Wednesday, March 21, 2012

Morning Journal Are US companies facing declining profit margins


Economics
This Week’s Data


The International Council of Shopping Centers reported weekly sales of major retailers up 0.9% versus the prior week and up 3.3% versus the comparable period a year ago; Redbook Research reported month to date retail chain store sales up 4.6% on a year over year basis.

Weekly mortgage applications plummeted 7.4% though purchase applications were only off 1.0%.

Other

Still lots of cash on the sidelines (medium):
http://scottgrannis.blogspot.com/2012/03/mountains-of-cash-are-still-on.html


And:
http://www.zerohedge.com/news/3-charts-money-sidelines

But there is trouble in mortgage bond land (medium):
http://www.zerohedge.com/news/mortgage-settlement-not-so-fast

Are we facing a period of declining corporate profit margins (medium and today’s must read):
http://www.zerohedge.com/news/no-record-profits-old-assets-jim-montier-unsustainable-parabolic-margin-expansion-dummies

The simple problem of too much debt (short and also a must read):
http://www.zerohedge.com/news/simple-problems-too-much-us-debt

Update on the Baltic Dry Index (short):
http://www.bespokeinvest.com/thinkbig/2012/3/20/baltic-dry-index-up-19-days-in-a-row-but-still-down-49-ytd.html

Politics

Domestic


Obama’s Edsel (medium):
http://www.nationalreview.com/articles/293885/sad-plight-obama-s-edsel-rich-lowry

A more in depth look at Obama’s energy policy (medium):
http://www.powerlineblog.com/archives/2012/03/issas-oversight-committee-rips-secretary-chu.php

More unintended consequences of rent seeking (medium):
http://www.jewishworldreview.com/cols/will031812.php3

International

Promising signs of EU growth (short):
http://scottgrannis.blogspot.com/2012/03/eurozone-recovery-is-in-sight.html

On the other hand, rising oil prices are helping (medium):
http://www.telegraph.co.uk/finance/comment/tom-stevenson/9150415/The-oil-price-is-the-new-eurozone-crisis.html

News on Stocks in Our Portfolios

Earnings per share reports:

Reported Expected

Tiffany’s $1.39 $1.42
Oracle .62 .56
General Mills .55 .55


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.