Filed under: International markets, Exxon Mobil (XOM), Middle East, Venezuela, Chevron Corp (CVX), ConocoPhillips (COP), BP p.l.c. ADS (BP), Canada, Politics, Oil

Venezuela, which earlier this month at a summit of oil producing nations suggested that producers add political objectives to their agenda, Tuesday called for oil to be priced in a basket of currencies, and not the U.S. dollar, Reuters reported.

Venezuela’s Energy Minister Rafael Ramirez blamed the United States for high oil prices, which he attributed to both political pressure on oil producing nations by the U.S. and the weak U.S. dollar.

Oil drops

Ramirez’s comments had little upward impact on the oil markets Tuesday at mid-day: oil fell more than $2.50 to $95.17 on word that OPEC will be able to fulfill its stated goal to increase oil production by 500,000 barrels per day, Bloomberg News reported. Equally important, the markets are now more-confident that Saudi Arabia, which has the most spare capacity in OPEC, is increasing its production. Saudi Oil Minister Ali al-Naimi said Saudi Arabia is now pumping 9 million barrels per day, according to Bloomberg News.

Continue reading Oil drops to $95 on Saudi production hike

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Filed under: Deals, Marketing and advertising, News Corp’B’ (NWS), Dow Jones and Co (DJ)

Dow Jones & Co. (NYSE:DJ ), publisher of the Wall Street Journal, is looking to unload some or all of its Ottaway community newspaper chain ahead of its $5 billion acquisition by Rupert Murdoch’s News Corp. (NYSE: NWS).

This isn’t surprising since Rupert Murdoch in August said that he would sell the chain to focus on the Journal and other financial information business. Ottaway, whose publications includes Pennsylvania’s Pocono Record, The Cape Cod Times of Massachusetts, and New York-based Middletown Record, isn’t a good fit with the flashy tabloids of the Murdoch empire such as The New York Post. Moreover, James Ottaway, the family’s representative on the Dow Jones board, was a vociferous critic of Murdoch takeover of Dow Jones.

The businesses, like all newspaper chains, is struggling. Revenue in Dow Jones’ Local Media business fell 5.8% in the third quarter as advertising revenue plunged 8.8%. Operating income fell a whopping 13.4%. Even so, buyers will be interested in the chain since local papers still generated considerable cash flow since they are less vulnerable to competition from the Internet than major metro dailies.

Perhaps Ottaway will take some of Murdoch’s money and try to buy his family business back.

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Filed under: Products and services, Launches, Politics

According to a story in today’s New York Times, American sugar beet growers have committed to planting a genetically modified strain that will allow them to control weeds via use of Scott Miracle-Gro’s (NYSE:SMG) Round-up product. The farmers expect that the Monsanto-developed beet will lower their production costs by eliminating hand-weeding and increasing yield.

Expect this to trigger another round of public controversy about genetically modified crops, held in great suspicion by world markets. Although the product was approved by the U.S. government in 2005, reluctance among manufacturers to contend with public distrust of modified foods led growers to hold back on adoption.

Look for this issue to raise other sugar-related discussions, including U.S. and E.U. price supports and the lack of free access to these markets by third world sugar suppliers, and the environmental cost of cane sugar growing practices. If Monsanto (NYSE:MON) can overcome these objections, it will represent another major step in cultivating acceptance for other genetically modified crops, which would bode well for the company’s future.

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Filed under: International markets, Other issues, India, China, Brazil, Russia, Middle East, Thailand, Mexico, Eastern Europe, Israel

Under the category of “the stock market did not need this additional headwind,” some of the largest public pension funds have been selling shares in a big way, The Wall Street Journal reported Tuesday.

The Journal said the New York State Teachers’ Retirement System, the New York State Common Retirement Fund, the Teacher Retirement System of Texas and the Florida Retirement System Pension Plan are all funds that are reducing stakes in U.S. companies. Collectively, these funds control more than $500 billion in assets.

Further, and equally significant, the nation’s largest fund, the $250-billion California Public Employees’ Retirement System (Calpers) is considering shedding its home-country bias, the Sacramento Bee reported.

One plan calls for Calpers to reduce U.S. equities exposure to 28.4% from 40% and increase international equities exposure to 28.4% from 20%. The Calpers Board of Directors is expected to vote on the measure next month.

Continue reading Harsh headwind: Some pensions reducing U.S. stock stakes

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Filed under: Earnings reports, Bad news, Competitive strategy

Medical device manufacturer Medtronic Inc. (NYSE: MDT) released 2Q 2008 results last week that inflicted some pain on investors. Total revenues increased by 2%. Sales outside the US increased 12%, but $73 million of that increase was due to currency exchange, not organic growth. Fully one-third of all Medtronic sales now originate outside the US.

CEO Bill Hawkins remains optimistic about “strong growth potential going forward,” which is about as much of an admission one will get that the current numbers leave a lot to be desired. The company is focused on growing non-US sales, which is a smart move since Medtronic has already suspended US product shipments in its physio-control division due to unauthorized human bones used in some procedures. More recently, the recall of Fidelis cardioverter defibrillators in the company’s largest division caused revenue to plummet by at least $130 million, in addition to $31 million inventory write-off.

On a positive note, the acquisition of Kyphon will begin to contribute to the bottom line in the spinal division sooner than expected, and both the diabetes and ear, nose and throat divisions posted 16% increases in revenue. The company expects final FDA approval for a drug-eluting stent by the end of the calendar year, so look for contributions to the cardiovascular bottom line in 2008.

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Filed under: Industry, Black Friday

Now that Black Friday and Cyber Monday are over, retailers nationwide will continue the price discounting this week (and beyond) to keep those sales pouring in all the way until the end of December. Some retailers are taking the discount versus profit line this week, as 50% off is being seen at many online outlets, which is sure to cause a profit knock at the end of the day.

Is this any surprise? Not really — loss leaders are always used to hook consumers looking for bargains into stores (and online retailer websites) where they are either ferociously upsold more expensive products or are extensively cross-sold more products than they came looking for.

It’s the savvy consumer who seeks out a good bargain and leaves with just that item (or items) that retailers don’t really want. But the U.S. consumer is a savvy one indeed, and the more tactics retailers use to push non-bargain products, the more consumers shrug them off.

It’s been said that there are no “must have” gift products this year. These products, based on the law of supply and demand, command premium prices. When there is a lack of that kind of product, the only recourse many retailers have is to slash prices to get customers lifting up their spending. Although the holiday shopping season this year may indeed be a large one, will any companies make significant profit? Is there a goal of selling as much as possible while making very little profit in the process?

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Filed under: Earnings reports, Analyst upgrades and downgrades, Penney (J.C.) (JCP), Chubb Corp (CB), Compuware Corp (CPWR), Oracle Corp (ORCL), Texas Instruments (TXN), Technical Analysis, Stocks to Buy

Concur Technologies (NASDAQ: CNQR) provides software applications that automate corporate travel and expense management. Its flagship program provides the process and information for management to reduce manual checking, improve internal controls, increase business policy compliance, speed up reimbursement, and increase expense report accuracy. The software features Web-based modules for tracking, submitting, and processing reports. Other offerings manage employee requests for vendor payments, manage the planning of corporate meetings and group travel, and search for fraud. Customers include Chubb (NYSE: CB), J.C. Penney (NYSE: JCP) and Texas Instruments (NYSE: TXN). Compuware (NASDAQ: CPWR) and Oracle (NASDAQ: ORCL) are competitors.

The company pleased investors last week, when it reported fiscal Q4 EPS of 15 cents (ex-items) and revenues of $35.75 million. Analysts had been expecting 9 cents and $34.29 million. Management also guided Q1 EPS to 13 cents (8 cent consensus), Q1 revenues to $46.0 million ($43.3M consensus), FY08 EPS to 70 cents (62 cent consensus) and FY08 revenues to $200.0 million ($194.5M consensus). Canaccord Adams and Broadpoint Capital subsequently declared the stock a “buy” and established $40 price targets.

Continue reading Concur Technologies (CNQR) shares forming bullish pennant

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Filed under: Products and services, Law, eBay (EBAY), Tiffany and Co (TIF)

If you had an empty parking lot and rented out spaces for a flea market, would you take responsibility for what was being sold there? No doubt you would draw the line at child porn, dope and other illegal goods. But how about the vendor selling fake Rolex watches?

eBay (NASDAQ: EBAY) is facing the same dilemma in the lawsuit brought by Tiffany and Co. (NYSE: TIF) as Zac Bissonette previewed here last week. The trial proceeding have come to a close, and the judge has promised a decision by next month (just in time for Christmas!), one that could challenge eBay’s entire business model. If eBay is held responsible for fake Tiffany items sold on its site, look for other often-counterfeited brands to immediately demand the same treatment. Verification processes would, I believe, be both costly and intrusive.

It’s no secret that eBay faces constant criticism for providing an avenue for fencing stolen goods, one so prevalent many police departments routinely browse the offerings looking for those taken in local heists. The company cooperates with law enforcement and has taken measures, such as capping weekly item postings, to limit the problem. However, the willingness of the buying public to turn blind eyes to the source of these ‘deals too good to pass up’ make elimination of the problem next to impossible.

Will the company making the market be held responsible for the actions of those taking part? A quarter of a billion eBay users are waiting for the judge’s decision.

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Filed under: International markets, Rumors, Products and services, Consumer experience, Middle East, Economic data, Oil

We took a look at how oil prices were starting to fade yesterday afternoon, and in today’s session, they have continued right where they left off. Prices have fallen $2.59 to $95.11 as traders worry about a slowing economy and a possible production increase from OPEC.

Earlier this week, it looked as though oil was going to be making its final charge to break through $100 a barrel, but now the mood has changed as concerns are mounting over the effect an economic slowdown could have on oil demand. Since the middle of this year we have been hearing whispers from Wall Street that a possible recession is on the way, and this chatter has seemed to really pick up over the past week.

Just today we got even more worrisome news when the current consumer confidence figures showed a drop down to 87.3, which is the lowest level we have seen confidence since back in October 2005. There has also been a rise in people thinking that the economy is in trouble to 19.1%, up from 16.6%.

Continue reading Oil continues its retreat on economic concerns

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Filed under: Economic data, Israel

With everyone speaking of a credit crunch and the rating agencies busy downgrading corporate credit ratings, S&P today announced that it is raising Israel’s rating for its long-term foreign currency sovereign credit to “A” from “A-”, the long-term local currency rating to “AA” from “A+”, and the short-term local currency rating to “A-1+” from “A-1.” S&P reiterated its short-term foreign currency rating at “A-1″. In addition, the long-term foreign currency outlook is “positive” and the long-term local currency outlook is stable. S&P also raised its transfer and convertibility assessment for Israel to “AA” from “AA-”.

This a huge for Israel. Just five years ago, the Israeli economy was on the verge of economic collapse. Thanks to the reforms initiated and pushed through by then Finance Minister and former PM Benjamin Netanyahu, five short years later the Israeli economy is thriving. Lower taxes, privatization and cuts in government spending helped right the sinking ship that was the Israeli economy. These reforms have continued with the current Ehud Olmert administration, to his credit. He has continued to encourage the privatization of government and quasi-government monopolies. Take for example Aliyah (immigration to Israel). A recent government decision empowers private organizations like Nefesh B’Nefesh to take the lead in offering services to North Americans looking to move to Israel. This private organization has been more successful in the last five years than the quasi-governmental agency has been in the last 25.

Continue reading S&P raises Israel’s credit rating

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