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Wednesday, August 8, 2012
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<p><b>Top Stories</b><br> <b><a href="http://online.wsj.com/article/SB10000872396390443659204577575520052266502.html" rel="nofollow">Disney's net profit surges 24% to hit record.</a></b> Walt Disney's (<a href='http://seekingalpha.com/symbol/dis' title='The Walt Disney Company'>DIS</a>) FQ3 net profit jumped 24% to a record $1.83B, boosted by strong earnings from its parks & resorts division, its cable TV channels, and its blockbuster movie "The Avengers." EPS of $1.01 beat forecasts, although revenue growth of 4.4% to $11.1B missed expectations. Shares <font color="red">fell 0.8%</font> after hours.</p> <p><b><a href="http://www.reuters.com/article/2012/08/08/us-standardchartered-iran-idUSBRE8750VM20120808" rel="nofollow">NY blindsided other regulators with StanChart allegations.</a></b> Standard Chartered (<a href='http://seekingalpha.com/symbol/scbff.pk' title='Standard Chartered.5'>SCBFF.PK</a>) wasn't the only one surprised by New York's publication of the Iran allegations - the Fed, Department of Justice and the Treasury were too. They're also probing the bank and some reportedly aren't happy with New York, which grew impatient with the inaction of the others. Standard Chartered <a href="http://www.bloomberg.com/news/2012-08-08/standard-chartered-probe-deal-said-to-require-up-to-700-million.html" rel="nofollow">might have to pay</a> up to $700M to settle the accusations.</p> <p><b>Top Stock News</b><br> <b><a href="http://www.reuters.com/article/2012/08/07/us-expressscripts-results-idUSBRE8761C420120807" rel="nofollow">Express Scripts rises after it ups outlook.</a></b> Express Scripts' (<a href='http://seekingalpha.com/symbol/esrx' title='Express Scripts, Inc.'>ESRX</a>) net profit slumped 49% to $170.9M in Q2, the pharmacy benefits manager said in its first quarterly report since closing its mega-merger with Medco. However, revenue more than doubled to $27.69B, including Medco, and beat forecasts, as did EPS of $0.88. Express Scripts increased its FY guidance to above Street consensus, due to the strong Q2, savings from the Medco deal, and the greater use of more lucrative generic drugs. Shares <font color="green">rose 7%</font> after hours.</p> <p><b><a href="http://www.reuters.com/article/2012/08/08/us-knightcapital-rescue-idUSBRE8750HF20120808" rel="nofollow">Knight Capital received rival $500M loan offer.</a></b> Knight Capital (<a href='http://seekingalpha.com/symbol/kcg' title='Knight Capital Group, Inc.'>KCG</a>) is set to resume its full market-making activities on the NYSE on Monday after yesterday gaining much of its market share back. Knight reportedly spoke to around 90 potential suitors about rescuing the firm, with rival Citadel offering a $500M loan in return for a 10-20% stake and control of Knight's Hotspot FX trading platform. That compares with the offer that Knight accepted: a $400M loan in exchange for 73%.</p> <p><b><a href="http://www.bloomberg.com/news/2012-08-07/warner-chilcott-ends-effort-to-sell-itself-announces-dividend.html" rel="nofollow">Warner Chilcott ends its attempts to find buyer.</a></b> Warner Chilcott (<a href='http://seekingalpha.com/symbol/wcrx' title='Warner Chilcott Limited'>WCRX</a>), which has a market cap of $4.45B, has ended its attempts to find a buyer, four months after saying it was considering a sale. The disclosure came yesterday as the drugmaker announced a special dividend of $4 a share and said it would renew a $250M buyback program.</p> <p><b><a href="http://in.reuters.com/article/2012/08/07/us-priceline-results-idINBRE8761IW20120807" rel="nofollow">Priceline outlook drags online travel sector down.</a></b> Priceline's (<a href='http://seekingalpha.com/symbol/pcln' title='priceline.com Incorporated'>PCLN</a>) shares <font color="red">slumped 14.8%</font> in post-market trading after the online travel company provided guidance that was below estimates, citing an assumption that economic conditions in Europe will deteriorate again. The outlook also took shares in rivals Expedia (<a href='http://seekingalpha.com/symbol/expe' title='Expedia, Inc.'>EXPE</a>) and TripAdvisor (<a href='http://seekingalpha.com/symbol/trip' title='TripAdvisor Inc.'>TRIP</a>) lower. Still, Priceline's Q2 net profit jumped 37% to $352.3M and revenue 27% to $1.36B, while EPS of $7.85 topped consensus.</p> <p><b><a href="http://www.marketwatch.com/story/rio-tinto-cautious-as-weaker-prices-dent-earnings-2012-08-08" rel="nofollow">Rio Tinto profit sinks 34%.</a></b> Rio Tinto's (<a href='http://seekingalpha.com/symbol/rio' title='Rio Tinto plc'>RIO</a>) H1 underlying profit tumbled 34% to $5.15B but beat forecasts, while revenue fell 12.8% to $25.34B. Earnings were hurt by a decline in iron ore and other commodity prices. Rio warned about short-term uncertainty but is confident demand will be strong in the long run. The miner has attracted interest for the aluminum and diamond assets it's looking to sell, both for individual operations and collectively. Shares <font color="green">rose 3%</font> premarket.</p> <p><b><a href="http://www.bloomberg.com/news/2012-08-08/e-tailor-startups-challenge-amazon-in-200-billion-market.html" rel="nofollow">Rivals great and small gun for Amazon.</a></b> Amazon (<a href='http://seekingalpha.com/symbol/amzn' title='Amazon.com, Inc.'>AMZN</a>) faces increased competition from clothing start-ups at one end and eBay (<a href='http://seekingalpha.com/symbol/ebay' title='eBay Inc.'>EBAY</a>) at the other. The start-ups cut out lots of middle men and make items to order to avoid needing warehouses, and so can undercut even Amazon. eBay tells retailers it can <a href="http://www.reuters.com/article/2012/08/07/net-us-ebay-retailers-idUSBRE8761F220120807" rel="nofollow">help them compete</a> by putting store fronts on its site, with RadioShack (<a href='http://seekingalpha.com/symbol/rsh' title='RadioShack Corporation'>RSH</a>), Barnes & Noble (<a href='http://seekingalpha.com/symbol/bks' title='Barnes & Noble Inc'>BKS</a>), and GNC (<a href='http://seekingalpha.com/symbol/gnc' title='GNC Holdings, Inc.'>GNC</a>) taking up eBay's offer.</p> <p><b>Top Economic & Other News</b><br> <b><a href="http://feeds.marketwatch.com/~r/marketwatch/marketpulse/~3/mlogcEvuGko/story.aspx" rel="nofollow">Japan's PM ready to call election to pass tax hike.</a></b> Japanese PM Yoshihiko Noda is prepared to dissolve the lower house of parliament "in the near future" and hold an election in order to receive support from opposition parties to double the country's consumption tax to 10% by 2015, Kyodo reports. The tax has passed the lower chamber but still needs approval in the upper house, where the opposition holds sway.</p> <p><b><a href="http://www.bloomberg.com/news/2012-08-08/japan-gets-reprieve-as-drop-in-oil-eases-trade-impact.html" rel="nofollow">Japan current-account surplus doubles.</a></b> Japan's current-account surplus surged to ¥433.3B ($5.5B) in June from ¥215.1B in May and topped consensus of ¥415.4B, helped by falling oil prices. The trade portion swung to a surplus of ¥112B from a deficit of ¥848.2B. The figures could ease worries that Japan will need foreign financing to service its massive debt.</p> <p><b><a href="http://www.standardandpoors.com/prot/ratings/articles/en/us/?articleType=HTML&assetID=1245338218332" rel="nofollow">S&P lowers its outlook on Greece to negative.</a></b> S&P has revised its outlook on Greece's long-term rating to negative, reflecting the potential for a downgrade if the country fails to secure the next disbursement from the EU/IMF financing program. S&P also affirmed its CCC foreign and C local-currency credit ratings for the country, and projected that its GDP will contract by a cumulative 10%-11% during 2012-13.</p> <p><b>Editors' Picks</b><br> <b><a href="http://seekingalpha.com/article/789441-zynga-bulls-need-to-look-at-the-facts">Zynga Bulls Need To Look At The Facts</a></b> <br> <b><a href="http://seekingalpha.com/article/789331-august-15th-is-d-day-for-standard-chartered">August 15th Is D-Day For Standard Chartered</a></b> <br> <b><a href="http://seekingalpha.com/article/787891-the-growing-disconnect-in-mining-investors-at-odds-with-management">The Growing Disconnect In Mining: Investors At Odds With Management</a></b></p> <p><b>Today's Markets:</b> <br> <b>In Asia</b>, Japan <font color="green">+0.9%</font>. Hong Kong flat. China <font color="green">+0.2%</font>. India flat. <br> <b>In Europe</b>, at midday, London <font color="red">-0.6%</font>. Paris <font color="red">-0.7%</font>. Frankfurt <font color="red">-0.6%</font>. <br> <b>Futures at 7:00:</b> Dow <font color="red">-0.2%</font>. S&P <font color="red">-0.25%</font>. Nasdaq <font color="red">-0.1%</font>. Crude <font color="red">-0.6%</font> to $93.07. Gold <font color="red">-0.2%</font> to $1609.60.</p> <p><b>Today's economic calendar:</b><br> <b><font color="maroon">7:00</font></b> MBA Mortgage Applications<br> <b><font color="maroon">8:30</font></b> Productivity and Costs<br> <b><font color="maroon">10:30</font></b> EIA Petroleum Inventories<br> <b><font color="maroon">1:00 PM</font></b> Results of $24B, 10-Year Note Auction</p> <p><b>Notable earnings before today's open:</b> <a href='http://seekingalpha.com/symbol/ainv' title='Apollo Investment'>AINV</a>, <a href='http://seekingalpha.com/symbol/anr' title='Alpha Natural Resources, Inc.'>ANR</a>, AONE, <a href='http://seekingalpha.com/symbol/atrs' title='Antares Pharma Inc'>ATRS</a>, <a href='http://seekingalpha.com/symbol/bce' title='BCE Inc.'>BCE</a>, <a href='http://seekingalpha.com/symbol/clh' title='Clean Harbors, Inc.'>CLH</a>, <a href='http://seekingalpha.com/symbol/csc' title='Computer Sciences Corporation'>CSC</a>, <a href='http://seekingalpha.com/symbol/cwh' title='CommonWealth REIT'>CWH</a>, <a href='http://seekingalpha.com/symbol/df' title='Dean Foods Company'>DF</a>, <a href='http://seekingalpha.com/symbol/dish' title='DISH Network Corporation'>DISH</a>, <a href='http://seekingalpha.com/symbol/es' title='EnergySolutions, Inc.'>ES</a>, <a href='http://seekingalpha.com/symbol/ezch' title='EZchip Semiconductor Limited'>EZCH</a>, <a href='http://seekingalpha.com/symbol/fsys' title='Fuel Systems Solutions, Inc.'>FSYS</a>, <a href='http://seekingalpha.com/symbol/hfc' title='HollyFrontier Corp.'>HFC</a>, <a href='http://seekingalpha.com/symbol/m' title='Macy's Inc.'>M</a>, <a href='http://seekingalpha.com/symbol/nrg' title='NRG Energy, Inc.'>NRG</a>, <a href='http://seekingalpha.com/symbol/ppl' title='PPL Corporation'>PPL</a>, <a href='http://seekingalpha.com/symbol/rl' title='Polo Ralph Lauren Corporation'>RL</a>, <a href='http://seekingalpha.com/symbol/soda' title='SodaStream International'>SODA</a>, <a href='http://seekingalpha.com/symbol/svnt' title='Savient Pharmaceuticals Inc'>SVNT</a>, <a href='http://seekingalpha.com/symbol/swc' title='Stillwater Mining Company'>SWC</a></p> <p><b>Notable earnings after today's close:</b> <a href='http://seekingalpha.com/symbol/atpg' title='ATP Oil & Gas Corporation'>ATPG</a>, <a href='http://seekingalpha.com/symbol/auy' title='Yamana Gold Inc.'>AUY</a>, <a href='http://seekingalpha.com/symbol/avnr' title='Avanir Pharmaceuticals, Inc'>AVNR</a>, <a href='http://seekingalpha.com/symbol/cjes' title='C&J Energy Services, Inc.'>CJES</a>, <a href='http://seekingalpha.com/symbol/clr' title='Continental Resources, Inc.'>CLR</a>, <a href='http://seekingalpha.com/symbol/cpe' title='Callon Petroleum Co.'>CPE</a>, <a href='http://seekingalpha.com/symbol/cpno' title='Copano Energy, L.L.C.'>CPNO</a>, <a href='http://seekingalpha.com/symbol/ctl' title='CenturyLink, Inc.'>CTL</a>, <a href='http://seekingalpha.com/symbol/egle' title='Eagle Bulk Shipping Inc.'>EGLE</a>, <a href='http://seekingalpha.com/symbol/exxi' title='Energy XXI (Bermuda) Limited'>EXXI</a>, <a href='http://seekingalpha.com/symbol/ftk' title='Flotek Industries, Inc.'>FTK</a>, GMXR, <a href='http://seekingalpha.com/symbol/gss' title='Golden Star Resources Ltd'>GSS</a>, <a href='http://seekingalpha.com/symbol/gxp' title='Great Plains Energy Inc.'>GXP</a>, <a href='http://seekingalpha.com/symbol/hnsn' title='Hansen Medical, Inc.'>HNSN</a>, <a href='http://seekingalpha.com/symbol/hogs' title='Zhongpin Inc.'>HOGS</a>, <a href='http://seekingalpha.com/symbol/kgc' title='Kinross Gold Corporation'>KGC</a>, <a href='http://seekingalpha.com/symbol/mbi' title='MBIA Inc.'>MBI</a>, <a href='http://seekingalpha.com/symbol/mdrx' title='Allscripts-Misys Healthcare Solutions, Inc.'>MDRX</a>, <a href='http://seekingalpha.com/symbol/mm' title='Millennial Media, Inc.'>MM</a>, <a href='http://seekingalpha.com/symbol/mnst' title='Monster Beverage Corp.'>MNST</a>, <a href='http://seekingalpha.com/symbol/nq' title='NQ Mobile Inc.'>NQ</a>, <a href='http://seekingalpha.com/symbol/nwsa' title='News Corporation'>NWSA</a>, <a href='http://seekingalpha.com/symbol/onty' title='Oncothyreon Inc .'>ONTY</a>, <a href='http://seekingalpha.com/symbol/panl' title='Universal Display Corporation'>PANL</a>, <a href='http://seekingalpha.com/symbol/satc' title='SatCon Technology Corporation'>SATC</a>, <a href='http://seekingalpha.com/symbol/scln' title='SciClone Pharmaceuticals, Inc.'>SCLN</a>, <a href='http://seekingalpha.com/symbol/sgen' title='Seattle Genetics, Inc.'>SGEN</a>, <a href='http://seekingalpha.com/symbol/spwr' title='SunPower Corporation'>SPWR</a>, <a href='http://seekingalpha.com/symbol/teg' title='Integrys Energy Group, Inc.'>TEG</a>, <a href='http://seekingalpha.com/symbol/zgnx' title='Zogenix, Inc.'>ZGNX</a></p> <p>See full <a href="http://seekingalpha.com/currents/earnings">real-time earnings coverage »</a></p> <p>Wall Street Breakfast is sent out by email for free -- <a href="http://seekingalpha.com/page/email-preferences/?source=newsbriefbody">Get it now »</a> </p>
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Is Disneyworld a cheaper vacation than Hawaii or Italy? Is it summer?--I recall almost every year Disney's results are great on this report. And an outlier such as "Avengers" helps put it over the top. One thing I know from talking with friends/acquaintances who own relatively pedestrian, direct to consumer businesses is that sales have been off by ~~40% since 2007. The fact is there's less economic activity relative to the past--which was an expanding leverage fueled bender from 2000-2008.
nuff said.
> jack
The same thing happened in Paris prior to the German invasion.
If so, then corporate America is in for one tough and lean end of year!!
Will this be the start of earning season warnings? Will it be the start of a massive stock market sell-off?
I was really referring to individuals who know they are spending more than they are making, believe that they may lose their job at anytime, and don't see anything in the future that gives them any confidence so they feel "what the heck" I might as well have a good time before it's to late. Vegas sees the same thing.
Too bad they were as blind as bats on the Subprime Mortgage Bonds debacle. Where was the accuracy then?????????
Junk bonds = Triple A rating
http://bit.ly/MxnpW9
Part of it describes a methodology used to prioritize projects to be funded by the Stimulus Money (in one state district) -- too bad most of the politicians did not apply this. We would have gotten some better residual results.
The one immediate and long tern project that could use your suggested analysis is the distribution of water resources. Water seems to be badly distributed today. The abundance of salt water can be a major plus with American can do science and engineering.
Nice approach. Ultimately, it is up to the electorate to decide whether or not specific programs pass the "I'll pay my fair share test", else its back to the drawing board as exemplified by the recent election results down south which perhaps proved if nothing else that the old axiom "all politics is local" applies not only in Chicago.
http://bit.ly/S2GFaH
Amen.
If we could apply these simple (to me they're simple) rules on all projects - how much money would we save and MORE IMPORTANTLY, how much more effective projects would we build that would have a positive residual effect on our economy?
Thanks again to those who took the time to read the white paper. I have also had some positive responses from within the government.
caused significant unemployment.
seems like lack of foresight.
when you disperse the team the american can do science & engineering is lost, unless you have a good stout data file.
> jack
What is wrong with New York? Don't they know enforcement of laws is not meant for banks. They are supposed to let banks slide on little $700 million infractions of silly laws.
Disney's net profit grew 24% yet somehow they "missed" analyst expectations. I, for one, have had enough of these "experts" claiming companies are "missing" their numbers each quarter. Look at Apple's last report and now Disney missed also? As John Stossel says: Give me a break.
Where is Jon Corzine why is he taking Australia + 39 in both men's and women's basketball?
Or is he posturing for support for his unpopular policies?
Japan is a grave yard for PMs. Is Noda another cannon folder?
Japan has a current account surplus, why does it need to double its consumption tax?
THe US has a current account deficit of around $ 1.4-1.6 trillion and it is contemplating further tax cuts.
Tax rate increases do not increase tax revenues.
There are a lot of Liberals who believe otherwise to the detriment of any economy. Especially regarding "consumption taxes".
Federal income taxes are only 45% of revenue.
FICA/Med/Payroll are an equal amount, and are collected starting with the first dollar you earn. Add in federal gasoline taxes and other excise taxes on things like cell phone service, alcohol, and tires, and the number of people not paying INTO federal coffers shrinks to a very small number - and that number is almost entirely retirees who live ONLY on Social Security benefits.
Cite all the numbers you want, fact remains more than 50% pay no income taxes and I doubt that the majority of that 50% are seniors living only on social security.
Japan - remember the old folks who live over there are the ones who have also taken all their savings and bought JGB (Japanese Government Bonds). They have essentially been "taxed" (had money taken away from they by the government) already. If the government were to tax, they would just essentially take away the government bonds. They wouldn't get any new money as the citizens of Japan already gave them their money out of savings.
I have said before....Japan needs to outlaw the purchase of JGB by it's own citizens - forcing them to SPEND their dad-gum money.
The point is you can tax more if you want.....but you won't get any more revenue. The historical number is pretty constant (except recently due to recession) at 20% +/- of GDP.
http://bit.ly/qh5p0p
People in the bottom half would pay more income taxes if they had more income. So how about addressing the INCOME inequality gap that exists in the US? 50 years ago, average CEO compensation was about 25x average production worker compensation. Now, it's about 200x.
So, maybe legislation should be aimed at discouraging CEO's from raiding their companies for lavish compensation, and encouraging them to spend more on investment and production worker's compensation. We used to have that, actually. When top marginal rates were at 80% or more, CEO's paid themselves reasonable salaries and invested the rest in their busineses, creating jobs and strong companies. Now, they bleed their companies blind, offshoring jobs and gutting capital assets to buy themselves a bigger yacht.
Just sayin'.
passed in his upper house. His bluff worked.
What is worse is that when they are raised you not only are likely to get less tax revenue as people will decide to take fewer capital gains but the damage done to the economy of locking up capital in less effective and growing parts of the economy will cost us millions and millions of future jobs.
The only time that it makes any difference to the company how often you trade is when a company is making a primary or secondary issue. Otherwise money is being exchanged between the buyer and seller.
Perhaps your suggestions will become valuable after the election if/when compromise becomes acceptable again.
They were valuable to the State Senator who used them. Unfortunately, this prioritization framework was not adopted by everyone else.
It adds some objectivity and structure to an otherwise very subjective approach which is also very antiquated.
Thanks for your feedback.
Now if the boys in New York would only find Jon Corzine.
http://buswk.co/RpmVR6
Not sure how many fans were in the market for a GM vehicle, but this can't please the person in charge of advertisement.
Have a great day everyone.
On the positive side, it looks like GM will continue to bailout its European arm, so all those Obama bucks are paying off for the Europeans.
The comments at the end were very telling.
Seems like GM goofed again.
Think of the positive media coverage of handing Uncle Sam a check for half a billion dollars for bailout payback.
Who knows what went on at the meetings to discuss this brainstorm. Someone had to give their stamp of approval on this idea.
Ferguson is 70 and has managed to win titles and keep United competitive despite the hundreds of millions spent by rivals Chelsea and Manchester City. It's difficult to think of any other manager who would have achieved what Ferguson has given the players and money at his disposal.
When Ferguson retires, replacing him will be exceptionally difficult, because his success will cast a long shadow over the club. When United's previous great manger, Matt Busby, retired in the 1969, his successors weren't able to cope with his legacy and the club were relegated from the top division in 1974. They didn't win another league title for 26 years.
I'm not suggesting that anything as catastrophic as relegation will happen to United when Ferguson goes, but their ability to compete for the Premier League title would be in doubt, and there would even be a serious risk that they would miss out on playing in the exceptionally lucrative European Champions League. If that were to occur, revenues would plummet and the top players would think of leaving.
My only disclosure is that I'm a fan of United's Premier League rivals Tottenham Hotspur.
Tottenham signed Under Armour for their uniform sponsor. A wise move by both sides, in my opinion.
Any word if Mr. Ferguson gets to choose a GM of his choice?
Have a great day and thanks for bringing WSB each morning.
Disclosure: My son has been wearing ManU jerseys for years. A soccer player with a football (US) coaching father! Makes for interesting debates.
The banks are still whistling past the graveyard.
We can fine the s#!t out of them today and then bail them out again tomorrow, if that's what you like.
Jail time for the felons, and effective oversight of the straight shooters that are left is about the only way forward, as well as straitforward tax and accounting rules for the profits and compensation packages.
Here is a clear demonstration of the desperation and utter unscrupulousness, indeed rampant criminality, of eBafia ...
“Shill Bidding Fraud on eBay: Case Study #5”
http://bit.ly/N1nTlc
eBay / PayPal / Donahoe: Dead Men Walking