Johnson & Johnson, $JNJ, Reports Mixed First Quarter Earnings

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“Sales at healthcare giant Johnson & Johnson fell some 0.2 percent during the first quarter of 2012, the company reported this morning.

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Over the first three months of the year, revenue at Johnson fell to $16.1 billion, missing the Street’s expectations by nearly $200 million.

However, excluding one time results, the company saw earnings slightly above consensus, at $3.9 billion, or $1.37 per share.

“We continue to bring meaningful innovations to our patients and customers through the strong performance of our recently launched products,” Johnson & Johnson Chief Executive William Weldon said.  “The dedication of the people of Johnson & Johnson gives me great confidence in the prospects of our business to deliver sustainable growth, well into the future.”

The company saw healthy growth in overseas markets, with sales up 4.1 percent. That growth helped stymie lackluster results in the U.S., where revenue declined 5.1 percent to $7.2 billion.

Shares in Johnson & Johnson are slightly higher in pre-market trading.

ORIGINAL:

Healthcare giant Johnson & Johnson is minutes away from reporting quarterly results for the first few months of 2012.

Analysts polled by Bloomberg forecast  the Dow component will report earnings of $1.36 per share on revenue of $16.3 billion.

Investors will be looking for commentary on  early sales of three new drugs: Incivo for hepatitis C, Zytiga for prostate cancer, and Xarelto to treat blood clotting.

Also in focus: the recent $1.2 billion fine for violating Arkansas’ deceptive practices laws.”

“Freeport-McMoRan Copper & Gold Inc. (FCX) is offering the best deal in copper for mining companies willing to bet big on the metal.

Freeport, the world’s largest publicly traded copper miner, is valued at 3.3 times its earnings before interest, taxes, depreciation and amortization in 2013, according to analysts’ estimates compiled by Bloomberg. That’s cheaper than any other base metals producer with more than $10 billion in market value and about a third less than the median, the data show.

While Freeport faces the first back-to-back slump in annual earnings after workers at its Indonesian mine went on a three- month strike and copper prices fell from a record on concern over a slowdown in China, analysts say its Ebitda next year will rebound to an all-time high as demand recovers. Freeport could now attract Rio Tinto Group (RIO), its partner inIndonesia, according to Adrian Day Asset Management. A deal would also give BHP Billiton Ltd. or Anglo American Plc (AAL) a company that produces 10 percent of the world’s copper, Oracle Investment Research said.

“Freeport has probably the most attractive assets in the world with its copper mine in Indonesia,” Jean-Francois Comte, co-founder of Lutetia Capital, a Paris-based hedge fund that bets on mergers and acquisitions, said in a telephone interview. “Anybody who believes that would probably look at it.”

Eric Kinneberg, a spokesman for Freeport, declined to comment on whether it would consider a sale or has been approached about an acquisition. The Phoenix-based company had a market capitalization of $35 billion yesterday….”

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“(Reuters) – Coca-Cola Co (NYS:KO – News) reported higher-than-expected quarterly results on Tuesday after the world’s largest soft drink maker sold more beverages.

The maker of Sprite, Minute Maid orange juice and vitaminwater said its first-quarter profit was $2.05 billion, or 89 cents per share, up from $1.90 billion, or 82 cents per share, a year earlier.

Revenue rose 6 percent to $11.14 billion.

Analysts on average were expecting earnings of 87 cents per share on revenue of $10.82 billion, according to Thomson Reuters I/B/E/S.

Sales volume rose 5 percent, with growth across every geographic region.

Coke shares were up 0.8 percent at $73 in premarket trading.

(Reporting by Martinne Geller in New York; Editing by Gerald E. McCormick and Lisa Von Ahn)”

“As Jim Yong Kim takes over as president of the World Bank, he will find himself at the helm of a poverty-fighting organization where large, emerging-market members no longer need it to finance much of their development.

Instead, it will be up to Kim to keep the bank relevant to China, Brazil and other nations that have access to private investors. With some countries even becoming rival lenders in Africa and Latin America, one of Kim’s main challenges is to keep them as clients and contributors, saidNancy Birdsall, president of the Washington-based Center for Global Development.

“It’s no longer a question of the bank doing things for those countries,” said Birdsall, a former director of policy research at the World Bank. “It’s a question of how those countries will engage with the bank, not only as possible borrowers but as participants for strengthening the capital base of the bank, as participants in pushing for policy changes.”

Kim’s selection yesterday over candidates from Nigeria andColombia extends a U.S. monopoly on the top job just as the share of emerging markets in the global economy increases. The 52-year-old physician said in a statement he “will seek a new alignment of the World Bank Group with a rapidly changing world,” fostering an institution that “amplifies the voices ofdeveloping countries.”

Brazil, Russia, India and China, the so-called BRIC group of major emerging markets, will account for 23 percent of the world’s output in 2016, up from 19 percent in 2011, according to a report by Grant Thornton International Ltd. The share of Group of Seven countries, which includes the U.S., Germany and Japan, will decline to 44 percent from 48 percent in the same time frame, it said….”

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“U.S. Bancorp (USB), the nation’s fifth- largest lender by deposits, reported a 28 percent increase in first-quarter profit that beat analysts’ estimates as revenue rose and credit losses fell.

Net income rose to $1.34 billion, or 67 cents a share, from $1.05 billion, or 52 cents, a year earlier, the Minneapolis- based bank said today in a statement. Earnings beat the 64-centaverage estimate of 31 analysts surveyed by Bloomberg….”

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“European consumer prices increased at a faster pace than initially estimated in March, driven by energy costs, complicating the European Central Bank’s task as it tries to push the inflation rate below its 2 percent limit.

Inflation in the 17-nation euro region held at 2.7 percent for a fourth month, the European Union’s statistics office in Luxembourg said in an e-mailed statement today. That’s higher than the estimate of 2.6 percent published on March 30…”

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“China remained the largest foreign U.S. creditor in February amid a rebound in the country’s foreign-currency reserves as Japan’s purchases of Treasuries picked up.

China’s holdings rose for a second straight month, increasing by 1.1 percent to $1.18 trillion, U.S. Treasury Department data released yesterday show. Those of Japan, America’s second-largest lender, climbed 1.2 percent to $1.096 trillion after the Asian nation intervened in months prior to stem the yen’s appreciation. Net foreign purchases of Treasuries rose $41.2 billion, or 0.8 percent, to a record $5.1 trillion, the data show…”

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“Foreign direct investment in China dropped for a fifth straight month in March on a slowing economy, limited prospects for gains in the yuan and renewed concerns that Europe’s debt crisis will worsen.

Inbound investment fell 6.1 percent from a year earlier to $11.76 billion, the Ministry of Commerce said today in Beijing, after a 0.9 percent drop the previous month. That’s the longest run of declines since the global financial crisis…”

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“Research In Motion Ltd. (RIM), the troubled maker of the BlackBerry smartphone, is in talks to hire a financial adviser to help it weigh strategic options, according to four people with knowledge of the matter.

A decision to work with at least one bank could come in the next few days, said one of the people, who asked to remain anonymous because the deliberations are private. RIM would prefer an agreement to license its mobile-phone software, and its next choice is a strategic investment, one person said. RIM doesn’t plan to sell itself, the person said….”

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Slowing inflation and growth have the bank thinking….

“Japan said it will provide $60 billion to the International Monetary Fund’s effort to expand its resources and shield the global economy against any deepening of Europe’s debt crisis.

Finance Minister Jun Azumi unveiled the commitment in speaking to reporters in Tokyo today before semiannual meetings of the IMF and World Bank in Washington April 20-22. Azumi said he hopes for an early agreement among Group of 20 members, who will also gather in Washington, on contributions to the IMF.

Japan, the world’s third-largest economy, becomes the largest donor yet outside of Europe to IMF Managing Director Christine Lagarde’s campaign to bolster the fund’s resources for the second time in three years. Azumi said that the stance ofChina, the world’s largest holder of foreign-exchange reserves, is in the same direction as Japan’s and that he hopes Japan’s pledge will accelerate the commitments of others.

“It’s in everyone’s best interest that Europe gets back on its feet as soon as possible,” said Matthew Circosta, an economist at Moody’s Analytics in Sydney. The announcement may “add stability to financial markets that had been weakening over the last few weeks as the crisis flared up again, particularly in Spain.”

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“India slashed its benchmark interest rate by a greater-than-forecast half a percentage point, seeking to bolster growth with the first reduction since 2009. Inflation might limit the room for further cuts, the central bank said.

Governor Duvvuri Subbarao lowered the repurchase rate to 8 percent from 8.5 percent, theReserve Bank of India said in a statement in Mumbai today. The outcome was predicted by three of 25 economists in a Bloomberg News survey. Seventeen expected a 0.25 percentage-point cut and the rest predicted no change.

The move stoked gains in the rupee and government bonds, and may buttress demand in an economy hampered by political gridlock that’s restraining investment. Policy makers are seeking at the same time to contain inflation that remains the fastest among the BRIC nations.

“They are playing with fire,” said Jahangir Aziz, an economist at JPMorgan Chase & Co. in Washington who used to work at theInternational Monetary Fund. “I am increasingly assured that this is going to be last rate cut” given the risks to inflation fromoil prices and loose fiscal policy, he said.

The yield on the most-traded 8.79 percent notes due November 2021 fell to 8.34 percent as of 4:28 p.m. in Mumbai, from the day’s high of 8.51 percent and yesterday’s close of 8.46 percent, according to the Reserve Bank of India’s trading system. The rupee strengthened 0.2 percent to 51.56 per dollar, according to data compiled by Bloomberg. It slumped 16 percent last year, spurring price pressures by boosting import costs. The BSE India Sensitive Index of stocks closed up 1.2 percent….”

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WTI is up $0.90 @ $103.83

“European stocks gained for a second day as demand increased at a Spanish debt sale and German investor confidence topped forecasts. U.S. index futures rose, while Asian shares fell.

Banks contributed the most to the Stoxx Europe 600 Index’s advance as Banco Popolare SC (BP) and Barclays Plc (BARC) climbed. Repsol YPF SA (REP) plunged 6.4 percent as Argentina took control of the Spanish company’s YPF unit following a dispute over slumping oil output and investments. Danone (BN) advanced as the world’s biggest yogurt maker reported higher first-quarter sales.

The Stoxx 600 rose 1 percent to 256.69 at 11:08 a.m. in London. The benchmark index hasclimbed 5 percent this year as the European Central Bank flooded financial markets with 1 trillion euros ($1.3 trillion) of cheap loans for three years to ease credit. ECB Governing Council member Ewald Nowotny said late yesterday that he doesn’t see an “immediate need” for a third three-year tender….”

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Asia

Europe

Futures

Currencies

Commodities

LIBOR, EURIBOR, 10 year yields for Italy, Spain, France, and Germany

Dow Theory watchers must not be liking the recent negative divergence between Dow Jones Industrial Average and Dow Jones Transportion Average.

Wines fermented with weed were a novelty in the early 1980s, but now quite a few California winemakers are producing cannabis cuvées on the sly—with cabernet the variety of choice.

via Middle Class Political Economist

Mike Kimel at Angry Bear has several nice posts on the “Laffer Curve” that underlies much of conservative economic orthodoxy in this country. As you may know, Art Laffer famously claimed that at tax rates of 0 and 100%, you would get zero tax revenue, and that in between, there is an inverted U shaped curve, where taxes collected first increase as the tax rate goes up, then decrease as tax rates go higher still, back down to zero tax collected when the tax rate is 100%.

The Kimel post linked above was prompted by an economist at the American Enterprise Institute, Alan Viard, telling the New York Times that all economists know that when the top tax rate is 35%, cutting rates further will reduce tax revenue.

“The Reagan tax cuts, on the whole, reduced revenue,” he explains. “The Bush tax cuts clearly reduced revenue. There is no dispute among economists about that.”

Except, as Kimel points out, lots of conservative economists dispute this, including one who co-authored a paper with Viard! For his trouble, Kimel became the subject of a post at the AEI blog by James Pethokoukis, which started by completely misidentifying him and going downhill from there. For Kimel’s enjoyable takedown of this post, see here.

All this led me back to an earlier post of Kimel’s, where he makes an empirical estimate of the Laffer Curve, using U.S. data all the way back to 1929, the first year for which official U.S. data exists. I’ll spare you the technical details (see Kimel’s post), but here’s the bottom line: Laffer got it exactly backward, with tax revenue initially falling as tax rates increase, then rising after a further increase in rates. Here is Kimel’s estimate of the “true” Laffer curve:

Read the rest here.

Ben Duronio | Apr. 16, 2012, 3:31 PM

Morgan Stanley Smith Barney is out with its latest Asset Allocation and Strategy Weekly report to its clients.

Adam Parker, Morgan’s top U.S. equity strategist, might be the most bearish name on Wall Strategist. Parker is calling for the S&P 500 to fall to 1,167 by year end.

So, it’s no surprise that the firm’s list of reasons to be bullish/bearish on stocks tilts bearish.

But they do have some positive things to say about stocks.

Read the rest here.

via bclund

The number one question I get asked by readers of my blog is “how can I become a better trader?”  My answer is usually “find a mentor.”  What I am going to show you in this post is how to find that person using StockTwits (and how that process in itself can make you a better trader).