Wall Street Breakfast: Must-Know News
- UK home prices plunge. Home prices in the UK fell 2.5% from February to March, their biggest drop in 15 years. Meanwhile former Fed Chairman Alan Greenspan thinks U.S. home prices will hit bottom by year end at latest, after which asset markets will begin to heal.
- Greenspan: Don't sweat inflation. Former Fed Chairman Alan Greenspan thinks inflationary fears are unwarranted, at least for now. "It's difficult to imagine any major breakout of inflation as economic slack continues to increase," he said. "What we will see is gradually rising inflationary pressures that will probably be subdued during the current period of slack, but that will surely reemerge when economies pick up."
- AMD warns, chips away at staff. AMD (AMD) is reducing its workforce by 10%. It now sees a 15% Q/Q drop in revenue to $1.5B, worse than a previous forecast of a 7% sequential drop; analysts had expected $1.6B. Analysts were surprised by the layoffs, which suggest AMD foresees weakness to continue well beyond the first quarter. Shares fell almost 3% AH.
- Alcoa misses, market forgives. Alcoa (AA) kicked off Q1 earnings season, reporting Q1 EPS $0.44, short of the $0.49 analysts expected. Revenue of $7.38B was higher than the consensus estimate of $7.18B. Shares fell just 0.6% in AH trading; analysts noted earnings were difficult to estimate due to substantial currency fluctuations, and said the quarter was otherwise solid. COO Klaus Kleinfeld, CEO Alain Belda's heir apparent, was upbeat. "I see a lot of earnings power going forward."
- WaMu finalizing $7B injection plan. Sources say TPG is hammering out the final details of an estimated $7B cash injection (yesterday it was $5B) that will allow WaMu (WM) to meet all its capital requirements amid deep subprime losses, but would obviously further dilute current shareholders' stakes.
- Icahn, Motorola join hands. Activist investor Carl Icahn finally came to terms with Motorola (MOT), the subject of much recent Icahn vitriol. In exchange for two seats on the board (he had wanted four), Icahn agreed to drop his lawsuits against the company (Icahn was trying to expose mismanagement) and sign a confidentiality pact. Icahn says the victory will give shareholders (well one, at least) "strong input into board decisions affecting the future of the company." One hopes putting the issue to rest will allow Motorola to regain some much-needed focus.
- E-commerce growth slows. Online spending will grow 17% in 2008 to $204B, Forrester says, down from 21% in 2007. The question: Is the sequential drop a result of broad consumer caution; a weakening appetite for online shopping; or just the natural consequence of a maturing industry. Retailers say they're likely to cut back on shipping incentives and focus instead on advertising on social-networking sites. Forrester's Sucharita Mulpuru is unimpressed: "It's great for brand-building and for buzz, but it's still unproven how social networking drives direct revenue."
- Status quo. Morgan Stanley (MS) CEO John Mack and his board will be re-elected today, sources say, despite a weak Q4 on the back of some bad bets. "Investors are looking to his experience," on analyst said. In light of how the markets devoured relative newbie Alan Schwartz (BSC), that might not be a bad idea.
- McClatchy-owned Seattle Times to lay off 200. Changes (MNI) include closing suburban news bureaus and local editions. The company did not rule out further cuts. "We have no choice but to bring our expenditures in line with our revenues," a spokeswoman said. Meanwhile, Washington Post (WPO) won six Pulitzers (that'll make Buffett (BRK.A) happy), NY Times (NYT) won two; Chicago Tribune won one, as did IBD.
- Pump pullback. Guy Caruso, head of the federal Energy Information Administration, says gasoline demand will fall this summer for the first time in more than 15 years amid record-high prices at the pump. He doesn't think prices will hit $4/gallon, but revised his peak price forecast above $3.60. He also called for OPEC to pump more oil.
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This article has 16 comments:
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BJS
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5 Comments
Apr 08 08:49 AM-
BJS
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5 Comments
Apr 08 08:50 AM-
Jason98758
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4 Comments
Apr 08 09:17 AM-
codewiz51
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4 Comments
My Website
Apr 08 09:40 AMGuess what? I paid $3.80 for a gallon of milk in Oklahoma. I guess Mr. Greenspan considers the price of milk a cost of keeping Wall Street salaries justifiably high?
Maybe we consumers should just shun consumption and start buying worthless derivatives to pump up the market and help out the poor ol' investment bankers?
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texaswiz says
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3 Comments
Apr 08 10:11 AM-
texasgolfer
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63 Comments
Apr 08 10:29 AM-
bjlchem
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2 Comments
Apr 08 11:21 AM-
David Barsan
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23 Comments
Apr 08 11:44 AM-
pockyclips 2020
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154 Comments
Apr 08 11:49 AMWe should expect to pay $4.00/gal this summer.
And that assumes W keeps his hands off Iran, and the Chinese don't
do anything foolish during the Olympics, like take advantage of the West's weakness and go for Taiwan or Indonesia.
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billddrummer
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551 Comments
Apr 08 12:25 PMAs far as other inflation is concerned, just don't buy food and energy. After all, the government doesn't count them in the 'core numbers anyway.
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NCP
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2 Comments
My Website
Apr 08 05:56 PM-
NCP
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2 Comments
My Website
Apr 08 05:57 PM-
theoilyboy
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16 Comments
Apr 08 08:49 PMPeople whining while drive hummers and wishing oil prices go back to $20 bbls.
People buying bottled water for $5 and $4 cups of coffee.
People shut off drilling in areas based on 1970's era technology for environmental protection.
People arguing out one side of their mouth about free markets, yet wanting windfall taxes on petro companies and gov't intervention in oil markets.
Give it a rest. Accept that your choices have consequences.
Walk or Ride a Bike.
But please just stop whining.
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cora
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3 Comments
My Website
Apr 09 02:40 AM-
Zeon
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23 Comments
Apr 09 08:17 AMOn Apr 08 11:21 AM bjlchem wrote:
> As long as hummers and SUV's outnumber small cars on our roads gas
> prices will go higher. Car pooling just needs to increase. Gas is
> still way too cheap and wasted - look at those long lines at the
> drive through.
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lightbulb
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1 Comment
Apr 09 09:21 AM