7/14/07 It's All In The Perception
Lufkin Industries Inc. expects second-quarter earnings of $1.13 a share to $1.15 a share for the three months ended June 30. Based on softness in the North American oil field markets, Lufkin also has lowered the top end of its forecast for 2007 earnings to $4.60 a share to $5.00 a share verses its earlier view of $4.60 a share to $5.40 a share.
Railroad operator Genesee & Wyoming Inc.'s June traffic fell 7.3% to 67,165 carloads. Same-railroad traffic fell 7.6% in June, mainly due to a decline in grain shipments in Australia caused by drought conditions, partially offset by higher coal coke and ores traffic.
GE's earnings totaled 52 cents, up 13% and in line with an analyst forecast of 52 cents compiled by Thomson Financial. Sales increased 12% to $42.3 billion, compared to last year's $37.7 billion. It also reaffirmed fiscal-year guidance. GE will also raise its 2007 share buyback program to $14 billion, from a previous level of $12 billion.
The International Energy Agency said Friday that it expects global oil product demand to rise by 2.5% to 88.2 millions of barrels a day in 2008, largely due to weather related demand in OECD countries and strong-demand in non-OECD countries. The estimate represents an increase of 2.2 million barrels a day, from 2007's revised level of 86 million barrels a day, the IEA said. Non-OPEC supply is expected to reach 51 mb/d in 2008, while OPEC capacity is expected to rise by 1 mb/d in 2008 to 35.4 mb/d.
Ralph Waldo Emerson: “People only see what they are prepared to see.”
More than 300 flights were cancelled on their way into and out of Japan's Southern islands as typhoon Man-yi swept through the region Friday, according to the Nikkei daily. The typhoon, the fourth to hit Japan this year, was forecast to hit the southern tip of Kyushu on Saturday, bringing heavy rain across a vast region of Western Japan, the Nikkei report said, citing data from the Japan Meteorological Agency.
China's broadest measure of money supply growth re-accelerated to 17.1% in June from a year earlier, up from 16.7% yearly growth in M2 for May, reversing a three-month declining trend, the statistics bureau said Friday.
The House of Representatives late Thursday voted to begin the withdrawal of U.S. troops from Iraq within 120 days, the Associated Press reported. The measure passed 223 to 201; President Bush has threatened to veto it, the AP said.
Energizer Holdings Inc. said on Thursday it would buy Playtex Products Inc. in an all-cash deal worth about $1.16 billion to grow Energizer's personal care product range. St Louis-based Energizer will pay $18.30 a share -- and assume the debt -- for Playtex, which makes leading sun-screen products like Banana Boat and Hawaiian Tropic. Playtex also markets a range of other feminine care and infant care products.
St Louis-based Energizer will pay $18.30 a share -- and assume the debt -- for Playtex, which makes leading sun-screen products like Banana Boat and Hawaiian Tropic. Playtex also markets a range of other feminine care and infant care products.
The RBC Cash Index showed that confidence tumbled to 76.1 in July. That was considerably weaker than June's 81.4 and was the worst reading since last August. The index is based on the results from the international polling firm Ipsos. Much of consumers' angst is over how the economy and their own financial fortunes will fare in the next six months. This expectations measure dropped to an 11-month low of 23.1 in July.
Consumer sentiment rebounded in July, according to a monthly survey released Friday by Reuters and the University of Michigan. The consumer sentiment index rose to 92.4 in July from 85.3 in June.
Amgen Inc. said its board authorized a $5 billion in increase in its share repurchase plan. The company said late Thursday it has about $1.5 billion remaining under its previous stock authorization.
Baker Hughes expects second-quarter net income of $1.07-$1.09 a share, below the level of $1.17 a share in the first quarter. Analysts surveyed by Thomson Financial forecast earnings of $1.18 a share for the latest period, on average. The Houston energy firm cited "significant deterioration" of activity and profitability in Canada in its drilling and evaluation segment.
President Bush acknowledged publicly for the first time Thursday that someone in his administration "perhaps" leaked the name of a CIA operative, although he also said he hopes the controversy over his decision to spare prison for a former White House aide has "run its course."
Nouriel Roubini: The riskiness and default risk on such commercial real estate mortgages is significantly rising. So after subprime mortgages and their related RMBS, ABXs and subslime loaded CDOs the next show to drop - in this endless and sometime confusing alphabet soup of credit derivatives - may be commercial mortgages and their related CMBSs and CMBXs..."
ABN Amro's sale of its U.S. arm LaSalle to Bank of America was lawful, the Dutch Supreme Court ruled Friday -- overturning a lower court's move blocking the sale and making the $21 billion sale virtually certain to succeed.
However, the larger fight between Barclays PLC and a consortium led by Royal Bank of Scotland PLC to buy ABN Amro Holding NV will likely continue.
"Now that the sale of LaSalle is definite, the interests of Bank of America and Barclays should be taken into account," the ruling said.
U.S. RETAIL SALES FALL 0.9% IN JUNE, LARGEST DROP SINCE AUGUST 2005.
Prices of goods imported into the U.S. rose by 1.0% in June on a 4.7% gain in the price of imported petroleum, the Labor Department said Friday. Excluding petroleum, the gain in import prices was 0.2%, the fourth consecutive increase. Excluding all fuels, the rise in import prices was 0.2%. Import prices have increased by 2.3% in the past 12 months. May's prices were revised to grow by 1.1% from a previously estimated 0.9%. The rise in import prices was slightly higher than expected.
BJ Process and Pipeline Services, a unit of BJ Services, has expanded its fleet of nitrogen converter pump units in Aberdeen. The three new diesel-driven 180k split skid units are custom units designed for BJ PPS to carry out commissioning services for clients operating in the UKCS and Norwegian sectors of the North Sea.
The units have been used to carry out commissioning services on the Norwegian Continental Shelf, and to complete a series of leak tests in the North Sea.
These three nitrogen generator units increase BJ PPS's fleet in the UK and Norway to 37 units, making it one of the largest in the North Sea. "The addition of these units means our customers can rest assured their assets will receive superior commissioning services as and when required," said Lindsay Link, general manager of BJ PPS. "Already, we are seeing the benefits, given the additional operations we have been able to take on since we acquired them. BJ PPS has the plant and human resources in the UK and Norway to maintain customer schedules, as well as a commendable history of providing competent and capable service," he added.
George Ure: "The purchasing power of a dollar in 1913 would cost $20.76 today by the Federal Reserve calculator which underscores the point. A dollar is worth 4.816955 cents compared to 1913...John Williams' highly respected "Shadow Government Statistics" has a dandy little chart here that shows annual consumer inflation has been running an average over 9% since 2000, while the government figures for the period average about 3 1/2 percent. You'll also notice that the inflation rate has been supported by a massive increase in M-3, the broadest measure of the money supply at recent annual rates in excess of 12% annualized. This brings to the fore two hugely important investor questions you need to ask yourself. The first is this: If the actual inflation reported by the government guides us to look at a current Dow of 13,989.99 would be necessary to just equal the 2000 level, then what would an actual consumer inflation at two-and-a-half times that level imply?
That would put the consumer inflation adjusted Dow at 17,390.50 to equal consumer purchasing power of 2000!"
The euro broke through the US$1.38 mark for the first time on Friday, as persistent worries about the the strength of the U.S. economy pushed the European currency higher. The 13-nation euro moved as high as US$1.3811 in afternoon European trading before falling back to US$1.3805. That was up from US$1.3783 in New York late Thursday.
Calyon, the investment banking unit of Credit Agricole SA, raised its forecast for lead prices this year by 43 percent to an average $2,620 a metric ton. Calyon cut its nickel price forecast for 2007 by 7 percent to $41,140 a ton from $44,080 a ton, on lower demand from stainless steel producers.
Chevron Corp. and ConocoPhillips said they lost output from North Sea fields that produce oil and gas after BP Plc closed the pipeline. BG Group Plc said its Armada oil field in the North Sea has been shut for maintenance since June.
Puru Saxena: "Today the average Chinese consumes less that 2 barrels of oil per year and the average Indian consumes less than a barrel of oil per year whereas the average American consumes 25 barrels per year. After reviewing this data, you don't have to be a rocket-scientist to figure out that demand for energy in Asia can only rise in the future. And unless we can find a way to increase supply, the price of oil will continue to appreciate."
Peter Schiff: "Today the average Chinese consumes less that 2 barrels of oil per year and the average Indian consumes less than a barrel of oil per year whereas the average American consumes 25 barrels per year. After reviewing this data, you don't have to be a rocket-scientist to figure out that demand for energy in Asia can only rise in the future. And unless we can find a way to increase supply, the price of oil will continue to appreciate."
Iran will allow United Nations inspectors to visit later this month a reactor under construction that could produce plutonium, the UN's International Atomic Energy Agency said. Iran's ambassador to the IAEA, Aliasghar Soltanieh, said the visit to the reactor would ``take place soon'' and ``just one visit will be enough,'' Agence France-Presse reported. The next set of talks between officials from the UN agency and Iran will be held on July 25 and 26, AFP reported, citing Soltanieh.
Iran asked Japanese refiners to switch to the yen to pay for all crude oil purchases, after Iran's central bank said it's cutting holdings of the U.S. dollar. Iran wants yen-based transactions ``for any/all of your forthcoming Iranian crude oil liftings,'' according to a letter sent to Japanese refiners that was signed by Ali A. Arshi, general manager of crude oil marketing and exports in Tehran at the National Iranian Oil Co. The request is for all shipments ``effective immediately,'' according to the letter, dated July 10 and obtained by Bloomberg News.
Marcus Aurelius: “If you are distressed by anything external, the pain is not due to the thing itself but to your own estimate of it; and this you have the power to revoke at any moment.”
``There's some really hot weather coming into the U.S. Midwest next week,'' said Peter Linder, portfolio manager of Calgary-based DeltaOne Energy Fund.
``The upper Midwest will reach 10 to 15 degrees above normal -- maybe even hotter than that,'' said Jim Rouiller, a senior energy meteorologist for Planalytics Inc. ``The Twin Cities and Chicago are going to feel the brunt of the heat wave as we move into the latter half of next week.'' Overall U.S. energy demand will increase to 18 percent above normal by July 20, according to Belton, Missouri-based Weather Derivatives. Linder said gas could go back up to earlier prices near $8 based on expected weather conditions. ``The forecast for the rest of the summer calls for hot weather, hotter than normal in much of the U.S., and that will increase the likelihood of an active hurricane season in the Gulf of Mexico,'' that could disrupt supplies, Linder said.
August crude closed at $73.93 a barrel Friday, up $1.43 for the session to gain 1.5% for the week. August natural gas climbed 16.5 cents, or 2.5%, to end at $6.662 per million British thermal units. It was up 3.4% from last Friday's close.
August gold closed at $667.30 an ounce, down $1 for the session, but it still gained $12.50, or 1.9%, for the week. September silver fell 7 cents to end at $13.11 an ounce, up 2.8% from a week ago. September copper climbed 1.2 cents to finish at $3.593 a pound, nearly unchanged from last Friday's close of $3.593.
The number of rigs drilling for oil and natural gas in North America increased by 113, or 5.6%, to 2,151, according to a weekly update by Baker Hughes Inc. on Friday. The U.S. rig count rose by 39 from last week to 1,791, while the offshore rig count fell by three to 76. The Canadian rig count rose by 74 to 360. In addition, the number of gas rigs increased by 28 to 1,501, while the oil rig count rose by 10 to 284, Baker Hughes reported.
The number of rigs searching for oil and gas in Canada about half the 560 mark a year ago. the weakness was felt particularly in the drilling and evaluation segment in Canada.
Poised to maintain a steady growth over the 2000-2010 analysis period, the world Oilfield Chemicals market is forecast to reach US$11.8 billion by 2010, according to a recently released market research report published by Global Industry Analysts, Inc. Asia-Pacific, Middle East & Africa and Latin America constitute high growth markets, while the US, accounting for an estimated 42.76% in 2006, will continue its dominance in the global Oilfield Chemicals market. Asia-Pacific region is projected to maintain a CAGR of 5.3% over the 2000-2010 analysis period.
William James: “The world we see that seems so insane is the result of a belief system that is not working. To perceive the world differently, we must be willing to change our belief system, let the past slip away, expand our sense of now, and dissolve the fear in our minds.”
Friday, July 13, 2007
Thursday, July 12, 2007
Goings On
7/12/07 Goings On
Wal-Mart Stores Inc.'s June sales at stores open at least one year rose 2.4%, excluding fuel. Including fuel, same-store sales rose 2.5%. Total company sales for the five weeks ended July 6 rose 9.4% to $35.81 billion. The company expects same-store sales for the July four-week reporting period to be between 1% and 2%. The world's largest retailer forecast second-quarter profit to be within its previously stated target range of 75 cents to 79 cents a share. "We remain in a challenging environment, but still believe the earnings guidance for the quarter is attainable," Chief Financial Officer Tom Schoewe said in a statement.
Nordstrom's June same-store sales rose 2%, while its total sales rose 2.9% for the month. The firm said it expects to report second quarter same store sales rose 2% to 3%, and that July same-store sales will also be up 2% to 3%.
Macy's Inc.'s June sales at stores open at least one year fell 2.7%. Department-store operator Macy's expects same-store sales in July to be flat to down 3%. Based on sales levels that are lower than originally expected, the company now expects second quarter profit, excluding merger integration costs, to be in the range of 20 cents to 30 cents a share, compared to its previous guidance of 35 cents to 45 cents a share.
Rio Tinto agreed to offer $38.1 billion, or $101 a share in cash, for Canadian aluminum producer Alcan. Alcan will owe a break fee of $1.05 billion to Rio Tinto in certain circumstances. Sempra Metals estimates that the combined group would control 17.1 per cent of the world’s bauxite production, 11.6 per cent of alumina output and 11.6 of aluminium production.
South Korea's central bank boosted its benchmark lending rate by a quarter percentage point to 4.75% Thursday, marking its first rate hike in 11 months.
A Chinese government spokesman said tax authorities do not have a timetable for implementing a capital gains levy, according to reports. Li Linjun, a spokesman with the State Administration of Taxation, made the comments in program broadcast on state television late Wednesday, according to a report by Dow Jones Newswires.
The 10 members of the Organization of Petroleum Exporting Countries bound by the group's crude oil output agreements boosted production by 40,000 barrels per day to 26.6 million b/d in June, up from a revised May level of 26.56 million b/d, according to results from a Platts survey released late Wednesday. Total OPEC output, including volumes from Iraq and new member Angola, averaged 30.22 million b/d in June, up from a revised figure of 30.21 million b/d for May, Platts said. "Given what groups such as the International Energy Agency are saying is required for supply and demand to stay balanced in the second half of the year, consumers can't view this latest report as anything but discouraging," said John Kingston, Platts global director of oil, in a statement.
Micron Technology Inc., struggling with sharp price declines for its memory chips used in PCs and other electronics, has cut 5% of its global workforce, or 1,100 jobs.
Halliburton announced an increase to its buyback of $2B. Current repurchase allowance stands at $3B which at current prices would equate to about 9% of the outstanding shares.
Motorola said its cell phone division would not be profitable until 2008. Motorola said sales in the quarter ended June 30 will be between $8.6 billion and $8.7 billion, compared with its previous forecast that sales would be about $9.4 billion.
Genentech Inc. made $747 million, or 70 cents a share, in the second quarter, compared with $531 million, or 49 cents a share, in the same quarter last year. Excluding certain onetime items, the profit came in at 78 cents a share. Revenue rose to $3 billion from $2.2 billion. Genentech also said it now expects full-year 2007 earnings to range from $2.85 to $2.95 a share vs. a prior expectation of $2.79 to $2.90 a share.
Costco Wholesale Corp reported a 6 percent rise in June sales at stores open at least a year, helped by increased sales of televisions, small appliances and other items.
Joe Duarte: " According to Debka, Iran is so certain that a U.S. attack is coming that it has begun to ration gasoline, while Syria is telling its citizens to leave Lebanon. Meanwhile "Israel, Syria and Hizballah have prepared their armies for a war contingency entailing a possible clash on Golan and the Lebanese-Israeli frontier regions."
Nouriel Roubini: "If consumption spending were to remain weak in H2 – say close to the 1.5% growth of Q2 – the recovery of capex and inventories would not continue as weakness in the private final demand for consumption goods would lead to a further accumulation of unsold goods and a need to cut back on inventories, production and capital spending. Note also that the significant weakening of consumption in Q2 is confirmed by latest weekly reports on same chain store sales. The International Council of Shopping Centers and UBS are projecting that June's sales at stores open longer than a year will rise a mediocre 1.5% to 2%, year over year; this means that they have fallen in real terms over the last year."
Chicago Tribune: " The Ricketts family is the latest in a growing list of bidders for the Cubs. Tribune Co., which owns the Chicago Tribune, Los Angeles Times, WGN-Ch. 9 and other media assets, put the team up for sale in April to help fund an $8.2 billion effort to take itself private in partnership with Chicago billionaire Sam Zell. The hype has been building ever since. An investment banker representing another potential buyer said his sources at Major League Baseball are hearing prices for the Cubs, Wrigley Field and Tribune's quarter share of cable channel Comcast SportsNet of well more than $1 billion.
"The price is going to be eye-popping," he said. I believe the takeover of Tribune will be completed at $34 in cash, and the present discount of $4 represents an outstanding opportunity.
US petrol consumption rose last week to 9.7m barrels a day, the third highest reading ever and the highest for 2007, according to Lehman Brothers data.
Copper prices are approaching $8,000 a ton. Soybeans are $9+ and wheat $6+. How would Bernanke describe that inflation perception? Perceive this! The S&P Goldman Sachs Commodity Index is trading at 509+.
The May trade gap for the U.S. totaled $60 billion. It widened 2.3 percent from a revised deficit of $58.7 billion for April, the U.S. Commerce Department said. The trade deficit, which hit a record $758.5 billion in 2006, totaled $295.5 billion for the first five months of 2007, narrowing from $317.8 billion in the same period last year. With crude prices nearing record levels, the trade deficit will widen in my view.
Apparel retailer Gap Inc. said on Thursday its sales at stores open at least a year fell 5 percent in June, hurt by weakness at its Old Navy and namesake Gap chains.
Washington Post's Bob Woodward writing of a Nov. 13, 2006 briefing at the White House: " CIA Director Michael V. Hayden said "the inability of the government to govern seems irreversible," adding that he could not "point to any milestone or checkpoint where we can turn this thing around," according to written records of his briefing and the recollections of six participants. "The government is unable to govern," Hayden concluded. "We have spent a lot of energy and treasure creating a government that is balanced, and it cannot function." Later in the interview, he qualified the statement somewhat: "A government that can govern, sustain and defend itself is not achievable," he said, "in the short term."
For the Apple bulls I suggest you read this: http://www.footnoted.org/blog-notes/giving-up-on-the-iphone/
Chevron cut its Erskine field oil production in the North Sea.
So-called margin debt, a broad measure of leverage, jumped 11% to $353 billion at NYSE in May, up from nearly $318 billion in April.
The number of U.S. properties in foreclosure climbed 87 percent last month from a year earlier as home prices fell and lending standards tightened, making it harder for borrowers to sell homes and refinance mortgages. There were 164,644 loan default notices, scheduled auctions and bank repossessions in June, led by filings in California, Florida, Ohio and Michigan that together accounted for half the total, according to RealtyTrac, a seller of foreclosure data. The June foreclosure figure was 7 percent lower than that in May.
Bloomberg reported U.K. natural gas rose as forecasts indicated supplies of the fuel will probably decline today. Gas for delivery intraday gained as much as 3.6 percent to 31.7 pence a therm, according to prices on Bloomberg from broker ICAP Plc. It traded at 31 pence at 12:15 p.m. in London. That's equivalent to $6.4 million British thermal units. A therm is 100,000 Btus. Gas prices have increased this week after a ship damaged a pipeline owned by BP Plc, preventing some North Sea gas from reaching the market. Imports from Norway via the Langeled pipeline have also dropped. Traders owning capacity in the pipe may have been buying supplies in the U.K.
Huntsman Corp. agreed to be bought for $28 a share in cash, or $10.6 billion, by Hexion Specialty Chemicals Inc., a unit of private equity firm Apollo Group.
Eldorado Gold Corp. said on Thursday that it was ordered to shut its Kisladag gold mine in western Turkey in a court decision registered on Wednesday. Shares in the junior miner plummeted to a nine-month low after the announcement. The stock bottomed at C$4.55 on the Toronto Stock Exchange, down C$2.67, or 37 percent. It then regained some ground to C$5.10 in Toronto and $4.88 on Amex, a 29 percent drop. The order will stand until the court rules on an appeal of a lower court decision, which confirmed the legality of Eldorado's environmental impact assessment. The Vancouver, British Columbia-based company did not say who filed the appeal. Eldorado said the open pit mine in Turkey's Usak province will be closed in about 30 days. The company is uncertain how long it will take the court to review the appeal, but expects the appeal will be denied and the mine closure temporary.
In 2006 I had suggested one consider the purchase of EGO shares at the $4.60 level. One would have been rewarded with a 50% profit and little risk. I think this Turkey situation will sort itself out and owners of EGO shares at these levels will be rewarded once again.
Kisladag began commercial production in July, 2006 and produced 70,895 ounces of gold that year. Eldorado had previously forecast 2007 production between 190,000 ounces and 200,000 ounces of gold.
Natural-gas inventories rose by 106 billion cubic feet for the week ended July 6, the Energy Department said Thursday.Total stocks now stand at 2.627 trillion cubic feet, down 64 billion cubic feet from the year-ago level, but 374 billion cubic feet above the five-year average, the government data said. August natural gas was down 19 cents, or 2.9%, at $6.41 per million British thermal units.
The Labor Department said the number of U.S. workers applying for jobless benefits fell 12,000 to a seasonally adjusted 308,000 last week from an upwardly revised 320,000 the prior week. The four-week moving average slipped to 317,750 from 319,250.
Jose Lopez of Nestle Lopez said the group would work to cut some product lines that appear less profitable in the light of higher commodity prices, but none of the 27 blockbuster brands that generate over 1 billion Swiss francs in sales. He declined to elaborate. Nestle's efficiency drive under Chief Executive Peter Brabeck has seen the group grow organically by 5.8% a year and increase its gross margin by 300 basis points to 13.5% over the 10 years to 2006, helping it deliver industry beating improvements, according to a recent study by investment bank Dresdner Kleinwort.
Mexico's peso rose as the price of crude oil, the country's biggest export, surged. Mexico's peso rose 0.2 percent to 10.7850 per dollar at 10:42 a.m. New York time, after gaining 0.4 percent yesterday.
The market cap for ExxonMobil is $500B+ and for GE it's $400B+
August crude closed at $72.50 a barrel Thursday, down 6 cents for the session. August natural gas fell 10.3 cents to close at $6.497 per million British thermal units.
August gold climbed $6.20 to close at $668.30 an ounce Thursday in New York. September silver gained 20.5 cents, or 1.6%, to close at $13.18 an ounce, but September copper fell 1.1%, or 4.05 cents, to end at $3.581 a pound.
The Dow Jones Industrial Average surged more than 280 points, or 2.1%, closing at a new all-time record high. The blue chip index posted the biggest one-day point-gain for the blue chip index since October 2002. The S&P 500 and the Nasdaq Composite both closed with gains of 1.9%.
Alcoa Inc. withdrew its $28 billion offer to buy Canadian aluminum rival Alcan Inc. on Thursday after being outbid by mining giant Rio Tinto.
Wal-Mart Stores Inc.'s June sales at stores open at least one year rose 2.4%, excluding fuel. Including fuel, same-store sales rose 2.5%. Total company sales for the five weeks ended July 6 rose 9.4% to $35.81 billion. The company expects same-store sales for the July four-week reporting period to be between 1% and 2%. The world's largest retailer forecast second-quarter profit to be within its previously stated target range of 75 cents to 79 cents a share. "We remain in a challenging environment, but still believe the earnings guidance for the quarter is attainable," Chief Financial Officer Tom Schoewe said in a statement.
Nordstrom's June same-store sales rose 2%, while its total sales rose 2.9% for the month. The firm said it expects to report second quarter same store sales rose 2% to 3%, and that July same-store sales will also be up 2% to 3%.
Macy's Inc.'s June sales at stores open at least one year fell 2.7%. Department-store operator Macy's expects same-store sales in July to be flat to down 3%. Based on sales levels that are lower than originally expected, the company now expects second quarter profit, excluding merger integration costs, to be in the range of 20 cents to 30 cents a share, compared to its previous guidance of 35 cents to 45 cents a share.
Rio Tinto agreed to offer $38.1 billion, or $101 a share in cash, for Canadian aluminum producer Alcan. Alcan will owe a break fee of $1.05 billion to Rio Tinto in certain circumstances. Sempra Metals estimates that the combined group would control 17.1 per cent of the world’s bauxite production, 11.6 per cent of alumina output and 11.6 of aluminium production.
South Korea's central bank boosted its benchmark lending rate by a quarter percentage point to 4.75% Thursday, marking its first rate hike in 11 months.
A Chinese government spokesman said tax authorities do not have a timetable for implementing a capital gains levy, according to reports. Li Linjun, a spokesman with the State Administration of Taxation, made the comments in program broadcast on state television late Wednesday, according to a report by Dow Jones Newswires.
The 10 members of the Organization of Petroleum Exporting Countries bound by the group's crude oil output agreements boosted production by 40,000 barrels per day to 26.6 million b/d in June, up from a revised May level of 26.56 million b/d, according to results from a Platts survey released late Wednesday. Total OPEC output, including volumes from Iraq and new member Angola, averaged 30.22 million b/d in June, up from a revised figure of 30.21 million b/d for May, Platts said. "Given what groups such as the International Energy Agency are saying is required for supply and demand to stay balanced in the second half of the year, consumers can't view this latest report as anything but discouraging," said John Kingston, Platts global director of oil, in a statement.
Micron Technology Inc., struggling with sharp price declines for its memory chips used in PCs and other electronics, has cut 5% of its global workforce, or 1,100 jobs.
Halliburton announced an increase to its buyback of $2B. Current repurchase allowance stands at $3B which at current prices would equate to about 9% of the outstanding shares.
Motorola said its cell phone division would not be profitable until 2008. Motorola said sales in the quarter ended June 30 will be between $8.6 billion and $8.7 billion, compared with its previous forecast that sales would be about $9.4 billion.
Genentech Inc. made $747 million, or 70 cents a share, in the second quarter, compared with $531 million, or 49 cents a share, in the same quarter last year. Excluding certain onetime items, the profit came in at 78 cents a share. Revenue rose to $3 billion from $2.2 billion. Genentech also said it now expects full-year 2007 earnings to range from $2.85 to $2.95 a share vs. a prior expectation of $2.79 to $2.90 a share.
Costco Wholesale Corp reported a 6 percent rise in June sales at stores open at least a year, helped by increased sales of televisions, small appliances and other items.
Joe Duarte: " According to Debka, Iran is so certain that a U.S. attack is coming that it has begun to ration gasoline, while Syria is telling its citizens to leave Lebanon. Meanwhile "Israel, Syria and Hizballah have prepared their armies for a war contingency entailing a possible clash on Golan and the Lebanese-Israeli frontier regions."
Nouriel Roubini: "If consumption spending were to remain weak in H2 – say close to the 1.5% growth of Q2 – the recovery of capex and inventories would not continue as weakness in the private final demand for consumption goods would lead to a further accumulation of unsold goods and a need to cut back on inventories, production and capital spending. Note also that the significant weakening of consumption in Q2 is confirmed by latest weekly reports on same chain store sales. The International Council of Shopping Centers and UBS are projecting that June's sales at stores open longer than a year will rise a mediocre 1.5% to 2%, year over year; this means that they have fallen in real terms over the last year."
Chicago Tribune: " The Ricketts family is the latest in a growing list of bidders for the Cubs. Tribune Co., which owns the Chicago Tribune, Los Angeles Times, WGN-Ch. 9 and other media assets, put the team up for sale in April to help fund an $8.2 billion effort to take itself private in partnership with Chicago billionaire Sam Zell. The hype has been building ever since. An investment banker representing another potential buyer said his sources at Major League Baseball are hearing prices for the Cubs, Wrigley Field and Tribune's quarter share of cable channel Comcast SportsNet of well more than $1 billion.
"The price is going to be eye-popping," he said. I believe the takeover of Tribune will be completed at $34 in cash, and the present discount of $4 represents an outstanding opportunity.
US petrol consumption rose last week to 9.7m barrels a day, the third highest reading ever and the highest for 2007, according to Lehman Brothers data.
Copper prices are approaching $8,000 a ton. Soybeans are $9+ and wheat $6+. How would Bernanke describe that inflation perception? Perceive this! The S&P Goldman Sachs Commodity Index is trading at 509+.
The May trade gap for the U.S. totaled $60 billion. It widened 2.3 percent from a revised deficit of $58.7 billion for April, the U.S. Commerce Department said. The trade deficit, which hit a record $758.5 billion in 2006, totaled $295.5 billion for the first five months of 2007, narrowing from $317.8 billion in the same period last year. With crude prices nearing record levels, the trade deficit will widen in my view.
Apparel retailer Gap Inc. said on Thursday its sales at stores open at least a year fell 5 percent in June, hurt by weakness at its Old Navy and namesake Gap chains.
Washington Post's Bob Woodward writing of a Nov. 13, 2006 briefing at the White House: " CIA Director Michael V. Hayden said "the inability of the government to govern seems irreversible," adding that he could not "point to any milestone or checkpoint where we can turn this thing around," according to written records of his briefing and the recollections of six participants. "The government is unable to govern," Hayden concluded. "We have spent a lot of energy and treasure creating a government that is balanced, and it cannot function." Later in the interview, he qualified the statement somewhat: "A government that can govern, sustain and defend itself is not achievable," he said, "in the short term."
For the Apple bulls I suggest you read this: http://www.footnoted.org/blog-notes/giving-up-on-the-iphone/
Chevron cut its Erskine field oil production in the North Sea.
So-called margin debt, a broad measure of leverage, jumped 11% to $353 billion at NYSE in May, up from nearly $318 billion in April.
The number of U.S. properties in foreclosure climbed 87 percent last month from a year earlier as home prices fell and lending standards tightened, making it harder for borrowers to sell homes and refinance mortgages. There were 164,644 loan default notices, scheduled auctions and bank repossessions in June, led by filings in California, Florida, Ohio and Michigan that together accounted for half the total, according to RealtyTrac, a seller of foreclosure data. The June foreclosure figure was 7 percent lower than that in May.
Bloomberg reported U.K. natural gas rose as forecasts indicated supplies of the fuel will probably decline today. Gas for delivery intraday gained as much as 3.6 percent to 31.7 pence a therm, according to prices on Bloomberg from broker ICAP Plc. It traded at 31 pence at 12:15 p.m. in London. That's equivalent to $6.4 million British thermal units. A therm is 100,000 Btus. Gas prices have increased this week after a ship damaged a pipeline owned by BP Plc, preventing some North Sea gas from reaching the market. Imports from Norway via the Langeled pipeline have also dropped. Traders owning capacity in the pipe may have been buying supplies in the U.K.
Huntsman Corp. agreed to be bought for $28 a share in cash, or $10.6 billion, by Hexion Specialty Chemicals Inc., a unit of private equity firm Apollo Group.
Eldorado Gold Corp. said on Thursday that it was ordered to shut its Kisladag gold mine in western Turkey in a court decision registered on Wednesday. Shares in the junior miner plummeted to a nine-month low after the announcement. The stock bottomed at C$4.55 on the Toronto Stock Exchange, down C$2.67, or 37 percent. It then regained some ground to C$5.10 in Toronto and $4.88 on Amex, a 29 percent drop. The order will stand until the court rules on an appeal of a lower court decision, which confirmed the legality of Eldorado's environmental impact assessment. The Vancouver, British Columbia-based company did not say who filed the appeal. Eldorado said the open pit mine in Turkey's Usak province will be closed in about 30 days. The company is uncertain how long it will take the court to review the appeal, but expects the appeal will be denied and the mine closure temporary.
In 2006 I had suggested one consider the purchase of EGO shares at the $4.60 level. One would have been rewarded with a 50% profit and little risk. I think this Turkey situation will sort itself out and owners of EGO shares at these levels will be rewarded once again.
Kisladag began commercial production in July, 2006 and produced 70,895 ounces of gold that year. Eldorado had previously forecast 2007 production between 190,000 ounces and 200,000 ounces of gold.
Natural-gas inventories rose by 106 billion cubic feet for the week ended July 6, the Energy Department said Thursday.Total stocks now stand at 2.627 trillion cubic feet, down 64 billion cubic feet from the year-ago level, but 374 billion cubic feet above the five-year average, the government data said. August natural gas was down 19 cents, or 2.9%, at $6.41 per million British thermal units.
The Labor Department said the number of U.S. workers applying for jobless benefits fell 12,000 to a seasonally adjusted 308,000 last week from an upwardly revised 320,000 the prior week. The four-week moving average slipped to 317,750 from 319,250.
Jose Lopez of Nestle Lopez said the group would work to cut some product lines that appear less profitable in the light of higher commodity prices, but none of the 27 blockbuster brands that generate over 1 billion Swiss francs in sales. He declined to elaborate. Nestle's efficiency drive under Chief Executive Peter Brabeck has seen the group grow organically by 5.8% a year and increase its gross margin by 300 basis points to 13.5% over the 10 years to 2006, helping it deliver industry beating improvements, according to a recent study by investment bank Dresdner Kleinwort.
Mexico's peso rose as the price of crude oil, the country's biggest export, surged. Mexico's peso rose 0.2 percent to 10.7850 per dollar at 10:42 a.m. New York time, after gaining 0.4 percent yesterday.
The market cap for ExxonMobil is $500B+ and for GE it's $400B+
August crude closed at $72.50 a barrel Thursday, down 6 cents for the session. August natural gas fell 10.3 cents to close at $6.497 per million British thermal units.
August gold climbed $6.20 to close at $668.30 an ounce Thursday in New York. September silver gained 20.5 cents, or 1.6%, to close at $13.18 an ounce, but September copper fell 1.1%, or 4.05 cents, to end at $3.581 a pound.
The Dow Jones Industrial Average surged more than 280 points, or 2.1%, closing at a new all-time record high. The blue chip index posted the biggest one-day point-gain for the blue chip index since October 2002. The S&P 500 and the Nasdaq Composite both closed with gains of 1.9%.
Alcoa Inc. withdrew its $28 billion offer to buy Canadian aluminum rival Alcan Inc. on Thursday after being outbid by mining giant Rio Tinto.
Wednesday, July 11, 2007
M&A Activity
7/12/07 M&A Activity
New Brunswick Scientific Co. and German laboratory-equipment provider Eppendorf Group said Wednesday they have agreed to a merger agreement in which Eppendorf will acquire New Brunswick Scientific for $11.50 a share.
Shares of Unilever advanced 2% in London trading as published reports citing unnamed traders linked the Anglo-Dutch consumer products giant to a possible takeover bid from Colgate Palmolive.
Liz Claiborne Inc.is putting 16 of its brands under strategic review, set a strategic realignment, and plans to cut 7% to 9% of its non-retail growth force, as part of a major corporate overhaul announced ahead of an analyst meeting on Wednesday. The company, whose brands include Juicy Couture, Lucky Brand, Mexx, and Sigrid Olsen, tightened its 2007 adjusted earnings per share target to a range of $1.90 to $2.00, with adjusted net sales expected to be flat to down low single digits compared to last year.
The U.S. dollar index is trading at $80.50. The Federal Reserve's broad dollar index on Tuesday showed the greenback's nominal, weighted value at its lowest level in a decade. Against a selection of major currencies, the dollar hit its lowest level ever in the free-floating currency period since the Fed's records began in 1973. "We continue to see two themes play out: the dollar taking the brunt of concerns about credit markets, and whether this should lead to more substantial risk aversion and unwind of carry positions," said Laura Ambroseno, currency strategist at Morgan Stanley in London.
India's Megasoft has agreed to buy Boston Communications for $65 million, or $3.60 a share.
Alcan has begun negotiating a merger agreement with Rio Tinto as it seeks to fend off a hostile bid from Alcoa, The Globe and Mail newspaper reported Wednesday, citing unnamed sources.
Gerdau Ameristeel Corp. agreed to buy Chaparral Steel Co. for $4.22 billion, or $86 a share.
Ministry of Commerce spokesman Wang Xinpei said Wednesday growth in China's trade surplus could slow in the second half, according to Dow Jones Newswires. China's foreign exchange reserves, the world's largest, swelled to $1.33 trillion by the end of the first half on the back of massive trade flows that contributed to an acceleration in money supply growth in June. The central bank said on Wednesday that reserves had grown by $266.3 billion to $1.3326 trillion between January and June, in excess of the $247.3 billion reserves accumulation for the whole of 2006.
Ryland Group Inc. expects to report a second-quarter loss of $1.25 to $1.35 a share. The Calabasas, Calif.-based homebuilder said that due to "continued deterioration in the housing market," it expects to incur $145 million to $155 million in pre-tax charges related to inventory impairments and write-offs in the quarter. The impairments are associated with assets in Arizona, California, Florida and Nevada. Excluding inventory impairments and write-offs, Ryland said it expects to a post second-quarter profit of 75 cents to 80 cents a share. In addition, the company said preliminary sales for the second quarter were 2,521 units, down 16.6% from last year, and cancellations were roughly 34% of gross orders, versus 35.9% a year ago. Preliminary closings in the period totaled 2,461 units, down 35.3% from 2006.
Ventana Medical Systems Inc. said its board has rejected an unsolicited $75 a share cash tender offer from Swiss drug maker Roche Holding AG as "inadequate in multiple respects.
The cancer diagnostics company said that with the assistance of its financial and legal advisers, it determined the offer by the Swiss health-care company is against the best interest of stockholders. Ventana urged holders not to tender their shares to Roche and said it intends to "vigorously resist" Roche's attempt to acquire it at the current offer price.
Australia is undergoing one of its worst-ever droughts amid predictions that global warming could make things worse.
Brad Setser: "We now know that the BRIe economies -- Brazil, Russia and India -- added $200b to their reserves in the first half of the year. Close to $199b to be exact. Russia accounted for $102b of the increase, Brazil chipped in $61.5 and India added another $36b. A tiny bit of that was valuation gains; most of it was real. $200b -- $400b annualized -- is a phenomenal sum...UPDATE: China justed released its q2 reserves data. The PBoC banked $130.6b in q2, putting Chinese reserve growth for the first half of the year at $266b. That puts total BRIC reserve growth for the first half above $450b ($900b, annualized)."
Edward E. Leamer, director of the Anderson Forecast at UCLA, said housing markets are probably weaker than statistics suggest because more homeowners would like to sell but have decided to wait out the slump.
"Builders have made price concessions, but even at that they still haven't cleared out their inventories," Leamer said. "We keep looking for some blue sky, some sign that the market is improving, but we just don't see anything out there."
The Popular Revolutionary Army (EPR) said it had attacked oil installations of the state-owned oil company, Pemex. A gas pipeline in central Mexico suffered an explosion and fire in the early morning hours Tuesday, prompting evacuations of nearby communities but causing no injuries.
Nigerian oil company Moni Pulo is expected to shut-in its production following an attack by militants on an oil production barge in the Calabar River in the Niger Delta, a trader of West African crude said Tuesday.
China’s central bank may raise interest rates twice more this year, with the first coming as soon as this month, according to a Bank of China research report.
Investor confidence in the ability of companies to repay debt used to finance leveraged buyouts fell to the lowest in at least nine months in Europe as lenders shun risky assets.The iTraxx LevX Index of credit-default swaps on loans to 35 European companies owned by buyout firms from Blackstone Group LP in New York to London-based Apax Partners Worldwide LLC fell to 97.75, the lowest since the index started last October, according to data compiled by Bloomberg. The LevX reached a high of 101.53 in February and traded at 98.76 yesterday.
The Oil Drum: "The Kuwaiti government will discuss the size of the country's oil reserves in a closed-door session with members of parliament today. The size of the reserves in the world's seventh-largest oil exporter became a sensitive issue last year when industry newsletter Petroleum Intelligence Weekly (PIW) said it had seen internal records showing reserves were about 48 billion barrels - half the officially stated 99 billon.The difference is equal to more than four percent of global proved oil reserves, according to data in BP's annual statistical review, the oil industry's most trusted."
Paul Kasriel: "Each month the Bureau of Labor Statistics attempts to estimate how many jobs were created (or eliminated) by smaller businesses not yet included in its survey of employers. This estimate is referred to as the "birth/death" adjustment. In the 12 months ended June, total-not-seasonally-adjusted nonfarm payrolls increased by 1.982 million. During the same interval, the birth/death adjustment contributed 1.111 million jobs to the total. That is, in the 12 months ended June, the birth/death adjustment accounted for 56.0% of the 12-month increase in total nonfarm payrolls...In the 12 months ended March 2006, the birth/death adjustment was contributing only 30.9% of the jobs to the change in nonfarm payrolls. The birth/death relative contribution has been trending higher since then. Notice that as the birth/death contribution to nonfarm payrolls has been trending higher, the percentage of small businesses saying that now is a good time to expand their operations has been trending lower. If existing small business managers do not think now is a good time to expand their operations, does it make sense that there are a lot of new small businesses starting up and hiring?"
The American Petroleum Institute reported a decline of 6.8 million barrels in crude supplies for the week ending July 6. The Energy Department had reported a fall of 1.4 million barrels for the latest week. Motor gasoline supplies rose by 2.9 million barrels, the API said. The government reported that supplies were up 1.2 million barrels. Distillate supplies climbed 1.5 million barrels, the API said. The government posted a rise of 0.8-million barrels. Refinery activity improved to 90.2% from 90.0% in the previous week.
The National Association of Realtors also said it expects existing-home sales to rise to nearly 6.4 million in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, the trade group said. As for new homes, sales are projected at 865,000 in 2007 and 878,000 next year, but the 2008 projection would still be down more than 20% compared with the nearly 1.1 million new homes sold in 2006.
Sallie Mae, formally known as SLM Corp, said Wednesday the group that has agreed to acquire the company said it believes that legislative proposals pending before Congress "could result in a failure of the conditions to the closing of the merger to be satisfied." Sallie Mae said it strongly disagrees with the assertion, and plans to proceed towards the closing of the merger transaction as rapidly as possible. In April, the student-loan firm agreed to be taken private by a group comprised of private-equity firms J.C. Flowers & Co. and Friedman Fleischer & Lowe LLC, as well as J.P. Morgan and Bank of America, for $60 a share, or about $25 billion.
August gold fell $2.30 to close at $662.10 an ounce Wednesday. September silver closed unchanged at $12.975 an ounce. September copper gained 1.15 cents to close at $3.6215 a pound.
The former White House political director, testifying for the first time about the firings of eight U.S. attorneys, declined today to answer most questions about her role in the controversy, which threatens the job of Atty. Gen. Alberto Gonzales. Sara Taylor, 32, who left the White House staff seven weeks ago, had shown the Senate Judiciary Committee a letter from White House Counsel Fred F. Fielding advising her to avoid answering questions about internal White House deliberations on grounds of executive privilege.
Reformulated gasoline's August contract lost 6.31 cents, or 2.7%, to close at $2.3063 a gallon. August crude fell by 25 cents to close at $72.56 a barrel. August natural gas lost 9.9 cents to finish at $6.60 per million British thermal units.
New Brunswick Scientific Co. and German laboratory-equipment provider Eppendorf Group said Wednesday they have agreed to a merger agreement in which Eppendorf will acquire New Brunswick Scientific for $11.50 a share.
Shares of Unilever advanced 2% in London trading as published reports citing unnamed traders linked the Anglo-Dutch consumer products giant to a possible takeover bid from Colgate Palmolive.
Liz Claiborne Inc.is putting 16 of its brands under strategic review, set a strategic realignment, and plans to cut 7% to 9% of its non-retail growth force, as part of a major corporate overhaul announced ahead of an analyst meeting on Wednesday. The company, whose brands include Juicy Couture, Lucky Brand, Mexx, and Sigrid Olsen, tightened its 2007 adjusted earnings per share target to a range of $1.90 to $2.00, with adjusted net sales expected to be flat to down low single digits compared to last year.
The U.S. dollar index is trading at $80.50. The Federal Reserve's broad dollar index on Tuesday showed the greenback's nominal, weighted value at its lowest level in a decade. Against a selection of major currencies, the dollar hit its lowest level ever in the free-floating currency period since the Fed's records began in 1973. "We continue to see two themes play out: the dollar taking the brunt of concerns about credit markets, and whether this should lead to more substantial risk aversion and unwind of carry positions," said Laura Ambroseno, currency strategist at Morgan Stanley in London.
India's Megasoft has agreed to buy Boston Communications for $65 million, or $3.60 a share.
Alcan has begun negotiating a merger agreement with Rio Tinto as it seeks to fend off a hostile bid from Alcoa, The Globe and Mail newspaper reported Wednesday, citing unnamed sources.
Gerdau Ameristeel Corp. agreed to buy Chaparral Steel Co. for $4.22 billion, or $86 a share.
Ministry of Commerce spokesman Wang Xinpei said Wednesday growth in China's trade surplus could slow in the second half, according to Dow Jones Newswires. China's foreign exchange reserves, the world's largest, swelled to $1.33 trillion by the end of the first half on the back of massive trade flows that contributed to an acceleration in money supply growth in June. The central bank said on Wednesday that reserves had grown by $266.3 billion to $1.3326 trillion between January and June, in excess of the $247.3 billion reserves accumulation for the whole of 2006.
Ryland Group Inc. expects to report a second-quarter loss of $1.25 to $1.35 a share. The Calabasas, Calif.-based homebuilder said that due to "continued deterioration in the housing market," it expects to incur $145 million to $155 million in pre-tax charges related to inventory impairments and write-offs in the quarter. The impairments are associated with assets in Arizona, California, Florida and Nevada. Excluding inventory impairments and write-offs, Ryland said it expects to a post second-quarter profit of 75 cents to 80 cents a share. In addition, the company said preliminary sales for the second quarter were 2,521 units, down 16.6% from last year, and cancellations were roughly 34% of gross orders, versus 35.9% a year ago. Preliminary closings in the period totaled 2,461 units, down 35.3% from 2006.
Ventana Medical Systems Inc. said its board has rejected an unsolicited $75 a share cash tender offer from Swiss drug maker Roche Holding AG as "inadequate in multiple respects.
The cancer diagnostics company said that with the assistance of its financial and legal advisers, it determined the offer by the Swiss health-care company is against the best interest of stockholders. Ventana urged holders not to tender their shares to Roche and said it intends to "vigorously resist" Roche's attempt to acquire it at the current offer price.
Australia is undergoing one of its worst-ever droughts amid predictions that global warming could make things worse.
Brad Setser: "We now know that the BRIe economies -- Brazil, Russia and India -- added $200b to their reserves in the first half of the year. Close to $199b to be exact. Russia accounted for $102b of the increase, Brazil chipped in $61.5 and India added another $36b. A tiny bit of that was valuation gains; most of it was real. $200b -- $400b annualized -- is a phenomenal sum...UPDATE: China justed released its q2 reserves data. The PBoC banked $130.6b in q2, putting Chinese reserve growth for the first half of the year at $266b. That puts total BRIC reserve growth for the first half above $450b ($900b, annualized)."
Edward E. Leamer, director of the Anderson Forecast at UCLA, said housing markets are probably weaker than statistics suggest because more homeowners would like to sell but have decided to wait out the slump.
"Builders have made price concessions, but even at that they still haven't cleared out their inventories," Leamer said. "We keep looking for some blue sky, some sign that the market is improving, but we just don't see anything out there."
The Popular Revolutionary Army (EPR) said it had attacked oil installations of the state-owned oil company, Pemex. A gas pipeline in central Mexico suffered an explosion and fire in the early morning hours Tuesday, prompting evacuations of nearby communities but causing no injuries.
Nigerian oil company Moni Pulo is expected to shut-in its production following an attack by militants on an oil production barge in the Calabar River in the Niger Delta, a trader of West African crude said Tuesday.
China’s central bank may raise interest rates twice more this year, with the first coming as soon as this month, according to a Bank of China research report.
Investor confidence in the ability of companies to repay debt used to finance leveraged buyouts fell to the lowest in at least nine months in Europe as lenders shun risky assets.The iTraxx LevX Index of credit-default swaps on loans to 35 European companies owned by buyout firms from Blackstone Group LP in New York to London-based Apax Partners Worldwide LLC fell to 97.75, the lowest since the index started last October, according to data compiled by Bloomberg. The LevX reached a high of 101.53 in February and traded at 98.76 yesterday.
The Oil Drum: "The Kuwaiti government will discuss the size of the country's oil reserves in a closed-door session with members of parliament today. The size of the reserves in the world's seventh-largest oil exporter became a sensitive issue last year when industry newsletter Petroleum Intelligence Weekly (PIW) said it had seen internal records showing reserves were about 48 billion barrels - half the officially stated 99 billon.The difference is equal to more than four percent of global proved oil reserves, according to data in BP's annual statistical review, the oil industry's most trusted."
Paul Kasriel: "Each month the Bureau of Labor Statistics attempts to estimate how many jobs were created (or eliminated) by smaller businesses not yet included in its survey of employers. This estimate is referred to as the "birth/death" adjustment. In the 12 months ended June, total-not-seasonally-adjusted nonfarm payrolls increased by 1.982 million. During the same interval, the birth/death adjustment contributed 1.111 million jobs to the total. That is, in the 12 months ended June, the birth/death adjustment accounted for 56.0% of the 12-month increase in total nonfarm payrolls...In the 12 months ended March 2006, the birth/death adjustment was contributing only 30.9% of the jobs to the change in nonfarm payrolls. The birth/death relative contribution has been trending higher since then. Notice that as the birth/death contribution to nonfarm payrolls has been trending higher, the percentage of small businesses saying that now is a good time to expand their operations has been trending lower. If existing small business managers do not think now is a good time to expand their operations, does it make sense that there are a lot of new small businesses starting up and hiring?"
The American Petroleum Institute reported a decline of 6.8 million barrels in crude supplies for the week ending July 6. The Energy Department had reported a fall of 1.4 million barrels for the latest week. Motor gasoline supplies rose by 2.9 million barrels, the API said. The government reported that supplies were up 1.2 million barrels. Distillate supplies climbed 1.5 million barrels, the API said. The government posted a rise of 0.8-million barrels. Refinery activity improved to 90.2% from 90.0% in the previous week.
The National Association of Realtors also said it expects existing-home sales to rise to nearly 6.4 million in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, the trade group said. As for new homes, sales are projected at 865,000 in 2007 and 878,000 next year, but the 2008 projection would still be down more than 20% compared with the nearly 1.1 million new homes sold in 2006.
Sallie Mae, formally known as SLM Corp, said Wednesday the group that has agreed to acquire the company said it believes that legislative proposals pending before Congress "could result in a failure of the conditions to the closing of the merger to be satisfied." Sallie Mae said it strongly disagrees with the assertion, and plans to proceed towards the closing of the merger transaction as rapidly as possible. In April, the student-loan firm agreed to be taken private by a group comprised of private-equity firms J.C. Flowers & Co. and Friedman Fleischer & Lowe LLC, as well as J.P. Morgan and Bank of America, for $60 a share, or about $25 billion.
August gold fell $2.30 to close at $662.10 an ounce Wednesday. September silver closed unchanged at $12.975 an ounce. September copper gained 1.15 cents to close at $3.6215 a pound.
The former White House political director, testifying for the first time about the firings of eight U.S. attorneys, declined today to answer most questions about her role in the controversy, which threatens the job of Atty. Gen. Alberto Gonzales. Sara Taylor, 32, who left the White House staff seven weeks ago, had shown the Senate Judiciary Committee a letter from White House Counsel Fred F. Fielding advising her to avoid answering questions about internal White House deliberations on grounds of executive privilege.
Reformulated gasoline's August contract lost 6.31 cents, or 2.7%, to close at $2.3063 a gallon. August crude fell by 25 cents to close at $72.56 a barrel. August natural gas lost 9.9 cents to finish at $6.60 per million British thermal units.
Tuesday, July 10, 2007
Statistics
7/11/07 Statistics
Violence against US troops has escalated since the surge began in February. The daily military death toll has increased to an average of 3.5. The number of military deaths in Iraq and Afghanistan yesterday topped 4,000, said the Pentagon.
"Sales for the fiscal month of June were relatively sluggish, but finished a tad better than how they began," said Michael Niemira, chief economist for the ICSC. For the fiscal month, ICSC is targeting same-store sales growth in a range of about 1.5% to 2%.
Sears said that if the sales trends experienced during the first nine weeks of the second quarter continue through the rest of the second quarter period, which ends Aug. 4, net income will be between $1.06 and $1.32 a share. The current year second quarter estimate includes a gain of about 8 cents a share from bankruptcy-related settlements and total return swap investing activities. Analysts, on average, expected it to earn $2.12 for the fiscal second quarter, according to Thomson Financial.
D.R. Horton's orders for the third quarter ending June 30 dropped 40% to 8,559 homes, or down 47% to $2 billion by value. The cancellation rate at the Fort Worth, Tex.-based builder was 38%. "Market conditions for new home sales declined in our June quarter as inventory levels of both new and existing homes remained high, and we expect the housing environment to remain challenging," said Chairman Donald R. Horton in a statement. It expects a profit before impairments, but a loss after including those impairments, during the June quarter.
Home Depot lowered its earnings goal for the fiscal year, citing weaker conditions in the housing market. It had predicted fiscal year earnings to fall 15% excluding the sale of the HD Supply business; it now sees adjusted earnings per share dropping between 15% and 18%. Total retail sales will fall between 1% and 2% and comparable store sales will fall in the mid single digits. Its operating margin will fall by between 1.2 and 1.5 percentage points. Separately it said it's launching its tender offer for 250 million shares at a price between $39 and $44 a share.
BHP Billiton is talking to private equity firms over a potential $40 billion takeover bid for Alcoa Inc. according to a report in the Times (of London) newspaper. The report said BHP's favored partner is Blackstone group. The miner has hired Merrill Lynch to investigate bids for both Alcoa and Alcan, with Alcoa seen as the preferable target, the newspaper said.
China's trade surplus rose to $26.91 billion in June, setting a new monthly record. The June data brings China's trade surplus for the first six months of the year to $112.5 billion. Goldman Sachs estimated that the Chinese export surplus in the first half of the year equaled about 8 percent of its gross domestic product in the same period. Its surplus in the first half of 2006 equaled 6.3 percent of gross domestic product.
Alcoa, Inc. expects Chinese aluminum demand to increase 33.6% this year to 11.7 million metric tons, up from an April projection of 23.1%.
The Microsoft Press Conference due this Tuesday at E3 Media & Business Summit will be the platform for a price cut announcement according to Wedbush Morgan Securities analyst Michael Pachter.
In a note to investors today he stated that the Xbox 360 price cut will be across the entire range of consoles. In US dollars, the $299 Core pack will drop to $249; the $399 Premium pack will drop to $349; and the recently released $479 Elite model will drop to $399.
A report citing a lack of progress by the Baghdad government is only ''a look at the starting line'' of the U.S. troop surge and shouldn't be used by critics to demand withdrawal, President Bush's spokesman said Tuesday.
Bloomberg reported that Cedar Fair LP, the third-largest US theme-park operator, hired Bear Stearns to seek a buyer that will agree to keep the management team.
“There’s massive inflation in copper and nickel and stainless steel and concrete,” said John Krenecki, president and chief executive of GE Energy. The uncertainty is not just in nuclear plants, he said; coal plant prices are now similarly unstable. As talk of building new power plants rises sharply, so does the cost. A new fleet of coal-fired power plants and a revival of nuclear construction after three decades are both looking tougher lately.
Robert McHugh: "Short term, the Dow Industrials are approaching an Intermediate term top. However, there is evidence that suggests more upside is likely over the next few weeks, leading to that top. The below pattern in the Dow Industrials is an Ascending Expanding Wedge, with diverging upper and lower boundaries, which suggests a top here of significance. Once complete, prices can be expected to drop to about the start of the pattern, at a minimum, meaning into the 9,000s over the intermediate-term, although if the PPT responds by hyperinflating the money supply, it could be 9,000 in real dollars (gold adjusted), not nominal. A confirmed Hindenburg Omen remains on the clock until October, 2007."
Peter Schiff: "The Japanese are pursuing this reckless monetary policy with the deliberate goal of creating inflation, and they are in danger of succeeding beyond their wildest dreams. Despite the tendency of central bankers to argue that consumers are better served by rising prices rather than falling prices, "deflation" was never a real threat to Japan. On the contrary, falling consumer prices are one of the natural rewards that people enjoy in market economies. The fact that this benefit has been denied to most people in modern times as a result of government created inflation is one of the great tragedies of our time. To spare its citizens from suffering the "scourge" of being able to buy products at lower prices, the Japanese are close to destroying one of the greatest savings hordes in history. The question is why are they doing it? The only logical answer I can offer is that the Japanese realize that if they stop the flow of global liquidity they will destroy the dollar and the U.S. economy. To survive, the U.S. must be able to both limitlessly exchange the dollars it prints for the goods the rest of the world makes and then pay low rates of interest on its IOU's that foreigners accumulate as a result. Were the Japanese to turn off the monetary spigot and raise interest rates to normal levels, Americans would not be able to do either."
Gemstar-TV Guide to explore options to maximize shareholder value including sale of the company.
Daily shipments of North Sea Brent crude, part of the price benchmark for almost two-thirds of the world's oil, will increase 16 percent next month. Tankers are set to load 209,613 barrels a day of Brent crude in August, from 180,645 in July, according to the loading program of field operator Royal Dutch Shell Plc, Europe's largest oil company.
The Bank of Canada announced it would raise interest rates by a quarter point to 4.5%.
Buenos Aires saw snow on Monday for the first time in 89 years.
Pepsi Bottling Group Inc. posted profit that rose more than analysts estimated and raised its earnings forecast on European gains and increased demand for Lipton tea.
The euro hit a new high Tuesday against the dollar, topping $1.3708 in mid-morning trading.
August natural gas rose 28.9 cents to close at $6.699 per million British thermal units Tuesday as a heat wave in the Northeast and Western U.S. raised demand expectations. August crude rose 62 cents to close at $72.81 a barrel.
August gold climbed $1.90 to close at $664.40 an ounce.
Stillwater Mining Co. said Tuesday union employees at its Stillwater Mine and Columbus processing facilities, represented by the USW International Union Local 11-0001, failed to ratify a new labor agreement reached on July 2. The union has called for a strike to begin tomorrow, Billings, Mont.-based Stillwater said.
Alcoa signed for a $30 billion credit facility with its lenders that it would use to pay for Alcan shares. The banks includes Citigroup Inc. and Goldman Sachs Group Inc. as joint lead arrangers and joint book-running managers. The maturity date for the credit facility is January 10, 2009.
The dollar fell to a 26-year low against sterling, and slumped nearly 1% against the yen. Gregory Salvaggio, a vice president for trading at Tempus Consulting in Washington, said "the ECB is going to hike rates at least two times more this year and U.S. bond yields are falling, giving no incentive for large global investors to hold dollars." There's more than just interest rate differentials at play here. How about risk? How will the U.S. repay its debts owed to other countries? By printing more dollar-denominated debt with the dollar continuing to lose purchasing power. There's a big hole in this ponzi scheme, and it won't get fixed any time soon.
The brilliant quote of the day: "Forecasts of core inflation must take into account the extent to which food and energy costs are passed through to other prices," Bernanke said. A NYC cab driver could tell you that, and in multiple languages.
Bill Bonner: "When you need to make a monthly mortgage payment, there is not much fantasy or romance to it. It is real. When you don't have the money, it is even more real…which is to say, the experience is more intense and more memorable."
Violence against US troops has escalated since the surge began in February. The daily military death toll has increased to an average of 3.5. The number of military deaths in Iraq and Afghanistan yesterday topped 4,000, said the Pentagon.
"Sales for the fiscal month of June were relatively sluggish, but finished a tad better than how they began," said Michael Niemira, chief economist for the ICSC. For the fiscal month, ICSC is targeting same-store sales growth in a range of about 1.5% to 2%.
Sears said that if the sales trends experienced during the first nine weeks of the second quarter continue through the rest of the second quarter period, which ends Aug. 4, net income will be between $1.06 and $1.32 a share. The current year second quarter estimate includes a gain of about 8 cents a share from bankruptcy-related settlements and total return swap investing activities. Analysts, on average, expected it to earn $2.12 for the fiscal second quarter, according to Thomson Financial.
D.R. Horton's orders for the third quarter ending June 30 dropped 40% to 8,559 homes, or down 47% to $2 billion by value. The cancellation rate at the Fort Worth, Tex.-based builder was 38%. "Market conditions for new home sales declined in our June quarter as inventory levels of both new and existing homes remained high, and we expect the housing environment to remain challenging," said Chairman Donald R. Horton in a statement. It expects a profit before impairments, but a loss after including those impairments, during the June quarter.
Home Depot lowered its earnings goal for the fiscal year, citing weaker conditions in the housing market. It had predicted fiscal year earnings to fall 15% excluding the sale of the HD Supply business; it now sees adjusted earnings per share dropping between 15% and 18%. Total retail sales will fall between 1% and 2% and comparable store sales will fall in the mid single digits. Its operating margin will fall by between 1.2 and 1.5 percentage points. Separately it said it's launching its tender offer for 250 million shares at a price between $39 and $44 a share.
BHP Billiton is talking to private equity firms over a potential $40 billion takeover bid for Alcoa Inc. according to a report in the Times (of London) newspaper. The report said BHP's favored partner is Blackstone group. The miner has hired Merrill Lynch to investigate bids for both Alcoa and Alcan, with Alcoa seen as the preferable target, the newspaper said.
China's trade surplus rose to $26.91 billion in June, setting a new monthly record. The June data brings China's trade surplus for the first six months of the year to $112.5 billion. Goldman Sachs estimated that the Chinese export surplus in the first half of the year equaled about 8 percent of its gross domestic product in the same period. Its surplus in the first half of 2006 equaled 6.3 percent of gross domestic product.
Alcoa, Inc. expects Chinese aluminum demand to increase 33.6% this year to 11.7 million metric tons, up from an April projection of 23.1%.
The Microsoft Press Conference due this Tuesday at E3 Media & Business Summit will be the platform for a price cut announcement according to Wedbush Morgan Securities analyst Michael Pachter.
In a note to investors today he stated that the Xbox 360 price cut will be across the entire range of consoles. In US dollars, the $299 Core pack will drop to $249; the $399 Premium pack will drop to $349; and the recently released $479 Elite model will drop to $399.
A report citing a lack of progress by the Baghdad government is only ''a look at the starting line'' of the U.S. troop surge and shouldn't be used by critics to demand withdrawal, President Bush's spokesman said Tuesday.
Bloomberg reported that Cedar Fair LP, the third-largest US theme-park operator, hired Bear Stearns to seek a buyer that will agree to keep the management team.
“There’s massive inflation in copper and nickel and stainless steel and concrete,” said John Krenecki, president and chief executive of GE Energy. The uncertainty is not just in nuclear plants, he said; coal plant prices are now similarly unstable. As talk of building new power plants rises sharply, so does the cost. A new fleet of coal-fired power plants and a revival of nuclear construction after three decades are both looking tougher lately.
Robert McHugh: "Short term, the Dow Industrials are approaching an Intermediate term top. However, there is evidence that suggests more upside is likely over the next few weeks, leading to that top. The below pattern in the Dow Industrials is an Ascending Expanding Wedge, with diverging upper and lower boundaries, which suggests a top here of significance. Once complete, prices can be expected to drop to about the start of the pattern, at a minimum, meaning into the 9,000s over the intermediate-term, although if the PPT responds by hyperinflating the money supply, it could be 9,000 in real dollars (gold adjusted), not nominal. A confirmed Hindenburg Omen remains on the clock until October, 2007."
Peter Schiff: "The Japanese are pursuing this reckless monetary policy with the deliberate goal of creating inflation, and they are in danger of succeeding beyond their wildest dreams. Despite the tendency of central bankers to argue that consumers are better served by rising prices rather than falling prices, "deflation" was never a real threat to Japan. On the contrary, falling consumer prices are one of the natural rewards that people enjoy in market economies. The fact that this benefit has been denied to most people in modern times as a result of government created inflation is one of the great tragedies of our time. To spare its citizens from suffering the "scourge" of being able to buy products at lower prices, the Japanese are close to destroying one of the greatest savings hordes in history. The question is why are they doing it? The only logical answer I can offer is that the Japanese realize that if they stop the flow of global liquidity they will destroy the dollar and the U.S. economy. To survive, the U.S. must be able to both limitlessly exchange the dollars it prints for the goods the rest of the world makes and then pay low rates of interest on its IOU's that foreigners accumulate as a result. Were the Japanese to turn off the monetary spigot and raise interest rates to normal levels, Americans would not be able to do either."
Gemstar-TV Guide to explore options to maximize shareholder value including sale of the company.
Daily shipments of North Sea Brent crude, part of the price benchmark for almost two-thirds of the world's oil, will increase 16 percent next month. Tankers are set to load 209,613 barrels a day of Brent crude in August, from 180,645 in July, according to the loading program of field operator Royal Dutch Shell Plc, Europe's largest oil company.
The Bank of Canada announced it would raise interest rates by a quarter point to 4.5%.
Buenos Aires saw snow on Monday for the first time in 89 years.
Pepsi Bottling Group Inc. posted profit that rose more than analysts estimated and raised its earnings forecast on European gains and increased demand for Lipton tea.
The euro hit a new high Tuesday against the dollar, topping $1.3708 in mid-morning trading.
August natural gas rose 28.9 cents to close at $6.699 per million British thermal units Tuesday as a heat wave in the Northeast and Western U.S. raised demand expectations. August crude rose 62 cents to close at $72.81 a barrel.
August gold climbed $1.90 to close at $664.40 an ounce.
Stillwater Mining Co. said Tuesday union employees at its Stillwater Mine and Columbus processing facilities, represented by the USW International Union Local 11-0001, failed to ratify a new labor agreement reached on July 2. The union has called for a strike to begin tomorrow, Billings, Mont.-based Stillwater said.
Alcoa signed for a $30 billion credit facility with its lenders that it would use to pay for Alcan shares. The banks includes Citigroup Inc. and Goldman Sachs Group Inc. as joint lead arrangers and joint book-running managers. The maturity date for the credit facility is January 10, 2009.
The dollar fell to a 26-year low against sterling, and slumped nearly 1% against the yen. Gregory Salvaggio, a vice president for trading at Tempus Consulting in Washington, said "the ECB is going to hike rates at least two times more this year and U.S. bond yields are falling, giving no incentive for large global investors to hold dollars." There's more than just interest rate differentials at play here. How about risk? How will the U.S. repay its debts owed to other countries? By printing more dollar-denominated debt with the dollar continuing to lose purchasing power. There's a big hole in this ponzi scheme, and it won't get fixed any time soon.
The brilliant quote of the day: "Forecasts of core inflation must take into account the extent to which food and energy costs are passed through to other prices," Bernanke said. A NYC cab driver could tell you that, and in multiple languages.
Bill Bonner: "When you need to make a monthly mortgage payment, there is not much fantasy or romance to it. It is real. When you don't have the money, it is even more real…which is to say, the experience is more intense and more memorable."
Monday, July 09, 2007
Possibilities
7/10/07 Possibilities
Melbourne newspaper "The Age" reported that Rio Tinto has done "a tremendous amount of work" on a potential Alcan bid. North American investment bank CIBC has been recruited by Rio Tinto, the mining giant, to help strike a potential agreed £14 billion takeover of Canada’s Alcan.
Iran is ready to sign a $7 billion tri-nation gas pipeline project with India and Pakistan when the two neighbours resolve differences over the transit fee for movement of the gas, a senior official was quoted on Sunday as saying. "After India and Pakistan reach an agreement on transit fee ... we will move toward signing a contract," Hojjatollah Ghanimifard, an international affairs director with the National Iranian Oil Company (NIOC), told the Sharq newspaper. The pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. Under the plan, the pipeline's capacity would be increased to 150 million cubic metres at a later date. Iran says it has completed 18 percent of the work for the pipeline, which will supply gas from its prolific South Pars field up to Iran-Pakistan border. Pakistan has yet to begin on a 1,000 km stretch of the pipeline to link Iran with India.
Dubai Mercantile Exchange Limited (DME) yesterday announced statistics for its first month of trading since its launch on June 1.
The exchange reported a total of 58,365 contracts traded during June, of which 39,571 were Oman Crude Oil Futures Contracts (OQ), 7,332 WTI-Oman Financial Spread Contracts (QW) and 11,462 Brent-Oman Financial Spread Contracts (QN). This exceptionally high number of contracts going for physical delivery has only been exceeded once, by Nymex's WTI benchmark in January 1995.
Sequa Corp. said Monday they have agreed to be bought by The Carlyle Group for $2.7 billion. Under the terms of the merger agreement, Carlyle will acquire all of the outstanding Class A and Class B shares of Sequa for $175.00 per share in cash, a premium of 54% to the closing prices of Sequa's Class A and Class B shares on July 6, the companies said.
Apollo Management raised its offer for U.S. chemical company Huntsman Corp. by 75 cents a share Sunday night to $28 a share, The Wall Street Journal Online reported on Monday.
In a dire forecast, the Paris-based International Energy Agency is warning of an impending crunch in the supply of oil and natural gas needed to power world economic growth in coming years. The IEA raised their yearly demand for crude to 2.2% through 2012 versus prior forecasts of just a 2% rise.
John Hussman: "In general, high stock valuations coupled with low interest rates (as we have now) have historically been symptomatic of a fully priced, overly optimistic market, with little margin for error."
Sony will knock $100 off the price of the PlayStation 3 in an effort to jump-start sluggish sales. The price drop, to $499 from $599, comes eight months after Sony started selling the console.
A group of investors led by private equity firm CVC Capital Partners said Monday it bid 1.5 billion euros ($2 billion) for chemicals distributor Univar with approval from Univar's boards.The bid of 53.50 euros ($72.76) per share represents a 37% premium over Univar's closing share price on Friday.
Japanese stocks rose to a seven-year high Monday, lifted by stronger-than-expected machinery orders. The Nikkei 225 index climbed 121.04 points, or 0.67 percent, on the Tokyo Stock Exchange, to 18,261.98 points, the index's highest close since May 2, 2000.
Google Inc. will pay $625 million in cash to buy Postini, a specialist in communications security. "With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes. With the addition of Postini, our apps are not just simple and appealing to users -- they can also streamline the complex information security mandates within these organizations," Google CEO and Chairman Eric Schmidt said.
Coventry Health Care Inc. said Monday it'll pay $685 million in cash to buy Florida Health Plan Administrators, LLC, owner of Vista Healthplans.
Gov. Ed Rendell late Sunday ordered a range of state government services shut down and placed about a third of the state work force on indefinite unpaid furlough after frantic last-minute negotiations failed to break a budget stalemate.
A surge in credit-card debt in May pushed outstanding U.S. consumer debt up at a 6.4% annual rate, or $12.9 billion, to $2.44 trillion, the Federal Reserve reported Monday. Credit-card debts rose at a 9.8% annual rate in May, the most in six months after a revised 0.2% gain in April. The average interest rate on credit-card accounts rose to 13.46%, the highest in five years.
The weather is forecast to be very hot across the nation this week, and temperatures will be much above normal levels. With the heat, natural gas prices should begin to strengthen.
Lear Corp. said its board has approved an amendment to a merger agreement with American Real Estate Partners LP under which AREP would increase its offer price for Lear shares to $37.25 from $36.
U.K. natural gas increased after BP Plc said flows of the fuel through a pipeline it operates may be halted for weeks. Shippers indicated they may pump less gas into storage in response to the higher prices.
Gas for intraday delivery rose as much as 10 percent to 33 pence a therm, the highest since Jan. 2, according to prices on Bloomberg from the energy broker ICAP Plc. It traded at 31.5 pence a therm at 12:12 p.m. in London, equivalent to $6.35 per million British thermal units. A therm is 100,000 Btus. Gas for delivery tomorrow also traded at 31.5 pence a therm.
Katanga Mining Ltd. added 34 cents to C$23.60. Central African Mining & Exploration Co., a miner of copper in the Democratic Republic of the Congo, said it will make an all-stock bid for rival copper miner Katanga Mining that values the company at 773.1 million pounds ($1.56 billion). Central African, based in London, will offer 15 of its shares for each share of Toronto-based Katanga. It already owns 22 percent of Katanga, Central African said in a statement distributed by the Regulatory News Service.
BHP Billiton Ltd's incoming chief executive, Marius Kloppers, believes the stockmarket underestimates the potential of the group's assets, even though the world's largest diversified resources group's shares are continuing to trade at record highs, UBS said in a research note.
Copper rose to a two-month high in New York after union workers went on strike at a mine in Chile, the world's largest producer of the metal. The protest will cut output at Dona Ines de Collahuasi, Chile's third-largest copper mine, union treasurer Pedro Diaz said today in a telephone interview.
Crude for August delivery closed down 62 cents at $72.19 a barrel on the New York Mercantile Exchange. August reformulated gasoline rose 3.50 cents at $2.3446 a gallon. August heating oil edged down 0.23 cent to $2.0928 a gallon. August natural gas fell 3.40 cents to $6.410 per million British thermal units.
ConocoPhillips has approved a $15 billion share buyback program. The Houston-based oil company said the repurchase authorization includes $2 billion remaining under the $4 billion stock buyback plan announced in February.\
Gold for August delivery closed up $7.70 at $662.50 an ounce on the New York Mercantile Exchange. September silver closed up 6.30 cents at $12.820 an ounce, October platinum gained $6.90 at $1,318.0 an ounce and September palladium gained $2.15 at $371.10 an ounce. September copper closed up 3.50 cents at $3.6295 a pound.
Johnson & Johnson has approved a share repurchase program of up to $10 billion.
Groupe Danone plans to buy Dutch baby-food maker Numico for 55 euros a share, or 12.3 billion euros ($16.7 billion) in cash.
President Bush invoked executive privilege Monday to deny requests by Congress for testimony from two former aides about the firings of federal prosecutors. The White House, however, did offer again to make former counsel Harriet Miers and one-time political director Sara Taylor available for private, off-the-record interviews.
BP apparently shut a crude unit at its 410,000 barrel per day Whiting, Ind. refinery.
Alcoa reported second-quarter earnings of 81 cents a share including one-time charges, though its sales of $8.1 billion fell short of expectations. The company also said it has extended its buyout offer for rival Alcan to Aug. 10. Alcoa has received about 418,500 Alcan common shares so far.
Gold warehouse inventories fell by 64,095 troy ounces to stand at 7.16 million troy ounces as of late Friday, according to Nymex data. Silver supplies rose to 135.1 million troy ounces, up 331,975 troy ounces, while copper supplies were unchanged at 22,123 short tons.
Melbourne newspaper "The Age" reported that Rio Tinto has done "a tremendous amount of work" on a potential Alcan bid. North American investment bank CIBC has been recruited by Rio Tinto, the mining giant, to help strike a potential agreed £14 billion takeover of Canada’s Alcan.
Iran is ready to sign a $7 billion tri-nation gas pipeline project with India and Pakistan when the two neighbours resolve differences over the transit fee for movement of the gas, a senior official was quoted on Sunday as saying. "After India and Pakistan reach an agreement on transit fee ... we will move toward signing a contract," Hojjatollah Ghanimifard, an international affairs director with the National Iranian Oil Company (NIOC), told the Sharq newspaper. The pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. Under the plan, the pipeline's capacity would be increased to 150 million cubic metres at a later date. Iran says it has completed 18 percent of the work for the pipeline, which will supply gas from its prolific South Pars field up to Iran-Pakistan border. Pakistan has yet to begin on a 1,000 km stretch of the pipeline to link Iran with India.
Dubai Mercantile Exchange Limited (DME) yesterday announced statistics for its first month of trading since its launch on June 1.
The exchange reported a total of 58,365 contracts traded during June, of which 39,571 were Oman Crude Oil Futures Contracts (OQ), 7,332 WTI-Oman Financial Spread Contracts (QW) and 11,462 Brent-Oman Financial Spread Contracts (QN). This exceptionally high number of contracts going for physical delivery has only been exceeded once, by Nymex's WTI benchmark in January 1995.
Sequa Corp. said Monday they have agreed to be bought by The Carlyle Group for $2.7 billion. Under the terms of the merger agreement, Carlyle will acquire all of the outstanding Class A and Class B shares of Sequa for $175.00 per share in cash, a premium of 54% to the closing prices of Sequa's Class A and Class B shares on July 6, the companies said.
Apollo Management raised its offer for U.S. chemical company Huntsman Corp. by 75 cents a share Sunday night to $28 a share, The Wall Street Journal Online reported on Monday.
In a dire forecast, the Paris-based International Energy Agency is warning of an impending crunch in the supply of oil and natural gas needed to power world economic growth in coming years. The IEA raised their yearly demand for crude to 2.2% through 2012 versus prior forecasts of just a 2% rise.
John Hussman: "In general, high stock valuations coupled with low interest rates (as we have now) have historically been symptomatic of a fully priced, overly optimistic market, with little margin for error."
Sony will knock $100 off the price of the PlayStation 3 in an effort to jump-start sluggish sales. The price drop, to $499 from $599, comes eight months after Sony started selling the console.
A group of investors led by private equity firm CVC Capital Partners said Monday it bid 1.5 billion euros ($2 billion) for chemicals distributor Univar with approval from Univar's boards.The bid of 53.50 euros ($72.76) per share represents a 37% premium over Univar's closing share price on Friday.
Japanese stocks rose to a seven-year high Monday, lifted by stronger-than-expected machinery orders. The Nikkei 225 index climbed 121.04 points, or 0.67 percent, on the Tokyo Stock Exchange, to 18,261.98 points, the index's highest close since May 2, 2000.
Google Inc. will pay $625 million in cash to buy Postini, a specialist in communications security. "With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes. With the addition of Postini, our apps are not just simple and appealing to users -- they can also streamline the complex information security mandates within these organizations," Google CEO and Chairman Eric Schmidt said.
Coventry Health Care Inc. said Monday it'll pay $685 million in cash to buy Florida Health Plan Administrators, LLC, owner of Vista Healthplans.
Gov. Ed Rendell late Sunday ordered a range of state government services shut down and placed about a third of the state work force on indefinite unpaid furlough after frantic last-minute negotiations failed to break a budget stalemate.
A surge in credit-card debt in May pushed outstanding U.S. consumer debt up at a 6.4% annual rate, or $12.9 billion, to $2.44 trillion, the Federal Reserve reported Monday. Credit-card debts rose at a 9.8% annual rate in May, the most in six months after a revised 0.2% gain in April. The average interest rate on credit-card accounts rose to 13.46%, the highest in five years.
The weather is forecast to be very hot across the nation this week, and temperatures will be much above normal levels. With the heat, natural gas prices should begin to strengthen.
Lear Corp. said its board has approved an amendment to a merger agreement with American Real Estate Partners LP under which AREP would increase its offer price for Lear shares to $37.25 from $36.
U.K. natural gas increased after BP Plc said flows of the fuel through a pipeline it operates may be halted for weeks. Shippers indicated they may pump less gas into storage in response to the higher prices.
Gas for intraday delivery rose as much as 10 percent to 33 pence a therm, the highest since Jan. 2, according to prices on Bloomberg from the energy broker ICAP Plc. It traded at 31.5 pence a therm at 12:12 p.m. in London, equivalent to $6.35 per million British thermal units. A therm is 100,000 Btus. Gas for delivery tomorrow also traded at 31.5 pence a therm.
Katanga Mining Ltd. added 34 cents to C$23.60. Central African Mining & Exploration Co., a miner of copper in the Democratic Republic of the Congo, said it will make an all-stock bid for rival copper miner Katanga Mining that values the company at 773.1 million pounds ($1.56 billion). Central African, based in London, will offer 15 of its shares for each share of Toronto-based Katanga. It already owns 22 percent of Katanga, Central African said in a statement distributed by the Regulatory News Service.
BHP Billiton Ltd's incoming chief executive, Marius Kloppers, believes the stockmarket underestimates the potential of the group's assets, even though the world's largest diversified resources group's shares are continuing to trade at record highs, UBS said in a research note.
Copper rose to a two-month high in New York after union workers went on strike at a mine in Chile, the world's largest producer of the metal. The protest will cut output at Dona Ines de Collahuasi, Chile's third-largest copper mine, union treasurer Pedro Diaz said today in a telephone interview.
Crude for August delivery closed down 62 cents at $72.19 a barrel on the New York Mercantile Exchange. August reformulated gasoline rose 3.50 cents at $2.3446 a gallon. August heating oil edged down 0.23 cent to $2.0928 a gallon. August natural gas fell 3.40 cents to $6.410 per million British thermal units.
ConocoPhillips has approved a $15 billion share buyback program. The Houston-based oil company said the repurchase authorization includes $2 billion remaining under the $4 billion stock buyback plan announced in February.\
Gold for August delivery closed up $7.70 at $662.50 an ounce on the New York Mercantile Exchange. September silver closed up 6.30 cents at $12.820 an ounce, October platinum gained $6.90 at $1,318.0 an ounce and September palladium gained $2.15 at $371.10 an ounce. September copper closed up 3.50 cents at $3.6295 a pound.
Johnson & Johnson has approved a share repurchase program of up to $10 billion.
Groupe Danone plans to buy Dutch baby-food maker Numico for 55 euros a share, or 12.3 billion euros ($16.7 billion) in cash.
President Bush invoked executive privilege Monday to deny requests by Congress for testimony from two former aides about the firings of federal prosecutors. The White House, however, did offer again to make former counsel Harriet Miers and one-time political director Sara Taylor available for private, off-the-record interviews.
BP apparently shut a crude unit at its 410,000 barrel per day Whiting, Ind. refinery.
Alcoa reported second-quarter earnings of 81 cents a share including one-time charges, though its sales of $8.1 billion fell short of expectations. The company also said it has extended its buyout offer for rival Alcan to Aug. 10. Alcoa has received about 418,500 Alcan common shares so far.
Gold warehouse inventories fell by 64,095 troy ounces to stand at 7.16 million troy ounces as of late Friday, according to Nymex data. Silver supplies rose to 135.1 million troy ounces, up 331,975 troy ounces, while copper supplies were unchanged at 22,123 short tons.
Sunday, July 08, 2007
The Heat Wave
7/9/07 The Heat Wave
In the latest indication that this will be a long, smoky summer, two lightning-sparked wildfires burned unchecked Saturday through 34,000 acres of the Inyo National Forest, forcing officials to shut down long stretches of U.S. Highway 395, the gateway to the Eastern Sierra Nevada.
At various times, portions of Highway 395 were closed between Bishop on the north and Pearsonville on the south — a 115-mile-long stretch of highway. Highway 395 is an essential thoroughfare to a list of destinations that reads like a California travel guide: Mammoth Lakes, Lake Tahoe, the John Muir Wilderness and Sequoia and Kings Canyon national parks.
An 8,000-acre wildfire forced hundreds of people in the town of Winnemucca to leave their homes, one of more than a dozen blazes that charred a combined 55 square miles in northern Nevada. The fire near Winnemucca, about 170 miles east of Reno, threatened up to eight blocks of homes and an electrical substation, said U.S. Bureau of Land Management spokesman Jamie Thompson.
A 100-mile stretch of Interstate 15 in central Utah was closed when a 160,000-acre wildfire jumped the highway, and other fires burned in California, Colorado, Arizona, Idaho, Oregon and Washington.
Courtesy of the Washington Post: "The security progress we're making is real," said a senior military intelligence official in Baghdad. "But it's only in part of the country, and there's not enough political progress to get us over the line in September." And more from the Washington Post: Senate and House committees have directed President Bush to provide by tomorrow a detailed justification of his executive privilege claims and a full accounting of the documents he is withholding. But White House counsel Fred F. Fielding plans to tell lawmakers that he has already provided the legal basis for the claims and will not provide a log of the documents, the sources said.
Russian Deputy Prime Minister Sergei Ivanov on Sunday spoke of the possibility of a new 'Berlin Wall' between Russia and Europe triggered by the stationing of US military technology in the Czech Republic and Poland.
BJ Tubular Services, a division of BJ Services, has won a well-services contract from Total E&P Borneo, for work in Brunei Darussalam. The contract covers a range of make-up services for three wells on Total's offshore development in Block B, roughly 50 kms north of the capital city of Bandar Seri Begawan.
With the recent Brunei contract award, BJ decided to open an operations base in Brunei that will be dedicated to supporting Total operations on Block B.
"It's extremely heartening to witness our relationship with Total expanding, not only in terms of their reliance on our full range of services, but geographically throughout the Asia-Pacific region," said Kenny Watt, division manager of BJ Tubular Services. "With the new dedicated BJ base in Brunei, I am confident we will be able to support this extensive operation for Total with even greater efficiency and responsiveness," he added.
Ten-year yields exceed two-year yields by 20 basis points, the most since June 26.
Mike Burk: "Next week includes the 5 trading days ahead of the 2nd Friday of July during the 3rd year of the Presidential Cycle...During the 3rd year of the Presidential Cycle the OTC has been up 64% of the time with an average gain of 1.15%, half of that gain has been made on Monday which has never been down. Over all years the OTC has also been up 64% of the time with about half the average gain of year 3. The SPX has been modestly positive over all periods...The market is overbought and the bull is getting a little tired, but, seasonally the week ahead has been pretty good. I expect the major indices to be higher on Friday July 13 than they were on Friday July 6."
Food prices will rise between 20-50% over the next decade, says a new report jointly published by the U.N. and the OECD.
Mitsubishi UFJ predicts an August rate hike to 0.75% for the Bank of Japan.
Houston Chronicle: "Much of Africa's estimated 5.5 percent economic growth last year was attributed to China's near-insatiable demand for the continent's oil, gas, timber, copper and other natural resources."
Lake Okeechobee, the heart of the Everglades and a backup drinking water source for millions of South Florida residents, has been hitting a record low almost weekly. Its main artery, the Kissimmee River starting near Orlando, hasn't flowed south in more than 240 days, depriving the lake of 50 percent of its water.
In the latest indication that this will be a long, smoky summer, two lightning-sparked wildfires burned unchecked Saturday through 34,000 acres of the Inyo National Forest, forcing officials to shut down long stretches of U.S. Highway 395, the gateway to the Eastern Sierra Nevada.
At various times, portions of Highway 395 were closed between Bishop on the north and Pearsonville on the south — a 115-mile-long stretch of highway. Highway 395 is an essential thoroughfare to a list of destinations that reads like a California travel guide: Mammoth Lakes, Lake Tahoe, the John Muir Wilderness and Sequoia and Kings Canyon national parks.
An 8,000-acre wildfire forced hundreds of people in the town of Winnemucca to leave their homes, one of more than a dozen blazes that charred a combined 55 square miles in northern Nevada. The fire near Winnemucca, about 170 miles east of Reno, threatened up to eight blocks of homes and an electrical substation, said U.S. Bureau of Land Management spokesman Jamie Thompson.
A 100-mile stretch of Interstate 15 in central Utah was closed when a 160,000-acre wildfire jumped the highway, and other fires burned in California, Colorado, Arizona, Idaho, Oregon and Washington.
Courtesy of the Washington Post: "The security progress we're making is real," said a senior military intelligence official in Baghdad. "But it's only in part of the country, and there's not enough political progress to get us over the line in September." And more from the Washington Post: Senate and House committees have directed President Bush to provide by tomorrow a detailed justification of his executive privilege claims and a full accounting of the documents he is withholding. But White House counsel Fred F. Fielding plans to tell lawmakers that he has already provided the legal basis for the claims and will not provide a log of the documents, the sources said.
Russian Deputy Prime Minister Sergei Ivanov on Sunday spoke of the possibility of a new 'Berlin Wall' between Russia and Europe triggered by the stationing of US military technology in the Czech Republic and Poland.
BJ Tubular Services, a division of BJ Services, has won a well-services contract from Total E&P Borneo, for work in Brunei Darussalam. The contract covers a range of make-up services for three wells on Total's offshore development in Block B, roughly 50 kms north of the capital city of Bandar Seri Begawan.
With the recent Brunei contract award, BJ decided to open an operations base in Brunei that will be dedicated to supporting Total operations on Block B.
"It's extremely heartening to witness our relationship with Total expanding, not only in terms of their reliance on our full range of services, but geographically throughout the Asia-Pacific region," said Kenny Watt, division manager of BJ Tubular Services. "With the new dedicated BJ base in Brunei, I am confident we will be able to support this extensive operation for Total with even greater efficiency and responsiveness," he added.
Ten-year yields exceed two-year yields by 20 basis points, the most since June 26.
Mike Burk: "Next week includes the 5 trading days ahead of the 2nd Friday of July during the 3rd year of the Presidential Cycle...During the 3rd year of the Presidential Cycle the OTC has been up 64% of the time with an average gain of 1.15%, half of that gain has been made on Monday which has never been down. Over all years the OTC has also been up 64% of the time with about half the average gain of year 3. The SPX has been modestly positive over all periods...The market is overbought and the bull is getting a little tired, but, seasonally the week ahead has been pretty good. I expect the major indices to be higher on Friday July 13 than they were on Friday July 6."
Food prices will rise between 20-50% over the next decade, says a new report jointly published by the U.N. and the OECD.
Mitsubishi UFJ predicts an August rate hike to 0.75% for the Bank of Japan.
Houston Chronicle: "Much of Africa's estimated 5.5 percent economic growth last year was attributed to China's near-insatiable demand for the continent's oil, gas, timber, copper and other natural resources."
Lake Okeechobee, the heart of the Everglades and a backup drinking water source for millions of South Florida residents, has been hitting a record low almost weekly. Its main artery, the Kissimmee River starting near Orlando, hasn't flowed south in more than 240 days, depriving the lake of 50 percent of its water.
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