Filed under: Before the bell, International markets, Market matters, Alcoa Inc (AA), Economic data, Oil

U.S. stock market futures were lower Wednesday morning following metals giant Alcoa (NYSE: AA) announcement from late Tuesday it would be cutting production and jobs. Meanwhile, after warning that the nation could face trillion-dollar deficits for years to come, Obama vowed long-term fiscal discipline along with his massive $775 billion stimulus plan.

Overseas, Asian markets were mixed, but European stock markets fell Wednesday as the hopes of recovery in 2009 is still that, a hope. Meanwhile, Russia has shut off all its gas supplies to Europe through Ukraine and has reduced or halted fuel deliveries to a dozen countries during a winter cold snap. Oil prices dipped to near $48 a barrel Wednesday as the continued geopolitical tensions affecting oil prices were weighed against likely slower demand.

On the economic front, ADP is set to release its December private sector payroll estimate, two days ahead of the government jobs report. Around 10:30 am, weekly energy inventories data is due as well.

Before the bell: Stocks to start lower following Alcoa cuts, ahead of jobs report originally appeared on BloggingStocks on Wed, 07 Jan 2009 07:45:00 EST. Please see our terms for use of feeds.

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Filed under: Economic data, Financial Crisis

President-elect Obama is telling the public that the US may run a trillion dollar deficit to bailout the economy. According to The New York Times, he made the point that Americans for the unparalleled prospect of “trillion-dollar deficits for years to come,” a stark assessment of the budgetary outlook that he said would force his administration to impose tighter fiscal discipline on the government.

After absorbing the shock of how large the number is, most people ask where the money will come from. Almost everyone already knows the answer. It will be passed on to taxpayers, probably in a few years when the economy recovers.

But, where the money comes from is the wrong question. The much more important issue is how it gets spent. The first proposal from the new administration is that about $700 billion gets invested in building infrastructure from roads to medical IT upgrades to broadband. The part of the plan is disturbing. The jobs it creates may take months. Getting complex programs for building out new schools and upgrading the energy grid means moving people to the geographic areas where the work needs to be done. It means creating agencies to oversee the work. That could take the better part of a year. The economy may be almost beyond repair at that point.

Continue reading Obama: Watch for trillion dollar deficits

Obama: Watch for trillion dollar deficits originally appeared on BloggingStocks on Wed, 07 Jan 2009 04:42:00 EST. Please see our terms for use of feeds.

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Filed under: Management, JPMorgan Chase (JPM), Bank of America (BAC)

Ken Lewis followed the lead of many other bank CEOs. The head of Bank of America (NYSE: BAC) will take no bonus for last year. BAC will also miss its financial forecasts for 2008.

There is still a very substantial question about how bank boards handled the credit crisis and the M&A deals some large firms did in the wake of the trouble. Bank of America bought Countrywide just as other large banks picked up rivals at bargain prices.

But, were they bargains? There is a good deal of analysis emerging that JPMorgan (NYSE: JPM) may struggle to integrate Bear Stearns and other acquisitions. The balance sheets of the bank’s targets may be worse than first realized.

Even if Countrywide was a relatively good deal, integrating it takes management time away from running the BAC core businesses which are likely to suffer heavy losses due to credit write-offs from consumer and business loans.

Lewis was the architect of the BAC M&A deals.He seems to be paying a relatively low price for the extent to which they have damaged the bank. The firm’s board does not appear to car much about that.

The buck of bad decisions is being passed around at BAC and shareholders will probably end up with it.

Douglas A. McIntyre is an editor at 247wallst.com.

Firing bank executives instead of cutting bonuses originally appeared on BloggingStocks on Wed, 07 Jan 2009 04:07:00 EST. Please see our terms for use of feeds.

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Filed under: Scandals, Columns, Mutual funds

Welcome to Way Off Wall Street, a column dedicated to providing Main Street opinions on topics of interest to investors. Each installment highlights the views of Americans who are far removed from the canyons of Wall Street — and who often see things more clearly as a result.

After reading nearly 400 publicly posted reader comments regarding the Bernard Madoff Ponzi scandal, I believe that I may have a good feel for the grass roots mood on the subject. In a nutshell, the average American internet crawler is thoroughly disgusted with our financial system and its regulatory agencies. They are fed up, strung out and unequivocally irate. As for Bernard Madoff himself, the overwhelming assertion is that he should be strung up immediately. That sentiment is not meant in a figurative sense either. People want Bernard Madoff publicly hanged, and they want it done with much fanfare in a place such as New York City’s Central Park. Yes, this sounds rather coarse. Perhaps it’s even uncivilized, but as the internet is my witness, this is what people are saying.

Very few of the comments I have read indicate a feeling that Madoff’s investors simply got what they deserved. I did, however, read many statements regarding the fact that high level greed obviously forced many large eggs into one very questionable basket. I myself have not much pity for those investors who lost “everything” to Madoff’s twisted dealings. It is my opinion that if investors don’t have the sense to diversify, and thereby somewhat protect themselves, they are not very deserving of much wealth. Even my own paltry savings reside in no less than five separate accounts, however paltry.

Continue reading Way Off Wall Street: The public responds to the Madoff scandal

Way Off Wall Street: The public responds to the Madoff scandal originally appeared on BloggingStocks on Tue, 06 Jan 2009 19:00:00 EST. Please see our terms for use of feeds.

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Filed under: Earnings reports, Analyst upgrades and downgrades, Forecasts, Products and services, Bed Bath and Beyond (BBBY)

Investors are going to keep a close eye on Bed Bath and Beyond (NASDAQ: BBBY) Wednesday afternoon when the company reports its fiscal third quarter numbers.

Going into tomorrow’s earnings announcement, analysts are expecting the company to post third quarter earnings of 33 cents per share. During its third quarter last year the company matched analyst estimates for 52 cents per share, so hitting its 33 cent estimate this year would mean a drop of 36% year over year.

Last month, the company pre-announced its quarterly numbers and stated that it expected earnings would fall somewhere between 31 and 35 cents a share. This estimate was down from the company’s previous guidance of 41 to 47 cents per share.

Of course, one of the main reasons for the company’s lower guidance was overall weakness in the economy, but it also faced increased competition from the liquidation sale at its main rival, Linens ‘n Things. As Linens ‘n Things was preparing to close its doors, its inventory was put on massive discount, and Bed Bath and Beyond was hurt by consumers flocking to buy the highly discounted prices over at Linens ‘n Things. I, personally, did a lot of holiday shopping at Linens ‘n Things, as did many people that I know.

Continue reading Bed Bath and Beyond (BBBY) Q3 earnings preview

Bed Bath and Beyond (BBBY) Q3 earnings preview originally appeared on BloggingStocks on Tue, 06 Jan 2009 18:40:00 EST. Please see our terms for use of feeds.

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Filed under: Earnings reports

On Tuesday, lighting equipment maker Acuity Brands Inc. (NYSE: AYI) reported that its fiscal first-quarter profit dropped 38% due to lower demand for its products. On the other hand, food and animal safety company Neogen Corp. (NASDAQ: NEOG) said that its second-quarter profit rose 20%, boosted by acquisitions.

For the quarter that ended Nov. 30, Acuity Brands earned $19.4 million, or 48 cents per share, which was 33.3% lower than in the same quarter of the previous year. Excluding a pretax charge related to the consolidation of facilities, the company posted an adjusted operating profit of $55.8 million, or 82 cents per share. Sales fell 11% to $452.0 million. Analysts polled by Thomson Reuters had expected a profit of 76 cents per share on $461.3 million in revenue.

Acuity said the rapid decline in demand for lighting products and a dramatic jump in material and component costs during the quarter were unprecedented. The Atlanta-based company said it expects the second quarter to be challenging due to the turbulent economic environment, and for demand from its core markets to be lower for fiscal 2009.

Acuity’s share price fell 26 cents, or 0.7% Tuesday, and are 16.5% lower than a year ago.

Continue reading Acuity Brands and Neogen top earnings estimates

Acuity Brands and Neogen top earnings estimates originally appeared on BloggingStocks on Tue, 06 Jan 2009 18:20:00 EST. Please see our terms for use of feeds.

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Filed under: Deals, Products and services, Amazon.com (AMZN), Netflix, Inc. (NFLX)

Netflix, Inc. (NASDAQ: NFLX) announced yesterday that its real-time internet video streaming service would soon be included in many new flat-screen television sets made by LG Electronics. The online DVD rental pioneer is taking huge leaps to get content directly to consumers without using any kind of physical media.

But what about other video streaming services? Perhaps Amazon.com Inc.’s (NASDAQ: AMZN) Video On Demand, which has more than 40,000 pieces of content to offer?

Although Apple Inc.’s (NASDAQ: AAPL) Apple TV product — which sells for over $200 — has been on the market for a few years now, the content is limited and the box only works on HDTV sets. A smaller box made by Roku, which was initially only able to offer Netflix’s 12,000-piece direct online catalog, will now be offering over 40,000 pieces of content from Amazon.com’s Video On Demand service. The $100 box also works with almost any television, although not much of the content if offered from either Netflix or Amazon.com in high-definition yet. Do customers really care? Based on the slow adoption rate and higher price of the high-definition Blu-ray format over standard-definition DVD, not much.

Apple may see some serious competition from Netflix here. The company that practically invented the DVD rental by mail business is now storming heavily into the digital content delivery business, where few companies have been successful. There still is not a popular, mass-market device that brings internet content and delivery directly to television sets. This Roku box — which now features content from two of the largest online digital libraries — may be the closest device yet.

Amazon.com video streaming added to Netflix set-top box originally appeared on BloggingStocks on Tue, 06 Jan 2009 18:00:00 EST. Please see our terms for use of feeds.

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Filed under: Bad news, Housing, Recession

It looks like the nation’s last hold-out — the last bastion of the housing bubble, if you will — has finally started to burst. Or at least deflate.

Manhattan, which remains, despite the nation’s decade of policy errors, the capital of the world, registered its fourth straight quarterly decline in apartment sales in Q4 2008, according to research compiled by Prudential Douglas Elliman Real Estate (pdf).

Transactions in Q4 2008 fell 9.4% from a year ago to 2,282, Prudential said. Further, while the median price of all units (new and existing) rose 5.9% to $900,000, the median price for re-sale properties fell 3.6% to $732,500. Luxury unit prices fell 3.9% to $4.13 million

Just as telling: inventories have soared. Listings increased 39.3% to 9,081 units compared to a year ago, with the average days a listing was on the market before sale rising to 159 days, from 131 days a year ago.

Driven by record investment banking / financial sector salaries and bonuses, and by creative mortgage forms, New York City’s real estate market, specifically the borough of Manhattan, experienced “a 5-year period of clearly unsustainable price gains,” so says economist Peter Dawson. Manhattan, he says, was able to hold on in 2007 as the housing slump devastated prices in the U.S., particularly in the California, Southwest U.S., and Florida markets, but the financial crisis that depleted New York’s investment banking employee ranks is finally showing up in Manhattan’s residential real estate market, he said.

Continue reading Tell-tale stat: Manhattan apartment sales decline for 4th straight quarter

Tell-tale stat: Manhattan apartment sales decline for 4th straight quarter originally appeared on BloggingStocks on Tue, 06 Jan 2009 17:45:00 EST. Please see our terms for use of feeds.

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Filed under: Newsletters, McDonald’s (MCD), Burger King Hldgs (BKC), Stocks to Buy, Best Stocks for 2009

This post is part of a special annual report — Top Stock Picks ‘09 — in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

Michael Vodicka, editor of Zacks Momentum Trader, looks to a “steady player” as his top stock pick for the coming year — McDonald’s Corp. (NYSE: MCD).

Meanwhile, Ann Northrop, CFA and senior equity analyst with Zacks adds, “My top speculative stock is Burger King (NYSE: BKC) which is proficiently managing a turnaround.”

Regarding McDonald’s, Vodicka explains, “Earnings estimates for the S&P 500 are all over the map going into the New Year, with a $40 spread between high and low figures.

“Most analysts are projecting much of the same market volatility that wreaked havoc in 2008. Steady players need apply; enter McDonald’s Corporation. A number of factors should continue to work in the company’s favor as 2009 unfolds.

“McDonald’s recent success has been driven by a combination of both domestic and international sales growth, with international results outpacing the company’s solid domestic results.

Continue reading Top Stock Picks ‘09: McDonald’s (MCD) and Burger King (BKC)

Top Stock Picks ‘09: McDonald’s (MCD) and Burger King (BKC) originally appeared on BloggingStocks on Tue, 06 Jan 2009 17:30:00 EST. Please see our terms for use of feeds.

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Filed under: Deals, Products and services, Industry, Consumer experience, Competitive strategy, Economic data, Personal finance

As everyone knows, the auto industry is on the skids. In December sales of cars and light trucks fell by 36% to 896,124 vehicles, with Chrysler down 53%, GM down 31% and Ford down 32%. Toyota, with sales also down, is suspending production in Japan for 11 days.

The auto industry is facing two major problems: The first is whether to produce SUVs or cars. George Pipas at Ford seems to believe that customers will tend toward buying more cars in the coming year. The second major problem facing the auto industry is how to get customers into the showrooms.

The usual promotions to the consumer are “cash back” offers. But Hyundai has come up with the most creative and unique promotional program yet. Hyundai will let customers return their cars for up to a year if they lose their jobs or can’t make the payments.

You can bet that as times get tough manufacturers and retailers will come up with a variety of “far out” deals. Whether or not they will work is anyone’s guess.

Would you buy a Hyundai?

Can’t make your car payments? Just give it back originally appeared on BloggingStocks on Tue, 06 Jan 2009 17:15:00 EST. Please see our terms for use of feeds.

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