Month: March 2012

We have mixed news on economic data today. New orders of durable goods decreased 4% MoM in January after seasonal adjustment, lower than the 3.2% increase in December and lower than market consensus of -1%. New orders of core durable goods, excluding transportation, dipped 3.2% MoM in January. Decreases were seen in primary metals, down 6.7% MoM; and machinery, down 10.4% MoM. Non-defense capital goods new orders, excluding aircraft, were down 4.5% MoM, also lower than 3.4% in December. This has been the steepest declined since 2009 and the reason behind it is the tax break that allows expensing full purchasing amount of the business equipments expired. On the positive side, consumer confidence rose to 70.8 in February from revised 61.5 in January, beating market consensus of 63. That’s the highest it has been in the past 12 month. The recent rally in the stock market and drop in unemployment gave American household more reasons to spend.

Lowe’s (LOW) was upgraded by Morgan Stanley (MS) to equal weight from underweight, as the firm expects higher earnings in the coming quarters, as well as share buybacks to occur. Shares are trading higher by four tenths of a percent.

The past week in monetary policy saw interest rate decisions announced by 6 central banks, with those changing rates including: Tajikistan -80bps to 9.00%, Philippines -25bps to 4.00%, and Uganda -100bps to 21.00%.  Those that held monetary policy rates unchanged were: Israel at 2.50%, Angola at 10.25%, and Hungary at 7.00%.  The European Central Bank also completed its second LTRO, with 529.5 billion Euros allotted to 800 banks.

Looking at the central bank calendar, the week ahead features several key central bank meetings; within developed markets there’s the ECB, BoE, RBNZ, RBA, and BOC, while in emerging markets there’s Poland, Brazil, Indonesia, Peru, and Malaysia. The most important meetings will likely be the European Central Bank, though they may continue to hold current policy settings; and the Banco Central do Brasil, which is likely to cut rates again. The developed market banks will likely hold, while there may be further cuts in emerging markets.

Apple hits the highest market cap in the world today with news on the iPad 3 announcement.

The Federal Reserve does not expect QE3 right now, at least not until late 2014.

The Bank of Uganda dropped its new monetary policy interest rate (the central bank rate [CBR]) another 100 basis points to 21.00% from 22.00% previously.  The rediscount rate and Bank rate were also reduced by 100 basis points to 25% and 26% respectively.  Bank of Uganda Governor, Emmanuel Tumusiime-Mutebile, said: “Looking ahead, BoU will continue to conduct prudent monetary policy to bring inflation close to 5 percent over the medium term and also ensure a firm anchoring of the inflation expectations in line with the BoU’s aim of maintaining price stability”

The Ugandan central bank also cut the rate 100 basis points in February, and last increased its interest rate by 300 basis points in November, and 400bps to 20% in October, after hiking 200bps in September, and 100bps at its August meeting, and previously setting the new central bank rate at 13.00% at its June meeting.  The Bank only recently began using the 7-day interbank rate to influence inflation, also commencing official targeting inflation; the Bank previously announced an inflation target of 7%, and noted it has a 5% core inflation target in its September press release.  

Uganda reported annual headline inflation of 27% in December, down from 29% in November, and 30.5% in October, compared to previous readings of 28.3% in September, 21.4% in August, 18.8% in July, 18.7% in June, 16% in May, and 14.1% in April, while core inflation was 29% in December.  Uganda reported annual GDP growth of 6.3% in the fiscal year to June, compared to 5.5% in the same period last year.  

The Ugandan shilling (UGX) is flat against the US dollar over the past year; while the USDUGX exchange rate last traded around 2,466, off from the highest (2,885) on record (against a low of 1570 in 2008).

Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.

Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.

In trading on Friday, advertising shares were relative leaders, up on the day by about 1.2%. Leading the group were shares of Focus Media Holding Limited (FMCN), up about 8.6% and shares of MDC Partners (MDCA) up about 4.2% on the day.

This is what’s in the news for Thursday March 1, 2012. The Wall Street Journal reports Royal Bank of Scotland Group (NYSE:RBS) is close to announcing a preliminary agreement on the sale of its Asian assets to Malaysia’s CIMB Group Holdings. The Wall Street Journal also reports Bank of America Corp. (NYSE:BAC) is moving towards changes requiring many users of basic checking accounts to pay a monthly fee unless they agree to bank online, buy more products or maintain a certain balance. Reuters reports Ford Motor (NYSE:F) CFO Lewis Booth said the automaker may lose up to $600M in Europe this year as the ongoing debt crisis affects overall sales there. Bloomberg reports U.S. homes in or close to foreclosure made up about 25% of residential purchases in the last three months of 2011 as lenders approved more short sales, where the price is less than the amount owed, according to RealtyTrac. Finally Bloomberg also reports ARM Holdings (NASDAQ:ARMH) chip designs are used in most smartphones and now the company will power the networks that run them as it increases competition with Intel (NASDAQ:INTC) in the $9B market.