&T was awarded a contract from the Department of State estimated to be worth $45 million if all options are exercised. AT&T will provide Private Line, Multi-Protocol Label Switching, Frame Relay, Voice and IP Telephony at more than 100 State Department locations. “Federal agencies need to ensure that their employees inside and outside the country can access information and communicate quickly in a secure manner,” said Don Herring, senior vice president, AT&T Government Solutions.
http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=27070
Medtronic announced organizational and leadership changes consolidating its businesses into two operating groups. One group will combine the company’s Cardiac Rhythm Disease Management (CRDM), CardioVascular and Physio-Control businesses; and the other group will combine its Spinal and Biologics, Neuromodulation, Diabetes, and Surgical Technologies businesses and will be headed by Chris O’Connell, formerly president of the company’s Diabetes business.
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1251738637041&lang=en_US&from=rss
Merck announced a new organizational structure and named top management effective upon completion of the merger of Merck and Schering-Plough. Mr. Clark was named CEO of the combined company. The new Merck will have five primary divisions: Global Human Health; Animal Health; Consumer Health Care; Merck Research Laboratories; and Merck Manufacturing. Each division leader will be a member of the new Merck Executive Committee and will report directly to Mr. Clark.
http://www.merck.com/newsroom/press_releases/corporate/2009_0831.html
Shell announced that it is starting construction of a major new lubricants blending plant – the first to be built by an international oil company in Russia. The plant will be one of the largest in the Shell network worldwide. David Pirret, Executive Vice President for Shell Lubricants, said: “Russia is a country of strategic importance for Shell, and today’s announcement is further evidence of our commitment to grow our business here, not only in upstream but also in downstream. Russia is the third largest lubricants market in the world and it is vital that Shell, as the leading global lubricants supplier has a significant presence here. Shell Lubricants has seen seven consecutive years of profitable growth in Russia and we believe that setting up lubricants production facilities will help us capitalise on further growth opportunities.”
http://www.shell.com/home/content/investor/news_and_library/press_releases/2009/lubricants_blending_plant_russia_31082009.html
Citi announced the sale of its interest of three North American partner credit card portfolios representing approximately $1.3 billion in managed assets.
http://www.citigroup.com/citi/press/2009/090831d.htm
The ICSC-Goldman Sachs chain store sales index for the week ending August 29 dropped 0.5% from the prior week. On a year-over-year basis, sales were down 0.7%.
http://www.icsc.org/homepage/research_article.php?id=31
The latest Manufacturing ISM Report On Business®was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July. While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth. The August index of 52.9 percent is the highest since June 2007. The 4 percentage point increase was driven by significant strength in the New Orders Index, which is up 9.6 points to 64.9 percent, the highest since December 2004. The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand.”
http://www.ism.ws/ismreport/mfgrob.cfm
According to the National Association of Realtors, the Pending Home Sales Index for July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. However, in the Northeast, the index declined 3.0 percent to 78.8 and in the Midwest the index slipped 2.0 percent to 88.1. These declines were offset by an increase of 3.1 percent in the South, and a 12.1 percent increase in the West.
http://www.realtor.org/press_room/news_releases/2009/09/record_roll
The Department of Commerce announced that construction spending during July 2009
was $958.0 billion, 0.2 percent below June’s $959.5 billion. The July figure is 10.5 percent below the July 2008 estimate of $1,070.2 billion. Residential construction, however, increased 2.3 percent in July, while nonresidential construction dropped 1.2 percent below June’s level.
http://www.census.gov/const/C30/release.pdf
Sources: DOC, NAR, ISM, ICSC, Citi, Shell, Merck, Medtronic, AT&T websites.
SKY News Summary 08-27-09
Boeing announced that the first flight of the 787 Dreamliner is expected by the end of 2009 and first delivery is expected to occur in the fourth quarter of 2010. By then, the area on the side section of the plane which needed to be reinforced will be taken care of. The company expects to produce 10 airplanes a month in late 2013.Costs previously recorded for the first three flight-test airplanes will be reclassified from program inventory to research and development expense, resulting in an estimated non-cash charge of $2.5 billion pre-tax, or $2.21 per share, against third-quarter results.
http://boeing.mediaroom.com/index.php?s=43&item=812
The Mortgage Bankers Association’s Purchase Index increased 1.0 percent from one week earlier, due to increased demand for government loans. This marks the fourth consecutive weekly gain – the first time this has happened since March, when fixed mortgage rates first dropped and stayed below 5 percent. The Refinance Index increased 12.7 percent from the previous week, the third increase in the last four weeks. The average contract interest rate for 30-year fixed-rate mortgages increased to 5.24 percent from 5.15 percent, with points increasing to 1.07 from 0.98 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
http://www.mortgagebankers.org/NewsandMedia/PressCenter/70129.htm
As usual, NAR’s Chief Economist, Lawrence Yun’s look at the latest developments
in housing and the economy are very insightful. He notes that “In addition to the broad
macroeconomic and credit market stabilizing impact, each home sale generates about $65,000 in economic activity: from using moving trucks to buying furniture and appliances. Furthermore, the thinning of the inventory will allow for homebuilders to start hiring construction workers. Rising home values also help with local tax revenue – this is money that stays in your community. Local money for local people.”
New orders for manufactured durable goods in July increased $7.8 billion or 4.9 percent to $168.4 billion, the U.S. Census Bureau announced today. This was the third increase in the last four months and the largest percent increase since July 2007. This followed a 1.3 percent June decrease. Excluding transportation, new orders increased 0.8 percent. Excluding defense, new orders increased 4.3 percent.
http://www.census.gov/indicator/www/m3/
In the week ending Aug. 22, the advance figure for seasonally adjusted initial claims was 570,000, a decrease of 10,000 from the previous week’s revised figure of 580,000. The 4-week moving average was 566,250, a decrease of 4,750 from the previous week’s revised average of 571,000. Continuing claims during the week ending Aug. 15 was 6,133,000, a decrease of 119,000 from the preceding week’s revised level of 6,252,000. The 4-week moving average was 6,241,750, a decrease of 27,000 from the preceding week’s revised average of 6,268,750.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
Sources: DOL, Census, NASDAQ, Realtor.org, Mortgage Bankers Association, and Boeing websites.