JDfn Daily Digest - December 5, 2008
U.S. non-farm payrolls fell by an astonishing 533,000 in November, the worst job loss in 34 years. The unemployment rate rose from 6.5% in October to 6.7% in November, the highest jobless rate since October 1993. Average hourly earnings rose by 7 cents, or 0.4%, to $18.30. Over the past three months, payrolls have fallen by an average of 419,000 per month.
White House spokeswoman Dana Perino said President Bush is "very concerned" about the latest unemployment situation and promises "aggressive" remedies.
The government is expected order a major restructuring of Detroit's struggling Big Three auto companies in exchange for a multibillion-dollar bailout under a plan circulating in Congress. Skeptical lawmakers are evaluating whether to distribute as much as $34 billion in aid to the automakers as the once-mighty companies make their second round of pleas for government help to keep them from collapsing by year's end and potentially deepening an already painful recession.
General Motors (GM) and Chrysler said they would be open to a merger if the U.S. government mandated it as a condition for providing the emergency financing they say is needed to allow them to survive into 2009.
Merrill Lynch said oil prices are likely to keep falling until well into next year and could reach $25 a barrel before recovering. In a research report, it said oil prices should begin to rally in the second half of 2009. More bad U.S. economic news is keeping oil prices near four-year lows, reflecting expectations of lessened demand worldwide.
Boeing Co. (BA) may delay the first deliveries of its new 787 Dreamliner at least six more months marking the fifth time the aerospace giant has been forced to extend the flagship commercial jet's rollout schedule. Officials are expected to announce that first deliveries of the jet may not occur until as late as summer 2010.
European Union antitrust regulators cleared Bank of America Corp. (BAC) to buy Merrill Lynch & Co., saying they saw no problems with the $50 billion takeover that will create the largest U.S. financial services company. And Merrill Lynch announced that its shareholders have approved its merger with Bank of America.
Money flowed out of mutual funds last week, erasing a spike in deposits from the week before, as market volatility continued to undermine investors' confidence. TrimTabs Investment Research said about $12.1 billion was withdrawn from stock-based mutual funds in the week ended Dec. 3rd. The week before, investors had put $10.4 billion into these funds.
Scheduled U.S. Economic Reports (Next Week)
Pending Home Sales (Oct), Wholesale Trade (Oct), Trade Balance (Oct), Producer Price Index (Nov), Retail Sales (Nov), University of Michigan Consumer Sentiment (Dec), Business Inventories (Oct)
In Earnings News
Brown-Forman Corp (BF-A) reported earnings of $143.2 million, or 94 cents a share, for the three months ended Oct. 31. That's up from $129.4 million, or 83 cents a share, a year ago.
Cascade Corp. (CAE) said its third-quarter profit fell 16 percent on lower sales in North America, Europe and China. Cascade earned $10.4 million, or 94 cents per share. That topped analysts' expectations of 85 cents a share.
Johnson Outdoors (JCI) posted a loss of $74.6 million, or $8.18 per share, in the quarter. Outdoor-equipment revenue edged up to $10 million from $9.4 million, as the company said it saw some growth in the military, commercial and consumer sectors.
Big Lots (BIG) said third-quarter net income fell 15% to $12.2 million from $14.3 million earned in the year-earlier quarter. Earnings from continuing operations came in at 15 cents a share compared to 14 cents a share a year earlier.
Sonoco (SON) lowered its fourth-quarter net income target to 48-52 cents a share from 60-64 cents a share. Analysts expected earnings of 61 cents a share.
Scheduled Earnings Reports (Next Week)
H&R Block, Learning Tree, BankUnited, AutoZone, Kroger, Vail Resorts, Ciena Corp, CKE Restaurants, Krispy Kreme
Stocks in the News
Yum Brands (YUM), owner of the Pizza Hut, Taco Bell and KFC chains reaffirmed its 2008 earnings growth forecast of 12% and said profit next year may increase at least 10%, excluding items.
Novell Inc (NOVL) met analysts’ estimates with its fourth-quarter profit, excluding some costs, after cutting jobs and outsourcing consulting to partner companies.
Thoratec Corp (THOR) said its mechanical heart pump outperformed an older version in a trial of 200 patients with advanced heart failure.
Cummins Engine Co. (CMI) said it would cut 500 jobs, 3.5% of its work force, citing deterioration in the U.S. and many other key markets around the world.
Starbucks (SBUX) warned it won't hit Wall Street's profit target for the quarter, due to declining comparable store sales.
White House spokeswoman Dana Perino said President Bush is "very concerned" about the latest unemployment situation and promises "aggressive" remedies.
The government is expected order a major restructuring of Detroit's struggling Big Three auto companies in exchange for a multibillion-dollar bailout under a plan circulating in Congress. Skeptical lawmakers are evaluating whether to distribute as much as $34 billion in aid to the automakers as the once-mighty companies make their second round of pleas for government help to keep them from collapsing by year's end and potentially deepening an already painful recession.
General Motors (GM) and Chrysler said they would be open to a merger if the U.S. government mandated it as a condition for providing the emergency financing they say is needed to allow them to survive into 2009.
Merrill Lynch said oil prices are likely to keep falling until well into next year and could reach $25 a barrel before recovering. In a research report, it said oil prices should begin to rally in the second half of 2009. More bad U.S. economic news is keeping oil prices near four-year lows, reflecting expectations of lessened demand worldwide.
Boeing Co. (BA) may delay the first deliveries of its new 787 Dreamliner at least six more months marking the fifth time the aerospace giant has been forced to extend the flagship commercial jet's rollout schedule. Officials are expected to announce that first deliveries of the jet may not occur until as late as summer 2010.
European Union antitrust regulators cleared Bank of America Corp. (BAC) to buy Merrill Lynch & Co., saying they saw no problems with the $50 billion takeover that will create the largest U.S. financial services company. And Merrill Lynch announced that its shareholders have approved its merger with Bank of America.
Money flowed out of mutual funds last week, erasing a spike in deposits from the week before, as market volatility continued to undermine investors' confidence. TrimTabs Investment Research said about $12.1 billion was withdrawn from stock-based mutual funds in the week ended Dec. 3rd. The week before, investors had put $10.4 billion into these funds.
Scheduled U.S. Economic Reports (Next Week)
Pending Home Sales (Oct), Wholesale Trade (Oct), Trade Balance (Oct), Producer Price Index (Nov), Retail Sales (Nov), University of Michigan Consumer Sentiment (Dec), Business Inventories (Oct)
In Earnings News
Brown-Forman Corp (BF-A) reported earnings of $143.2 million, or 94 cents a share, for the three months ended Oct. 31. That's up from $129.4 million, or 83 cents a share, a year ago.
Cascade Corp. (CAE) said its third-quarter profit fell 16 percent on lower sales in North America, Europe and China. Cascade earned $10.4 million, or 94 cents per share. That topped analysts' expectations of 85 cents a share.
Johnson Outdoors (JCI) posted a loss of $74.6 million, or $8.18 per share, in the quarter. Outdoor-equipment revenue edged up to $10 million from $9.4 million, as the company said it saw some growth in the military, commercial and consumer sectors.
Big Lots (BIG) said third-quarter net income fell 15% to $12.2 million from $14.3 million earned in the year-earlier quarter. Earnings from continuing operations came in at 15 cents a share compared to 14 cents a share a year earlier.
Sonoco (SON) lowered its fourth-quarter net income target to 48-52 cents a share from 60-64 cents a share. Analysts expected earnings of 61 cents a share.
Scheduled Earnings Reports (Next Week)
H&R Block, Learning Tree, BankUnited, AutoZone, Kroger, Vail Resorts, Ciena Corp, CKE Restaurants, Krispy Kreme
Stocks in the News
Yum Brands (YUM), owner of the Pizza Hut, Taco Bell and KFC chains reaffirmed its 2008 earnings growth forecast of 12% and said profit next year may increase at least 10%, excluding items.
Novell Inc (NOVL) met analysts’ estimates with its fourth-quarter profit, excluding some costs, after cutting jobs and outsourcing consulting to partner companies.
Thoratec Corp (THOR) said its mechanical heart pump outperformed an older version in a trial of 200 patients with advanced heart failure.
Cummins Engine Co. (CMI) said it would cut 500 jobs, 3.5% of its work force, citing deterioration in the U.S. and many other key markets around the world.
Starbucks (SBUX) warned it won't hit Wall Street's profit target for the quarter, due to declining comparable store sales.
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