Today’s Market Hub represents something of a milestone: it’s the first time that John, Steve and I have all been on at the same time. Today we talk about Ford and the Fed, earnings and easings.
Archive for October 26th, 2010
Media / Comments Off
Just a programming note, I’ll be on The John Batchelor Show tonight (9-12 a.m., 77 WABC on your AM dial here in the metropolitan New York area,) which tonight is being broadcast live from the Hard Rock Cafe in Times Square, on the corner of 43rd Street and Broadway in the old Paramount Building.
I’ll be on in the 10 p.m. hour, for what that’s worth, talking about the economy. Some of the, ahem, other guests include Larry Kudlow, Charlie Gasparino and Monica Crowley.
Show’s open to the public, first come, first served, so if you’re in the area, come on down. They’re even going to give away an iPad, if you’re into that kind of thing.
Today’s Upshot looks at the not-as-mundane-as-it-sounds inventory levels. What makes inventory levels so interesting is that it was a rebuilding of inventory levels that so boosted manufacturing, after businesses depleted inventories in the early stages of the recession.
But now that cycle is pretty much over, and companies are going to have to make money the old fashioned way: petition Congress for tax breaks. No, no, we’re kidding there. But the easy money from inventory rebuilding is over.
From today’s column:
The inventory build that boosted the U.S. economy this year is slowing. Third-quarter earnings reports reflect rising uncertainty among manufacturers whether the inventory elastic stretched too far, and could snap back later this year or next.
The so-called bullwhip effect, whereby a post-recession resumption of demand creates a snap-back effect that’s often larger than customer demand, is waning as inventory gains slow and companies are more closely matching their output to demand.
Tool maker Stanley Black & Decker Inc.’s retail customers are being very cautious with their inventory levels, said Chief Operating Officer James Loree on a call last week. If the holiday season doesn’t prove very strong, the odds will increase for an inventory correction.
“We don’t expect any earth-shattering inventory corrections,” he said. But if sales are weak in late November or early December, “there is a chance that there could be more inventory correction than normal in this particular year.”
Stock markets generally lower overnight in Asia, currently drifting down in Europe and US stock futures hint at a slightly lower open. USD index a shade higher, euro has lost a little zest, recently below $1.40 at around $1.393.
Ford’s 3Q results look decent, but not quite up to Wall Street snuff; shares down 2.6% premarket. DuPont raises 2010 EPS view. Bristol-Myers, Kimberly-Clark and US Steel all report results before the open. S&P/Case-Shiller August home price index due at 9:00 a.m.; Richmond Fed Oct manufacturing survey, Conference Board’s Oct consumer confidence gauge both set for 10:00 a.m. ET.
S&P futures down 4.10, DJ futures 26. Ten-year note lower, yield at 2.58%.