Business News: Jobs Data, FDO, CEPH, QE3, Mortgages, Japanese Autos, Canadian Inflation, Oil Inventory

Today's Coffee

Today's Business Summary highlights economic data and business news from: ADP on Private Payrolls, Challenger on Job Cuts, the Mortgage Bankers Association on Mortgage Activity, Fed indications toward QE3 completion, Family Dollar's strong quarter, Cephalon's intriguing trading and its hostile bid from Valeant Pharmaceuticals, logistical issues at Japanese automakers, Obama's energy push, the EIA Petroleum Status Report, Canadian inflation, the repercussions of Japan's disaster, Salesforce.com's acquisition and more.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Business News: ADP and Challenger Jobs Data, FDO, CEPH, QE3, Mortgages, Japanese Autos, Canadian Inflation, Oil Inventory

By "The Greek"

ADP Private Employment Report

ADP published its best estimate today for March Nonfarm Payrolls, seeing a 201K net increase in private market jobs. The result was just slightly less than the revised February net addition of 208K jobs. ADP reports that the result was in line with consensus expectations for ADP's data and for the government's data, due on Friday. The pace of job increase was significantly better through the first quarter of 2011, versus the last quarter of 2010.

Challenger Announced Corporate Layoffs

After a spike up in February, Challenger, Gray & Christmas reported that Announced Corporate Layoffs fell 18% in March, to 41,528. First quarter job cuts, at 130,749, were the lowest measured since 1995. Job cuts were still much improved from the prior year period, down 39%. However, the public sector saw job cuts increase by 17%, as municipalities and federal government budget cutbacks force layoffs. That said, even government layoffs were down from a year ago, falling by 62%.

Mortgage Activity Eases

As rates moved back up on easing concerns about the Middle East and Japan, mortgage refinancing activity led overall mortgage activity lower. For the period ending March 25, the Market Composite Index of mortgage activity fell 7.5% on a seasonally adjusted basis. The Refinance Index dropped 10.1%, as contracted rates on fixed rate mortgages of 30-year and 15-year durations increased to 4.92% (from 4.8%) and 4.16% (from 4.02%), respectively. Purchase activity also eased, but by just 1.7% on a seasonally adjusted basis, as the spring buying season is getting underway.

Fed Men Support Completion of Quantitative Easing

Two Federal Reserve Bank Presidents, Boston's Eric Rosengren and Chicago's Charles Evans, voiced support for the full completion of the Fed's $600 billion quantitative easing program scheduled to last through June. The argument by some Fed men that the economy is on "firmer footing," and so might not need the full program, is coming into question of late, given new economic data and developments in the marketplace and global economy. The duo of Fed Presidents intimated that it was likely still too early to pull stimulus and that it appears the target figure of $600 billion is appropriate.

Obama Pushing Energy Today

President Obama is delivering a speech today to promote energy independence in the wake of disruptions abroad which highlight the vulnerability of supplies. The goal is to reduce oil imports by one-third over the next decade through the development of alternative fuels and energy. In a teaser last night, the President said, "Let's actually have a plan. Let's, yes, increase domestic oil production, but let's also invest in solar and wind and geothermal and bio-fuels and let's make our buildings more efficient and our cars more efficient."

Japan Might be Bigger Problem than Experts Suggest

Reports that the nuclear situation could drag out like the BP (NYSE: BP) oil spill did have many quick-to-speak market strategists looking foolish today. Japan's nuclear experts are now saying that it could take a substantial amount of time to stabilize Fukushima. As this catastrophe drags out, it weighs on the world's third largest economy. Uncertainty is a heavy weight for markets to bear, and it appears gurus were wrong in their overlooking what is a very complex and unique situation in Japan.

Portugal Says A-Okay for 2011

Despite bearing a downgrade by credit rating bully S&P on Tuesday, Portugal's Secretary of State for Treasury and Finance, Carlos Costa Pina, said Portugal is in position to meet its bond obligations for 2011, especially the redemptions of long-term debt that will take place in April and June. Costa Pina suggests his country will do all it can to avoid taking foreign aid, as it is viewed internally as a great burden on both public and private sector growth. Indeed, Greece also tried to avoid taking help, but the markets forced it to by pressuring its cost of borrowing beyond its ability. The recent government turnover only increased uncertainty in Portugal and pushed bond yields higher. The outlook is not a bright one for Portugal and so credit-rater S&P is probably right, but after the fact as is proving a trend on Water Street (i.e. US MBS).

Canada Contributes to Inflation Fears

Canada reported its industrial product and raw materials prices increased more than expected in February. The North reported that industrial product prices increased 0.7% in February, against expectations for a 0.3% increase. The gain followed a 0.4% rise in January and a 0.8% increase in December. Prices were up 3.4% year-to-year. The Raw Materials Price Index rose 1.8% in February, and was three times more than economists foresaw.

EIA Petroleum Status

With Saudi Arabia on its horse to make up for the supply disruption from Libya, oil inventory increased again by 2.9 million barrels in the latest week. However, for the period ending March 25, total motor gasoline inventory again dropped precipitously, by 2.7 million barrels this time. The Saudis are saying they will send more oil conducive to gasoline refining to make up for the loss of high quality oil usually delivered from Libya. Indeed, US interests are at stake in Libya, as the price of gasoline is growing intolerable to American consumers.

Corporate News Wire

Family Dollar (NYSE: FDO) reported a penny better quarterly EPS than analysts had forecast on average (even after their adjustment higher in early March), and FDO forecast annual income ahead of analysts' estimates. As a result, its shares are higher today, but down from their premarket scramble. Family Dollar sees full year EPS at $3.13 to $3.23, ahead of the analysts' consensus for $3.12.

Cephalon (Nasdaq: CEPH) is trading at a $75 and change today, above the $73 per share hostile takeover bid by Valeant Pharmaceuticals (NYSE: VRX), Canada's largest drugmaker. Valeant's bid marked a 24% premium to CEPH's closing price Tuesday. Valeant is an aggressive acquirer, and it looks like the market is anticipating Cephalon's playing hard to get might work in its shareholders' favor. Or, investors may be indicating the possibility of a bidding war. Otherwise, if the deal were accepted, CEPH's shares would be trading at a slight discount to the bid price.

Salesforce.com (NYSE: CRM) is adding a social media aspect through its acquisition of private firm Radian6, announced Wednesday. The deal, costing $326 million in cash and stock, is seen as an asset to the cloud software writer's clients ability to track customer trends on social media sites.

Japanese automakers Toyota (NYSE: TM), Honda (NYSE: HMC) and Nissan (Nasdaq: NSANY) are experiencing logistics issues tied to car parts deliveries from shutdown plants in Japan. Toyota has reportedly told its US dealers to stop ordering certain parts, for fear it will run out. Meanwhile, testing for radiation at foreign locations poses threat to further taint the Japanese automakers' brands and deliveries.

Wal-Mart (NYSE: WMT) is holding an international conference today for the investment community. The J.P. Morgan (NYSE: JPM) Global Protein Conference highlights a presentation by Tyson Foods (NYSE: TSN). The earnings schedule highlights reports from Acuity Brands (NYSE: AYI), American Electric Technologies (Nasdaq: AETI), Ameron International (NYSE: AMN), Andatee China Marine Fuel Services (Nasdaq: AMCF), Banks.com (AMEX: BNX), China Wind Systems (Nasdaq: CWS), Citadel Broadcasting (OTC: CDELB), Derma Sciences (Nasdaq: DSCI), Dreams (AMEX: DRJ), DryShips (Nasdaq: DRYS), Ediets Com (Nasdaq: DIET), Emergent (AMEX: LZR), EnergySolutions (NYSE: ES), Entremed (Nasdaq: ENMD), Ever-Glory (AMEX: EVK), Family Dollar (NYSE: FDO), Food Technology Services (Nasdaq: VIFL), General Maritime (NYSE: GMR), Global-Tech Advanced Innovation (Nasdaq: GAI), Gold Reserve (AMEX: GRZ), Gushan Environmental Energy (NYSE: GU), Innovaro (AMEX: INV), Jos. A. Banks (Nasdaq: JOSB), Lakes Entertainment (Nasdaq: LACO), Lindsay (NYSE: LNN), Merriman (Nasdaq: MERR), Mosaic (NYSE: MOS), Performance Tech (Nasdaq: PTIX), Signet Jewelers (NYSE: SIG), Unifirst (NYSE: UNF), UniTek Global (Nasdaq: UNTK), VCG Holding (Nasdaq: VCGH), Wireless Telecom (AMEX: WTT) and others.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Business News 11-23-09

Visit the front page of Wall Street Greek to see our current coverage of the day's business news.

(Tickers: NYSE: ADI, ATW, BJS, TSN, VAL, CPB, DY, HPQ, LDK, NBG, NED, Nasdaq: JOBS, ALTU, BRCD, CDCS, CNTF, CTRN, LONG, GLAD, KCAP, NUAN, SBLK, TECD, NCTY, AMEX: EAG, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD)

The day's business news highlights data on Existing Home Sales and general economic conditions. Stock index futures indicate a positive opening to the day, but watch out for another negative reading we see highly possible for the real estate market. That report is due at 10:00 AM.

Business News 11-23-09

Economic Reports

Last week's Housing Starts data for October illustrated a sort of First-Time Homebuyer Tax Credit Hangover, which we detailed in the article hereto linked. Housing Starts ran at an annual pace of 529K in October, down 10.6% from September's revised rate of 592K. The result was quite a surprise for economists, who were looking for an October sales pace of 600K on average.

"The Greek" was not caught off-guard though, as we foresaw the "hangover." Economists have not adjusted their forecasts for October's Existing Home Sales, which will be reported this morning at 10:00 AM. Based on Bloomberg's survey, economists forecast an October Existing Home Sales pace of 5.7 million, versus September's 5.57 million rate. We have a sneaking suspicion that expectations here could also prove too high.

The Chicago Fed reported on its National Activity Index this morning, and noted another reading in negative territory. The National Activity Index measures overall economic activity and inflationary pressure. October's reading dipped to -1.08, but compared slightly favorably to September's -1.01. Dips in production and income offset other factors considered within the measure.

Washington DC Drivers

The Senate voted and agreed to "debate" Health Care Reform. The bill is not going to have easy going without amendment, especially regarding the "Public Option."

Corporate News Drivers

Japanese markets are closed on Monday due to the Labor Thanksgiving Day holiday. The US business news day earnings schedule includes 51job Inc. (Nasdaq: JOBS), Altus Pharmaceuticals (Nasdaq: ALTU), American Defense Systems (AMEX: EAG), Analog Devices (NYSE: ADI), Atwood Oceanics (NYSE: ATW), BJ Services (NYSE: BJS), Brocade Communications (Nasdaq: BRCD), Campbell Soup (NYSE: CPB), CDC Software (Nasdaq: CDCS), China TechFaith Wireless (Nasdaq: CNTF), Citi Trends Inc. (Nasdaq: CTRN), Dycom (NYSE: DY), eLong (Nasdaq: LONG), Gladstone Capital (Nasdaq: GLAD), Hewlett-Packard (NYSE: HPQ), Kohlberg Capital (Nasdaq: KCAP), LDK Solar (NYSE: LDK), National Bank of Greece (NYSE: NBG), Noah Education Holding (NYSE: NED), Nuance Communications (Nasdaq: NUAN), Star Bulk Carriers (Nasdaq: SBLK), Tech Data (Nasdaq: TECD), The9 Ltd. (Nasdaq: NCTY), Tyson Foods (NYSE: TSN) and Valspar (NYSE: VAL).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Business News - 11-18-09

Visit the front pages of Wall Street Greek to see our current coverage of the day's business news.

(Tickers: Nasdaq: SMLC, TRMD, ATGN, CSCO, AMTC, CSUN, CYBX, DEST, GYMB, HOTT, JACK, NTAP, NTES, PNNT, PERY, PETM, ESLT, SMTC, SHMR, SOLF, VVTV, WGOV, NYSE: BJ, CHS, DCI, GU, LTD, MTU, TOT, DNA, CF, NM, PVH, AMEX: BMJ, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD, XLF, IWM, TWM, IWD, SDK)

Today's early business news showed that Housing Starts stopped and mortgage activity continued its slide, and we know why! You'll see exactly why when we publish our feature article on the subject later today. This report on the day's business news includes coverage of Housing Starts, Mortgage Activity, Consumer Prices, Petroleum Status, Corporate Earnings, and more. Stocks are only off modestly to start the day, as this bad news is absorbed into a base of recent past improved economic data across the board. However, turns in trend start somewhere, and we may be sitting at the precipice of return to recession, ala double-dip fashion.

Business News

Housing Starts Stopped!

The day's business news highlights the monthly Department of Housing report showing Housing Starts fell to an annual pace of 529K in October, versus misguided expectations for a pace of 600K. We say misguided for good reason, and boy are we itching to tell you why, but that article is prepared and scheduled for publishing later this day. Just come back a little later...

The slower pace of starts represents a 10.6% fall from September's revised rate of 592K, and is off 30.7% from last year's pace. Single family Starts were down 6.8% from September. Permits did better, though also slipped. Privately owned housing units authorized by building permits, a forerunner to actual starts, ran at a pace of 552K, versus September's revised pace of 575K.

Mortgage Activity Falls Further

The day's business news also highlights a trend we have well-noted previously that continued again in the week ended November 13. Despite lower contracted rates for 30-year and 15-year fixed rate mortgages to 4.83% (from 4.9%) and 4.32% (from 4.33%), respectively, mortgage activity declined. The Market Composite Index measuring overall mortgage volume fell 2.5% on a seasonally adjusted basis. The Purchase Index, which measures loans taken out for home purchases, dropped another 4.7%. The Refinance Index fell 1.4%. Take Note: The MBA's Index has not been this low since 2000.

Consumer Price Index (CPI)

A day after the Producer Price Index (PPI) offered a nice bit of business news for inflation watchers, the government released information on consumer level pricing. This data, however, was a bit salty. Headline Consumer Prices rose 0.3% in October, against expectations for a 0.2% increase, according Bloomberg's survey of economists. The government noted the key drivers as energy and new and used motor vehicle price increase. That information led "The Greek" to scratch his head (or my head if I were sane), because we were under the impression that automakers were slashing prices post "Cash for Clunkers." We welcome your thoughts here auto market enthusiasts. Comment below. The renewal of energy price inflation is no surprise though, as the energy index has now risen five of the last six months. Headline CPI is now only down 0.2% from the prior year check...

Ex-food and energy, or Core CPI, rose a troubling 0.2%, against expectations for a slighter 0.1% increase. We worry about this figure more, because it excludes the wild swings in energy pricing. This represents a more accurate current metric of inflation, and it's on the rise at a decent pace for a recessionary period. Core prices also increased 0.2% in September.

Petroleum Status Report

At last check - for the week ended November 6, crude oil inventory increased by 1.8 million barrels and stood slightly above the upper limit of the average range for this time of year. Gasoline stores also increased by 2.5 million barrels and stood above the upper limit of the average range. Distillate fuel inventories rose 0.3 million barrels, and also stood at above average levels. Look for the latest data at 10:30 AM.

Corporate News Drivers

Agrium's (NYSE: AGU) offer of $97.47 for the shares of CF Industries (NYSE: CF) expires today. The shares trade at $85, so the deal is apparently not happening. We have not followed this story, but the price action tells us that - the shares would trade at about $97.47 otherwise. Cisco Systems' (Nasdaq: CSCO) offer for Tandberg is also set to expire today.

An FDA committee will review Genentech's (NYSE: DNA) and Novartis' childhood asthma treatment. Also, a French court rules on Total's (NYSE: TOT) appeal against environmental damages ruled its fault from a '99 incident.

Wednesday's EPS schedule includes reports from 012 Smile.Communications (Nasdaq: SMLC), TORM A/S (Nasdaq: TRMD), AltiGen Communications (Nasdaq: ATGN), Ameritrans Capital (Nasdaq: AMTC), Birks & Mayors (AMEX: BMJ), BJ's Wholesale Club (NYSE: BJ), Chico's FAS (NYSE: CHS), China Sunergy (Nasdaq: CSUN), Cyberonics (Nasdaq: CYBX), Destination Maternity (Nasdaq: DEST), Donaldson (NYSE: DCI), Elbit Systems (Nasdaq: ESLT), Gushan Environmental Energy (NYSE: GU), Gymboree (Nasdaq: GYMB), Hot Topic (Nasdaq: HOTT), Jack in the Box (Nasdaq: JACK), Limited Brands (NYSE: LTD), Mitsubishi UFJ Financial Group (NYSE: MTU), Navios Maritime (NYSE: NM), NetApp Inc. (Nasdaq: NTAP), NetEase.com (Nasdaq: NTES), Pennantpark Investment (Nasdaq: PNNT), Perry Ellis Int'l (Nasdaq: PERY), PetSmart (Nasdaq: PETM), Phillips-Van Heusen (NYSE: PVH), Semtech (Nasdaq: SMTC), Shamir Optical Industry (Nasdaq: SHMR), Solarfun Power Holdings (Nasdaq: SOLF), ValueVision (Nasdaq: VVTV), Woodward (Nasdaq: WGOV) and a few others.


Please see our disclosures at the Wall Street Greek website and author bio pages found there.