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Monthly Archives: April 2013

A Conundrum

[youtube://http://www.youtube.com/watch?v=oBO2I2QRPLQ 450 300]

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Nelson Peltz Discloses a Position in $PEP and $MDLZ

“NEW YORKActivist investor Nelson Peltz has disclosed stakes in Mondelez (MDLZ) and PepsiCo (PEP), following earlier reports that the billionaire could be pushing for a marriage between the sweet and salty snack giants.

In a statement early Friday, PepsiCo said that it has held meetings with Peltz’s Trian Fund Management in recent weeks to consider its “ideas and initiatives” for long-term growth. A spokesman for Mondelez wasn’t immediately available say whether the company has met with Trian as well.

A representative for Trian declined to comment.

Peltz’s disclosures come at a sensitive time for the two U.S. food and drink makers. Mondelez, which makes Oreo cookies and Cadbury chocolates, has stumbled in its first quarters as an independent company after splitting from Kraft Foods. But in a short statement, the company noted that it has “created significant value through our transformation.” ….”

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Will Deflation Bring More Easing & QE ?


“WASHINGTON (MarketWatch) – The Federal Reserve will be watching price data closely for further signs of falling prices, two central bank officials indicated on Thursday Richmond Fed President Jeffrey Lacker and Minneapolis Fed President Narayana Kocherlakota said that that the Fed must be on its guard against falling prices. “If inflation looked like it was going to sag further on a persistent basis, I would certainly consider stimulus for the purpose of bringing inflation up to target,” Lacker told reporters, according to Bloomberg. In a separate speech, Kocherlakota said that cooling price pressures were “definitely a cause for concern.” The comments echo remarks made Wednesday by St. Louis Fed President James Bullard, who said he was concerned that the Fed’s preferred measure of inflation, the personal consumption expenditures price index, increased at a 1.3% rate in February, well below the Fed’s 2% target. Economists said the implication of the concern is that the Fed may maintain its $85 billion-per-month asset-purchase program for longer than expected and perhaps augment it with other easing steps.”

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$SEAS Pops 15% for its IPO Debut

“Shares of the beloved killer whale’s parent company SeaWorld Entertainment (SEAS)surged nearly 15% on their debut on the New York Stock Exchange, where penguins, an otter and a lemur walked through the trading floor…..”

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Gold Expert: Prices Fell Do to Central Banks Activity Trying to Avoid a Short Squeeze

“Theories about what triggered gold’s recent drop are “cover stories,” says Chris Powell, co-founder of the Gold Anti-Trust Action Committee (GATA), an organization focused on exposing, opposing and litigating against collusion to control the price and supply of gold and related financial instruments.

The reason the metal fell was because central banks stepped in and gutted gold prices to avert a short squeeze in London, he noted.

Gold saw its biggest two-day drop ever, reported CNBC, which compared the decline with the stock market crash of 1987…..”

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The U.S. Mint Reports Record Sales of Gold Coins Following Price Debacle

“The U.S. Mint in April has sold 153,000 ounces of American Eagle gold coins, the highest in almost three years, after futures prices started the week by plunging the most since 1980.

Sales have more than doubled from March and surged sevenfold from a year earlier, data on the Mint’s website showed. The amount for all of May 2010 was 190,000 ounce.

This week, retail sales and jewelry demand soared in India, the world’s top gold buyer, and China, the second-biggest, after futures in New York slumped into a bear market, touching the lowest in more than two years. Coin sales also surged in Australia….”

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The Chart That Keeps the Fed Up at Night

“While Cyprus has been brushed away as a “storm in a teacup” and asset-gatherers stare blankly at their screens pointing at record highs to confirm the “market knows best”, it appears something rather important ‘broke’ that day (and hasn’t stopped breaking since). While we have discussed the rather glaring divergences between US equities’ exuberance and global equity markets and macro- and micro- data; supposedly theFed’s key indicator (the 5Y5Y forward inflation expectation) has reversed rather significantly. The last two times, forward inflation expectations dropped so significantly, the ECB launched LTRO and the Fed launched QE3. It seems the BoJ’s QQE is not having the effect perhaps they had hoped on inflation expectations. Will the Fed have to come to the rescue once again? And how will gold react to that?


Cyprus appears to have stolen the jam out of the reflation-game donut…


as one of the Fed’s key indicators (5Y5Y forward inflation) is diverging significantly… suggesting multiple compression (not expansion)

or moar money-printing…”

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$MCD Says They See No Restaurant Rebound Thus Far in April

“(Reuters) – McDonald’s Corp on Friday threw cold water on hopes that its restaurant sales would accelerate, warning that global sales at established restaurants would be slightly lower in April.

The forecast sent shares of the world’s biggest fast-food chain down 1.8 percent to $100.10 in morning trading.

The shares recently hit a record high above $103 on expectations that results would improve in the second half of 2013, when the chain will no longer be up against year-earlier U.S. results that were bolstered by unseasonably warm winter weather.

Results were expected to improve in April because the company would only have to top 3.3 percent growth in global restaurant sales in April 2012. By comparison, sales were up a whopping 7.7 percent in March 2012.

The McDonald’s forecast for April “does put a little bit of a damper on the theory that as soon as comparisons got easier, comps were going to take off,” Bernstein Research analyst Sara Senatoresaid.

While investors and analysts are giving McDonald’s new chief executive, Don Thompson, and his management team time to revive restaurant sales, they could get impatient as the year wears on.

“There will be some pressure on the guys to pick up the pace,” Edward Jones analyst Jack Russo said.

McDonald’s reported first-quarter profit that fell short of Wall Street expectations as global comparable sales fell 1 percent – slightly less than the 1.1 percent decline forecast by analysts polled by Consensus Metrix…..”

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$BA cuts Production of Jumbo Jets, FAA May Let Dreamliner Fly Shortly

“(Reuters) – Boeing Co said it would cut the production rate for the latest version of the 747 jumbo jetfrom 2 aircraft per month to 1.75 aircraft citing lower demand for large passenger and cargo planes.

The first delivery of the 747-8 aircraft at the new production rate is expected in early 2014, the company said, adding that the change was not expected to have a significant financial impact.

“Boeing has noted soft demand in the freighter market for some time, and if there is no pick up in orders we could see further cuts to the 747-8 production rate,” RBC Capital Markets analyst Robert Stallard said in a flash note to clients.

Boeing has a backlog of 64 747-8s, with just 7 orders in 2012 and 3 orders year-to-date in 2013, he said.

Stallard added that the revenue impact of any further cut is likely to be modest, though he expects the company may have to take accounting charges related to a significant step down in production rate.

The aircraft maker has been struggling with the grounding of its 787 Dreamliner jets worldwide since January after lithium-ion batteries burned on two of the planes.

The grounding has cost the company an estimated $600 million, but Reuters reported earlier this week that regulators are close to approving a key document that could start the process of returning the grounded planes to service within weeks….”

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Boston Bomber’s Uncle: ‘They Do Not Deserve To Live On This Earth’

“Ruslan Tsarni, the uncle of the two suspects in the Boston Marathon bombings, told a local television station that the suspects “do not deserve to live on this earth.”

Tsarni told WBZ-TV in Boston (in an interview that was just aired Friday by CNN) that the two suspects — Dzhokar and Tamerlan Tsarnaev — do not deserve to live, and he apologized to their victims.

“He deserved his. He absolutely deserved his,” Tsarni said of Tamerlan, who was killed early Friday morning. “They do not deserve to live on this earth.”…”

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Gapping Up and Down This Morning



Symb Last Change Chg %
AGI.N 10.85 +0.62 +6.06
VET.N 46.67 +1.80 +4.01
TAM.N 14.55 +0.43 +3.05
HY.N 51.65 +1.45 +2.89
BCC.N 30.61 +0.79 +2.65


Symb Last Change Chg %
RALY.N 17.16 -0.84 -4.67
RH.N 32.75 -1.60 -4.66
SSNI.N 17.76 -0.76 -4.10
AXLL.N 51.50 -1.65 -3.10
ASGN.N 22.15 -0.61 -2.68



Symb Last Change Chg %
OSTK.OQ 15.70 +4.24 +37.00
THRX.OQ 32.56 +4.55 +16.24
TZOO.OQ 24.33 +2.60 +11.97
TCCO.OQ 6.70 +0.70 +11.67
CRME.OQ 2.15 +0.22 +11.40


Symb Last Change Chg %
MCOX.OQ 5.18 -1.29 -19.94
RDHL.OQ 8.20 -1.80 -18.00
UTEK.OQ 29.88 -6.50 -17.87
UNXL.OQ 32.42 -5.65 -14.84
EXAS.OQ 8.84 -1.13 -11.33



Symb Last Change Chg %
SVLC.A 2.05 +0.29 +16.48
SAND.A 7.02 +0.68 +10.73
OGEN.A 3.73 +0.28 +8.12
BXE.A 6.20 +0.44 +7.64
ALTV.A 9.92 +0.47 +4.97


Symb Last Change Chg %
MHR_pe.A 21.35 -0.65 -2.95
REED.A 4.08 -0.03 -0.73
EOX.A 5.96 -0.03 -0.50

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$MCD Reports Disappointing Earnings

“McDonald’s Corp. (NYSE: MCD) reported first-quarter 2013 results before markets opened this morning. For the quarter, the fast-food restaurant chain posted diluted earnings per share (EPS) of $1.26 on revenues of $6.61 billion.

In the same period a year ago, the company reported EPS of $1.23 on revenues of $6.55 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.27 and $6.59 billion in revenues.

Globally, same-store sales in the first quarter fell 1%, and consolidated net income also fell 1%. U.S. same-store sales fell 1.2% and were down 1.1% in Europe and 3.3% in Asia. Results in China were “negative,” according to the company.

McDonald’s has an opportunity to improve its sales in China while competitor Yum! Brands Inc. (NYSE: YUM) struggles with both tainted chicken and bird flu at its KFC stores. But somehow, the company is flubbing it.

The company’s CEO said:

While the Company’s results for the quarter reflected difficult prior year comparisons and the ongoing impact of global economic headwinds, we continue our efforts to build market share and deliver sustained profitable growth for all stakeholders….”


Full report

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Chaos Erupts in Boston as Manhunt for Boston Bombers Ensues

“(CNN) — Police sealed off densely populated portions the Boston metro area early Friday after a violent night of chasing the Boston Marathon terror suspects left one of the men and a police officer dead.

Police ordered businesses in the suburb of Watertown and nearby communities to stay closed and told residents to stay inside and answer the door for no one but authorities. Boston authorities advised the same. The city’s subway, bus and Amtrak train systems have been shut down. Taxi service across the city was suspended. Every Boston area school is closed.

“It’s jarring,” said CNN Belief blog writer Danielle Tumminio, who lives in Watertown.

Boston’s public transit authority sent city buses to Watertown to evacuate residents while bomb experts combed the surroundings for possible explosives.

Police shot one of the men dead after a wild car chase through Watertown in which authorities say they hurled explosives at pursuing officers.

Police believe the men are the same ones pictured in images released Thursday by the FBI as suspects in the marathon bombing that killed three people Monday.

The men are shown in the images walking together near the marathon finish line.

Several sources told CNN that the dead suspect has been identified as Tamerlan Tsarnaev, 26. The one still being sought is Dzhokhar Tsarnaev, age 19.

The first suspect, the one believed killed by police, appears in the images wearing a dark hat, sunglasses and a backpack. The second suspect, wearing a white cap, is the one who remains at large, police said.

Police warned Watertown residents to lock their homes and stay away from their windows and doors.

Federal, state and local law officers are swarming through Watertown, going door-to-door to track him down, said Massachusetts State Police spokesman Col. Timothy Alben.

Police officers in full body armor, carrying automatic weapons, flooded the area as authorities praised residents for their cooperation.

“We need more time,” Alben said. “We’re making significant progress up there. But it may take hours to do this.”

“This situation is grave.” Alben said earlier. “This is a very serious situation that we are dealing with.”

The violence began late Thursday with the robbery of a 7/11 convenience store, he said. Soon after, in Cambridge, across the Charles River from Boston, a Massachusetts Institute of Technology police officer was fatally shot while he sat in his car, the Suffolk County District Attorney’s Office said in statement. Police believe the bombing suspects were responsible for the shooting.

The same two suspects, according to authorities, then hijacked a car at gunpoint in Cambridge. They released the driver a half-hour later at a gas station.

As police picked up the chase, the car’s occupants threw explosives out the windows and shot at officers, according to the district attorney’s office….”

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$GE Beats Expectations, Immelt Comments on Weakness in Europe

“(Reuters) – Strong sales to aviation customers helped General Electric Co’s first-quarter revenue beat Wall Street expectations on Friday, assuaging fears of a miss after a lukewarm report on March U.S. factory activity.

The world’s biggest maker of jet engines and electric turbines said revenue rose slightly to $35 billion, surpassing the $34.51 billion analysts had expected, according to Thomson Reuters I/B/E/S.

“That is a beat on revenue, and that’s important because the Street has been very worried about revenue numbers at industrial firms because the quarter appears to have tailed off in March,” said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire, which owns GE shares.

The Institute for Supply Management said earlier this month that U.S. factory activity grew at the slowest rate in three months in March, suggesting the economy lost some momentum at the end of the first quarter.

While investors and analysts await more information on sales from GE Chief Executive Jeff Immelt on an earnings conference call, GE said in a statement that orders from aviation customers jumped 47 percent and orders from energy customers rose 24 percent in the quarter.

GE’s order backlog – a closely watched indicator of future sales – rose to $216 billion from $210 billion in the fourth quarter of 2012. Backlog can be a positive sign that customers are willing to wait in line for a company’s products, or a sign that a company is having a hard time meeting demand. GE’s backlog has grown consistently in recent quarters….”

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$IBM Receives Multiple Downgrades as Earnings Miss Across the Board, All Business Sectors Experience Weakness

“(Reuters) – Three brokerages cut their price targets on IBM Corp shares and warned its weak earnings suggested results would also be disappointing at other hardware technology companies such as EMC Corp, Dell Inc and HP Co.

IBM’s shares were set to open 1.5 percent lower on Friday than their Thursday closing price of $207.15 on the New York Stock Exchange.

IBM posted on Thursday a rare quarterly earnings miss as a sliding yen hurt earnings from Japan and it failed to close a number of major deals, especially in Europe and the United States.

“The IBM miss is a decidedly negative read through for the entire IT hardware segment and we are incrementally more cautious on the sector; particularly those with a March quarter end,” Deutsche Bank analyst Chris Whitmore wrote in a note….”

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