Important news from Stephnie

Oct 18

FTSE ends lower, below key level as growth worries weigh


* Financials fall as euro zone debt woes resurfaceBy David BrettLONDON, Oct 18 (Reuters) - Britain’s leading share index ended lower on Tuesday as nervous investors retreated from riskier assets, forcing the FTSE 100 below a significant technical level as global growth concerns returned to haunt the market.The blue-chip index fell 26.35 points, or 0.5 percent, to 5,410.35 — below the 5,450 level it has managed to close above just once since early August — as investors pulled out of the mining and banking sectors.The FTSE bounced off a session low at 5,348.64, tracking movements on Wall Street as market volatility continued in thin trade.Echoing difficulties faced by investment managers, U.S. investment bank Goldman Sachs reported its second quarterly loss as a public company, blaming difficult market conditions and a lack of confidence among investors and corporate clients.That confidence had been further eroded overnight by figures from China showing quarterly growth at its weakest pace in two years, highlighting the impact an uncertain recovery in the United States and lingering debt problems in Europe was having.Investors had seen China, along with other Asian economies, as providing sustainable growth for businesses while developed economies struggled.Asia-focused bank Standard Chartered fell 2.8 percent, among the worst hit financials.Traders said Standard Chartered shares were not helped by uncertainty after Singaporean state investor Temasek launched a bond exchangeable into the London-listed bank’s shares.Sentiment was dealt a further blow when Moody’s cast doubts over France’s AAA credit rating, and Germany’s finance minister played down heightened expectations that European Union governments will resolve the region’s sovereign debt crisis at a summit on Sunday.Meanwhile, inflation in Britain hit a three-year high in September, heaping pressure on corporates already faced with the rising unemployment figures sapping demand.”Actions by western Governments and central banks will engineer persistent inflation despite high levels of unemployment (stagflation) and very weak growth in developed markets,” Ana Armstrong, managing partner of Armstrong Investment Managers said.Armstrong said allocations to high-yielding equities, with stable cash flows, and with pricing power will be the best performers in this type of environment.Morgan Stanley published a note listing companies with long-term sustainable competitive advantages — included Experian , InterContinental Hotels , Imperial Tobacco , Rio Tinto and Rolls-Royce .Rolls Royce and IMI were among the top risers up 1.6 percent and 2.2 percent, respectively.Elsewhere, Whitbread rose 0.5 percent after Britain’s biggest hotel and coffee shop operator reported a higher-than-expected first-half pretax profit and hiked its dividend over 50 percent.Bargain hunters picked up G4S , which bounced 9.8 percent, having slumped more than 20 percent on Monday when announcing a deeply discounted rights issue to pay for its 1.5 billion pound acquisition of Danish frim ISS .Tullow Oil rose 2.5 percent with traders expecting a well update from the oil explorer soon.

Oct 14

PREVIEW-UPDATE 1-Canada Sept inflation rate seen at 3.1 pct


WHEN: Friday, Oct. 21 at 7 a.m. (1100 GMT)REUTERS FORECASTS Sept Aug ForecastrangeHeadline CPI m/m +0.2 pct +0.3 pctHeadline CPI yr/yr +3.1 pct +3.1 pct +2.8 pctto +3.2 pctCore CPI m/m +0.2 pct +0.4 pctCore CPI yr/yr +1.9 pct +1.9 pct +1.5 pctto +2.1 pctFACTORS TO WATCH:If the forecasts are correct, headline inflation will remain above the Bank of Canada’s target range of 1 percent to 3 percent. Core inflation, which excludes volatile items like gasoline and some food, is right near the center of the band.In normal times, this would put the central bank under considerable pressure to raise rates to keep inflation from spinning out of control in coming quarters.But BoC Governor Mark Carney, and markets for that matter, are more focused on growth than on inflation, given unease over Europe’s sovereign debt crisis and signs of weak demand for Canadian goods from the key U.S. market.The bank has signaled it is in no rush to raise rates from their ultra-low target of 1 percent, even if inflation looks high.MARKET IMPACT:With investors focused on Europe and fears of contagion in the global banking system, it may take a sharp jump in inflation to alter expectations that the Bank of Canada will hold its key interest rate unchanged at 1 percent until the second half of 2012.An unexpected jump in the rate could support the Canadian dollar and hurt bonds.Lower-than-expected inflation could prompt some to see a rate cut as a more serious option for the central bank’s next move, dampening the value of the currency.The overnight index swap market is now pricing in the possibility of a rate decrease, although economists still expect the next move to be an increase.

PREVIEW-UPDATE 1-Canada Sept inflation rate seen at 3.1 pct


WHEN: Friday, Oct. 21 at 7 a.m. (1100 GMT)REUTERS FORECASTS Sept Aug ForecastrangeHeadline CPI m/m +0.2 pct +0.3 pctHeadline CPI yr/yr +3.1 pct +3.1 pct +2.8 pctto +3.2 pctCore CPI m/m +0.2 pct +0.4 pctCore CPI yr/yr +1.9 pct +1.9 pct +1.5 pctto +2.1 pctFACTORS TO WATCH:If the forecasts are correct, headline inflation will remain above the Bank of Canada’s target range of 1 percent to 3 percent. Core inflation, which excludes volatile items like gasoline and some food, is right near the center of the band.In normal times, this would put the central bank under considerable pressure to raise rates to keep inflation from spinning out of control in coming quarters.But BoC Governor Mark Carney, and markets for that matter, are more focused on growth than on inflation, given unease over Europe’s sovereign debt crisis and signs of weak demand for Canadian goods from the key U.S. market.The bank has signaled it is in no rush to raise rates from their ultra-low target of 1 percent, even if inflation looks high.MARKET IMPACT:With investors focused on Europe and fears of contagion in the global banking system, it may take a sharp jump in inflation to alter expectations that the Bank of Canada will hold its key interest rate unchanged at 1 percent until the second half of 2012.An unexpected jump in the rate could support the Canadian dollar and hurt bonds.Lower-than-expected inflation could prompt some to see a rate cut as a more serious option for the central bank’s next move, dampening the value of the currency.The overnight index swap market is now pricing in the possibility of a rate decrease, although economists still expect the next move to be an increase.

Google to gain from growing mobile focus: analysts


Accelerating revenue growth in Google’s international business, particularly from emerging markets, and its mobile business contributed to the 28-percent increase in paid click growth, analysts said.Google’s third-quarter results signal a positive trend for the sector, said BofA Merrill Lynch analysts, including Justin Post — a five-star rated analyst according to Starmine data for the accuracy of his earnings estimates on the company.BofA Merrill analysts maintained their positive stance on eBay Inc and Amazon.com Inc and continue to rate the Google stock a “buy.”Collins Stewart raised its price target on the stock to $795 from $725 — 42 percent higher than its current levels.According to Thomson Reuters StarMine data, 13 analysts rate Google a “strong buy,” 20 rate the stock a “buy” and 4 others rate it a “hold,” with a mean price target of $716.17.Google’s Frankfurt-listed shares were trading up 8 percent on Friday. The company’s shares, which closed at $558.99 on Nasdaq on Thursday, were trading up $41.31 at $600.30 in pre-market trade on Friday.”We remain buyers of Google shares as strong third-quarter results, including accelerating top line growth, reflect continuing momentum in mobile and building traction in display,” Deutsche Bank analysts wrote in a note to clients.GAINS FROM MOBILE BUSINESSSeparately, analysts at J.P. Morgan Securities said they believe mobile was the biggest factor in Google’s sharp growth in paid clicks.The revenue run rate for Google’s mobile business is more than $2.5 billion, a significant leap from $1 billion just a year ago. It is plowing money into its fast-growing mobile business which competes with iPhone maker Apple Inc.The strong mobile revenue highlights the importance of Google’s Android mobile software — already the world’s most-used smartphone platform — and supports the rationale for its Motorola Mobility Holdings deal, the analysts said.In August, Google announced plans to acquire Motorola Mobility for $12.5 billion. The deal will give Google access to one of the largest patent libraries in the wireless industry as well as hardware manufacturing operations that will allow it to develop its own line of smartphones.The increasing usage of tablets in a manner more similar to PCs than phones is helping drive incremental queries and paid clicks to Google, even if they are coming at a lower price for now, JP Morgan analysts, who rate the stock “overweight,” said.”We expect this trend to continue, and for Google to be the primary beneficiary as it likely has 90 percent plus share of mobile search — even higher than on the desktop,” they added.

Oct 13

Analysis: Return of the pink slip? Risk of layoffs rising


That may be the wrong question. With Europe’s debt crisis rattling the world financial system and demand fading, the question on many executives’ and economists’ minds is whether the nation is on the brink of another large round of layoffs.It does not help that the uncertainty that has sent the Standard & Poor’s 500 index down more than 10 percent since mid-July is lingering into October when big companies start planning out their 2012 budgets. At the very least, executives said it looks unlikely that companies will start the significant rounds of hiring that would be needed to drive down the nation’s unemployment rate, currently 9.1 percent.”I think people are in the process of dialing back 2012 expectations and that will bleed into whatever they were planning,” said Michael Neal, a General Electric Co vice chairman who heads the company’s GE Capital finance arm. “My view is they continue to stay with a tight belt and I think it means less hiring than they would have done otherwise.”Weak earnings reports from JPMorgan Chase & Co and Alcoa Inc are only increasing the market’s anxiety, and the tone of executives’ comments are far from upbeat.Chief executives have already begun to echo the warning that U.S. President Franklin Delano Roosevelt made early in the Great Depression of the 1930s: “The only thing we have to fear is fear itself.”“I’m more concerned about lack of confidence than about market fundamentals,” Alcoa CEO Klaus Kleinfeld said on Tuesday. “It almost looks like the world is worrying itself into another recession and that should not be allowed to happen.”Their concern about worry has not stopped them from acting, though. JPMorgan on Thursday said it would cut 1,000 jobs from its investment banking business.THE BALL GETS ROLLING?JPMorgan’s cuts follow a much larger move by Bank of America Corp, which last month said it would eliminate some 30,000 jobs — about 10 percent of its workforce. While smaller in scale, earlier this month drugmaker AstraZeneca Plc, Level 3 Communications Inc and Verso Paper Corp all disclosed plans to cut hundreds of jobs.Some 24 percent of large-company chief executives expect to cut jobs in the U.S. over the next six months, according to a survey by the Business Roundtable. That is more than double the 11 percent who expected to cut in the June edition of the survey, but less than the 36 percent that planned to add jobs.Theirs is a darker view than that of the chief financial officers of mid-sized companies, where 68 percent expect to add jobs over the next year, down from 80 percent earlier this year, according to a GE Capital-sponsored survey.Companies are also cutting their spending plans for the United States. Wal-Mart Stores Inc, the world’s largest retailer said on Wednesday it plans to cut its U.S. capital spending by 7.4 percent next year.”If the economy continues to slow … I expect companies probably to continue to keep payroll very lean and for the unemployment rate to bump to 9.25 percent, conceivably it could go to 9.5 percent,” said Michael Yoshikami, CEO of YCMNET Advisors a San Francisco investment house with $1 billion under management. “As CFOs and (human resources) managers are planning going forward, you can’t avoid the human dynamic here. And if the outlook is very uncertain, they’re going to be very, very hesitant to make broad hiring decisions. It’s not good timing because budgets are being set right now.”PROFIT PINCHOne warning sign that more belt-tightening could be ahead is that profit growth seems to be slowing down. Most U.S. public companies report quarterly results in the coming weeks, and earnings season has gotten off to a weak start.Analysts have lowered their growth forecasts for the companies of the S&P 500 and now look for overall profit for the group to rise 12.5 percent in the third quarter, less than the 17 percent they expected at the start of July.The sharpest downward revisions have come in the finance sector, where analysts now look for profit to rise just 1.7 percent, down from a prior expectation of 15.6 percent. They’ve also lowered estimates for companies that sell basic materials like metals, telecommunications firms and sellers of consumer staples like food.The finance, retail and manufacturing sectors could all see cuts — with retailers particularly vulnerable if the holiday selling season is weak, analysts said.”We certainly are on a cusp here and it does feel as though the economy has downshifted,” said John Challenger, CEO of Challenger, Gray and Christmas, a consulting company that helps laid-off executives find jobs. “A lot of companies are coming into this last quarter cautious and they’re not optimistic … It feels like the economy could turn either way.”One hopeful sign for workers is that companies that cut head count aggressively during the recession may have little fat left to trim, making them more likely to hold off unless the economy definitively weakens.”There might be some firms that decide to preemptively cut, but I think that many firms are pretty lean and mean,” said Michael Goodman, director of economic and public policy research at the University of Massachusetts at Dartmouth. “Even though output has been growing, that’s with tens of millions of fewer workers on the job. So it’s tough to imagine too much more work being squeezed out of fewer employees in this environment.”

Oct 12

UPDATE 2-NeuStar to buy Targus Information for $650 mln


* Q3 earnings tops estimates* To buy additional $250 mln of Class A common shares* NeuStar shares up 3 pct in after-hours tradeBy A. AnanthalakshmiOct 11 (Reuters) - Telecommunications company NeuStar Inc is to buy privately-held Targus Information Corp, a provider of caller identification services, for about $650 million in cash to boost its presence in the real-time information and analytics market.NeuStar, which routes phone calls and text messages in North America, expects the deal to add at least 20 cents a share to its 2012 earnings and push annual revenue to about $750 million.Vienna, Virginia-based Targus — which helps identify, verify and locate callers, and maintains a database — generated about $149 million in revenue for the twelve months ended Sept. 30.NeuStar, which was spun off from Lockheed Martin Corp in 1999, also maintains databases that directs communication via phones and the Internet.”We permit the phone calls to be sent and they (Targus) enable the people who are picking up the phone to know who is calling them,” NeuStar CEO Lisa Hook told Reuters in an interview.Hook said the companies have some customer overlap in the cable, wireless carrier and advertising industries.When NeuStar began talking to Targus in November 2010, the target company was not pursuing a sale, Hook said.Last year, Targus had hired Wells Fargo to conduct a sale process. But it was discontinued and the company decided to pursue recapitalization.NeuStar expects to fund the deal with a combination of cash on hand and $600 million in committed financing.Morgan Stanley and Allen & Co were NeuStar’s financial advisers, while Wells Fargo advised Targus.Separately, NeuStar reported third-quarter earnings of 51 cents a share that beat analysts’ expectations by 7 cents and guided higher earnings for the year.Revenue rose 18 percent to $152.5 million.The company also said it plans to buy back another $250 million of its Class A common shares on an accelerated basis.Shares of the company, which closed at $28.04 on Tuesday on the New York Stock Exchange, were up 3 percent in after market trade at $29.03.

Oct 11

Inflation not a big worry, top Fed officials say


However, both Dallas Federal Reserve Bank President Richard Fisher and Atlanta Fed chief Dennis Lockhart sounded skeptical of pushing for further monetary easing and unsure of how much it might help.”The economy currently is weak, but not dramatically weakening. It is sort of bumping along at a very low level. There’s a mix of data, some of it is negative but some of it is mildly positive,” Lockhart said.”I do not think we can take any monetary policy option off the table but I continue to think that the conditions in which we would invoke another round of large-scale asset purchases should be pretty demanding conditions,” he told a forum at Emory University in Atlanta.Fisher, who has dissented against more stimulative policy at the central bank’s two latest meetings, said inflation was not currently a concern.While headline inflation has risen in recent months, the data suggests it will gravitate toward the Fed’s target of about 2 percent, he told the Texas A&M Retailing Summit.The bigger problem is jobs, Fisher said. The Fed has done a “great deal” to boost the economy, he said, adding that if he believed “fiddling with the yield curve” and easing monetary policy further could add more stimulus, he would support it.Fisher reiterated his long-held view that it is fiscal authorities who are holding back recovering by not providing clarity on tax and regulatory policy.The Fed cut overnight interest rates to near zero in December 2008 and has bought $2.3 trillion in securities in a further attempt to spur economic growth.Last month, the central bank announced a program dubbed Operation Twist in which it will channel its ongoing bond purchases toward longer-dated Treasuries to put more downward pressure on long-term borrowing costs.The U.S. economy grew at less than a 1 percent annual rate over the first half of the year, and while economists think it’s growing a bit more strongly now, recession worries have mounted as Europe’s debt crisis threatens to spill over.On Friday, the U.S. Labor Department reported 103,000 new jobs were created in September, better than economists expected but not enough to put a dent in the 9.1 percent jobless rate.Consumers are still paying down debts accumulated before the Great Recession, and any spending they are doing now is eating into their “seed corn,” Fisher said, in a reference to the farming roots of his A&M audience.”I think it’s going to be a very, very long haul” before households are able to boost spending again, he added.

How should we respond to the “enormous” cyber attacks?


Security company McAfee uncovered a series of attacks on the networks of 72 organizations including the U.N., governments and companies around the world and said there was one “state actor” behind them. What should be the priority in the wake of the biggest series of cyber attacks? Fight fire with fire by going on the cyber attack offensive (29%, 124 Votes)

How should we respond to the “enormous” cyber attacks?


Security company McAfee uncovered a series of attacks on the networks of 72 organizations including the U.N., governments and companies around the world and said there was one “state actor” behind them. What should be the priority in the wake of the biggest series of cyber attacks? Fight fire with fire by going on the cyber attack offensive (29%, 124 Votes)