Good morning. Happy Friday.
First a quick personal note. I may temporarily suspend sending this Before the Open document out next week. My 13-week old twins are sick and need constant attention and daily trips to the doctor. It’s fairly easy to trade around their needs, but right now taking care of them is more important than taking an hour every morning to produce this document. I’ll make a final decision this weekend based on their condition. Thanks for your understanding. – Jason
The Asian/Pacific markets closed mixed without many noticeable standouts. Japan lost 3.1%; Singapore lost 1.1%; India gained 2%.
Europe is currently mostly down. France, Germany, Amsterdam, Norway, Italy, Spain, Switzerland and London are each down about 1% or more.
Futures here in the States indicate a small gap up open for the cash market. 40 minutes before the open, Nas 100 futures are up 4.75 (0.3%) to trade at 1210.75 while SPX futures are 1.25 (0.2%) to trade at 844.00.
Asian and European summary from barchart.com ->> Unemployment in the Euro-Zone climbed for the fifth consecutive month in December, rising to a 2-year high of 8.0%, while the Euro-Zone inflation rate fell to its lowest level since the euro was introduced in 1999, giving the ECB more scope to continue cutting interest rates. The Jan Euro-Zone CPI estimate fell to +1.1% y/y from +1.6% y/y in Dec and below market estimates of +1.4% y/y. Mining companies in Europe are seeing a boost this morning from the surge in gold prices to a 3-1/2 month high as investors flock into the metal as a safe-haven. Economic data from Japan continues to be bleak with Dec Japanese industrial production falling -9.6% m/m, the biggest decline since data began in 1953, while Japan’s unemployment rate in Dec surged to a 3-year high of 4.4% and Japanese household spending in Dec fell for the 10th straight month. Toshiba, Japan’s number one chipmaker, tumbled 17% after reversing its full-year profit outlook to a loss while Nintendo, which makes the Wii game console, fell 12% after cutting its full-year income forecast by 33%. NEC Corp., Japan’s largest personal-computer maker, fell over 6% after changing its full-year profit forecast to a loss and saying it will cut 6.7% of its workforce, or 20,000 workers by 2010. Finance ministers from Japan, China, South Korea and 10 Southeast Asian nations are said to be planning a meeting next month in Thailand to hammer out a pact to pool together $120 billion of foreign exchange reserves to help defend their currencies.
Yesterday, reported unemployment claims rose to their highest level since record keeping began in 1967, durable goods orders fell for the 5th straight month, the longest decline since 1992, and US new home sales tumbled to its lowest level since at least 1963 while the supply of homes on the market jumped to a record high of 12.9 months.
Amazon.com (AMZN) is trading 12% higher in Europe this morning after the world’s largest online retailer reported Q4 profit late yesterday of 52 cents a share, well ahead of analysts’ estimates of 38 cents a share and the company said Q1 net revenue will rise to between $4.53 billion and $4.93 billion which was also ahead of analyst estimates of $4.55 billion
Honeywell International Inc.’ (HON) quarterly earnings rose 2.6 percent, as lower costs offset falling sales in most of its divisions amid a worsening recession.
Consumer products maker Procter & Gamble Co. (PG) says profits jumped 53 percent in its second quarter, boosted by its sale of the Folgers coffee business.
Electronics giant NEC Corp. said it will cut 20,000 workers worldwide to stanch mounting losses, joining a slew of other Japanese corporate heavyweights who are slashing jobs to survive the deepening global downturn.
Swiss pharmaceuticals company Roche Holding AG made a fresh bid to buy U.S.-based Genentech Inc. (DNA) Friday by offering $86.50 per share — $2.50 less than its previous offer — directly to shareholders.
Exxon Mobil Corp. (XOM) on Friday reported a profit of $45.2 billion for 2008, breaking its own record for a U.S. company, even as its fourth-quarter earnings fell 33 percent from a year ago.
Honda Motor Co. (HMC) slashed its annual profit target by over half Friday as profit tumbled 90 percent in the latest quarter, hit by rising costs, a stronger yen and falling sales in key markets.
Ametek Inc. (AME), a manufacturer of electric motor and aircraft monitoring equipment, said Friday that its fourth-quarter profit fell 29 percent and its top executive said “difficult economic conditions” will persist this year.
Coal-producing Arch Coal Inc. says its fourth-quarter earnings slid but still beat Wall Street’s expectations. But the company is lowering its production outlook for this year, citing continued weakness in the U.S. coal markets.
Japanese electronics maker Hitachi Ltd. predicted it would post a massive net loss this fiscal year and said it will slash about 7,000 jobs as part of a global restructuring plan.
Mining giant Rio Tinto (RIO) said Friday it has struck a deal to sell an iron ore mine and other projects in South America to rival Vale for $1.6 billion.
Jiangxi province in southeast China plans to pump $17 billion into railway construction over the next three years, state media reported Friday.
German sports and luxury carmaker Porsche SE said Friday that sales for the first six months of its fiscal year fell 14 percent as the world economic crisis curtailed demand.
Barge operator K-Sea Transportation Partners LP (KSP) said Friday its fiscal second-quarter profit plunged 60 percent as higher operating expenses outweighed an increase in revenue.
Affiliated Computer Services (ACS) said its fiscal second-quarter profit fell to $75.5 million, or 77 cents a share, from $81.6 million, or 81 cents a share, in the year-ago period.
Allstate (ALL) had its ratings cut by Moody’s Investors Service because of investment losses, weak earnings, and reduced capitalization.
Broadcom (BRCM) eported a fourth-quarter net loss of $159.2 million, or 32 cents a share, compared with a net profit of $90.3 million, or 16 cents a share, for the year-earlier period.
CA (CA) reported its third-quarter net income rose to $213 million from $163 million in the same quarter last year.
Chubb (CB) said fourth-quarter net income came in at $407 million, or $1.13 a share, down 37% from a year earlier when the property and casualty insurer made $650 million, or $1.68 a share.
Eastman Chemical (EMN) reported a fourth-quarter loss of $2 million, or 3 cents a share. It had net income of $98 million, or $1.25 s share, a year earlier.
Juniper (JNPR) said its fourth-quarter net income rose to $132.5 million, or 25 cents a share, from $122.9 million, or 22 cents a share in the same period a year earlier.
KLA Tencor (KLAC) reported it swung to a net loss of $434.3 million, or $2.57 a share, in the second quarter from a net income of $83.9 million, or 45 cents a share, in the same quarter last year.
Maxim Integrated Products (MXIM) said it swung to a fiscal second-quarter loss of $38.8 million, or 12 cents a share, from a profit of $107 million, or 33 cents a share, in the year-ago period.
Monster Worldwide (MWW) said its fourth-quarter profit fell to $28.6 million, or 24 cents a share, from $45 million, or 36 cents a share, in the year-ago period.
PMC-Sierra (PMCS) reported a fourth-quarter net income of $13.7 million, or 6 cents a share, recovering from a loss of $5.1 million, or 2 cents a share, in the same quarter last year.
Gold is up 1.7% and Silver is up 1.5%.
Crude Oil is up 54 cent to trade at 41.98.
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| UPGRADES | SBIB, SII, TEG, ARAY, BSX, MLM, AZN, UEPS, CNX |
| DOWNGRADES |
SGP, TEC, NFLX, CACB, FLWS, HOT, INFA, RIGL, NCX, TROW, TWC, JNPR, MRX, FITB, RF, SEPR, ALL, RYAAY, GBE, CRL, NI, RDYN, AZN, ZNT, VE, UA, OSK, TKR |
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| EARNINGS | |
| before the open | ACO, AXL, AME, ACI, CVX, XOM, GCI, HON, IDXX, IVZ, KLIC, MBFI, MV, LABL, NARA, OSTK, PCAR, PG, SAIA, SPG, VVI, WL |
| during trading | none |
| after the close | EEP, GKK |
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ECONOMIC RELEASES
8:30 Chain Deflator-Adv.
8:30 GDP-Adv.
9:45 Chicago PMI
9:55 Mich Sentiment-Rev.
10:00 Employment Cost Index
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