Friday, October 28, 2011

Morning Journal--The evils of crony capitalism


News on Stocks in Our Portfolios

02:56 PM Abbott Labs (ABT +0.7%) spinoff Hospira (HSP +3.9%) gains after Bank of America ups the shares to buy on valuation, saying that most of the bad news surrounding its plant closures has already been priced into the shares, and the company has significant growth potential going forward.

11:29 AM Occidental Petroleum (OXY +7.6%) competes with the likes of Exxon (XOM), Conoco Phillips (COP) and Chevron (CVX), yet it offers one thing its huge rivals don't: growth. Its Q3 easily beat expectations, and Y/Y earnings and revenue growth was 46% and 22.6%, respectively. But shares trade at just 10x 2012 earnings estimates. Comment!

11:19 AM Exxon Mobil (XOM +0.3%) is back on top as the biggest U.S. public company, with its market cap now hitting $395B, after recording its third straight quarter of $10B-plus profit and a staggering $125B in revenue, which topped forecasts by more than $10B. Although oil-equivalent production fell 4%, analysts eye a more positive outlook by 2013 as current capital spending starts to pay off. Comment!


09:44 AM Coca-Cola (KO +1.8%) agrees to buy Great Plains Coca-Cola Bottling for close to $360M, nabbing the 5th largest independent bottler in the country. The company says the deal is expected to be completed before the end of the year. Comment!

More earnings reports:
Reported Expected
LEG $.31 $.36
FII .37 .39
BEN 1.88 2.07
XOM 2.13 2.13
CL 1.31 1.30
MO .56 .56

Economics

This Week’s Data


September pending home sales fell 4.6% versus expectations of being unchanged.

September personal income rose 0.1% versus estimates of an increase of 0.3%; personal spending was up 0.6% versus forecasts of up 0.7%; and the core PCE deflator was flat versus an anticipated rise of 0.1%.
http://www.calculatedriskblog.com/2011/10/personal-income-increased-01-in.html


Politics

Domestic


Are student loans the next debt crisis (medium):
http://bit.ly/uTtJPg

Great article on the evils of crony capitalism (medium and today’s must read):
http://www.nytimes.com/2011/10/27/opinion/kristof-crony-capitalism-comes-homes.html?_r=1

And now a word from our dear leader (medium):
http://www.zerohedge.com/news/did-potus-just-become-self-congratulatory-ft-op-ed-blogger