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Monthly Archives: December 2012

Old Man Buffet’s Favorite Indicator Begins to Slow

“Rail traffic is taking a turn for the worse in recent weeks as the economy appears to be slowing even further into Q4.  The latest reading on intermodal traffic came in at -1.1%.   That brings the trailing 12 week average to 1.65%.  The US economy appears to be just barely treading water at this point.   This is also consistent with my latest update for Q4 GDP which is tracking at 1.1% (available via Orcam Investment Research).

Here’s more via the AAR: ”

Full report

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More U.S. Service Jobs Heading Offshore

“9:58PM EST December 6. 2012 – The strike that crippled two of the nation’s busiest shipping ports was settled this week, but the trend it spotlighted — the offshoring of service jobs — is expected to continue to grow across the USA.

The eight-day walkout by clerical workers at the ports of Los Angeles and Long Beach largely centered on the outsourcing of their jobs overseas and elsewhere in the U.S., says Craig Merrilees, a spokesman for the International Longshore and Warehouse Union. Shippers denied outsourcing jobs, but the tentative settlement restricts the practice, according to the Associated Press.

Yet service companies have been sending jobs abroad in large numbers the past decade to cut labor costs — a trend that accelerated in the recession and is expected to continue the next few years before slowing after 2016. About 663,000 large-company jobs in information technology, human resources, finance and purchasing — the category that includes the port workers — have been offshored since 2002, according to The Hackett Group.

By 2016, the consulting firm estimates, another 375,000 jobs in the sectors will be moved abroad. More than a third of the U.S. jobs in those industries in 2002 will have moved offshore by 2016….”

Full article

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The Top 10 Worst & Best IPOs of 2012

“Moneywatch) Although Facebook’s (FB) initial public offering was the most notorious of 2012, it was far from the worst.

Just three months after Facebook’s IPO, its stock price had dropped by more than 50 percent, falling from $38 a share to $17.73. This had many people wondering if Facebook was the worst IPO of all time. Now the numbers are in and it turns out Facebook wasn’t even the worst IPO of the year. In fact, it didn’t even crack the top 10.

Facebook has seen a marked increase in its stock price in the last month, going from $19.20 on November 9 to close at $26.97 on December 6. That means its stock is down “only” 29.1 percent since May, which puts it at No. 12 on our list of the year’s weakest IPOs.

Here are the 10 worst IPOs of 2012, based on information gathered from research firms Dealogic, Renaissance Capital, IPO Monitor and other sources…”

Full article

Top 10 best performers

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Boehner Says No Progress on Fiscal Cliff Talks

“WASHINGTON (MarketWatch) — There has been no progress so far in budget talks between the staff of House Republicans and the White House, House Speaker John Boehner said on Friday. In a brief press conference, Boehner urged President Barack Obama to make a new offer that moves toward congressional Republicans. Obama’s negotiating stance is now “my way or the highway,” Boehner said…”

Full article

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Gun Makers Tank Despite Great Earnings and Guidance


“Is the post-election rally in gun stocks over? Smith & Wesson (SWHC) reported pretty solid earnings after the closing bell Thursday. It also announced a share buyback program and raised its guidance.

But shares of Smith & Wesson fell 6% Friday morning on heavy volume. Rival Sturm, Ruger(RGR) dropped about 3% as well…”

Full article

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Market Update

U.S. equities turned negative futures into a positive open off the headline employment numbers. Looking into the report it is clear that s good headline number was achieved on the backs of plebs getting crushed. Currently the DOW is up 43 bones while gold an oil are flat. The dollar is currently paring larger gains from this morning.

The NASDAQ remains under pressure as $AAPL drops 2.5%.

Europe failed to keep its gains and ended up largely flat on the session with the exception of Spain falling 0.79%.

Market update

3D heat map 

[youtube://http://www.youtube.com/watch?v=5di5EhZshdQ 450 300]


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$GS: Commodity Super Cycle Not Over Yet

“The supercycle that saw the prices for many commodity prices soar over the past decade hasn’t finished yet, according to Goldman Sachs.

Commodities won’t appreciate much going forward, but bursts of global demand will spark short-term shortages, according to a new report from the bank. And that will create mini rallies in various commodities, it says.

“It is tempting to call an end” to the commodity supercycle, thanks to increased supplies and slowing growth in China, the report says, according to Marketwatch…”

Full article

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$CHU & MSFT Team Up to Boost Sales in China

“The world’s third largest wireless operator, China Unicom, has today announced an alliance with Microsoft’s Windows Phone to help boost sales and provide more innovative Windows Phone devices in the Chinese market, reports the China Daily.

According to Analysys International, a Beijing-based research firm, Windows Phone holds less than 3 percent of the market in China, whereas Android came away with a 72 percent share in the third quarter of this year.

This comes at a big time for China Unicom, who seems to be racking up orders for the iPhone 5. This also allows Windows Phone a competitive foothold alongside such a strong Chinese carrier, which boasts over 70 million subscribers.

Here’s what Microsoft’s Chief Operating Officer Steven Turner had to say about it at a news briefing in Beijing:

China is the No 1 market worldwide in terms of PC, tablet, mobile and Internet users. It is a very exciting place. We believe there is a great opportunity across the country to provide new business models to partners, new technologies to developers and best services to customers….”

Full article

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Beyond Today’s Headline Employment Number

“While the GETCO algos care only about one thing: the headline NFP number derived by the establishment survey, the reality is that in November this number was strictly a divination of seasonal adjustments (which resulted in the typical for November 1.2 million “gain” in jobs), as well as who knows what other Sandy-related adjustments which the BLS has not broken down, the reality is that a more granular dig through the jobs data reveals a far uglier picture, especially for those in the prime working demographic between 25-54. This has been a sensitive issue for the pundits as ever since the arrival of the Obama administration, all the job gains have gone in the 55 and older job category as we now see age outsourcing, while jobs in the 55 and lower age group have imploded. Sure enough, the November data, when seen through the prism of the Household Survey’s age distribution, is frankly horrendous….”

Full article and charts

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$AIG in Talks to Sell Control of Aircraft Leasing Unit

American International Group Inc. AIG +2.59% is in talks to sell a controlling stake in its plane-leasing unit to a Chinese-led consortium for more than $5 billion, according to a person with knowledge of the situation.

The move would mark the second time that the U.S. financial-services group has tried to sell all or part of its International Lease Finance Corp. unit, and it filed last year for an initial public offering of a business deemed as non-core.

The proposed sale of a controlling stake in ILFC, the world’s second-largest jet leasing company by assets after the Gecas unit of General Electric Co. GE -0.35%— would also be the latest in a string of Chinese investments in the U.S.—and among the largest.

The bidding group, led by New China Trust Co., also includes the Industrial & Commercial Bank of China Ltd., 601398.SH +0.26% or ICBC, and the China Aviation Industry Fund, the person with knowledge of the situation said. New China Trust is 20% owned by Barclays PLC. BARC.LN +0.16%

ICBC is an established player in aircraft finance, and Bank of China also has a fast-growing Singapore-based aircraft leasing business.

The AIG talks were previously reported by Bloomberg News, which said ILFC’s management would participate in the transaction as well. A deal isn’t imminent, the person with knowledge of the situation said.”

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Consumer Sentiment Plunges in December

“Americans’ outlook on the economy and their finances took a turn for the worst in early December due likely to anxiety about higher taxes from the budget stalemate in Washington, a survey released on Friday showed.

The Thomson Reuters/University of Michigan’s preliminary reading in the overall index on consumer sentiment plunged to 74.5 in early December, the lowest level since August.

It was far below November’s figure of 82.7 and the median forecast of 82.4 among economists polled by Reuters.”

Full article

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A Look at Yesterday’s Biggest Gainers and Losers


AAPL (551.03 +12.24), EQIX (187.27 +6.30), EPHC (27.70 +5.79), GOOG (693.37 +5.55), ATHN (70.74 +5.03), NFLX (88.08 +4.71), AZO (364.88 +4.61), HITK (35.14 +4.09), AKAM (38.81 +3.31), PPG (122.23 +2.77), CP (99.99 +2.49), BSFT (34.06 +2.37), OPEN (45.22 +2.35), SPG (154.59 +2.32), GTLS (62.08 +2.32), LULU (70.91 +2.32), SBUX (53.10 +2.31), FOSL (88.81 +2.09), WLT (33.73 +2.07), NBL (97.88 +1.84)


VRA (23.15 -3.06), IOC (51.63 -2.72), GMCR (39.01 -2.16), CLR (73.44 -1.60), APA (76.19 -1.54), CMI (99.77 -1.54), EPAY (23.60 -1.52), TD (81.75 -1.47), PXD (103.49 -1.36), WHR (97.26 -1.36), ALGN (24.84 -1.30), SHLD (39.96 -1.25), UTIW (12.80 -1.23), SNI (56.50 -1.20), FCX (30.99 -1.17), CHRW (60.75 -1.16), MW (30.19 -1.16), EOG (117.56 -1.16), SM (49.80 -1.13)

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Gapping Up and Down This Morning

Gapping up 

BIOD +17.6%, BAGL +7.6%, GEO +6.5%, SWHC +2.9%, ENB +2.9%, ESL +1.4%, DEO +1.2%,

RHHBY +0.3%, MPEL +2.7%, AET +1.1%, MCD +1%, TSM +0.3%, AFG +0.3%, RGR +1%,

RGR +1%, CZR +1.9%, DEO +1.2%, SQNM+3.7%,  BAGL+7.6%, BIOD +17.6%, FIZZ +1.3%,

Gapping down 

AMRN -17.7%, CMTL -12.8%, VTSS -8.1%, UVE -7.3%, RIMM -5.4%, QRE -4.5%, PANW -4.2%,

FOLD -2.1%, WBS -1.9%, MT -1.8%, AVGO -1.8%, DB -1.3%, NFLX -1.2%, MEMP -0.9%,  RGC -6.6%,

AVB -0.9%, NVS -0.7%

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$JEF Announces an Accelerated Dividend

“Jefferies Group, Inc. (JEF) announced today that on December 6, 2012, its Board of Directors declared a quarterly dividend of $0.075 per share of common stock, payable on December 31, 2012 to stockholders of record on December 21, 2012.”

Full article

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Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion

“A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus.

Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit — increasing the risk that a jump in interest rates would crush the economic recovery.

“There is certainly an issue about unwinding the balance sheet” in a way that “is effective and continues to support the recovery without creating inflation,” St. Louis Fed Bank President James Bullard said in an interview in October. The central bank might have to “revisit” the 2011 strategy, he added.

The Fed is already buying $40 billion a month in mortgage- backed securities to boost the economy, and policy makers meeting Dec. 11-12 will consider whether to purchase more assets. John Williams, president of the San Francisco Fed, has proposed adding $45 billion of Treasury securities a month.

The bigger the balance sheet, “the riskier the exit becomes,” Richmond Fed President Jeffrey Lacker said during a Nov. 20 speech in New York. “That is something we need to think carefully about.”

Krishna Memani, director of fixed income at OppenheimerFunds Inc., said a too-rapid sale of assets risks disrupting the $5.2 trillion market for agency mortgage debt….”

Full article

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$NFLX Receives a Wells Notice


Netflix Inc. (NFLX) and Chief Executive Officer Reed Hastings said they may face a U.S. Securities and Exchange Commission civil claim over a July Facebook post that coincided with the stock’s biggest gain in almost six weeks.

SEC staff alleges Netflix and its CEO violated rules governing selective disclosure, according to a company filing yesterday. The July 3 post by Hastings said Netflix viewing “exceeded 1 billion hours” of videos in June. The shares rose 6.2 percent that day….”

Full article

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Inflation Accelerates in Brazil for a Third Consecutive Month, Economists Baffled


Brazil’s inflation accelerated in November for the third month, as prices rose more than all forecasts from economists surveyed by Bloomberg, limiting the central bank’s room to provide more stimulus for the struggling economy. Swap rates jumped.

Prices as measured by the benchmark IPCA index rose 0.6 percent in the month, the national statistics agency said today in Rio de Janeiro. The highest estimate from any of 39 economists surveyed was for a 0.56 percent rise, and the median call was for an increase of 0.5 percent. Annual inflation accelerated to 5.53 percent from 5.45 percent the previous month….”

Full article

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