Archive for February 2nd, 2008
Filed under: International markets, China, Economic data, Oil
The oil ministers at OPEC could not leave well enough alone and just tell the world that they would not alter production at their current meeting. They had to add that they might decrease output in March because they believe that economic growth in the U.S. is slowing.
Reacting to these comments, the International Energy Agency said “With the current pressures from the financial system, the economy does not need additional downward pressure on consumer spending and growth from near record oil prices,” according to the Financial Times. That is a masterpiece of understatement.
Much of the movement of oil price is now based on rumor and psychology as much as on real measurement of supply and demand. The willingness of China to underwrite gas and diesel prices perverts the global market’s normal action. Oil suppliers are now keeping more of their output for growing numbers of cars and new infrastructure building within their own borders. The normal measurements of how oil is priced have warped into something new.
OPEC’s hint at a March cut says one thing and one thing only. When oil is over $90, we make more money. The current slowing of the global economy has not dropped prices much. If it does, we can keep prices high by a slight manipulation of what we ship.
Douglas A. McIntyre is an editor at 247wallst.com.
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Filed under: Earnings reports, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Exxon Mobil (XOM), Halliburton (HAL), Sony Corp ADR (SNE), Boeing Co (BA), United Parcel’B’ (UPS), U.S. Steel (X), Dow Chemical (DOW), Valero Energy (VLO), JetBlue Airways (JBLU), Burlington Northern Santa Fe (BNI), Raytheon Company (RTN)
The earnings crunch is in full swing, and here are a few of the highlights of this past week’s earnings coverage from BloggingStocks:
For additional BloggingStocks earnings highlights, see Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others and McDonald’s, Kraft, P&G, Verizon, MasterCard, 3M and others.
Continue reading Earnings highlights: Exxon, Boeing, Halliburton, Sony, UPS, Honda and others
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Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Intel (INTC), S and P 500, NASDAQ
The market spent much of Friday running numbers on what a Microsoft Corp. (NASDAQ: MSFT) buy-out of Yahoo! Inc. (NASDAQ: YHOO) might yield in terms of competition in the online ad market. What may have been missed is that the S&P 500 had its worst January since 1990 according to Reuters.
The S&P fell about 4%, but the figure for the Nasdaq Composite was much worse. It dropped 8%. Some off the most important stocks in the index had breathtaking falls. Apple Inc. (NASDAQ: AAPL) fell-off about 30%. Intel Corp. (NASDAQ: INTC) fell 15%. Google Inc. (NASDAQ: GOOG) moved down 25%. With their huge market caps, these stocks get tremendous weight in the index.
What this tells the market is that Wall Street is deeply mistrustful about any recovery in the economy. Tech helped keep U.S. stocks from an awful year in 2007. They are now extremely unlikely to reprise that role in 2008. That does not leave any sector to help the market through a tough period. The economic slowdown has already touched most industries.
If the past is prelude, the stock market is in for a bone-jarring drop in 2008. A day of M&A news is just a distraction.
Douglas A. McIntyre is an editor at 247wallst.com.
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Filed under: Getting started, Comfort Zone Investing
 Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he’ll offer advice to investors who are just getting started.
Most investors buy stocks by simply putting in a market order and hoping for the best. That means they’ll pay whatever the offer (or ask) price is for the stock. There are a couple of things wrong with this approach. There’s a much better way to buy stocks that saves money and makes more money when a stock heads higher.
Here’s the problem with buying at the market: you’re paying a price set by someone else, and you may not buy all your stock at the same price. Furthermore, if you’re looking to buy 1000 shares and buy it all at once, you’re betting a stock is at its low, that it will go up from your entry point. Most likely, that’s not the case.
Let’s start with the price of the stock. If you’ve done your homework, you should determine what you’re willing to pay for a stock. Whether that’s from fundamental or technical analysis or both, you determine what’s a fair price. Once you know that, and are comfortable with your price, put that price in as a bid. Most likely, it’s not where the stock is trading when you decide to enter your order. So put in your order below the market and wait for the stock to come to you.
Continue reading Comfort Zone Investing: A better strategy for buying stocks
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Filed under: Deals, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Employees
 With the announcement of Microsoft (NASDAQ: MSFT)’s $44.6 billion bid for Yahoo! (NASDAQ: YHOO), the real courting process is about to begin.
As I predicted back in July 2007, this “affair” had to happen if Microsoft was ever going to be serious in challenging Google (NASDAQ: GOOG)’s reign in the lucrative search engine world. Looking at October 2007 data from comScore — the independent scorekeeper in the search world — Google was actually widening its dominance. Explain please!
There were 55.3 billion search queries worldwide during the month of October. Google handled 42.4 billion of these queries, while 2.1 billion were directed to Microsoft and Yahoo! handled 10.8 billion — or a total of one-quarter of Google searches. Worldwide growth was 56% year-over-year for the industry, while Google’s annual growth alone was 81%. The message: Google was taking market share at the expense of Microsoft and Yahoo!. Coupled with its recent disappointing guidance for 2008, Yahoo! had no choice but to hook up with Microsoft, and the opportunity for Microsoft was now. That’s all well and good, but now what happens?
Continue reading Microsoft-Yahoo: What happens now?
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Filed under: Earnings reports, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Amazon.com (AMZN), Countrywide Financial (CFC), Monster Worldwide (MNST), Merck and Co (MRK), Allegheny Technologies (ATI), Lilly (Eli) (LLY), EMC Corp (EMC), Symantec Corp (SYMC)
The earnings crunch is in full swing, and here are a few of the highlights of this past week’s earnings coverage from BloggingStocks:
For additional BloggingStocks earnings highlights, see Exxon, Boeing, Halliburton, Sony, UPS, Honda, and others and McDonald’s, Kraft, P&G, Verizon, MasterCard, 3M, and others.
Continue reading Earnings highlights: Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others
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Filed under: Scandals
Here’s how great the employment system in France is: after losing a company $7.2 billion, rogue trader Jerome Kerviel has not been fired yet.
According (subscription required) to the Wall Street Journal, “Société Générale has stopped paying Mr. Kerviel and told him not to come to the office, but it hasn’t managed to formally fire him. French law stipulates that to do that, the bank must first call him in for a sit-down meeting and explain its dissatisfaction. He has the right to bring along a trade-union official, a lawyer or anyone else he’d like.”
Meanwhile, he’s developed a cult following of people who think he’s actually good. For some reason I’m not quite sure if I understand, the French Communist Party has leapt to his defense.
Continue reading Is rogue trader Jerome Kerviel a hero or a villain? Neither?
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Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
 In the mergers and acquisitions game, a buyer’s math can be kind of strange — that is, looking for a situation where 1+1 = 3. Unfortunately, the result is usually -3.
This is especially the case with mega deals, which involve mind-numbing complexities (especially with integration). In fact, the history of tech mega deals has been especially problematic.
Well, this doesn’t seem to be an issue with the folks at Microsoft Corporation (NASDAQ: MSFT). They are willing to pay a whopping $44.6 billion for Yahoo!, Inc. (NASDAQ: YHOO).
So, can Microsoft make this thing work? Actually, the company’s shareholders are skeptical. After all, the stock price is down $2.15 to $30.45. Keep in mind that — based on various studies — Wall Street is usually spot-on about these things.
Continue reading Can Microsoft really Yahoooo?
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Filed under: Other issues, Deals, BHP Billiton Ltd ADR (BHP), Commodities
Alcoa and Aluminum Corp. of China, known as Chinalco, have jointly acquired a 12% stake in Rio Tinto, Alcoa announced Friday, in a statement.
The deal is estimated to be worth $14.05 billion, and represents the largest overseas investment by a Chinese company, Chinalco said. Alcoa Inc. (NYSE: AA) said it would contribute $1.2 billion to the investment.
Alcoa’s shares closed Friday up $1.19 to $34.15 on the news, as did Rio Tinto plc (ADR) (NYSE: RTP), which closed up $34.05 to $441.00.
Alcoa and Chinalco’s stake could very well obstruct a bid from Anglo-Australian mining giant BHP Billiton for Rio Tinto, the Associated Press reported. BHP Billiton Limited (ADR) (NYSE: BHP) closed up $6.15 to $73.73.
Continue reading Alcoa, Chinalco 12% interest in Rio Tinto seen as savvy move for both stakeholders
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Filed under: Internet
The A-Train finance blog recently posted a set of some pretty impressive financial haikus. Some of them contain wonderful financial wisdom in the 5-7-5 syllable format. Take a look:
Day Trading Is Hard
Ninety Percent Lose Money
Most Try Anyway
Reality Is
What Goes Up Always Comes Down
See: Dot Com Bubble
Compounding Interest
One Of Life’s Greatest Forces
Start Young It’s Better
Tragically I’m not much of a poet, so I won’t try to top this haiku-master. For a wonderful subprime-inspired riff on subprime, check out one trader’s Dr. Seuss-inspired Broker Joe! I do not like your CDO.
There’s also an interview from Wharton about poetry and its similarities with investment banking. Not quite sure I follow, but hey.
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