- SEC reaches a $550 million settlement with Goldman Sachs. “The regulators get to claim victory while the Eloi get to continue their frolic atop the fluffy clouds of privilege and untouchability,” Josh Brown writes at The Reformed Broker. “Nobody admits wrongdoing, rightdoing or frankly, admits anything at all for that matter.”
- “This is surely a massive win for Goldman, whose entire business was at stake if it was found guilty of serious wrongdoing,” Reuters blogger Felix Salmon says. “The risk, of course, is that Goldman’s victory here will only serve to exacerbate its arrogance. Could the Squids of West Street become even more insufferable, now?”
- Business Insider has a list of winners and losers in the Goldman fraud settlement case.
- Lots of data to digest this morning, and most of it isn’t promising. Producer prices fall for third straight month and manufacturing data was weak. Headline jobless claims number looks good, but seasonal adjustments played a large role in the better-than-expected figure. “Due to the seasonal issues around the adjustments with GM doing the opposite of what they’ve historically done has made initial claims more difficult to analyze for a few weeks,” says Miller Tabak’s Peter Boockvar. “One thing though is for sure, up to 3 million workers will be falling off the extended claims rolls as benefits run out.”
- Naked Capitalism blogger Yves Smith relays an interesting nugget from HousingWire: for every one home currently on the market, two are waiting to be sold. “The scary part here is this estimate of market overhang refers only to foreclosed and distressed property,” she says. “There is another category of hidden inventory, people who would like to sell but aren’t even listing their houses.”
- Oil has finally stopped gushing into the Gulf. For now, as BP tests a new containment cap.
- Apple’s (AAPL) acquisition of mapping company Poly9 marks the second maps-focused company AAPL has bought in the last year. “In the short term, and with Poly9 specifically, Apple is buying its Google Earth,” Business Insider’s Dan Frommer says. “But more broadly, Apple is preparing for life after Google.”
- H-P’s (HPQ) Android tablet, which was supposed to hit the market in 4Q, has been delayed and won’t ship before the end of the year, Digital Daily blogger John Paczkowski reports, citing anonymous sources. Reason for the delay aren’t clear. “Perhaps, H-P has decided to focus its resources on the future webOS slate PC that its new Palm unit is developing,” he says. “Or perhaps the company is reconsidering its multi-OS tablet strategy in light of the Palm acquisition. After all, H-P has said repeatedly it is ‘doubling down’ on webOS.”
- “Even as lenders struggle to pull themselves out of the credit crisis, signs of a new and potentially dangerous infatuation with risky borrowers are emerging,” WSJ reports.
- Pretty pumped to see Carlos Beltran patrolling center field once again for the Mets.
US stocks finish mixed, with blue chips extending their winning streak, as the Fed downgrading its economic growth outlook weighs on Intel’s blowout earnings.
Dow rises for a seventh-straight day, narrowly edging up 4 to 10367, its longest wining streak since March. Nasdaq Comp gains 8 to 2250, but S&P 500 drops 0.2 to 1095.
Fed, which trims its forecast for first time in more than a year, now expects GDP growth of 3% to 3.5% and sees prospect of more monetary stimulus. Economic data also disappoint amid a bigger-than-expected decline in retail sales and smaller-than-predicted gain in business inventories.
But weak economic data have largely been overshadowed this week as earnings season has gotten off to a commanding kickoff.
Lots on deck for tomorrow. JPMorgan reports in the AM and Google’s posting earnings after the bell. PPI, industrial production as well as weekly jobless claims on the economic calendar. And China’s expected to report 2Q GDP.
- Is the economy ready to walk without the Fed’s MBS crutch? It’s possible, but keep in mind the Fed’s made it clear it’ll resume the purchase program if trouble ensues, John Curran says. “I doubt that a declining stock market alone would be trouble enough to trigger a restart of the program but a sinking economy certainly would.”
- The most important thing FCC’s National Broadband Plan should accomplish is increasing amount of wireless spectrum available for broadband Internet, writes Fred Wilson. “The fact is that wires, fiber, and cable aren’t going to get us where we need to go.”
- It seems homeowners are increasingly opting for strategic
defaults. At least that’s the sense from recent NY Times and LA Times stories, Calculated Risk says. “I’m not sure if walking away is becoming more common or if there is a bubble in walking away articles.”
- Palm’s situation is turning from bad to worse, as its 4Q may not be any better than its ugly 3Q, John Paczkowski notes.
- Number of single-family homes under construction has fallen off a cliff since the housing bubble burst. About 1 million were under construction in February 2006; today there are just 300,000. “The precipitous decline ended last summer, and housing construction has been essentially flat for several months,” Donald Marron says. “Perhaps housing construction has finally found bottom?”
- Our DJ colleague Brendan Conway wonders whether the party’s over for financial stocks.
- Sen. Dodd’s financial regulation bill is “tougher and better than I had expected,” Edmund Andrews writes on the Capital Gains and Games blog. “The big banks and Wall Street firms are already howling in protest. Front groups like the US Chamber of Commerce, which claim to be looking out for mom-and-pop businesses, are throwing everything they have at it.”
- PPI falls 0.6% in February, marking biggest drop in seven months and curbing inflation expectations, for now. Gasoline costs declined sharply.
- Fed’s faced its fair share of scrutiny for underestimating the financial crisis, but simply calling for change doesn’t mean much. “Let’s be practical. What other institution did a better job?” James Hamilton ponders. “Where in Washington today do you see an agency with the intellectual resources to get this right? Simply squawking that we need a change is not constructive leadership; it’s political finger-pointing.”
- Starbucks (SBUX) appears to be testing blueberry waffles in some markets, Starbucks Gossip blog reports, with Denver, Oregon and an area north of Seattle trying out the toasted items. Waffles could help increase those morning sales, too, especially at a price noted by several blog commenters: $2.50 per waffle.
Slightly softer premarket tone for US stocks, with the morning’s most notable feature being a conspicuous strength in the US dollar index, up 0.6% at 76.85.
Two-day FOMC meeting gets underway today, statement will come tomorrow afternoon. November PPI, NY Fed’s December Empire State manufacturing survey both due at 8:30am; Nov industrial production & capacity utilization set for 9:15am; homebuilders Dec sentiment index at 1:00pm ET.
Best Buy’s 3Q net quarduples from a year ago, but shares fell premarket as consumer-electronics seller sees 4Q gross profit below prior views.
S&P futures down 3.80; 10-yr flat, yield at 3.55%.
Posted by Steven Russolilloon October 20, 2009 Earnings, Economy, Markets /
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Check out Paul Vigna and Madeleine Lim discussing Caterpillar’s quarterly results, U.S. producer prices and the latest statement from the Bank of Canada on Tomorrow’s News Today.
You will feel a great need to alter your prices...
September producer price index dropped 0.6%, a larger decline than economists were expecting, prompting bloggers to once again worry about the dreaded D-word.
Prices won’t close out 2009 in outright free-fall, as recent increases in industrial production suggest prices could actually rebound sooner than later. But housing prices are still dropping, labor costs are falling, holiday spending remains depressed and discount shopping is still prevalent, the Economist’s Free Exchange blog says.
“The bigger threat at this point is clearly deflation, rather than inflation, and so it is somewhat disconcerting to see the Fed working to convince inflation hawks that it takes their concerns seriously,” blog says.
It’s still unlikely the Fed will tighten before the second half of 2010, “but there is a good case to be made that it should be easing further,” blog notes.
Yesterday’s retail sales data had some pundits questioning the “green shoots” in the economy, but today’s data have people feeling optimistic again. Whether that optimism is well placed is another issue.
April PPI increased 0.3%, while core PPI – excluding food and energy costs – rose 0.1%. Weekly jobless claims increased by 32,000 to 637,000 in the week ended May 9, much larger than the 10,000-claim increase Wall Street expected.
Increasing prices suggests the deflationary threat is passing and jobless claims may be close to peaking, meaning today’s data strengthens the notion that the worst of the economic crisis has passed, James Picerno writes at The Capital Spectator.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
David Oreck, founder of a well-known maker of vacuums and air purifiers, says he’s upset his namesake company is in bankruptcy. He says Nashville, Tenn.-based Oreck Corp. was a perfectly profitable company when he sold his stake in it to a private equity firm in 2004. He blames the firm, New York-based American Securities Capital […]
