Wednesday, December 14, 2011

Morning Journal 'You're in Your Own' economics


Economics
This Week’s Data


The International Council of Shopping Centers reported weekly sales of major retailers down 0.1% versus the prior week but up 2.9% versus the comparable period last year; Redbook Research reported month to date retail chain store sales down 2.9% versus the similar time frame last month but up 2.9% on a year over year basis.

October business inventories rose 0.8% versus expectations of a 0.9% increase; business sales were up 0.7%.

Weekly mortgage applications advanced 4.1% but purchase applications fell 8.2%.


Other

Housing affordability at highs (medium):
http://mjperry.blogspot.com/2011/12/housing-affordability-is-now-at-record.html

The UCLA Pulse of Commerce index inches up in November (short):
http://advisorperspectives.com/dshort/updates/Pulse-of-Commerce-Index.php

Bank lending is finally picking up (medium):
http://advisorperspectives.com/commentaries/abbett_121211.php

Politics

Domestic


Mark Steyn on ‘you’re on your own’ economics (medium and today’s must read):
http://www.nationalreview.com/articles/285409/statist-delusions-mark-steyn


News on Stocks in Our Portfolios

04:33 AM Caterpillar (CAT) announced it will sell part of the former Bucyrus distribution business to Sime Darby Berhad (SMEBF.PK) for ~$360M. Comment!

03:18 PM FactSet Research (FDS -8.3%) sinks after the financial software firm projects EPS above analyst consensus for the current quarter but revenue slightly below Street estimates. FQ1 earnings rose 9.4%, helped by higher revenue and client growth, though recent volatility in financial markets interrupted buying patterns from some clients. Comment!

09:08 AM Shares of Boeing (BA) move up 1.1% premarket on the heels of its mega order from Southwest Airlines (LUV) - a deal that extends a strong relationship between the two firms. Southwest only flies Boeing-made planes, and it marks the 4th time the carrier has served as the initial customer for a variant of the 737. LUV +0.4% premarket. Comment!

08:33 AM Rockwell Collins CEO Clay Jones says the firm isn't for sale at the moment, but would have to do the "responsible fiduciary thing" if a high offer came in. Jones calls his firm currently undervalued, pointing to the hefty tab United Technologies (UTX) picked up when it nabbed Goodrich (GR). Comment!

06:44 AM Medtronic (MDT) announces that it reached a settlement with the DOJ over alleged violations of the False Claim Act. Under the terms of the agreement, the firm will make a $23.5M payment from a reserve it's established without making any admission that post-clinical studies were improper. Comment!



Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.