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Monthly Archives: October 2012

$AET Beats Expectations

“Aetna Inc.’s third-quarter earnings rose 2 percent and trumped expectations as revenue gains outweighed costs tied to paying off debt and the insurer’s purchase of Coventry Health Care.

The Hartford, Conn., insurer said Thursday it earned $499.2 million, or $1.47 per share, in the three months that ended Sept. 30. That’s up from $490.4 million, or $1.30 per share, in last year’s quarter.

Aetna earned $1.55 per share, excluding the one-time costs and capital gains. That topped the average analyst forecast of $1.33 per share, according to FactSet.

Total revenue, which counts capital gains, climbed 5 percent to $8.92 billion. Analysts expected $8.83 billion.”

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$S Loses Subscribers in Q3

 

“NEW YORK (AP) — Subscriber trends are turning south again for Sprint Nextel as it struggles to compete with Verizon Wireless, the juggernaut of the industry.

The country’s No. 3 wireless carrier on Thursday said it lost overall subscribers for the first time in two and a half years in the third quarter, as customers gave up on the moribund Nextel network and the company failed to sign up enough of them on the Sprint network.

It’s the first time Sprint Nextel Corp.’s is reporting quarterly results since agreeing to sell 70 percent of itself to Japanese cellphone company Softbank Corp. for $20.1 billion. The deal hasn’t closed yet, but Sprint has already borrowed money from Softbank.

Sprint lost an overall 423,000 subscribers in the July to September period, as trends across its product lineup were weak.”

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$COP Reports a Miserable Q

 

“(Reuters) – ConocoPhillips on Thursday reported a 31 percent decline in quarterly profit, hit by a drop in prices for crude oil and natural gas.

Profit in the third-quarter was $1.8 billion, or $1.46 per share, compared with $2.6 billion, or $1.91 per share in the same period a year earlier.

Oil and gas output in the quarter was 1.53 million barrels of oil equivalent per day (BOE), down from 1.54 million BOE per day a year earlier.”

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$PG Blows Away Estimates Until You Factor in a Strong Dollar

“(Reuters) – Procter & Gamble Co’s profit excluding items rose more than expected on Thursday and the world’s largest household products maker maintained a key forecast for the year, which indicated it is making progress after coming under pressure from activist investor William Ackman.

P&G is cutting costs and narrowing its focus on key markets, products and countries. The company’s goals and Chairman and Chief Executive Bob McDonald have been under intense scrutiny after Ackman bought shares this summer.

P&G earned $1.06 per share in the fiscal first quarter on a “core” basis, which excludes charges, up from $1.01 per share a year earlier. Analysts, on average, expected it to earn 96 cents per share, according to Thomson Reuters I/B/E/S.

The company had forecast a profit of 91 cents to 97 cents per share for the quarter, which ended in September.”

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Initial Claims and Durable Goods Orders Data

Initial Claims: Prior 388k, Market Expects 375k, Actual 369k

Durable goods Orders: Prior -13.2%, Market Expects 8%, Actual +9.9%….minus transportation 2.2%

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$POT Cuts Guidance as Sales Fall in The Pacific Rim

 

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, cut its 2012 earnings forecast because of reduced sales to China and India as it reported third-quarter profit in line with analysts’ estimates.

Profit this year excluding an impairment charge related to an investment in Sinofert Holdings Ltd. (297) will be $2.40 to $2.60 a share, the Saskatoon, Saskatchewan-based company said today in a statement. Potash Corp. said on Oct. 17 that full-year results are expected to fall below its previous guidance of $2.80 to $3.20 a share. Analysts projected a profit of $3.04 a share, the average of 27 estimates compiled by Bloomberg.

Higher-than-average North American inventories are impairing the ability of Potash Corp. and other miners to secure new supply contracts in China and India, Matthew Korn, a New York-based analyst for Barclays Plc, said in an Oct. 17 note. Sales of potash, a crop nutrient that helps strengthen plant roots and improve resistance to drought, generated 64 percent of the company’s gross profit last year, according to data compiled by Bloomberg.”

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$SPG Raises Dividends as Rents Climb

Simon Property Group Inc. (SPG), the largest U.S. shopping-mall owner, raised its quarterly dividend and its forecast for full-year funds from operations as its tenants benefit from an increase in consumer spending.

FFO, which gauges a property company’s ability to generate cash, climbed in the third quarter to $720.1 million, or $1.99 a share, from $606.2 million, or $1.71, a year earlier, the real estate investment trust said today in a statement. The average estimate of 21 analysts in a Bloomberg survey was $1.92 a share.

Demand for space at regional malls is rising, helping to boost revenue for Indianapolis-based Simon. U.S. retail sales advanced 1.1 percent in September following a revised 1.2 percent increase in August, according to data from the Commerce Department. The company also is benefiting from its outlet centers, said Craig Guttenplan, a REIT analyst at CreditSights Inc. inLondon. Those properties are a top area of expansion.”

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Technical Analysts See Gold Moving towards $1,600

 

“Gold futures may slump to $1,600 an ounce by the end of the year, according to technical analysis by Paul Kavanaugh at FuturePath Trading LLC.

The contract for December delivery settled below its 50-day moving average for the second straight day, signaling the metal may slide 6 percent from yesterday’s closing price of $1,701.60 on the Comex in New York, Kavanaugh, the Chicago-based director of business development, said in a telephone interview.

“The downside risks are growing, and prices have peaked for this year,” said Kavanaugh, who correctly predicted in early April that the Standard & Poor’s GSCI Spot Index of 24 raw materials would slump by the end of the second quarter. “Gold will correct further.”

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Britain’s Economy Pops 1% vs Consensus of 0.6%

“Britain exited a double-dip recession in the third quarter with the strongest growth in five years as Olympic ticket sales and a surge in services helped boost the rebound.

Gross domestic product rose 1 percent from the three months through June, the fastest growth since 2007, the Office for National Statistics said in London today. That exceeded the highest estimate in a Bloomberg News survey for growth of 0.8 percent. The median forecast of 33 economists was 0.6 percent. The pound rose after the data were published.

The growth surge reflects a boost from the Olympics and a rebound from the second quarter, when GDP was affected by an extra public holiday.”

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European Markets Rally on Good Earnings and Better Than Expected Growth in the U.K.

“European stocks climbed for a second day as companies including BASF SE (BAS) andUnilever NV (UNA) posted results that exceeded analysts’ estimates. U.S. index futures and Asian shares also advanced.

Unilever gained 3.8 percent, its biggest advance in three months, after reporting quarterly sales that grew faster than analysts had projected. BASF rose 1.9 percent as profit rose because of increased oil production in Libya. Daimler AG (DAI) slid 3.2 percent after the world’s third-largest luxury carmaker abandoned its profit-margin target for 2013.”

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Asian Markets Pare Early Losses to Rally on Stimulus Bets

Asian markets got started to the downside last night, but after some good earnings came in stocks stopped falling. The yen began to climb over 80 to the USD and rumors spread the BoJ would provide stimulus by as early as next week causing a rally.

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Is Financial Crime A Systemic Risk?

“Famed Austrian economist Ludwig von Mises wrote in his seminal work, Human Action (originally published by the Yale University Press in 1949), that “There is no means of avoiding the final collapse of a boom brought about by credit expansion.  The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”  The collapse of a historic credit bubble occurred in 2008.  However, despite years of further credit expansion, “a final and total catastrophe” of the U.S. dollar system has yet to occur.”

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Has Evaluations and Concentration Placed High Yield Stocks in Bubble Territory ?

“Investors have been flocking to high-dividend-paying stocks, lured by their predictable, bondlike income and downside defenses. But investors may be getting more risk than they bargained for.

The widespread pursuit of safety in high-yielding stocks has driven up their valuations and increased market concentration in these stocks. It has also caused an alarming surge in their correlation to bonds, so investors may be getting a lot less diversification than they realize.”

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Richard Koo: American Politicians Know Absolutely Nothing About a Balance Sheet Recession

“In his latest note, Richard Koo of Nomura shreds US politicians for their lack of understanding regarding the current macroeconomic situation. In a few paragraphs he says Krugman, Summers, Obama and the entire Republic party have misunderstood the crisis and its necessary fix.  Of course, Koo is best known for the idea of the Balance Sheet Recession.  Here’s where he say virtually no one has understood the macroeconomic landscape and grades President Obama as a solid D for understanding:”

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Marc Faber: ‘Don’t Get Out of Bed’ if You Can’t Take a 20% Decline

“Stocks could drop 20 percent from their recent highs, says Marc Faber, publisher of the Gloom, Boom and Doom Report.

“I believe globally we are faced with slowing economies and disappointing corporate profits, and I will not be surprised to see the Dow Jones, the S&P, the major indices, down from the recent highs by say 20 percent,” Faber told CNBC.

“That is not a big decline. If you can’t take a 20 percent decline, don’t get out of your bed in the morning.”

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