6/10/07 Online Ads
Michael Santoli:"If, as now seems likely, that epochal downtrend in rates is now reversing-- in whatever halting and saw-toothed pattern it follows-- then the same 5%-ish level becomes a headwind."
Kopin Tan: "Since 2004, there have been two other occasions when the Dow has fallen by more than 80 points for three straight days. Both times, the Dow has bounced back resoundingly." At the same time, these rebounds did not take place with the 10-year Treasury yielding 5.12%.
What would the tech sector performance look like for the past 2 weeks with out Google, Apple, and Amazon? One might consider going long Google and shorting Amazon. This is not for the faint of heart.
Online ad spending increased 17% last year to $9.8 billion, and that was versus only 5% growth for television. Zenith Optimedia predicts that online ad spending will grow 28% in 2007 while the rest of the market will grow only 4%. Gary Carter is president of creative networks at Fremantle Media, the company that brought us American Idol and other hit shows. He observes "thirty-second commercials are dead. Television is dead. Everybody is dead except for Google, and iTunes, and YouTube."
Doug Noland: "The latest Federal Reserve Z.1 Report provides its usual interesting and illuminating “read”. At $3.607, Total SAAR (Seasonally-Adjusted and Annualized Rates) Credit Market Borrowings remain enormous - although somewhat slower than Q4’s SAAR $3.820 TN growth. For perspective, 2004 was the first year total borrowings surpassed $3.0 Trillion, with total borrowings averaging $2.292 TN annually during the decade 1996 to 2005. Total borrowings increased $3.706 TN during 2006, $3.463 TN in ’05, $3.232 TN in ’04, $2.896 TN in ’03, $2.495 TN in ’02, and $2.263 TN in ‘03. The trend of accelerating Credit expansion is unmistakable and, despite the housing slowdown, there’s a legitimate possibility it runs through 2007...
For the quarter, Household Assets increased $725bn (4.2% annualized) to $69.608 TN. Real Estate Assets increased $212bn (a 3.7% rate) and Financial Assets jumped $463bn (4.4% rate) to $42.522 TN. And with Liabilities increasing “only” $137bn during the quarter, Household Net Worth rose a respectable $587bn to $56.176 TN. For the year, Household Asset gains of $3.914 TN (6.0%) were offset by Liability increases of $1.002 TN (8.1%), leaving a $2.912 TN (5.5%) rise in Net Worth. Over four years, Assets inflated $21.157 TN (44%); Liabilities $4.604 TN (52%); and Net Worth $16.552 TN (42%). We should not understate the ongoing influence on consumer behavior from the spectacular (4-year plus) inflationary windfall.
The windfall is also lining government coffers. Federal Government first quarter Receipts were up 6.9% from the year ago period, with State & Local Receipts gaining 4.6%. First quarter spending was up a robust 6.0% at the federal level and 7.6% locally. Despite booming tax receipts, federal government borrowings increased at a 6.6% rate during the quarter (after growing 3.9% during 2006). State & Local debt expanded at an 8.6% rate (after 2006’s 8.2%).
The ongoing excesses confirmed in the Q1 2007 Flow of Funds leave little confusion with regard to surging global bond yields. It’s just surprising bonds ignored rampant global liquidity excess for so long. The abrupt nature of the yield spike is surely problematic for those highly leveraged players (and curve speculators) caught on the wrong side of the market. Clearly, scores of players had positioned for the imminent start of a Fed easing cycle. It’s never a smooth process when the crowd rushes to the exit an unsuccessful “crowded trade.” But to what extent this unwind impacts liquidity (reduces gross excess) is difficult to assess at this point. The near-term market assumption will likely be that the jump in market yields is sufficient to keep the economy and inflationary pressures in check – holding the Fed at bay...The enormous ongoing cost of national security and the global “war on terror” are brushed off as if they are inconsequential. But, then again, inflating financial markets create their own rationalizations, spin and reality. The latest round of bullish propaganda has really pushed the envelope, setting the stage for major disappointment and disillusionment. If history is any guide, expect a period of wild volatility leading to a financial accident."
Water is becoming scarcer. Due to lack of rainfall throughout California, there is a high fire risk for the summer. If the troops in Iraq were not having enough trouble with the insurgents, now they must contend with on-going water shortages.
Looking to buy a new condo in and around the Bay Area? Expect no HOA costs for the first 2 years and an additional $25,000+ in free incentives.
According to the WSJ, the U.S. Department of Labor has launched a national program to make sure refineries are following safety regulations, including stepped-up inspections in the next two years.
Chuck Butler: "Investors are using the dollar as a parking spot while they are waiting to see where to invest next. Europe and Asia continue to grow at a better pace than the United States, so I believe investors will be returning to these markets."
Saturday, June 09, 2007
Friday, June 08, 2007
The Friday Rebound
6/9/07 The Friday Rebound
Between The Hedges: "We are still very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then."
China plans to spend $196 billion over the next 13 years to increase the use of renewable energy sources to account for 16% of total supply.
Interfax said ThyssenKrupp AG is in talks to buy U.S. Steel.
China’s inflation rate rose 3.6%, and that was more than a two-year high last month.
The Trade Deficit for April shrank to -$58.5 billion versus estimates of -$63.5 billion and a downwardly revised -$62.4 billion in March.
Chinese exports to India jumped to US$14.5 billion from just under US$9 billion in 2005 and US$6 billion in 2004. This growth propelled bilateral trade to US$25 billion in 2006, up from US$13.6 billion in 2004 and a paltry US$1 billion in 1995. India's exports to China - which totaled US$10.2 billion in 2006 - are dominated by iron ore for steel, processed cotton and yarn, plastic, precious stones and minerals. China takes these raw materials and sends back machinery, organic chemicals that feed India's generic pharmaceuticals industry, steel and fuel.
The Dow Jones Industrial Average and the S&P 500 each saw gains of more than 1.1% while the Nasdaq Composite rose 1.2% on strength in chip stocks. It was the twelfth straight week the Dow has closed Friday higher. Friday's positive action helped stem weekly losses in the major indexes. The Dow posted a weekly decline of 1.8%, the S&P 500 fell 1.9% and the Nasdaq declined 1.5%.
Crude for July delivery closed down $2.17, or over 3%, at $64.76 a barrel on the New York Mercantile Exchange. The contract has lost 32 cents this week. July reformulated gasoline fell 6.56 cents, or 3%, to $2.1271 a gallon. July heating oil fell 7.76 cents, or nearly 4%, at $1.8988 a gallon. July natural gas fell 16.20 cents, or nearly 2%, to $7.663 per million British thermal units.
Gold for August delivery closed down $14.90 at $650.30 an ounce on the New York Mercantile Exchange, marking a five-session losing streak. The contract has tumbled $26.60 this week. July silver fell 44 cents, or about 3%, to close at $13.040 an ounce, while July copper fell 11.95 cents, or more than 3%, to $3.2575 a pound. July platinum tumbled $8.70 to $1,286.80 an ounce. September palladium fell $1.85 to $370.60 an ounce.
McDonald's Corp. said its global same-restaurant sales rose 8.7% in May.
Between The Hedges: "We are still very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then."
China plans to spend $196 billion over the next 13 years to increase the use of renewable energy sources to account for 16% of total supply.
Interfax said ThyssenKrupp AG is in talks to buy U.S. Steel.
China’s inflation rate rose 3.6%, and that was more than a two-year high last month.
The Trade Deficit for April shrank to -$58.5 billion versus estimates of -$63.5 billion and a downwardly revised -$62.4 billion in March.
Chinese exports to India jumped to US$14.5 billion from just under US$9 billion in 2005 and US$6 billion in 2004. This growth propelled bilateral trade to US$25 billion in 2006, up from US$13.6 billion in 2004 and a paltry US$1 billion in 1995. India's exports to China - which totaled US$10.2 billion in 2006 - are dominated by iron ore for steel, processed cotton and yarn, plastic, precious stones and minerals. China takes these raw materials and sends back machinery, organic chemicals that feed India's generic pharmaceuticals industry, steel and fuel.
The Dow Jones Industrial Average and the S&P 500 each saw gains of more than 1.1% while the Nasdaq Composite rose 1.2% on strength in chip stocks. It was the twelfth straight week the Dow has closed Friday higher. Friday's positive action helped stem weekly losses in the major indexes. The Dow posted a weekly decline of 1.8%, the S&P 500 fell 1.9% and the Nasdaq declined 1.5%.
Crude for July delivery closed down $2.17, or over 3%, at $64.76 a barrel on the New York Mercantile Exchange. The contract has lost 32 cents this week. July reformulated gasoline fell 6.56 cents, or 3%, to $2.1271 a gallon. July heating oil fell 7.76 cents, or nearly 4%, at $1.8988 a gallon. July natural gas fell 16.20 cents, or nearly 2%, to $7.663 per million British thermal units.
Gold for August delivery closed down $14.90 at $650.30 an ounce on the New York Mercantile Exchange, marking a five-session losing streak. The contract has tumbled $26.60 this week. July silver fell 44 cents, or about 3%, to close at $13.040 an ounce, while July copper fell 11.95 cents, or more than 3%, to $3.2575 a pound. July platinum tumbled $8.70 to $1,286.80 an ounce. September palladium fell $1.85 to $370.60 an ounce.
McDonald's Corp. said its global same-restaurant sales rose 8.7% in May.
Thursday, June 07, 2007
On The Skids
6/8/07 On The Skids
August gold dropped $9.40, or 1.4%, to close at $665.20 an ounce Thursday. July silver fell 23.7 cents to close at $13.48 an ounce and July copper lost 2.7 cents to end at $3.377 a pound.
Households slowed the growth of debt to a 6% annualized rate, the slowest pace in nine years. Mortgage debt increased at a 6.2% pace, the slowest in eight years, the Fed said. Household net worth increased by $587.4 billion to a record $56.18 trillion, a 4.3% annual growth rate. Homeowners withdrew an estimated $151 billion at an annual rate from their home equity, the slowest equity withdrawal in six years.
Natural-gas inventories rose by 110 billion cubic feet for the week ended June 1, the Energy Department said Thursday.
The benchmark 30-year fixed rate mortgage average rose in the week ending Thursday, to 6.53% from 6.42% last week, according to Freddie Mac.
Inventories at U.S. wholesalers rose by 0.3% in April, led mostly by a 6.3% gain in petroleum inventories, the Commerce Department reported Thursday. The April inventory gain follows a revised increase of 0.4% in March. Wholesale inventories are up 7.1% from a year ago. At the same time, wholesale sales rose by 1.3% in April, with petroleum sales again leading the way.
The Energy Department reported Wednesday that refinery utilization fell to 89.6% of capacity last week, from 91.1% a week earlier, renewing concerns about gasoline production during the summer driving season.
The Australian dollar rallied to an 18-year high against the U.S. dollar, extending its recent gains after a report showed Australia's unemployment rate in April fell to a multi-decade low.
The number of Americans receiving state jobless benefits rose 72,000 to 2.54 million in the week ending May 26. The four-week moving average of continuing claims fell 4,000 to 2.50 million, the lowest since the week ended Jan. 27.
J.C. Penney Company Inc. said May same-store sales fell 2% at its department stores, compared to the forecast for a rise of 0.3% in a survey of analysts by Thomson Financial. Looking ahead, the company expects June same-store sales to fall in the low single-digit percentage range.
Biomet Inc.agreed to be acquired for $46 a share, or $11.4 billion, by a private-equity group. The group members are Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts and TPG.
BHP Billiton could be in line for a bid from the recently-formed Chinese State Investment Company, according to a report in the Herald Sun newspaper. The report, which cited Peter Quinton, chief of research at Australian stockbroker Bell Potter, said the Chinese fund's recent investment in U.S. private equity firm Blackstone could be a precursor to other deals.
New Zealand's central bank Thursday surprised markets by raising its key interest rate a quarter-point to a record 8%. The benchmark 10-year U.S. Treasury note fell the most in more than three years after New Zealand unexpectedly raised interest rates, igniting concern other central banks will respond to faster global growth. The 10-year Treasury yield jumped to 5.10%.
Putin suggested a joint plan to base part of the system at a former Soviet radar station in Azerbaijan.
Costco Wholesale Corp. reported that in May, total sales rose 11% to $5.14 billion while same-store sales rose 7%.
Brent crude has traded above $72 a barrel, and that's in excess of $5 above NYMEX crude.
TheOilDrum: "As of noon on 6/7, this is the Gonu post of record. The final models from Chuck Watson of KAC/UCF are in and they are forecasting, based on their damage models, that:
* Qalhat (Sur) LNG terminal: 18 days down time
* Mina al Fahal oil terminal: 14 days down time
(NB: These final damage estimates decreased a bit from initial runs but have been close to these numbers all along--all assume US construction standards.)"
Lieutenant General Douglas Lute, a skeptic of the troop increase in Iraq and President George W. Bush's choice to oversee the war, said withdrawing troops may pressure the Iraqi government to make needed changes. Under questioning from Senate Armed Services Chairman Carl Levin, Lute said the Michigan Democrat may be correct in his long-held assertion that the Iraqi government will only work to end sectarian strife if it has to. A withdrawal ``ought to be considered,'' Lute, 54, said during the committee's hearing in Washington on his nomination as a coordinator of war operations in Iraq and Afghanistan.
Trading in the Russian Export Blend Crude Oil (REBCO) futures will move from the New York Mercantile Exchange to a new commodity market in St. Petersburg, a deputy economics minister said Tuesday.
Zman: "Petroleo Brasileiro S.A. (PBR) union workers threaten five day strike. This can really rally crude. This is not a "warning strike," as it has the specific purpose of cutting oil production. The problem is wages (again), talks have "broken down", and the strike, while not a certainty, will take some time to get off the ground -- giving CNBC plenty of time to call your attention to it. The last time they did this was 2001, and Brazil was forced to import extra oil at the time. Brazil is the 8th largest oil consumer in the world, and currently consumes all it can get out of the ground and a little bit more. Obviously, the threat of this strike will be supportive of crude, and to a lesser extent gasoline prices into the weekend."
The four-year death toll for American forces in Iraq rose to 3,501, according to an Associated Press tally.
The Dow Jones industrials plunged about 199 points, 1.5%, to just under 13,267. The Standard & Poor's 500 Index fell nearly 27 points, 1.3%, to 1,490, and the Nasdaq Composite Index tumbled 46 points, 1.8%, to 2,541.
In three days, the Dow has dropped about 409 points, the biggest three-day loss since it fell nearly 470 points over Feb. 23, Feb. 26 and Feb. 27.
SAIC Inc. on Wednesday blamed lower interest income and a higher tax rate for a 25 percent decline in fiscal first-quarter profits, triggering a sell-off of its shares.
The government contractor earned $80 million, or 19 cents a share, during the three months ended April 30, down from $106 million, or 31 cents a share, in the same period last year. Revenue grew 6 percent to $2.07 billion from $1.95 billion. The CEO reaffirmed financial estimates for the 2008 fiscal year: per-share earnings between 83 and 88 cents a share from continuing operations and revenue between $8.7 billion and $9 billion.
August gold dropped $9.40, or 1.4%, to close at $665.20 an ounce Thursday. July silver fell 23.7 cents to close at $13.48 an ounce and July copper lost 2.7 cents to end at $3.377 a pound.
Households slowed the growth of debt to a 6% annualized rate, the slowest pace in nine years. Mortgage debt increased at a 6.2% pace, the slowest in eight years, the Fed said. Household net worth increased by $587.4 billion to a record $56.18 trillion, a 4.3% annual growth rate. Homeowners withdrew an estimated $151 billion at an annual rate from their home equity, the slowest equity withdrawal in six years.
Natural-gas inventories rose by 110 billion cubic feet for the week ended June 1, the Energy Department said Thursday.
The benchmark 30-year fixed rate mortgage average rose in the week ending Thursday, to 6.53% from 6.42% last week, according to Freddie Mac.
Inventories at U.S. wholesalers rose by 0.3% in April, led mostly by a 6.3% gain in petroleum inventories, the Commerce Department reported Thursday. The April inventory gain follows a revised increase of 0.4% in March. Wholesale inventories are up 7.1% from a year ago. At the same time, wholesale sales rose by 1.3% in April, with petroleum sales again leading the way.
The Energy Department reported Wednesday that refinery utilization fell to 89.6% of capacity last week, from 91.1% a week earlier, renewing concerns about gasoline production during the summer driving season.
The Australian dollar rallied to an 18-year high against the U.S. dollar, extending its recent gains after a report showed Australia's unemployment rate in April fell to a multi-decade low.
The number of Americans receiving state jobless benefits rose 72,000 to 2.54 million in the week ending May 26. The four-week moving average of continuing claims fell 4,000 to 2.50 million, the lowest since the week ended Jan. 27.
J.C. Penney Company Inc. said May same-store sales fell 2% at its department stores, compared to the forecast for a rise of 0.3% in a survey of analysts by Thomson Financial. Looking ahead, the company expects June same-store sales to fall in the low single-digit percentage range.
Biomet Inc.agreed to be acquired for $46 a share, or $11.4 billion, by a private-equity group. The group members are Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts and TPG.
BHP Billiton could be in line for a bid from the recently-formed Chinese State Investment Company, according to a report in the Herald Sun newspaper. The report, which cited Peter Quinton, chief of research at Australian stockbroker Bell Potter, said the Chinese fund's recent investment in U.S. private equity firm Blackstone could be a precursor to other deals.
New Zealand's central bank Thursday surprised markets by raising its key interest rate a quarter-point to a record 8%. The benchmark 10-year U.S. Treasury note fell the most in more than three years after New Zealand unexpectedly raised interest rates, igniting concern other central banks will respond to faster global growth. The 10-year Treasury yield jumped to 5.10%.
Putin suggested a joint plan to base part of the system at a former Soviet radar station in Azerbaijan.
Costco Wholesale Corp. reported that in May, total sales rose 11% to $5.14 billion while same-store sales rose 7%.
Brent crude has traded above $72 a barrel, and that's in excess of $5 above NYMEX crude.
TheOilDrum: "As of noon on 6/7, this is the Gonu post of record. The final models from Chuck Watson of KAC/UCF are in and they are forecasting, based on their damage models, that:
* Qalhat (Sur) LNG terminal: 18 days down time
* Mina al Fahal oil terminal: 14 days down time
(NB: These final damage estimates decreased a bit from initial runs but have been close to these numbers all along--all assume US construction standards.)"
Lieutenant General Douglas Lute, a skeptic of the troop increase in Iraq and President George W. Bush's choice to oversee the war, said withdrawing troops may pressure the Iraqi government to make needed changes. Under questioning from Senate Armed Services Chairman Carl Levin, Lute said the Michigan Democrat may be correct in his long-held assertion that the Iraqi government will only work to end sectarian strife if it has to. A withdrawal ``ought to be considered,'' Lute, 54, said during the committee's hearing in Washington on his nomination as a coordinator of war operations in Iraq and Afghanistan.
Trading in the Russian Export Blend Crude Oil (REBCO) futures will move from the New York Mercantile Exchange to a new commodity market in St. Petersburg, a deputy economics minister said Tuesday.
Zman: "Petroleo Brasileiro S.A. (PBR) union workers threaten five day strike. This can really rally crude. This is not a "warning strike," as it has the specific purpose of cutting oil production. The problem is wages (again), talks have "broken down", and the strike, while not a certainty, will take some time to get off the ground -- giving CNBC plenty of time to call your attention to it. The last time they did this was 2001, and Brazil was forced to import extra oil at the time. Brazil is the 8th largest oil consumer in the world, and currently consumes all it can get out of the ground and a little bit more. Obviously, the threat of this strike will be supportive of crude, and to a lesser extent gasoline prices into the weekend."
The four-year death toll for American forces in Iraq rose to 3,501, according to an Associated Press tally.
The Dow Jones industrials plunged about 199 points, 1.5%, to just under 13,267. The Standard & Poor's 500 Index fell nearly 27 points, 1.3%, to 1,490, and the Nasdaq Composite Index tumbled 46 points, 1.8%, to 2,541.
In three days, the Dow has dropped about 409 points, the biggest three-day loss since it fell nearly 470 points over Feb. 23, Feb. 26 and Feb. 27.
SAIC Inc. on Wednesday blamed lower interest income and a higher tax rate for a 25 percent decline in fiscal first-quarter profits, triggering a sell-off of its shares.
The government contractor earned $80 million, or 19 cents a share, during the three months ended April 30, down from $106 million, or 31 cents a share, in the same period last year. Revenue grew 6 percent to $2.07 billion from $1.95 billion. The CEO reaffirmed financial estimates for the 2008 fiscal year: per-share earnings between 83 and 88 cents a share from continuing operations and revenue between $8.7 billion and $9 billion.
Wednesday, June 06, 2007
Oil And Gas News
6/7/07 Oil And Gas News
Valero Energy, the largest US refiner, said it shut fluid catalytic cracking units for maintenance at refineries in Houston and Louisiana. The unit at the Houston plant will be shut for “approximately two weeks.” Gasoline production will drop by 40,000 barrels a day in Houston and 25,000 barrels a day at Krotz Springs during the maintenance period.
Private investment firm Colony Capital LLC has agreed to pay 4 billion euros ($5.4 billion) for Libya's European oil company Tamoil and Oilinvest.Tamoil owns and operates more than 3,000 service stations in Europe, concentrated in Italy, and has oil refineries in Italy, Switzerland, Spain and Germany, Colony said.
TD Ameritrade Holding Corp. has been "talking to people in the industry all along and will continue to do that," its chief executive said in an interview with CNBC television on Wednesday.
Productivity in the non-farm business sector increased at an annual rate of 1% in the quarter, revised down from 1.7% reported a month ago. Productivity is up just 1% in the past four quarters. Unit labor costs - a key gauge of inflationary pressures - was revised higher to 1.8% annualized from 0.6% earlier. Output rose 0.6% annualized in the first quarter, hours worked fell 0.4% and real hourly compensation fell by 1%.
The European Central Bank has raised its main interest rate by another quarter percentage point to 4 per cent – the highest since August 2001.
Morgan Stanley has issued a "full house sell signal" as of Monday, saying three of its leading indicators - bond yields, Institute for Supply Management new orders, as well as valuation and risk - showed it was time to sell. "Such a full house sell signal across these three indicators is rare, and has occurred only five times since 1980," said analyst Teun Draaisma in a European strategy research report. "Equities have always been down in the next 6 months, on average by 15%.
Prudential Financial said it's discontinuing all its institutional equity research, sales and trading businesses. The decision affects 420 employees.
Russ Berrie & Co. said it received an unsolicited offer to acquire the company for $18 a share, but said the proposal undervalues the company.
Due to both this comparable sales target revision and these margin pressures, Panera Bread is issuing a revised second quarter 2007 earnings per diluted share target of $0.38 to $0.40. Analysts polled by Thomson Financial expected second-quarter earnings per share of 49 cents.
More than 4 million Iraqis have been forced from their homes by violence and the refugee crisis will probably worsen, the United Nations said. That's part of they price for delivering a democratic society!
The center of the cyclone is now expected to hit land in southeastern Iran over the next 36 hours. Gonu had disrupted Oman's oil and gas exports, closed its stock exchange as well as private and public institutions until Saturday, while national carrier Oman Air had halted all flights.
Iran's meteorological department in a statement has warned people in other coastal areas and islands in the Oman Sea and Strait of Hormuz to keep a distance from the waters and avoid any sea transport.
It also said that height of the waves would reach to 5.5 meters (18 feet), a rare record in the area.
WCI Communities, Inc. announced that an affiliate of Carl Icahn has signed a confidentiality agreement and has entered WCI's sales process as a bidder.
Alon USA President and Chief Executive Officer Jeff Morris told the Reuters Global Energy Summit in New York that his company would be interested in buying certain refineries, citing those in the Rockies and the Midwest. Morris also said refineries that processed the cheaper priced heavy crudes were more appealing than those that ran the lighter, sweeter -- and more expensive -- grades.
Abdalla el-Badri said in an interview that members of the Organization of Petroleum Exporting Countries, which supplies about 40% of global petroleum output, need to invest as much as $500 billion by 2020 to satisfy rising global demand for crude. He acknowledged some of that must come from foreign sources, like Western oil majors, and not just from state-run national oil producers.
BJ Tubular Services is expanding its growing fleet of hydraulic hydrohammers with the addition of the S-280, the group’s most powerful hydrohammer. Its ability to drive bigger piles and achieve deeper penetration will enable BJ to drive the larger caissons required for many construction projects being carried out in the Gulf of Mexico.
The National Association of Realtors has lowered its forecasts for key housing indicators for this year and next. Sales of existing homes are now expected to fall 4.6% to a seasonally adjusted annual rate of 6.18 million. A month ago, the real estate trade group was expecting sales to fall 2.9%. Sales of new homes are expected to fall 18.2% to 860,000 and housing starts are expected to fall 20.4% to 1.43 million. For 2008, sales of existing homes are expected to rise 3.7%, sales of new homes should rise 4.8% and starts should rise 3.6%. NAR senior economist Lawrence Yun said sales would "gradually trend upward with improving activity by the end of the year."
The U.S. economy should slow this year to 2.3% growth, but the job market should remain healthy with a jobless rate of 4.5%, the White House said Wednesday in its semiannual economic forecast. Inflation should spike higher to 3.2% on increased energy costs, but core inflation should stay at moderate levels, according to the combined forecast of the Council of Economic Advisers, the Treasury Department and the Office of Management and Budget.
Wu Xiaoling, a deputy governor of the People's Bank of China, said recent volatility in share prices would not damage the world's fourth-largest economy as long as the market did not turn "unhealthy"."China's economic fundamentals are good, and the intention of the Chinese government's macro controls is very clear. That is, to ensure a healthy, rising market," Wu told reporters on the sidelines of a conference in the northern port city of Tianjin.
The Dow Jones industrials was down about 131 points at 12,465 at its unofficial close. The S&P 500 fell 13.55 points to 1,517.40 and the Nasdaq Composite dropped 24.05 points to 2,587.18.
July crude climbed 35 cents to close at $65.96 a barrel Wednesday, but July reformulated gasoline fell by 1.69 cents to close at $2.1904 a gallon, the contract's lowest closing level since early May. July natural gas closed at $8.08 per million British thermal units, up 1.6 cents for the session.
August gold fell 50 cents to close at $674.60 an ounce Wednesday. July silver fell 9.5 cents to close at $13.717 an ounce, while July copper closed at $3.404 a pound, down 1.1%, or 3.75 cents.
The American Petroleum Institute reported a fall of 5.7 million barrels in crude supplies for the week ended June 1. The Energy Department had reported a climb of 100,000 barrels. Motor gasoline supplies were up 7.2 million barrels, the API said. The government reported a rise of 3.5 million. Distillate supplies climbed 3.5 million barrels, the API said. The government posted a 1.9 million-barrel rise.
Harry Truman: "I never give 'em hell. I just tell them the truth and they think it's hell."
Valero Energy, the largest US refiner, said it shut fluid catalytic cracking units for maintenance at refineries in Houston and Louisiana. The unit at the Houston plant will be shut for “approximately two weeks.” Gasoline production will drop by 40,000 barrels a day in Houston and 25,000 barrels a day at Krotz Springs during the maintenance period.
Private investment firm Colony Capital LLC has agreed to pay 4 billion euros ($5.4 billion) for Libya's European oil company Tamoil and Oilinvest.Tamoil owns and operates more than 3,000 service stations in Europe, concentrated in Italy, and has oil refineries in Italy, Switzerland, Spain and Germany, Colony said.
TD Ameritrade Holding Corp. has been "talking to people in the industry all along and will continue to do that," its chief executive said in an interview with CNBC television on Wednesday.
Productivity in the non-farm business sector increased at an annual rate of 1% in the quarter, revised down from 1.7% reported a month ago. Productivity is up just 1% in the past four quarters. Unit labor costs - a key gauge of inflationary pressures - was revised higher to 1.8% annualized from 0.6% earlier. Output rose 0.6% annualized in the first quarter, hours worked fell 0.4% and real hourly compensation fell by 1%.
The European Central Bank has raised its main interest rate by another quarter percentage point to 4 per cent – the highest since August 2001.
Morgan Stanley has issued a "full house sell signal" as of Monday, saying three of its leading indicators - bond yields, Institute for Supply Management new orders, as well as valuation and risk - showed it was time to sell. "Such a full house sell signal across these three indicators is rare, and has occurred only five times since 1980," said analyst Teun Draaisma in a European strategy research report. "Equities have always been down in the next 6 months, on average by 15%.
Prudential Financial said it's discontinuing all its institutional equity research, sales and trading businesses. The decision affects 420 employees.
Russ Berrie & Co. said it received an unsolicited offer to acquire the company for $18 a share, but said the proposal undervalues the company.
Due to both this comparable sales target revision and these margin pressures, Panera Bread is issuing a revised second quarter 2007 earnings per diluted share target of $0.38 to $0.40. Analysts polled by Thomson Financial expected second-quarter earnings per share of 49 cents.
More than 4 million Iraqis have been forced from their homes by violence and the refugee crisis will probably worsen, the United Nations said. That's part of they price for delivering a democratic society!
The center of the cyclone is now expected to hit land in southeastern Iran over the next 36 hours. Gonu had disrupted Oman's oil and gas exports, closed its stock exchange as well as private and public institutions until Saturday, while national carrier Oman Air had halted all flights.
Iran's meteorological department in a statement has warned people in other coastal areas and islands in the Oman Sea and Strait of Hormuz to keep a distance from the waters and avoid any sea transport.
It also said that height of the waves would reach to 5.5 meters (18 feet), a rare record in the area.
WCI Communities, Inc. announced that an affiliate of Carl Icahn has signed a confidentiality agreement and has entered WCI's sales process as a bidder.
Alon USA President and Chief Executive Officer Jeff Morris told the Reuters Global Energy Summit in New York that his company would be interested in buying certain refineries, citing those in the Rockies and the Midwest. Morris also said refineries that processed the cheaper priced heavy crudes were more appealing than those that ran the lighter, sweeter -- and more expensive -- grades.
Abdalla el-Badri said in an interview that members of the Organization of Petroleum Exporting Countries, which supplies about 40% of global petroleum output, need to invest as much as $500 billion by 2020 to satisfy rising global demand for crude. He acknowledged some of that must come from foreign sources, like Western oil majors, and not just from state-run national oil producers.
BJ Tubular Services is expanding its growing fleet of hydraulic hydrohammers with the addition of the S-280, the group’s most powerful hydrohammer. Its ability to drive bigger piles and achieve deeper penetration will enable BJ to drive the larger caissons required for many construction projects being carried out in the Gulf of Mexico.
The National Association of Realtors has lowered its forecasts for key housing indicators for this year and next. Sales of existing homes are now expected to fall 4.6% to a seasonally adjusted annual rate of 6.18 million. A month ago, the real estate trade group was expecting sales to fall 2.9%. Sales of new homes are expected to fall 18.2% to 860,000 and housing starts are expected to fall 20.4% to 1.43 million. For 2008, sales of existing homes are expected to rise 3.7%, sales of new homes should rise 4.8% and starts should rise 3.6%. NAR senior economist Lawrence Yun said sales would "gradually trend upward with improving activity by the end of the year."
The U.S. economy should slow this year to 2.3% growth, but the job market should remain healthy with a jobless rate of 4.5%, the White House said Wednesday in its semiannual economic forecast. Inflation should spike higher to 3.2% on increased energy costs, but core inflation should stay at moderate levels, according to the combined forecast of the Council of Economic Advisers, the Treasury Department and the Office of Management and Budget.
Wu Xiaoling, a deputy governor of the People's Bank of China, said recent volatility in share prices would not damage the world's fourth-largest economy as long as the market did not turn "unhealthy"."China's economic fundamentals are good, and the intention of the Chinese government's macro controls is very clear. That is, to ensure a healthy, rising market," Wu told reporters on the sidelines of a conference in the northern port city of Tianjin.
The Dow Jones industrials was down about 131 points at 12,465 at its unofficial close. The S&P 500 fell 13.55 points to 1,517.40 and the Nasdaq Composite dropped 24.05 points to 2,587.18.
July crude climbed 35 cents to close at $65.96 a barrel Wednesday, but July reformulated gasoline fell by 1.69 cents to close at $2.1904 a gallon, the contract's lowest closing level since early May. July natural gas closed at $8.08 per million British thermal units, up 1.6 cents for the session.
August gold fell 50 cents to close at $674.60 an ounce Wednesday. July silver fell 9.5 cents to close at $13.717 an ounce, while July copper closed at $3.404 a pound, down 1.1%, or 3.75 cents.
The American Petroleum Institute reported a fall of 5.7 million barrels in crude supplies for the week ended June 1. The Energy Department had reported a climb of 100,000 barrels. Motor gasoline supplies were up 7.2 million barrels, the API said. The government reported a rise of 3.5 million. Distillate supplies climbed 3.5 million barrels, the API said. The government posted a 1.9 million-barrel rise.
Harry Truman: "I never give 'em hell. I just tell them the truth and they think it's hell."
Tuesday, June 05, 2007
Special Posting
6/6/07 Special Posting
The Oil Drum: "This is an unprecedented event. NO CYCLONE has ever entered the Gulf of Oman. And there are no custom 'storm surge' models available for that area. This forecast is based on my experience and subjective analysis of the seabed slope and storm surge interaction with the sea floor. Considering the region has never experienced a hurricane, let alone a strong one it is highly unlikely the loading facilities or platforms were constructed to withstand the forces - both wave action and wind force - that they will experience. Significant, damage will occur. How much long term damage, and the volumes associated with it - can not be determined at this time.
Special update at 8PM on Cyclone GONU: "KAC/UCF and Chuck Watson are forecasting, based on their damage models, that the Qalhat (Sur) LNG terminal will be out for 25-30 days and the Mina al Fahal oil terminal will be down for 15-20 days--all of this assuming they are built to US standards."
Oman matters in this because it produces 743,000 bbl/day; Oman is also a net exporter, non-OPEC.
The Oil Drum: "This is an unprecedented event. NO CYCLONE has ever entered the Gulf of Oman. And there are no custom 'storm surge' models available for that area. This forecast is based on my experience and subjective analysis of the seabed slope and storm surge interaction with the sea floor. Considering the region has never experienced a hurricane, let alone a strong one it is highly unlikely the loading facilities or platforms were constructed to withstand the forces - both wave action and wind force - that they will experience. Significant, damage will occur. How much long term damage, and the volumes associated with it - can not be determined at this time.
Special update at 8PM on Cyclone GONU: "KAC/UCF and Chuck Watson are forecasting, based on their damage models, that the Qalhat (Sur) LNG terminal will be out for 25-30 days and the Mina al Fahal oil terminal will be down for 15-20 days--all of this assuming they are built to US standards."
Oman matters in this because it produces 743,000 bbl/day; Oman is also a net exporter, non-OPEC.
More Action
6/6/07 More Action
Laureate Education Inc. said Monday that it has agreed to go private for $3.82 billion in cash from a group led by the higher education company's chairman and chief executive officer. The sweetened offer of $62 per share tops the investor group's earlier bid of $60.50 per share, a deal that some of Laureate's major investors said was too low. A tender offer for Laureate's shares is scheduled to begin Friday.
The ISM non-manufacturing index rose to 59.7% from 56% in April. It's the highest since April 2006. Twelve of 15 industries were expanding in May.
Bed Bath & Beyond fell 5.7% after the retailer issued a profit warning, prompting Goldman Sachs to downgrade the stock to neutral from buy.
Enbridge Inc.and ExxonMobil agreed to jointly assess the commercial development of a new pipeline project to transport crude oil from Patoka, Illinois, to Beaumont, Texas, and onward to Houston.
Avaya has agreed to a buyout offer of $8.2 billion in cash, or $17.50 a share, from private equity firms TPG Capital and Silver Lake.
Federal Reserve Chairman Ben Bernanke said Tuesday that the current "benign" risk environment in global financial markets might not persist forever, which could prove problematic should some disruptive event occur.
Barry Ritholtz: "it isn't too hard to imagine some point in the future where Oil or even Gold is priced in Euros - THATS a situation with grave consequences." I have been talking about this point for over one year. It will happen sooner rather than later.
Nouriel Roubini: " By now it is estimated that credit derivatives alone are $26 trillion, increasingly issued and traded by a variety of highly leveraged institutions, including hedge funds. The systemic risk implications of the operations of hedge funds, high global liquidity, releveraging of investors and greater complacency in risk management practices is something regulators are starting to worry. These concerns are partly triggered by the fact that the degree of leverage at the micro level - that of individual investors or institutions - may be much smaller than the macro aggregate level of leverage that could be the source of systemic risk. The following example shows how leverage can pile up in a "debt house of cards"...
Richard Daughty: "Up to now, the price inflation was the "fun" kind, as it went into stocks, bonds, housing, and more and bigger government programs giving research money, grant money, stipend money, program money, entitlement money, block transfer money, bribe money, and more money, money, money to more and more people. The real, underlying tragedy is that the economy mutated from one that makes goods and services that people want to buy, into one that produces goods and services that the government buys. Now inflation is showing up in the "not fun" category, namely food and stuff you have to buy just to stay alive."
Ron Burkle has joined a union representing Dow Jones & Co. Inc. employees to try to formulate a counter-offer to a $5 billion bid for the company from Rupert Murdoch's News Corp., a union official said on Tuesday. Burkle has told the union that he's interested in working with it to put together an offer, said Steven Yount, a representative for the Independent Association of Publishers' Employees (IAPE), which represents 2,000 Dow Jones workers.
Bank of Japan governor Toshihiko Fukui said the central bank intended to adjust interest rates "gradually" as the economic fundamentals improve. "These adjustments assume no pre-set time frame," Fukui said in a speech to a bankers' conference in Cape Town, South Africa.
A powerful cyclone hit Oman and briefly disrupted exports from the Gulf energy producer. The storm, the worst to hit Oman in 30 years, forced thousands of people from Masirah Island in the Arabian Sea and temporarily closed a terminal shipping 650,000 barrels a day of crude. Supplies from top oil exporter Saudi Arabia, Oman's western neighbor, were expected to escape disruption.
The European Energy Exchange, the region's biggest bourse for power trading, will offer contracts in certified emission reduction credits this year, as greenhouse gas trading expands. Buying and selling CER credits, which are approved by the United Nations and derived from projects that curb greenhouse gases in developing nations, will ``be launched in the course of this year,'' EEX said.
BCE Inc.said late Tuesday another group is entering into discussions to explore the possibility of taking the company private. Montreal-based BCE, which owns Bell Canada, said the consortium includes Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan and Providence Equity Partners Inc.
The benchmark 10-year Treasury note fell 11/32 to close at 96-10/32 with a yield of 4.974%. The yield on the 2-year note broke through the 5% level for the first time since August.
July crude fell 60 cents to close at $65.61 a barrel in New York Tuesday. July natural gas fell by 1.6%, or 12.7 cents, to end at $8.064 per million British thermal units.
August gold fell $1.20 to close at $675.10 an ounce Tuesday. July silver rose 6.7 cents to close at $13.812 an ounce, but July copper fell 2.65 cents to end at $3.4415 a pound.
Two hedge funds took an 8.4% stake in TD Ameritrade Holding and sent the online brokerage a letter urging it to merge with either E*Trade Financial or Charles Schwab. TD Ameritrade expressed willingness to consider such an offer.
Laureate Education Inc. said Monday that it has agreed to go private for $3.82 billion in cash from a group led by the higher education company's chairman and chief executive officer. The sweetened offer of $62 per share tops the investor group's earlier bid of $60.50 per share, a deal that some of Laureate's major investors said was too low. A tender offer for Laureate's shares is scheduled to begin Friday.
The ISM non-manufacturing index rose to 59.7% from 56% in April. It's the highest since April 2006. Twelve of 15 industries were expanding in May.
Bed Bath & Beyond fell 5.7% after the retailer issued a profit warning, prompting Goldman Sachs to downgrade the stock to neutral from buy.
Enbridge Inc.and ExxonMobil agreed to jointly assess the commercial development of a new pipeline project to transport crude oil from Patoka, Illinois, to Beaumont, Texas, and onward to Houston.
Avaya has agreed to a buyout offer of $8.2 billion in cash, or $17.50 a share, from private equity firms TPG Capital and Silver Lake.
Federal Reserve Chairman Ben Bernanke said Tuesday that the current "benign" risk environment in global financial markets might not persist forever, which could prove problematic should some disruptive event occur.
Barry Ritholtz: "it isn't too hard to imagine some point in the future where Oil or even Gold is priced in Euros - THATS a situation with grave consequences." I have been talking about this point for over one year. It will happen sooner rather than later.
Nouriel Roubini: " By now it is estimated that credit derivatives alone are $26 trillion, increasingly issued and traded by a variety of highly leveraged institutions, including hedge funds. The systemic risk implications of the operations of hedge funds, high global liquidity, releveraging of investors and greater complacency in risk management practices is something regulators are starting to worry. These concerns are partly triggered by the fact that the degree of leverage at the micro level - that of individual investors or institutions - may be much smaller than the macro aggregate level of leverage that could be the source of systemic risk. The following example shows how leverage can pile up in a "debt house of cards"...
Richard Daughty: "Up to now, the price inflation was the "fun" kind, as it went into stocks, bonds, housing, and more and bigger government programs giving research money, grant money, stipend money, program money, entitlement money, block transfer money, bribe money, and more money, money, money to more and more people. The real, underlying tragedy is that the economy mutated from one that makes goods and services that people want to buy, into one that produces goods and services that the government buys. Now inflation is showing up in the "not fun" category, namely food and stuff you have to buy just to stay alive."
Ron Burkle has joined a union representing Dow Jones & Co. Inc. employees to try to formulate a counter-offer to a $5 billion bid for the company from Rupert Murdoch's News Corp., a union official said on Tuesday. Burkle has told the union that he's interested in working with it to put together an offer, said Steven Yount, a representative for the Independent Association of Publishers' Employees (IAPE), which represents 2,000 Dow Jones workers.
Bank of Japan governor Toshihiko Fukui said the central bank intended to adjust interest rates "gradually" as the economic fundamentals improve. "These adjustments assume no pre-set time frame," Fukui said in a speech to a bankers' conference in Cape Town, South Africa.
A powerful cyclone hit Oman and briefly disrupted exports from the Gulf energy producer. The storm, the worst to hit Oman in 30 years, forced thousands of people from Masirah Island in the Arabian Sea and temporarily closed a terminal shipping 650,000 barrels a day of crude. Supplies from top oil exporter Saudi Arabia, Oman's western neighbor, were expected to escape disruption.
The European Energy Exchange, the region's biggest bourse for power trading, will offer contracts in certified emission reduction credits this year, as greenhouse gas trading expands. Buying and selling CER credits, which are approved by the United Nations and derived from projects that curb greenhouse gases in developing nations, will ``be launched in the course of this year,'' EEX said.
BCE Inc.said late Tuesday another group is entering into discussions to explore the possibility of taking the company private. Montreal-based BCE, which owns Bell Canada, said the consortium includes Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan and Providence Equity Partners Inc.
The benchmark 10-year Treasury note fell 11/32 to close at 96-10/32 with a yield of 4.974%. The yield on the 2-year note broke through the 5% level for the first time since August.
July crude fell 60 cents to close at $65.61 a barrel in New York Tuesday. July natural gas fell by 1.6%, or 12.7 cents, to end at $8.064 per million British thermal units.
August gold fell $1.20 to close at $675.10 an ounce Tuesday. July silver rose 6.7 cents to close at $13.812 an ounce, but July copper fell 2.65 cents to end at $3.4415 a pound.
Two hedge funds took an 8.4% stake in TD Ameritrade Holding and sent the online brokerage a letter urging it to merge with either E*Trade Financial or Charles Schwab. TD Ameritrade expressed willingness to consider such an offer.
Monday, June 04, 2007
More Deals
6/5/07 More Deals
Dominion agreed to sell most of its U.S. onshore natural gas and oil exploration and production operations in two separate transactions for a total of approximately $6.5 billion. These operations include 3.51 trillion cubic feet equivalent of proved natural gas and oil reserves as of Dec. 31, 2006. Loews Corp is buying Dominion's Permian Basin, Mich. and Alabama operations for $4.025 billion and XTO Energy is buying Dominion's operations in the Rocky Mountains, Gulf Coast, San Juan Basin and South Louisiana for $2.5 billion.
Flextronics International Ltd. agreed to acquire Solectron Corp. Shareholders of Solectron will receive total consideration valued at about $3.6 billion, based on the Friday closing price of Singapore-based Flextronics' ordinary shares. The buyout price represents a premium of some 20% over Solectron's closing price of $3.37 on June 1. Stockholders of Milpitas, Calif.-based Solectron can receive 0.3450 share of Flextronics or a cash payment of $3.89 for each of their shares, with a limit of 70% pegged on the aggregate amount of Solectron shares that can be converted into Flextronics stock.
Palm Inc. said it would recapitalize by selling 25% of the company for $325 million to the Menlo Park, Calif., private-equity firm Elevation Partners. Existing shareholders, whose stake in Palm drops to 75%, will get a distribution of $9 a share, Palm said.
Avaya Inc. may have two top suitors: TPG Capital and Silver Lake Partners were closing in on an about $17-a-share deal for the Basking Ridge, N.J., telecom-solutions provider, people familiar with the matter told The Wall Street Journal. The deal isn't certain: Nortel Networks or another rival could yet step in and grab Avaya, the Journal reported.
Atlas Pipeline Partners L.P. agreed to acquire control of Anadarko Petroleum Corp.'s interests in the Chaney Dell and Midkiff/Benedum natural-gas-gathering and -processing systems for $1.85 billion. Atlas Pipeline's board has approved the deal and the company expects to close it around July 11. Atlas America Inc. holds owns 17.5 million units, or 83% of the limited-partner interest, in Atlas Pipeline Holdings LP. Atlas Pipeline Holdings, in turn, controls the general-partner interest in Atlas Pipeline Partners. Atlas America also controls 80% of the common units and holds certain other interests in Atlas Energy Resources. As a result of the deal, Atlas Pipeline plans a distribution of $3.80 to $4 per limited-partner unit in 2008.
Cadence Design Systems, a maker of software for designing microchips, is in talks with at least two buyout firms about a possible sale, the New York Times reported in its online edition on Monday.
Orders placed with American factories rose less than forecast in April, suggesting businesses may still be working inventories down before restocking. Bookings increased 0.3 percent, following a 4.1 percent gain in March, the Commerce Department said in Washington. Excluding transportation equipment, bookings rose 0.7 percent after a 2.4 percent gain in March.
China's benchmark stock index plunged 7.7 percent after the government's main business newspaper signaled officials won't try to halt a slump that's erased more than $350 billion of market value in four days.
John Hussman: "For our part, we aren't taking significant risks here – bullish or bearish. Essentially, my investment view is that the market is in a speculative blowoff that may continue to grind marginally higher, but is also vulnerable to abrupt, possibly spectacular losses. Overall, based on prevailing conditions, market risk is not worth taking (as usual, nearly every dollar of my net worth is invested in the Hussman Funds, so I am far from a passive observer).Currently, the Strategic Growth Fund is fully hedged – not relying on a continued advance, nor relying on a plunge (though the current overvalued, overbought, overbullish, rising-yield conditions strongly suggest that a market plunge shouldn't be ruled out)."
The iPhone will be available June 29.
There's a $4.75 a barrel spread between Brent crude and Nymex crude.
World-wide chip sales hit $19.9 billion in April, edging up 1.6% from $19.6 billion a year earlier, but slipping 2.1% from $20.3 billion the previous month, according to the Semiconductor Industry Association, the chip industry's trade group.
BP declared a "force majeure" on Canadian crude supply to its Whiting, Ind., plant Friday, meaning that the company cannot meet its contract requirements to purchase oil from Canadian suppliers to the refinery.
Orders for core capital equipment goods rose 2.1% in April, revised up from 1.2% reported two weeks ago, the government said. Shipments of core capital goods - which exclude both defense goods and civilian aircraft - increased 1%, ahead of the 0.7% previously reported. Total factory orders rose 0.3% in April, below the 0.8% expected by economists.
Early Monday, Doral Financial said a private bank called FBOP Corp. offered to buy an 80 percent stake in the company for $610 million. FBOP also offered to lend Doral Financial $150 million. Doral Financial needs the money because it will owe $625 million to its bondholders on July 20 and also faces legal expenses.
Gas for July delivery rose 33.2 cents, or 4.2 percent, to $8.21 per million British thermal units to settle at 2:44 p.m. on the New York Mercantile Exchange. The settle was the highest price since December 1, 2006, when gas closed at $8.422.
Iran's Supreme Leader Ayatollah Ali Khamenei said Iran, the world's fourth biggest oil exporter, would not retreat from the "field of danger" to protect its right to develop nuclear technology. Plans by the US to install a missile defense system in eastern Europe to defend NATO allies are "the joke of the year," Iranian envoy Ali Larijani said Monday.
There was word that a cyclone was headed towards the oil-producing Arabian peninsula with a potential to disrupt shipping and output.
Crude for July delivery closed up $1.13 at $66.21 a barrel on the New York Mercantile Exchange. July natural gas rose 31.3 cents, or 4%, at $8.191 per million British thermal units. July heating oil closed up 4.18 cents, or 2%, at $1.9646 a gallon. July reformulated-gasoline fell 0.66 cent to $2.2380 a gallon.
Gold for June delivery closed down 50 cents at $670.70 an ounce on the New York Mercantile Exchange. July silver edged up 5 cents at $13.745 an ounce. July platinum closed up $7.40 at $1,303.0 an ounce. September palladium closed up 5 cents at $377.50 an ounce. July copper rallied 6.35 cents at $3.4680 a pound.
Winston Churchill: "The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian governments whether Nazi or Communist."
Openwave Systems Inc. said its board is rejecting the unsolicited partial tender offer from Harbinger Capital Partners to purchase 49% of the company's outstanding stock for $8.30 per share in cash. Openwave called the offer "inadequate," and recommended that the company's shareholders not tender their shares. The company also declared a $100 million, or $1.20 per share, special cash dividend, and said it plans to cut 20% of its workforce, generating annual cost savings of $50 million a year.
Chittenden Corp. has agreed to acquire Community Bank & Trust Co. for about $124.1 million in a cash-and-stock deal. Under the terms of the agreement, Community shareholders can elect to receive $33.37 a share in cash, with total cash consideration of about $33.4 million, or 1.1293 shares of Chittenden common stock for each share of Community stock they own, Chittenden said.
The Chandler Trusts now hold about 17 percent of Tribune's outstanding shares, down from about 20 percent before the tender offer. The Chandler Trusts have agreed to sell all remaining Tribune shares through a block trade underwritten by Goldman, Sachs & Co., Tribune said.
Susan George: "Much of what is called investment is actually nothing more than mergers and acquisitions, and of course mergers and acquisitions are generally accompanied by downsizing."
Dominion agreed to sell most of its U.S. onshore natural gas and oil exploration and production operations in two separate transactions for a total of approximately $6.5 billion. These operations include 3.51 trillion cubic feet equivalent of proved natural gas and oil reserves as of Dec. 31, 2006. Loews Corp is buying Dominion's Permian Basin, Mich. and Alabama operations for $4.025 billion and XTO Energy is buying Dominion's operations in the Rocky Mountains, Gulf Coast, San Juan Basin and South Louisiana for $2.5 billion.
Flextronics International Ltd. agreed to acquire Solectron Corp. Shareholders of Solectron will receive total consideration valued at about $3.6 billion, based on the Friday closing price of Singapore-based Flextronics' ordinary shares. The buyout price represents a premium of some 20% over Solectron's closing price of $3.37 on June 1. Stockholders of Milpitas, Calif.-based Solectron can receive 0.3450 share of Flextronics or a cash payment of $3.89 for each of their shares, with a limit of 70% pegged on the aggregate amount of Solectron shares that can be converted into Flextronics stock.
Palm Inc. said it would recapitalize by selling 25% of the company for $325 million to the Menlo Park, Calif., private-equity firm Elevation Partners. Existing shareholders, whose stake in Palm drops to 75%, will get a distribution of $9 a share, Palm said.
Avaya Inc. may have two top suitors: TPG Capital and Silver Lake Partners were closing in on an about $17-a-share deal for the Basking Ridge, N.J., telecom-solutions provider, people familiar with the matter told The Wall Street Journal. The deal isn't certain: Nortel Networks or another rival could yet step in and grab Avaya, the Journal reported.
Atlas Pipeline Partners L.P. agreed to acquire control of Anadarko Petroleum Corp.'s interests in the Chaney Dell and Midkiff/Benedum natural-gas-gathering and -processing systems for $1.85 billion. Atlas Pipeline's board has approved the deal and the company expects to close it around July 11. Atlas America Inc. holds owns 17.5 million units, or 83% of the limited-partner interest, in Atlas Pipeline Holdings LP. Atlas Pipeline Holdings, in turn, controls the general-partner interest in Atlas Pipeline Partners. Atlas America also controls 80% of the common units and holds certain other interests in Atlas Energy Resources. As a result of the deal, Atlas Pipeline plans a distribution of $3.80 to $4 per limited-partner unit in 2008.
Cadence Design Systems, a maker of software for designing microchips, is in talks with at least two buyout firms about a possible sale, the New York Times reported in its online edition on Monday.
Orders placed with American factories rose less than forecast in April, suggesting businesses may still be working inventories down before restocking. Bookings increased 0.3 percent, following a 4.1 percent gain in March, the Commerce Department said in Washington. Excluding transportation equipment, bookings rose 0.7 percent after a 2.4 percent gain in March.
China's benchmark stock index plunged 7.7 percent after the government's main business newspaper signaled officials won't try to halt a slump that's erased more than $350 billion of market value in four days.
John Hussman: "For our part, we aren't taking significant risks here – bullish or bearish. Essentially, my investment view is that the market is in a speculative blowoff that may continue to grind marginally higher, but is also vulnerable to abrupt, possibly spectacular losses. Overall, based on prevailing conditions, market risk is not worth taking (as usual, nearly every dollar of my net worth is invested in the Hussman Funds, so I am far from a passive observer).Currently, the Strategic Growth Fund is fully hedged – not relying on a continued advance, nor relying on a plunge (though the current overvalued, overbought, overbullish, rising-yield conditions strongly suggest that a market plunge shouldn't be ruled out)."
The iPhone will be available June 29.
There's a $4.75 a barrel spread between Brent crude and Nymex crude.
World-wide chip sales hit $19.9 billion in April, edging up 1.6% from $19.6 billion a year earlier, but slipping 2.1% from $20.3 billion the previous month, according to the Semiconductor Industry Association, the chip industry's trade group.
BP declared a "force majeure" on Canadian crude supply to its Whiting, Ind., plant Friday, meaning that the company cannot meet its contract requirements to purchase oil from Canadian suppliers to the refinery.
Orders for core capital equipment goods rose 2.1% in April, revised up from 1.2% reported two weeks ago, the government said. Shipments of core capital goods - which exclude both defense goods and civilian aircraft - increased 1%, ahead of the 0.7% previously reported. Total factory orders rose 0.3% in April, below the 0.8% expected by economists.
Early Monday, Doral Financial said a private bank called FBOP Corp. offered to buy an 80 percent stake in the company for $610 million. FBOP also offered to lend Doral Financial $150 million. Doral Financial needs the money because it will owe $625 million to its bondholders on July 20 and also faces legal expenses.
Gas for July delivery rose 33.2 cents, or 4.2 percent, to $8.21 per million British thermal units to settle at 2:44 p.m. on the New York Mercantile Exchange. The settle was the highest price since December 1, 2006, when gas closed at $8.422.
Iran's Supreme Leader Ayatollah Ali Khamenei said Iran, the world's fourth biggest oil exporter, would not retreat from the "field of danger" to protect its right to develop nuclear technology. Plans by the US to install a missile defense system in eastern Europe to defend NATO allies are "the joke of the year," Iranian envoy Ali Larijani said Monday.
There was word that a cyclone was headed towards the oil-producing Arabian peninsula with a potential to disrupt shipping and output.
Crude for July delivery closed up $1.13 at $66.21 a barrel on the New York Mercantile Exchange. July natural gas rose 31.3 cents, or 4%, at $8.191 per million British thermal units. July heating oil closed up 4.18 cents, or 2%, at $1.9646 a gallon. July reformulated-gasoline fell 0.66 cent to $2.2380 a gallon.
Gold for June delivery closed down 50 cents at $670.70 an ounce on the New York Mercantile Exchange. July silver edged up 5 cents at $13.745 an ounce. July platinum closed up $7.40 at $1,303.0 an ounce. September palladium closed up 5 cents at $377.50 an ounce. July copper rallied 6.35 cents at $3.4680 a pound.
Winston Churchill: "The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian governments whether Nazi or Communist."
Openwave Systems Inc. said its board is rejecting the unsolicited partial tender offer from Harbinger Capital Partners to purchase 49% of the company's outstanding stock for $8.30 per share in cash. Openwave called the offer "inadequate," and recommended that the company's shareholders not tender their shares. The company also declared a $100 million, or $1.20 per share, special cash dividend, and said it plans to cut 20% of its workforce, generating annual cost savings of $50 million a year.
Chittenden Corp. has agreed to acquire Community Bank & Trust Co. for about $124.1 million in a cash-and-stock deal. Under the terms of the agreement, Community shareholders can elect to receive $33.37 a share in cash, with total cash consideration of about $33.4 million, or 1.1293 shares of Chittenden common stock for each share of Community stock they own, Chittenden said.
The Chandler Trusts now hold about 17 percent of Tribune's outstanding shares, down from about 20 percent before the tender offer. The Chandler Trusts have agreed to sell all remaining Tribune shares through a block trade underwritten by Goldman, Sachs & Co., Tribune said.
Susan George: "Much of what is called investment is actually nothing more than mergers and acquisitions, and of course mergers and acquisitions are generally accompanied by downsizing."
Sunday, June 03, 2007
The Killing Surge
6/4/07 The Killing Surge
Fourteen American soldiers were killed in three deadly days in Iraq, the U.S. military said Sunday, including four in a single roadside bombing and one who was struck by a suicide bomber while on a foot patrol southwest of the capital.
Russian President Putin warned that U.S. plans to build a missile defense system in Eastern Europe would force Moscow to target its weapons against Europe.
Qiagen NV , a maker of genetic testing equipment, said on Sunday it will acquire Digene Corp. for $1.6 billion in cash and stock, to expand into testing for cervical cancer and sexually transmitted diseases. The deal values Digene shares at $61.25, a 37 percent premium to its closing price on the Nasdaq on Friday, the companies said in a joint statement.
The European Central Bank is poised this week to raise its 2007 forecasts for eurozone inflation and growth, heightening the chances that further interest rate rises will follow an increase likely to be announced on Wednesday.
Blackstone will buy Alliant Insurance Services for about $1 billion.
Tata Motors is on schedule to launch its Rs100,000 ($2,467) car by the third quarter of 2008 and may unveil it at next January’s Auto Expo in Delhi, Ravi Kant, its managing director, told the Financial Times.
Mike Burk: "Since 1963 the OTC has been up 55% of the time in June with an average gain of 0.5%. During the 3rd year of the Presidential Cycle the OTC has been up 82% of the time with an average gain of 3.1%...Since 1928 the SPX has been up 55% of the time in June with an average gain of 1.0%. During the 3rd year of the Presidential Cycle the SPX has been up 68% of the time with an average gain of 2.8%...The first week of June during the 3rd year of the Presidential Cycle is the strongest part of a strong month. I expect the major indices to be higher on Friday June 8 than they were on Friday June 1."
Fourteen American soldiers were killed in three deadly days in Iraq, the U.S. military said Sunday, including four in a single roadside bombing and one who was struck by a suicide bomber while on a foot patrol southwest of the capital.
Russian President Putin warned that U.S. plans to build a missile defense system in Eastern Europe would force Moscow to target its weapons against Europe.
Qiagen NV , a maker of genetic testing equipment, said on Sunday it will acquire Digene Corp. for $1.6 billion in cash and stock, to expand into testing for cervical cancer and sexually transmitted diseases. The deal values Digene shares at $61.25, a 37 percent premium to its closing price on the Nasdaq on Friday, the companies said in a joint statement.
The European Central Bank is poised this week to raise its 2007 forecasts for eurozone inflation and growth, heightening the chances that further interest rate rises will follow an increase likely to be announced on Wednesday.
Blackstone will buy Alliant Insurance Services for about $1 billion.
Tata Motors is on schedule to launch its Rs100,000 ($2,467) car by the third quarter of 2008 and may unveil it at next January’s Auto Expo in Delhi, Ravi Kant, its managing director, told the Financial Times.
Mike Burk: "Since 1963 the OTC has been up 55% of the time in June with an average gain of 0.5%. During the 3rd year of the Presidential Cycle the OTC has been up 82% of the time with an average gain of 3.1%...Since 1928 the SPX has been up 55% of the time in June with an average gain of 1.0%. During the 3rd year of the Presidential Cycle the SPX has been up 68% of the time with an average gain of 2.8%...The first week of June during the 3rd year of the Presidential Cycle is the strongest part of a strong month. I expect the major indices to be higher on Friday June 8 than they were on Friday June 1."
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