July 29, 2010 on 4:14 pm | In News of the Day | Comments Off

SKY News Summary 07-29-10

Much fuss was made yesterday of the headline new orders for durable goods number that decreased $2.0 billion or 1.0 percent to $190.5 billion in June. But if one looks carefully at the report, stripping away the volatile defense and aircraft orders, it shows growing demand in the business sector and increasing consumer confidence. The report is based on results from 4,200 manufacturers in 89 industries, and, excluding defense and transportation, is an effective gauge of consumer confidence. The remaining new orders mostly represent purchases (both domestic and foreign) of high-priced consumer products such as boats, wide-screen TVs, computers and dishwashers. New durable goods orders, without transportation and defense declined only 0.1 percent in June, having grown 1.5 percent in May. Year-to-date, new durable goods, excluding transportation and defense, has grown 13 percent.

Nondefense capital goods orders (excluding aircraft), which economists refer to as the “core capital goods orders,” and which is a very good indication of business investment, grew 0.6 percent to $61 billion and has grown steadily from $53.7 billion at the beginning of the year. It is generally agreed that, “Capital goods orders rebound anywhere from three to 18 months after the economy hits a recession bottom.”1

However, one area of concern is the steady growth in inventory which could precede a reduction in output. Inventories grew 0.9 percent in June, 1.1 percent in May, and 0.8 in April.
http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

In the week ending July 24, initial jobless claims decreased 11,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 452,500, a decrease of 4,500 from the previous week’s revised average of 457,000. However, continuing claims for the week ending July 17 was 4,565,000, an increase of 81,000 from the preceding week. The 4-week moving average was 4,548,250, a decrease of 18,000 and the lowest level since December 2008. The highest insured unemployment rates in the week ending July 10 were in Puerto Rico (6.9 percent), Pennsylvania (5.1), Oregon (5.0), New Jersey (4.8), Nevada (4.6), Wisconsin (4.6), California (4.5), Connecticut (4.5), Massachusetts (4.5), and Alaska (4.4).
http://www.dol.gov/opa/media/press/eta/ui/current.htm

Earnings:

Boeing
http://boeing.mediaroom.com/index.php?s=43&item=1354

Exxon
http://www.businesswire.com/portal/site/exxonmobil/index.jsp?ndmViewId=news_view&ndmConfigId=1001106&newsId=20100729006024&newsLang=en

Praxair
http://www.praxair.com/praxair.nsf/praxair.nsf/AllContent/EB7614ABC0F71CB98525776D00741461?OpenDocument

Southern Company
http://files.shareholder.com/downloads/SO/843106311×0x390841/e3f82b16-9d8d-47b4-81dd-8090d161b501/SO_Q2_2010_Earnings_Conf_Call_-_post_call_28JUL2010.pdf

CB&I
http://www.b2i.us/profiles/investor/ResLibraryView.asp?ResLibraryID=39564&GoTopage=1&Category=1889&BzID=1705

1 Bernard Baumohl, The Secrets of Economic Indicators ( Upper Saddle River, New Jersey: Wharton School Publishing, 2008), 124-130.

Sources: CB&I, Southern Company, Praxair, Exxon Boeing, Census, DOL

July 27, 2010 on 2:38 pm | In News of the Day | Comments Off

SKY News Summary 07-27-10

Today’s economic numbers indicate the consumer is beginning to release pent up spending. The Conference Board’s Consumer Confidence Index, while slipping on expectations and the present situation, showed an increase in consumers planning to buy a car or a major appliance in the next six months. Perhaps we will see this reflected in tomorrow’s durable goods report for June.

The Conference Board Consumer Confidence Index for July is 50.4, down from 54.3 in June. The Present Situation Index decreased to 26.1 from 26.8. The Expectations Index declined to 66.6 from 72.7 last month. Those claiming jobs are “hard to get” increased to 45.8 percent from 43.5 percent, while those saying jobs are “plentiful” remained unchanged at 4.3 percent. According to NASDAQ, the good news is that buying plans have picked up in some categories. “Those planning to buy a car within six months rebounded to 4.5 percent from 4.1 percent in June. Those planning to buy a major appliance within six months jumped to 28.5 percent in July from 23.7 percent in June. However, those planning to purchase a house edged down to 1.9 percent from 2.0 percent in June.”
http://www.conference-board.org/data/consumerconfidence.cfm

http://www.nasdaq.com/asp/econodayframe.asp?page=http://anasdaq.econoday.com/byweek.asp?cust=nasdaq

The ICSC-Goldman Sachs chain store sales index for the week ending July 24 rose 0.6%. On a year-over-year seasonally-adjusted basis, the pace of spending was 3.8% in the latest week.
http://www.icsc.org/homepage/research_article.php?id=174

Sales of new single-family houses in June 2010 were very soft, but at least showed a comeback from last month’s epic plunge. Sales, at an adjusted annual rate of 330,000, were 23.6 percent above the revised May rate of 267,000, but is 16.7 percent below June 2009. The median sales price of new houses sold in June 2010 was $213,400; the average sales price was $242,900.
http://www.census.gov/const/newressales.pdf

Intel announced an important advance in the quest to use light beams to replace the use of electrons to carry data in and around computers. ”The company has developed a research prototype representing the world’s first silicon-based optical data connection with integrated lasers. The link can move data over longer distances and many times faster than today’s copper technology; up to 50 gigabits of data per second. This is the equivalent of an entire HD movie being transmitted each second. Today computer components are connected to each other using copper cables or traces on circuit boards. Due to the signal degradation that comes with using metals such as copper to transmit data, these cables have a limited maximum length. This limits the design of computers, forcing processors, memory and other components to be placed just inches from each other. Today’s research achievement is another step toward replacing these connections with extremely thin and light optical fibers that can transfer much more data over far longer distances, radically changing the way computers of the future are designed and altering the way the datacenter of tomorrow is architected.”
http://www.intel.com/pressroom/archive/releases/2010/20100727comp_sm.htm#story

Earnings:

Altria
http://www.altria.com/en/cms/company_announcements/announcement.aspx?src=press_releases&reqId=1449852

American Express
http://home3.americanexpress.com/corp/pc/2010/2Q10.asp

Exelon
http://www.exeloncorp.com/Newsroom/pr_20100722_EXC_q2earnings.aspx

Fifth Third
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTQzNjF8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

Johnson Controls
http://www.johnsoncontrols.com/publish/us/en/news.html

Kimberly-Clark
http://investor.kimberly-clark.com/releasedetail.cfm?ReleaseID=491216

Lilly
http://investor.kimberly-clark.com/releasedetail.cfm?ReleaseID=491216

Masco
http://investors.masco.com/releasedetail.cfm?ReleaseID=492260

Roche
http://www.roche.com/media/media_releases/med-cor-2010-07-22.htm

T. Rowe Price
http://corporate.troweprice.com/ccw/files/pressReleases/TROWQ22010EarningsRelease.pdf

UBS
http://www.ubs.com/1/e/investors/releases?newsId=182327

Sources: UBS, T. Rowe, Masco, Lilly, Kimberly-Clark, Johnson Controls, Fifth Third, Exelon, American Express, Altria, Intel, ICSC, NASDAQ and Conference Board websites.

July 22, 2010 on 4:45 pm | In News of the Day | Comments Off

SKY News Summary 07-22-2010

Much has been made of the cash buildup in the nonfinancial corporate sector. A recent Wall Street Journal article on acquisition activity notes that, “At the end of March, nonfinancial companies in the U.S. were sitting on $1.84 trillion in cash and other liquid assets, up 26% from a year earlier….” It is interesting to look at the original Federal Reserve report that shows the significant growth of cash since the first quarter of 2009.
http://www.federalreserve.gov/releases/z1/Current/z1.pdf

http://online.wsj.com/article/SB10001424052748703720504575377433203558498.html?KEYWORDS=184+trillion

Initial unemployment claims rose the week of July 17, but not as much as it appeared. Claims reported in the week before were distorted by manufacturing shutdowns which normally occur, but did not occur this year, and by the July 4th holiday. The initial claims number for July 17 was 464,000, an increase of 37,000 from the previous week’s revised figure of 427,000. The 4-week moving average was 456,000, an increase of 1,250 from the previous week’s revised average of 454,750, and slightly lower than this time last month. Continuing unemployment claims during the week ending July 10 was 4,487,000, a decrease of 223,000 from the preceding week’s revised level of 4,710,000. The 4-week moving average was 4,567,000, a decrease of 21,500 from the preceding week’s revised average of 4,588,500.
http://www.dol.gov/opa/media/press/eta/ui/current.htm

The National Association of Realtors reported that May’s existing home sales, fell 5.1 percent, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009.Lawrence Yun, NAR chief economist, said, “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months.” The national median existing-home price was $183,700 in June, which is 1.0 percent higher than a year ago. Distressed homes were at 32 percent of sales last month, compared with 31 percent in May; it was also 31 percent in June 2009. Regionally, existing-home sales in the Northeast rose 7.9 percent to an annual level of 960,000 in June and are 17.1 percent above June 2009. “The median price in the Northeast was $244,300, down 1.2 percent from a year ago. Existing-home sales in the Midwest dropped 7.5 percent in June to a pace of 1.23 million but are 11.8 percent higher than a year ago. The median price in the Midwest was $155,900, down 0.1 percent from June 2009. In the South, existing-home sales fell 6.5 percent to an annual level of 2.01 million in June but are 11.0 percent above June 2009. The median price in the South was $163,600, unchanged from a year ago. Existing-home sales in the West dropped 9.3 percent to an annual pace of 1.17 million in June but are 0.9 percent higher than a year ago. The median price in the West was $221,800, up 1.5 percent from June 2009.”
http://www.realtor.org/press_room/news_releases/2010/07/ehs_june_above

Federal Reserve Chairman, Ben S. Bernanke’s, Semiannual Monetary Policy Report to the Congress before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 21, 2010 can be found at:
http://www.federalreserve.gov/newsevents/testimony/bernanke20100721a.htm

Earnings:

Fifth Third
http://ir.53.com/phoenix.zhtml?c=72735&p=irol-newsArticle&ID=1450532&highlight=

UPS

AT&T
http://www.att.com/Investor/Financial/Earning_Info/docs/2Q_10_slide_c.pdf

Sources: Fifth Third, AT&T, UPS, Federal Reserve, NAR, DOL, Wall Street Journal, Federal Reserve websites.

July 20, 2010 on 4:26 pm | In News of the Day | Comments Off

SKY News Summary 07-20-2010

There was good news on the housing front, consumer spending front, and corporate earnings front.

According to Bloomberg, “Of the 42 companies in the S&P 500 that reported since July 12, all nine beat earnings-per-share forecasts…. While second-quarter net income has topped analysts’ projections by 13 percent on average, revenue has been only 3.3 percent more than estimated.”

The ICSC-Goldman Sachs chain store sales index for the week ending July 17 improved by 1.4% on a week-over-week basis. Year-over-year, spending jumped to 4.2%, the strongest showing since May 8.
http://www.icsc.org/homepage/research_article.php?id=173

New residential spending numbers released by the Census Bureau show single-family housing completions in June were 31.3 percent above the revised May rate of 515,000. Most importantly, building permits issued increased 2.1 percent from May, showing a continued interest in new building. Housing starts in June were 5.0 percent below May and are 5.8 percent below the June 2009 rate of 583,000.
http://www.census.gov/const/newresconst.pdf

Earnings:

Citibank
http://www.citigroup.com/citi/fin/data/p100716a.pdf?ieNocache=166

GE
http://www.genewscenter.com/Resource-Library/2Q-10-Earnings-Release-cb5.aspx

HP
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDY3NDN8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

IBM
http://www.ibm.com/investor/events/investor0510/index.phtml

ITW
http://investor.itw.com/phoenix.zhtml?c=71064&p=irol-newsArticle&ID=1449418&highlight=

Intel
http://files.shareholder.com/downloads/INTC/717196182×0x386626/805273e3-e1e3-4b17-9acb-a99e1fefccb5/Earnings_July_13.pdf

J&J
http://www.investor.jnj.com/webcasts-presentations.cfm

Pepsi
http://www.pepsico.com/Download/PEP_Q210_Earnings_Release.pdf

TI
http://newscenter.ti.com/Blogs/newsroom/archive/2010/07/19/ti-reports-financial-results-for-2q10-460520.aspx

Sources: TI, Pepsi, J&J, Intel, ITW, IBM, HP, GE, Citi, Census, Bloomberg app, and ICSC websites.

July 8, 2010 on 3:00 pm | In News of the Day | Comments Off

SKY News Summary 07-08-10

Given that consumer spending and employment are expected to lead us out of the recession, today’s numbers are encouraging. The ICSC index showed gains in consumer spending and we saw a reduction in unemployment this week, but this may have been done with smoke and mirrors if the rumors are correct. Next week could be exciting as retail sales numbers are released on Wednesday, industrial production, PPI and the Philadelphia survey are released on Thursday, and CPI and Consumer Sentiment will appear on Friday.

The Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 2, 2010 showed the Refinance Index increased 9.2 percent from the previous week. According to Michael Fratantoni, MBA’s Vice President of Research and Economics, “For the month of June, purchase applications declined almost 15 percent relative to the prior month, and were down more than 30 percent compared to April, the last month in which buyers were eligible for the tax credit.”
http://www.mbaa.org/NewsandMedia/PressCenter/73352.htm

ICSC reported that its index of 31 chain stores showed a 3.0% gain in June. In some cases, lower prices, especially for generic drugs, held back growth. But smaller margins at drug stores were offset by gains in the luxury sector (up 8.8%) and department stores overall (up 5.9%). On a fiscal year-to-date basis, total sales grew by 3.8%, which is the best performance since 2006.
http://www.icsc.org/homepage/research_article.php?id=170

In the week ending July 3, initial unemployment claims decreased by 21,000 from the previous week’s revised figure of 475,000. The Continuing claims figure during the week ending June 26 was 4,413,000, a decrease of 224,000 from the preceding week’s revised level of 4,637,000. Rumor has it that 5 states estimated their numbers because of the 4th of July holiday, but the Department of Labor does not substantiate the rumors.
http://www.dol.gov/opa/media/press/eta/ui/current.htm

Boeing has agreed to acquire Narus, a small maker of real-time network traffic and analytics software used to protect against cyber attacks and persistent threats aimed at large Internet Protocol networks. Narus is privately held and the terms of the transaction were not disclosed. The acquisition is expected to close during the third quarter of 2010.
http://boeing.mediaroom.com/index.php?s=43&item=1294

The recent IMF findings on the state of the United States make for interesting reading.
http://www.imf.org/external/np/ms/2010/070810.htm

Sources: IMF, Boeing, DOL, ICSC, MBAA websites.

July 6, 2010 on 4:46 pm | In News of the Day | Comments Off

SKY News Summary 07-06-10

The latest economic numbers show a more gradual growth in the economy, while a close look at our companies indicates continued growth through acquisition and sales.

Boeing reported that the People’s Republic of China has requested 20 more Next-Generation 737-800 jetliners. Boeing announced in June that it will increase production rates on the Next-Generation 737 program to 35 airplanes per month in 2012. This aircraft family has more than 2,000 unfilled orders.
http://boeing.mediaroom.com/index.php?s=43&item=1290

Eli Lilly and Alnara Pharmaceuticals announced they have signed a definitive merger agreement, whereby Lilly will acquire Alnara, a privately held biotechnology company developing protein therapeutics for the treatment of metabolic diseases. Alnara’s lead product in development is liprotamase, a non-porcine pancreatic enzyme replacement therapy (PERT). Liprotamase is under review by the U.S. Food and Drug Administration for the treatment of exocrine pancreatic insufficiency (EPI). Causes of EPI include cystic fibrosis, chronic pancreatitis, pancreatectomy and other conditions.
http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=484742

Fortune Magazine has a good article on Nestlé and its growing success.
http://money.cnn.com/2010/07/02/news/companies/nestle_refreshes_brand.fortune/index.htm

Chevron announced a new deepwater natural gas discovery in a Chevron-operated block in the Carnarvon Basin offshore Western Australia. Chevron, through its Australian subsidiary, holds a combined 66.66 percent interest, while Shell Development (Australia) holds the remaining interest.
http://investor.chevron.com/phoenix.zhtml?c=130102&p=irol-newsArticle&ID=1444563&highlight=

Gilead Sciences and CGI Pharmaceuticals, Inc., a privately-held, development-stage pharmaceutical company focused on small molecule chemistry and kinase biology, announced the signing of a definitive agreement whereby Gilead will acquire CGI for up to $120 million, the majority as an upfront payment and the remaining based on clinical development progress, all of which will be financed through available cash on hand.
http://www.gilead.com/pr_1441656

Nissay Information Technology and IBM Japan announced they will jointly build a cloud-based development and test environment for Nippon Life Insurance to go live in September 2010.
http://www-03.ibm.com/press/us/en/pressrelease/32053.wss

Manufacturing ISM Report On Business showed growth, but at a slower pace than May. Plastics and Rubber products showed the strongest growth, followed by Transportation Equipment, Printing & Related Support Activities, and Computer & Electronic.
http://www.ism.ws/ISMReport/MfgROB.cfm

Sources: ISM, IBM, Gilead, Chevron, Fortune Magazine, Lilly and Boeing websites.

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