PRODUCTIVITY AND COSTS, Second Quarter 2013

PRODUCTIVITY AND COSTS, Second Quarter 2013, Preliminary

Nonfarm business sector labor productivity increased at a 0.9 percent annual rate during the second quarter of 2013, the U.S. Bureau of Labor Statistics reported today.

The increase in productivity reflects increases of 2.6 percent in output and 1.7 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.)

From the second quarter of 2012 to the second quarter of 2013, productivity was unchanged as output and hours worked both increased 1.8 percent. (See table A.)

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.

Continue reading the detailed release

The Intelligent Investor: The Definitive Book on Value Investing. 
 Benjamin Graham, Jason Zweig and Warren E. Buffett

Original content +Bob DeMarco , All American Investor

U.S. Net International Investment Position: End of First Quarter 2013, Year 2012, and Annual Revisions

Quarterly and Annual Statistics

In this release, BEA presents the U.S. international investment position statistics for the first quarter of 2013 along with historical revisions and detailed annual statistics for 2012, including changes in positions resulting from annual financial flows and valuation changes such as price, exchange-rate, and other changes.

Quarterly positions are revised for the first quarter of 2009 to the fourth quarter of 2012 and detailed annual statistics are revised for 2009-2012.

Quarterly position statistics are available for the fourth quarter of 2005 to the first quarter of 2013. They are presented as part of BEA's effort to provide more frequent and timely statistics on cross-border linkages to help users better assess U.S. vulnerability to external financial shocks in the aftermath of the 2008 financial crisis. Quarterly statistics are made available every March, June, September, and December via BEA news releases.

Census Bureau Report Details Rising Internet Use and Shows Impact of Smartphones on Digital Divide

Some food for thought here for investors. Sometimes it pays to look beyond the obvious.

All American Investor


The findings are part of the latest Census Bureau report, Computer and Internet Use in the United States: 2011, which provides analysis of computer and Internet use for households and individuals.

The information comes from data collected as part of the Current Population Survey’s 2011 Computer and Internet Use Supplement, which was sponsored and funded by the National Telecommunications and Information Administration (NTIA).

The report also features a table that places users along a “connectivity continuum” and shows that a sizeable percentage of Internet users now make their online connections both inside and outside the home and from multiple devices.

REAL EARNINGS NOVEMBER 2012

All American Investor

Real average hourly earnings for all employees rose 0.5 percent from October to November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today.

This change resulted from a 0.2 percent increase in average hourly earnings combined with a 0.3 percent decline in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.5 percent over the month due to the increase in real average hourly earnings combined with an unchanged average workweek. Since reaching a peak in June 2012, real average weekly earnings has fallen 0.8 percent.

Real average hourly earnings were unchanged, seasonally adjusted, from November 2011 to November 2012. The unchanged real average hourly earnings, combined with an unchanged average workweek, resulted in no change in real average weekly earnings over this period.

Read the full blown report -- Real Earnings

Carter Worth, a favorite technician of mine, is not worried about the Market (I disagree)

Carter Worth's technical view of the stock market.


If you don't see the video go here -- Carter Worth

McDonald's (MCD) 2012 Review

McDonald’s operates or licenses more than 33,500 fast food restaurants world wide. 

Over the past ten years, the company has grown profits at a 13% pace but dividends at 26% annualized while earning a 25%+ return on equity. Looking forward, the pace of advance of dividends should slow somewhat although earnings growth is expected to continue at an above average pace as a result of:

(1) global growth not only in the number of restaurants but also in same store sales,

(2) introduction of new higher margin products [McCafe Real Fruit Smoothies, Frappes, Angus snack wraps],

(3) a revitalization program aimed at increasing market share via rising restaurant visits, growing brand loyalty and a new marketing campaign,

Wall Street rallies on Fed meeting stimulus discussion

A day after U.S. stocks briefly topped four-year highs before fading and posting losses at the close, investors got what they wanted in the release of Federal Reserve minutes from a policy making meeting three weeks ago.

All American Investor

The minutes of the July 31-Aug. 1 meeting show many Fed officials speaking with increased urgency about the need to provide more help for a weak U.S. economy. Further support would be needed "fairly soon" unless the economy improved significantly, the minutes show, although they didn't detail what steps might be taken.
In late afternooon trading and after the release of the Fed minutes, the Dow Jones industrial average rebounded sharply although it is still below its opening level while rebounds in the Standard & Poor's 500 index and the Nasdaq composite index pushed them into positive territory.

Continue Reading Wall Street rallies on Fed meeting stimulus discussion

Rick Santelli--Draghi won't deliver

If you don't see the video go here -- Rick Santelli--Draghi won't deliver

Thoughts on Investing from Bob Farrell

1. Markets tend to return to the mean over time
When stocks go too far in one direction, they come back. Euphoria and pessimism can cloud people’s heads. It’s easy to get caught up in the heat of the moment and lose perspective.

2. Excesses in one direction will lead to an excess in the opposite direction
Think of the market baseline as attached to a rubber string. Any action too far in one direction not only brings you back to the baseline, but leads to an overshoot in the opposite direction.

3. There are no new eras – excesses are never permanent
Whatever the latest hot sector is, it eventually overheats, mean reverts, and then overshoots.

As the fever builds, a chorus of “this time it’s different” will be heard, even if those exact words are never used. And of course, it – human nature – is never different.

The Closing Bell--Stocks are Fair Value but with lots of problems

Statistical Summary

Current Economic Forecast

2012

Real Growth in Gross Domestic Product (revised): +1.0- +2.0%
Inflation (revised): 2.5-3.5 %
Growth in Corporate Profits (revised): 5-10%

2013

Real Growth in Gross Domestic Product +1.0-+2.0
Inflation 2.0-2.5
Corporate Profits 0-7%

Target (TGT) 2012 Review

Target (TGT) is a leading discount retailer concentrated in California, Texas, Florida and the upper Midwest. It has grown profits and dividends at an 11-14% pace over the last 10 years earning a 15%+ return on equity. 

The company faltered a bit in its 2008 fiscal year due to the slowing economy but has since recovered and should continue growing at an above average rate as a result of:

(1) improving comparable store sales and operating margins due to its product innovation, aggressive pricing strategy and its efficient, multi channel marketing strategy,

(2) rising store productivity arising from expanded grocery offering, better store layout and an enhanced in-store shopping experience,

(3) introduction of smaller stores in urban markets,

(4) expansion internationally.

(5) active stock buyback program.

Xilinx (XLNX) 2012 Review

Xilinx designs, develops and markets complementary metal-oxide-silicon programmable logic devices, including field programmable gate arrays and complex programmable logic devices and markets hardware devices and develops software design tools for programmable electronic technologies.

Steve Cook

The company has grown profits at a 10% pace over the last 10 years and has raised its dividend per share from $.20 in 2004 to $.64 in 2010. Return on equity has come in between 16% and 20% in the last five years. XLNX experienced a hiccup in 2009 due to the recession but recovered in 2010 year and should continue to make progress as a result of:

(1) benefiting from the global trend of programmable logic devices replacing application-specific integrated circuits,

(2) improvement in demand from its two principal markets,

(3) new products expected to open new markets,

Family Dollar Stores (FDO) 2012 Review

Family Dollar Stores operates a chain of 6,785 general retail discount merchandise stores in 44 states. It provides competitively priced goods to low and middle income consumers, including home products, apparel and accessories, seasonal goods and electronics. 

FDO has grown profits and dividends at an 11% pace over the last 10 years earning a 15-20% return on equity. The company successfully navigated its way through the recent recession and should continue to improve earnings as a result of:

(1) its strategy to upgrade its merchandising, marketing and store operations,

(2) aggressive price management and cost containment programs,

Exxon Mobil Corproation (XOM) 2012 Review

Exxon Mobil (XON) is the largest publicly traded oil company. 

The company produces approximately 2.4 million barrels of oil and 12.1 BCF of natural gas daily, has reserves of over 24.8 billion barrels of oil equivalents and manages a best in class upstream operation including refining and chemical operations.

XOM has grown profits at a pace in excess of 15% over the last 10 years and earned a return on equity of between 17-25%. While the pace of Exxon’s dividend growth has not kept pace with profits (7% over the past 10 years), it is expected rise. The financial performance of XOM should be solid over the coming years as a result of:

(1) its reserves are diversified geographically as well as by product [conventional oil and gas, heavy oil, tight gas, liquefied natural gas]; its recent acquisition of XTO Energy raises its share of the world energy market,

Mohamed El Erian on Greece

@AllAmerInvest, The Trend of the Market Remains UP, Chart

The uptrend in the S & P 500 continues.

All American Investor

One thing you should notice when you look at the SP 500 chart below is the slope of the 40 day moving average (green line). The slope is trending up. It is the slope that is most important, not the absolute value of the moving average.

The market should now be able to take downside attacks. Expect the market to find good support if the market comes back to, or near the 40 day moving average. This is where you want to consider buying the market.

Obviously, the market is still vulnerable to event risk from Europe.

Johnson & Johnson (JNJ) 2012 Review

Johnson & Johnson (JNJ) is a major developer, manufacturer and marketer of health care products. 

Its major divisions are: Consumer (baby care, oral care, non-prescription drugs, wound care and skin care), Medical Devices (electrophysiology, circulatory disease management and orthopedic joint reconstruction) and Pharmaceuticals (contraceptives, psychiatric, anti-infective, gastrointestinal and dermatological).

Over the past ten years, the company has earned a 20-30% return on equity while growing its earnings and dividend at a 12-14% annual rate. While profit and dividend growth may slow somewhat short term, its strong, well diversified product line should continue to grow rapidly longer term as a result of:

@AmerInvest, Stocks a Bit Lower on Euro, Chart

Stocks are a bit lower this morning on worries about the Euro

All American Investor

@AllAmerInvest, Obama’s Revolution, Voice Operated Smart TVs, Consumer Electronics Show, Stocks Up Size

Obama’s revolution in American strategy

While the media has focused on the Republican presidential primaries, offstage the greatest revolution in American foreign policy in a generation has occurred, with little discussion or debate surrounding its announcement last week by President Obama.
Read More

Voice-Operated Smart TVs May Spur Tech Profits
At the Consumer Electronics Show in Las Vegas opening today, LG and Lenovo will show TVs that allow users to search for shows and Web applications with natural-sounding voice commands. Samsung introduced three high-end models with so- called Smart Interaction technology, which builds in motion- sensing and voice-command software similar to Microsoft Corp. (MSFT)’s Kinect peripheral for the Xbox 360 video-game console.

The Consumer Electronics Show in Las Vegas opening today.


All American Investor

Staples (SPLS) 2011 Review

Staples (SPLS) is one of the largest office supply superstore chains in the US, Europe, Asia and South America (1900+ stores).

SPLS also sells its branded products in over 2400 grocery stores in the US. In the past five years, the company has grown profits at a 5% pace, earning a return of equity in the 12-18% area. In 2004, it initiated a dividend and has since more than tripled it (27% AR). While SPLS did not escape the impact of the recent economic down turn, it should resume its long term growth as a result of:

(1) as an industry leader, it is positioned to sustain above average growth due to better margins and its effective merchandizing skills,

(2) new products,

(3) new store expansion,

(4) improving same store sales by expanding its business technology and copy and print services,