Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:51 AM EST
S&P 500: +2.10; 1,455.40
NASDAQ 100: +9.00; 1,812.50
Dow: +13.00; 12,710.00
NIKKEI 225: -0.66%; 17,292.32 (-114.54)
HANG SENG: +0.12%; 20,679.69 (+24.49)
S&P/ASX 200: +0.50%; 5,899.80 (+29.30)
BSE SENSEX 30: +1.14%; 14,643.13 (+164.94)
FTSE 100: +0.04%; 6,349.00 (+2.70)
CAC 40: +0.32%; 5,694.71 (+17.93)
XETRA-DAX: +0.41%; 6,903.65 (+27.95)
Commodity Futures (Reuters/Jefferies CRB)
Oil: +0.70%; $59.29 (+$0.41)
Gold: -0.17%; $657.60 (-$1.10)
Natural Gas: +1.02%; $7.69 (+$0.08)
Silver: +0.04%; $13.68 (+$0.005)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
• U.S. Worker Productivity, Labor Costs Come In Ahead of Forecasts
Another sign the risk of inflation is lessening as the U.S. government reported worker productivity accelerated a greater than expected 3% while unit labor costs grew just 1.7%. The 3% gain in productivity just reported follows a 0.1% decline in the previous quarter; both the productivity and labor cost numbers beat expectations. Economists surveyed by MarketWatch were expecting a 2.4% rise in productivity and a 2% gain in unit labor costs. Meanwhile, real hourly compensation increased 7.1% on falling consumer prices (2.2%).
• Sources: Bloomberg, MarketWatch
• Commentary: Fed Minutes: Watching Inflation , Comfortable With Housing, Sunny Economic Skies, But Fed to Remain Hawkish
• Stocks and ETFs to watch: S&P 500 Index - "Spiders" (NYSEARCA:SPY), iShares S&P 500 Index (NYSEARCA:IVV)
• News Corp.: Strong Film and Weak TV Earnings
Media company News Corp. reported this morning its FQ2 2007 net income fell 24% to $0.26/share ($822 million) from $0.33 ($1.08 billion) in 2006, in line with consensus estimates. Revenues were $7.84b, beating estimates of $7.35 billion. Profits from its Fox television network fell 39% to $112m; on Dec. 4 President Peter Chernin said he was "wholly dissatisfied" with Fox's fall season, which was last among the big networks. Its new MyNetwork TV's ratings came in "far below expectations." Fox's film unit posted strong gains; its hit movie Borat, which cost $18m to make, took in $248m in worldwide ticket sales. In December, Liberty Media Corp. agreed to exchange its 16.3% share of News Corp. for the company's 38% share in DirecTV Group, three regional sports networks and $550 million of cash, subject to adjustment. The deal is expected to close in the second half of 2007.
Sources: Press Release, Bloomberg, MarketWatch, Wall Street Journal
Commentary: News Corp. Rattles Google on Third-Party E-Commerce Partnerships • Views On Liberty's DTV Swap • Google, Fox Renegotiating Advertising Deal • News Corp. Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: News Corp. (NASDAQ:NWS). Competitors: Time Warner Inc. (NYSE:TWX), Walt Disney Company (NYSE:DIS), Viacom Inc. (NYSE:VIA), General Electric Co. (NYSE:GE) owns NBC. ETFs: PowerShares Dynamic Media Portfolio ETF (NYSEARCA:PBS)
• How Much of Toyota's Success Comes From the Weak Yen?
The Wall Street Journal asserts that the vehicles Toyota is exporting from Japan for sale in the U.S. Japan are pumping up its bottom line. Yesterday Toyota reported a 7.3% rise in net income for fiscal Q3 2007. But exports have bolstered the auto maker's profits because the weak yen means fatter profits from dollar-paying customers. There have been concerns in Congress about the yen, and Toyota executives have expressed concern over political backlash as it usurps market share from GM, Ford and Chrysler. Toyota says it is working to increase the number of vehicles it makes in North America, but in 2006 imported cars and trucks sold by Toyota in the U.S. rose 37% to 1.2 million vehicles (out of total sales of 2.5m), while sales from North American production were for the most part unchanged. Analysts estimate the yen decline from January 2005 adds about $3,000 in profit to each vehicle exported from Japan. In November, the CEOs of GM, Ford and Chrysler discussed the issue with President Bush. And yesterday, Ford Chief Alan Mulally said called the yen "an issue the government needs to continually assess," saying, "We would encourage the U.S. to continually review the trade policies and make sure that we don't have currency manipulation."
Sources: Wall Street Journal
Commentary: Toyota Reports Record Q3 Earnings, Maintains Guidance • No Tough Times For Toyota • Significance of the Surprisingly Weak Yen
Stocks/ETFs to watch: Toyota Motor Corp. (NYSE:TM). Competitors: General Motors Corp. (NYSE:GM), Ford Motor Co. (NYSE:F), DaimlerChrysler (DCX), Honda Motor Co. (NYSE:HMC)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Hover Near Record as BHP Billiton, DoCoMo Gain; China Jumps Asian stocks held near a record after BHP Billiton (NYSE:BHP) said it will buy back $10 billion in shares and on speculation NTT DoCoMo Inc. (NYSE:DCM) will increase dividends.
• United Microelectronics Fourth-Quarter Net Jumps 87 Percent on Share Gains United Microelectronics Corp. (NYSE:UMC), the world's second-largest custom-chip maker, posted an 87 percent gain in profit on lower costs and share-investment gains. The company said sales will fall up to 12 percent this quarter.
• China Minsheng May Sell Up to $3.1 Billion of Stock to Replenish Capital China Minsheng Banking Corp., the nation's only non-state lender, plans to raise as much as 23.8 billion yuan ($3.1 billion) selling shares to select investors to strengthen capital as loans soar.
• Stockland Buys U.K. Developer Halladale for $335 Million to Enter Europe Stockland, Australia's second-biggest real estate investment trust, agreed to buy U.K. property manager and developer Halladale Group Plc for 170 million pounds ($335 million), its first acquisition in Europe.
European Headlines (via Bloomberg.com)
• European Utility Stocks, E.ON Rise; Roche Declines, BHP Gains on Buyback European utility stocks climbed to a record high after E.ON AG (EON) won support for its 12-month battle to acquire Spain's Endesa SA (ELE). Benchmarks were little changed.
• Peugeot Reports Loss as Streiff Initiates Turnaround, Writes Down Assets PSA Peugeot Citroen's new chief, executive officer, Christian Streiff, said he'll increase earnings and car quality after Europe's second-biggest automaker reported a loss on the writedown in value of car and parts programs.
• Roche Profit Rises 33 Percent on Demand for Cancer Therapies, Tamiflu Drug Roche Holding AG (OTCQX:RHHBY), the world's biggest maker of cancer medicines, said full-year profit rose 33 percent, less than analysts estimated, as its medical-testing equipment unit struggled.
• U.K. Manufacturing Expanded for Second Month in December on Foreign Demand U.K. manufacturing increased in December for a second month, a sign a stronger pound has yet to damp demand for British goods.