Business News Review 01-07-10

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A colorful palette of information hit the business wire today, providing for an interesting business news review here. The Consumer Electronics Show kicked off in Las Vegas, offering a look into the future that is here today. Two more employment reports provided further insight ahead of tomorrow's key Labor Department data. The Dow Jones Industrials Index was relatively unchanged on the day and is meandering through the first week of the year. As we stated in our "This Week" issue, January depends on employment trends.

Business News Review

Consumer Electronics Show

The yearly Consumer Electronics Show kicked off in Las Vegas today. Microsoft (Nasdaq: MSFT) CEO Steve Ballmer gave the keynote speech, which was focused on enhancing home entertainment by tying the household's three screens together (TV, computer and mobile devices). After the as expected promotion of Windows 7, Ballmer also talked up plans for the XBox 360 and XBox Live online service.

Other notable introductions included Sony's (NYSE: SNE) Dash, a counter top device costing $200 that provides Internet access. Sanyo (OTC: SANYY.PK) showcased its Eneloop battery assisted bicycle ($2,300), while Panasonic (NYSE: PC) presented the first consumer 3D video camera ($21,000).

Of course, the highly touted Nexus One, by Google (Nasdaq: GOOG), offers mobile phone users yet another option. Google's expertise is in Internet search, and so you can use the Nexus One for search on the go. In this case, you can speak your search terms into the phone for a user-friendlier tool.

Jobless Claims

Weekly Initial Jobless Claims were reported in the pre-market this morning. For the week ended January 2, the advance figure for weekly initial jobless claims nearly matched the revised prior week tally. The 434,000 new benefits filers reported this week was only 1K higher than last week's count of 433K. Economists were looking for 450K new benefits filers, based on Bloomberg's survey.

The prior week count marked a significant dip in new claims filers from the 454K reported the week before that. However, we remind readers that you have to be a real nutcracker to fire people over the holidays, and so we would look toward January for a trend we can believe in. Shopping season also likely left the newly jobless with little time to visit the unemployment office.

Online Job Demand

The Monster Employment Index (MEI), produced by Monster World Wide (NYSE: MWW), measures online job demand monthly. December's measure edged down four points to 115, on what Monster reported as "seasonal factors due to the holidays." That is consistent with our expectation, but keep an eye on January for confirmation. A note of encouragement was found in the year-to-year comparison (vs. month-to-month), with December's measure down 12% from the prior year. December produced the best annual decline in 18 months.

Retailer Chain Store Sales

Retailers are mostly reporting Chain Store Sales for the month of December today. Wal-Mart (NYSE: WMT), the nation's critical retailer, refrains from monthly reporting, so an important bit of information is lacking. That said, retailers generally reported a 2.9% increase in December sales, according to Thomson Reuters. Last year's dismal shopping season saw a 3.6% drop. It looks like shoppers waited out retailers, squeezing them for the best deals, since November's sales only rose 0.5%.

The biggest winners of the season were the storekeepers offering the best value (same story all year). Discounters Costco (Nasdaq: COST), BJ's Wholesale Club (NYSE: BJ) and Target (NYSE: TGT) reported same-store sales gains of 9%, 4.8% and 1.8%, respectively. Sears Holdings (Nasdaq: SHLD), owner of discounter Kmart, posted a 0.4% sales gain and raised its fourth quarter forecast. Losers included Limited Brands (NYSE: LTD) and J.C. Penney (NYSE: JCP), as they posted sales decreases of 2% and 3.8%, respectively.

"As the winter threatens to be one of the coldest in recent history, look for more pressure on oil and nat gas pricing."

Natural Gas Report

The EIA reported on Natural Gas Inventory this morning. Natural gas stocks declined by 153 Bcf in the week ended January 1. This seasonal draw period also generated an inventory decrease of 124 Bcf the week before last. Gas stores were still 316 Bcf above the five-year average mark for this time of year, but that was down from 391 Bcf at this time last week. As the winter threatens to be one of the coldest in recent history, look for more pressure on oil and nat gas pricing. Remember though, that a stronger dollar acts to weaken oil, but also that Iran looms.

Constellation Brands

Wine and Spirits distiller Constellation Brands (NYSE: STZ) warned that its fiscal third quarter profits fell 47% on restructuring costs and weaker US wine sales. STZ shares were actually up fractionally on the day though, since its operating EPS forecast sits two cents higher than the analysts' consensus view.

General Motors

GM's (OTC: MTLQQ.PK) deadline for Saab offers comes to pass today, but it is making news otherwise. CEO Jim Whitacre announced that GM had produced the first advanced lithium-ion battery for eventual use in the Chevrolet Volt, and that its in-house production plant was ready to roll. The company also announced plans to sell its Nexteer Automotive business, and to shape a leaner more profitable company.

After the Close & Miscellaneous Events

Raymond James (NYSE: RJF) is sponsoring a Government Services and Technology Summit in Washington D.C. Global Payments (NYSE: GPN) will report its fiscal second quarter earnings results after the close of trading. The Fed reports on the state of its balance sheet at 4:30 p.m. Fed representatives James Bullard (St. Louis) and Thomas Hoenig (Kansas City) are addressing separate groups Thursday.


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