Spin Doctor Economics Will Help U.S Growth to Hit 3%

“The U.S. economy will grow 3 percent larger in July because the government is tweaking certain statistics that add billions of dollars in intangible assets to the gross domestic product (GDP), according to the Financial Times.

The revisions are aimed at more accurate tracking of changes in U.S. output and include the addition of factors such as spending on research and development (R&D), the impact of creative works such as movies and music and defined pension benefit schemes.

“We are carrying these major changes all the way back in time — which for us means to 1929 — so we are essentially rewriting economic history,” Brent Moulton, manager of national accounts at the Bureau of Economic Analysis (BEA), told the Times….”
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[youtube://http://www.youtube.com/watch?v=eu7TOncR7FU 450 300]

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What a sick trade in such a short period of time….

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“Travelers posted a higher first-quarter profit, helped by a decline in natural disaster losses and rising insurance rates.

After the earnings announcement, the company’s shares rose in pre-market trading. (Click here to get the latest quotes for Travelers.)

The company posted first-quarter earnings excluding items of $2.33 per share, up from $2.01 a share in the year-earlier period.

Revenue increased to $5.597 billion from $5.50 billion a year ago….”

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“The FHFA’s reading of U.S. home prices for February is out.

The headline index climbed by 0.7% month-over-month, which was right in line with expectations.

This is up from 0.6% a month ago.

“The U.S. index is 13.6 percent below its April 2007 peak…”

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“April Flash PMI is out.

The headline index fell to 52.0 from last month’s 54.9 reading.

Economists were looking for a smaller decrease to 53.9.

Any number over 50 indicates expansion, so this reading says American manufacturing is still expanding, but at a slower pace than last month.

Below is a full breakdown of the sub-components of the index: …”

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Upgrades  – MT, SAN, BAC, CATT, CON, GE, INFA, KMB, MBI, MS, VECO,

Downgrades  – RATE, C, CMP, MSFT, RCI, SLM, WU, YUM,

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SOURCE 
NYSE

NASDAQ

AMEX

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In Play ,

On the Wires 

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“The trustee overseeing MF Global Holdings Ltd.’s bankruptcy sued former Chief Executive Jon S. Corzine and two other executives for their role in the brokerage’s collapse.

Trustee Louis J. Freeh on Monday filed a lawsuit in bankruptcy court against Mr. Corzine, the former governor of New Jersey, and former Chief Operating Officer Bradley I. Abelow and former Chief Financial Officer Henri J. Steenkamp….”

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“Delta Air Lines Inc.’s DAL -0.79% first-quarter net profit fell 94% as the carrier posted fewer fuel-hedging gains, offsetting modest revenue growth.

Adjusted earnings topped expectations, however.

Delta recently was one of the first companies to cite the so-called sequester U.S. budget cuts that came into force last month as it saw revenue growth slow in March. The company also blamed reduced government spending for lower late flight bookings, which typically attract higher fares—while signaling that demand also was hurt by efforts to raise fares….”

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“(Reuters) – Xerox Corp on Tuesday reported first-quarter earnings that beat expectations but said second-quarter profit would miss estimates as it restructures to become a broader technology company.
Adjusted earnings were 27 cents per share, compared with the average analyst estimate of 24 cents. Revenue fell 3 percent to $5.4 billion, below analyst expectations of $5.5 billion.
Xerox said earnings were higher than expected due to a benefit of 2 cents after reducing its reserve for recent litigation. It did not elaborate.
For the second quarter, Xerox, which has its roots in copiers and printers and now focuses on services like managing toll systems and healthcare programs, forecast earnings, excluding items, in the range of 23 cents to 25 cents per share. Wall Street is looking for 26 cents per share, according to Thomson Reuters I/B/E/S…”

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“(Reuters) – Chemicals maker DuPont’s quarterly profit more than doubled as the worst dry spell in decades encouraged U.S. farmers to buy its drought-hardy seeds and crop-protection products to boost yields.

Strong wheat, corn and soybean prices also spurred agricultural sales in the Americas, helping DuPont beat estimates for the quarter despite an ongoing decline in demand for its once-lucrativetitanium dioxide paint pigment.

The Wilmington, Delaware-based company’s shares traded up 0.7 percent at $50.74 before the bell on Tuesday.

“The first quarter finished as expected, with the strong agriculture performance and performance chemicals’ decline from peak levels last year,” DuPont Chief Executive Ellen Kullman said in a statement.

The 210-year-old company, known for its chemicals business, is focusing on food and agriculture products that are less exposed to ebbs and flows in titanium dioxide (Ti02) sales.

The shift is evident in the $5 billion sale of its car paint unit last year and the $6 billion purchase of nutritional supplements maker Danisco in 2011.

“Ti02 has declined and it’s a much smaller factor now. We also think it is bottoming so it’s become less of an issue,” John Roberts, who leads U.S. chemical coverage at UBS Investment Research, said ahead of the announcement.

He had expected first-quarter earnings of $1.55 per share, above the Wall Street estimates of $1.52 per share. Excluding one-time items, DuPont earned $1.56 per share….”

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“ARM Holdings Plc (ARM), whose chip designs power Apple Inc. (AAPL)’s iPhone and iPad, reported higher sales that beat analysts’ estimates as demand increased for its graphics and processing technology. The stock jumped.

Revenue rose 29 percent to 170.3 million pounds ($260 million) in the first quarter ended in March, the Cambridge, England-based company said today. Analysts predicted 160 million pounds, the average of estimates compiled by Bloomberg.

ARM Chief Executive Officer Warren East said in March he would retire July 1 after almost 12 years in charge. His successor, Simon Segars, will focus on increasing the company’s share of semiconductor designs and moving ARM’s technology into connected devices, Web-enabled “smart” televisions, tablets and smartphones. ARM’s chip designs compete with patents from semiconductor makers such as Intel Corp. (INTC)

“We’ve made an encouraging start to 2013 with more leading companies deploying our technology in their products,” ARM Chief Financial Officer Tim Score said on a conference call.

ARM’s revenue increase this year will be “quite well ahead of” the industry’s projected growth in the “mid-single digits,” Score said. That means ARM’s sales will be at least in line with market expectations, he said.

ARM rose as much as 8.8 percent to 945.5 pence, the biggest intraday gain since July, and advanced 7.3 percent to 932.5 pence at 8:30 a.m. in London. The stock had risen 53 percent in the 12 months through yesterday.

Connected Appliances…”

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“STMicroelectronics NV (STM), Intel Corp. (INTC)’s biggest competitor in Europe, forecast new products and chip demand will boost sales in the second half as it winds down a wireless venture with Ericsson AB that has contributed to six consecutive quarterly losses.

Europe’s biggest chipmaker predicted second-quarter sales growth of about 7 percent, excluding the wireless business. The projection “seems to be ahead of analog peers and implies share gains,” Bank of America Merrill Lynch analysts led by Didier Scemama wrote in a note to clients….”

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“The euro fell to a two-week low against the dollar as a report showed services and manufacturing output in the region shrank for a 15th month, adding to signs the recession is worsening.

The single currency weakened against 13 of its 16 major counterparts as the data added to speculation the European Central Bank will cut interest rates to spur growth. The yen and the dollar strengthened after an industry report showed Chinese manufacturing expanded at a slower pace, increasing demand for safer assets. Sweden’s krona dropped to a four-month low against the U.S. currency after the nation’s unemployment rate unexpectedly increased in March.

“The overall picture is pretty bleak,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt. “The likelihood of the ECB cutting interest rates increased today. All in all, it’s negative for the euro.”

The euro declined 0.6 percent to $1.2985 at 10:02 a.m. London time after sliding to $1.2974, the weakest level since April 8. The 17-nation currency dropped 1.2 percent to 128.16 yen. Japan’s currency gained 0.5 percent to 98.69 per dollar….”

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“Italian bonds advanced, pushing two-year note yields to a record low, as data showing euro-area output contracted for a 15th month in April boosted speculation the European Central Bank will lower interest rates.

The yield on Italian 10-year government bonds fell below 4 percent for the first time in almost 2 1/2 years, while Spanish and Portuguese yields dropped to the least since 2010. Borrowing costs in France and Ireland declined to the lowest on record as a purchasing managers’ index showed services in Germany unexpectedly shrank with manufacturing. Bunds rose for a second day, with yields falling to the lowest since July, and Treasuries and U.K. gilts also advanced.

“The weaker tone in the headline and German PMIs this morning has fueled rate-cut speculation with regard to the next meeting,” Michael Leister, an interest-rate strategist at Commerzbank AG in London. “Bonds are rallying across the board, bunds as well as peripherals, which clearly shows to us that this hunt for yield is really intensifying and the market is expecting an ultra-low yield environment to stay in place for the foreseeable future.”

Italy’s two-year yield fell six basis points, or 0.06 percentage point, to 1.17 percent at 12:14 p.m. London time, after reaching 1.16 percent, the lowest level since Bloomberg began compiling the data in 1993. The 6 percent security due November 2014 rose 0.09, or 90 euro cents per 1,000-euro ($1,230) face amount, to 107.41.

The nation’s 10-year yield declined as much as eight basis points to 3.975 percent, the lowestsince Nov. 8, 2010.

Yield Lows…”

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“Michelin & Cie. (ML), Europe’s largest tiremaker, said first-quarter revenue fell 8.1 percent as a recession reducing car sales in its home region widened to hurt demand at bulldozer and military-plane manufacturers.

Sales dropped to 4.88 billion euros ($6.36 billion) from 5.3 billion euros a year earlier, Clermont-Ferrand, France-based Michelin said yesterday in a statement. Revenue missed the 4.97 billion-euro average of four analyst estimates compiled by Bloomberg. The tiremaker, reiterating forecasts of “steady” volume and “stable” earnings for 2013, said it may look at reorganizing in the absence of a market recovery.

Demand for earthmovers is “falling sharply” in Europe and North America, and sales of farm tractors and defense aircraft are also declining, Michelin said. The manufacturer is seeking more growth outside Europe and marketing more so-called specialty tires used on large vehicles amid a car-market contraction that French auto producer PSA Peugeot Citroen (UG)expects at as much as 5 percent this year.

“If volumes stay at the levels at which they are today, that would imply some European restructuring,” Chief Financial Officer Marc Henry said on a conference call with analysts. “This is under scrutiny of course, but nothing is said yet.”

The shares dropped as much as 2.77 euros, or 4.6 percent, to 57.23 euros and were down 2.3 percent as of 9:22 a.m. in Paris trading. The French manufacturer has declined 18 percent this year, valuing the company at 10.8 billion euros.

Shrinking Market…”

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“Euro-area services and factory output shrank for a 15th month in April as the currency bloc struggled to emerge from a recession, adding to pressure on the European Central Bank to do more to boost growth.

A composite index based on a survey of purchasing managers in both industries held at 46.5, London-based Markit Economics said today. That’s in line with the median of 26 economists’ forecasts in a Bloomberg News survey. A reading below 50 indicates contraction. The euro area’s woes were compounded today by concern global growth may falter after a report showed Chinese manufacturing expanding at a slower pace this month….”

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“The Australian and New Zealand dollars fell against most of their major counterparts after a report signaled manufacturing slowed more than estimated in China, the biggest trading partner of both nations.

The so-called Aussie slid for a third day against the U.S. dollar after the data added to signs the global economic recovery is struggling, reducing the appeal of riskier assets. Australian and New Zealand government bond yields touched their lowest levels this year.

“We’re not seeing a sustained period of recovery in the China data, which is a bit of a concern,” said David Forrester, a senior vice president for Group of 10 foreign-exchange strategy at Macquarie Bank Ltd. in Singapore. “It’s a reflection of weaker global growth, and it’s not good news for the Aussie or the kiwi.”

The Australian dollar slid 0.3 percent to $1.0242 at 5:19 p.m. in Sydney after touching $1.0221, the lowest since March 11. New Zealand’s kiwi dollar dropped 0.5 percent to 83.86 U.S. cents after reaching 83.64 cents, the weakest since April 4.

The HSBC Manufacturing Purchasing Managers’ Index for China slipped to 50.5 this month from 51.6 in March. Economists in a Bloomberg News survey predicted 51.5. Readings above 50 signal expansion.

Data on April 15 showed China’s economy slowed in the first quarter. Gross domestic productexpanded 7.7 percent, compared to 7.9 percent growth in the three months to December. Economists projected 8 percent growth in a Bloomberg poll.

Rate Expectations…”

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“Japanese Prime Minister Shinzo Abe vowed to use force if necessary to defend islands also claimed by China as tensions rose over visits by his fellow lawmakers to a Tokyo shrine seen inAsia as a symbol of wartime aggression.

China and Japan each issued formal protests today over the presence of each other’s vessels in waters around the islands, which lie in an area rich in resources including fish and oil. Abe today told a parliamentary committee that the government would not allow any Chinese boats to land on them….”

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