Thursday, November 17, 2011

Morning Journal, The myth that we need higher taxes

This Week’s Data

October industrial production rose 0.7% versus expectations of an increase of 0.4%; capacity utilization came in at 77.8 versus estimates of 77.7.

Weekly jobless claims fell 2,000 versus expectations of a 7,000 increase.

October housing starts declined 30,000 versus estimates of a 58,000 drop; building permits jumped 64,000 versus an anticipated rise of 16,000.


The myth that we need higher taxes (short):

An in depth look at consumer price inflation (medium):



Bank fraud prosecutions drop under Obama (short):

News on Stocks in Our Portfolios--courtesy of Seeking Alpha

07:39 PM Industrial goods supplier W.W. Grainger (GWW) raises the low end of its FY11 guidance and issues a mostly upbeat forecast for 2012. The industrial-goods supplier now expects its FY11 EPS to come in around $8.85 - $9 per share. Comment!

04:29 PM All searches powered by Microsoft's (MSFT) Bing comprised 28.62% of the U.S. search market in October, up from 28.07% in September, Experian Hitwise reports. Bing took 13.23%, and Yahoo's (YHOO) share rose to 15.39%, each up a bit M/M. Google (GOOG) still dominated with a 65.38% share, off a bit from 66.12% a month earlier. Comment!

03:37 PM Qualcomm (QCOM), which had an estimated 42% share in Q2 of the giant market for mobile baseband processors, is announcing 8 new chips for its fast-growing Snapdragon baseband line; the chips are based on Qualcomm's next-gen Krait architecture. In addition, Qualcomm is looking to boost Snapdragon's value proposition by offering Android games that exclusively run on Snapdragon chips. Comment!

03:23 PM Morningstar crunches the numbers on a possible PepsiCo (PEP +1.5%) split - a rumor given legs by a New York Post story - to find the sum of the parts could be worth more than the company. Analysts with the firm assume a division of the firm into a Snacks company and a Drinks company - assigning price multiples of 11X and 13X earnings respectively. After factoring in current earnings estimates, a fair market value for PepsiCo works out to $76 or a tidy 16% premium to its current share price. Comment!

12:24 PM Philip Morris (PM +0.9%) pops as CEO Louis Camilleri - speaking at a Morgan Stanley conference - raises the company's FY11 EPS outlook to at least 4.85, the top of a previous range of $4.75-4.85. Consensus estimates were for $4.82. Comment!

10:35 AM Verizon Wireless (VZ, VOD) has a big lead on AT&T (T) when it comes to 4G LTE coverage, and it looks like it won't be going away anytime soon. Verizon says its LTE coverage will soon reach 179 markets. By contrast, AT&T's LTE coverage will only reach 15 markets by the end of the month. In addition, Verizon will be able to offer the LTE-enabled Galaxy Nexus and Droid Razr to customers. Comment!

10:23 AM Refiners are getting slammed as the Conoco (COP) deal will squeeze profit margins by eliminating some of the glut of cheap oil at Cushing. Phillip Dunham notes the rally in refiners was "all about the Brent-WTI spread, not organic growth. Nice job with late summer upgrades, sell side." Valero VLO -5.7%, Western Refining WNR -8.5%, Marathon MPC -6.1%. Comment!

09:31 AM More on ConocoPhillips's (COP -1.2%) asset sales: One of the deals is a $1.15B transaction to sell ConocoPhillips' 50% stake in the Seaway Crude Pipeline Company, which transports oil between Texas and Oklahoma, to Enbridge (ENB -1.4%). ConocoPhillips says the deals will bring total proceeds from its 2010-2012 divestiture program up to $10.5B. Comment!

06:40 AM Peabody Energy (BTU) says it's acquired more than 90% of Macarthur Coal (MACDF.PK) - a trigger that allows the company to force remaining shareholders to sell and increases the offering price to $16.52/share from $16.27/share. Comment!