Tag - De

China's economy is still on a roll. Maybe not at the breakneck speed of the past decade, but the economy is still growing at a comfortable 9-plus percent.

The China Academy of Social Sciences most recent GDP forecast calls for 2010 economic expansion to finish 2010 at a 9.9 percent rate, with similar growth in 2011. The government think-tank predicts greater stability in China and little change in the government’s macroeconomic policies. The World Bank has projected China’s economy will grow 9.5% this year and slow to 8.5% next year.

You've probably heard the quote from the great entrepreneur Henry Ford who once commented, "People can have the model-T in any color, so long as it's black".

 

The man's unique ability to combine innovation with simplicity is symbolic of the great entrepreneurial spirit that helped America become the world's leading superpower. Unfortunately, in modern America, the U.S. automobile industry has faltered and once great companies like Ford (NYSE:F) and General Motors have fallen from grace.

 

Ford also once said, "Nothing is particularly hard if you divide it into small jobs." That's the mentality that is needed right now for U.S. auto companies and parts suppliers if they are going to succeed in the 21^st century.

Small-cap stocks remained in an upward holding pattern ahead of Thursday’s Thanksgiving Day holiday in the United States, with the Russell 2000 (NYSE:IWM) notching four consecutive higher closes for just the second time since the Memorial Day holiday back in late May. Technology shares, energy stocks and telecoms helped power the rise today. In addition, investors continue to applaud President-elect Obama’s choices for his economic team, this time giving a thumbs up for his choice of chief for his economic advisory board – former Federal Reserve Chairman Paul Volcker. The Russell 2000 closed up 25.68, or 5.79%, at 468.86 and is now down 39% for 2008. The Dow trailed gains in small caps, gaining just 2.91% Wednesday, but is still beating small caps for the year, with a loss of 34%. The S&P 500 was up 3.53% Wednesday and is down 40% for the year.

The higher close today flew in the face of a bevy of dreary economic data, highlighted by a durable goods report that showed orders fell off 6.2%, the largest drop in more than two years. Durables can be a volatile data series, and is sometimes written off when a big swing in aircraft orders skews the numbers. But this time around, the drop in orders was broad-based and shipments were down as well, not a good sign for the manufacturing sector of the U.S. economy. Speaking of manufacturing, a report on Midwest manufacturing – the Chicago Purchasing Manager’s Survey – came in at 33.8, which wasn’t just well off the forecast of 38.0, but was also the lowest reading in 26 years. Elsewhere on the data front, the weekly unemployment claims met projections, but was still dreadfully close to last week’s 26-year highs on continuing claims. New home sales tumbled 5.3% to the lowest level since January 1991. And oh yeah, just to emphasize a worrisome picture into the holiday season, consumer sentiment as measured by the Michigan sentiment survey tumbled to 55.3, below . . .

Small-cap stocks took a dive on the opening as the optimism that drove a sterling three-day rally abated amid a backlash from sobering economic data and a fresh batch of downbeat corporate forecasts. However, tech stocks were surprisingly firm today, which helped the overall market bounce off the morning lows. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.44, or 0.78%, at 439.74.

Market watchers were hip deep in data overload this morning as various government and private offices release reports early ahead of the Thanksgiving Day holiday in the United States. Amid this smorgasbord of information, the headliner appeared to be durable goods report, which showed a jolting decline of 6.2%, the largest drop in more than two years and well beyond the consensus forecast for a drop of 2.7%. The durables data base can be a little volatile, especially with huge orders for aircraft involved, but in this report orders for almost every category were down, and orders for non-defense capital goods excluding aircraft were off 4%. Shipments of finished goods were also down, which is a troubling sign for U.S. manufacturers and their likely hiring plans.

Another gloomy report on manufacturing came from today’s Chicago Purchasing Manager’s Survey, which was at 33.8, well below the 38 forecast and at the lowest point in 26 years. Meanwhile, new home sales were at an annualized rate of 433,000 units, down from the forecast of 440,000. The Michigan sentiment survey came in at 55.3, which was below the projection of 57.9 and at the lowest point since 1980.

Speaking of hiring (or the lack thereof), the weekly claims report came in at 529,000, which was in line with the forecast of 530,000. Even though the number of people filing for unemployment insurance fell 14,000 from last week, it should be noted . . .

The Russell 2000 has slipped to its lows on the session midday, as a weak July retail sales report and a rebound in crude oil prices have kept small caps submerged in the red.

At 12:35 p.m. ET, the Russell 2000 (NYSE:IWM) had skidded 6.87, or 0.92%, at 738.07, while the Dow slumped 165.2, or 1.42%, to 11,477.27.

The Census Bureau reported this morning that retail sales dropped 0.1% in July, down from June’s 0.1% uptick and the weakest in five months. Weak auto sales were the main culprit that dragged down sales, as a soft economy and sky high gas prices continued to take a toll on demand for cars. Sans autos, retail sales would have posted a 0.5% increase for July. However, even excluding auto sales, retail sales would have only been buoyed by consumption of gas on the part of higher prices, not higher demand. 

“This sales report marks only the beginning of the third quarter and though it is not looking very good for U.S. consumers, it wasn't quite as bad as expected,” BMO Capital Markets economist Jennifer Lee wrote in a note today. “But we could be seeing some final effects of the rebate checks here, and as they fade, real consumer spending likely fell for in Q3, the first in about 17 years.”

In other economic news, import prices soared 1.7%, which was above the forecast, and year-over-year prices were up 21.6%, the highest rate in 26 years.

The business inventory report came out at plus 0.7%, which was above the forecast for a rise of 0.4%. However, this data series is somewhat dated (June figures) and tends to have very little lasting impact on stock market traders.

Small-cap stocks edged lower in morning trading, pulled down by follow through jitters from Tuesday’s financial-tied slide and a firm tone in energy as a batch of morning economic data failed to impress investors. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.61, or 0.22%, at 743.33.

The market was already struggling ahead of the economic reports this morning, and there simply wasn’t any upside surprise on the retail sales or import price fronts to spark a recovery move. Still, the retail sales figure was in line with expectations, while the import price surge isn’t exactly a surprise. Import prices soared 1.7%, which was above the forecast, and year-over-year prices were up 21.6%, the highest rate in 26 years, stealing some of the thunder away from retail sales. The jump on inflation reflected in the import price report sparked a modest pullback in Treasury futures, which frown on rising prices that devalue fixed income investments.

The dollar was little changed after the duo of economic reports, but did start to strengthen against the euro into the U.S. stock market open after slipping to six-month highs during Tuesday’s session. The greenback remained soft against the yen, however, and has been in correction mode since leaping to seven-month highs just three sessions ago. The firmness in the yen is a little surprising given a slide in GDP overnight that stirred a 2.1% fall in Japanese equities. Elsewhere around the globe, stocks were trading in weak fashion, with Hong Kong shares off 1.6%, Australia down 2% and India down 0.7%.

At 10:00 a.m. ET, the business inventory report came out at plus 0.7%, which was above the forecast for a rise of 0.4%. This particular data series is somewhat dated (June figures) and tends to have very little lasting impact on stock market traders.

With the economic data now out of the way, stock market traders here in the United States will likely keep a close watch on financials and on crude oil as . . .

Small-cap stocks are expected to open lower, pressured by inflation jitters stirred by import price data and by ongoing concerns in the financial arena. It’s worth noting that stocks were already in the negative column overnight before this morning’s retail sales and import price reports were released, and they remained in the red when the data failed to generate any kind of upside surprises. The Russell 2000 (NYSE:IWM) was expected to open about 0.5% lower, which would suggest an open near 740.30.

The retail sales report headline figure came in at minus 0.1%, which was in line with the market consensus. The sales figure excluding autos was at plus 0.4%, which was slightly below the forecast for a rise of 0.5%. However, last month’s figure was revised upward to plus 0.3%, after being reported at plus 0.1%. The immediate response in stock market futures was muted, while the dollar was basically flat versus the euro and remained lower against the yen.

The retail sales report was released in tandem with the import price data, which was very strong, and which sparked a slide in Treasury futures. July import prices was up 1.7%, compared with the forecast for a rise of 1.0%, June prices were revised upward and the year-over-year rise in import prices was up a stunning 21.6% to the highest level in 26 years, fueled by soaring petroleum prices. Treasury prices typically recoil from a rise on inflation, which devalues fixed income investments.

Outside of the data, traders are expected to keep a close watch on the financial arena, as worries about debt write-downs took a toll on bank stocks Tuesday. Also, farm machinery maker Deere & Co. (NYSE:DE) reported soft sales and . . .

Small-cap shares are edging higher in midday trading, supported by a reversal rally that was triggered ahead of the opening by an inflation report suggesting that the economic slowdown is moderating inflation related to soaring food and energy prices. At 1:20 p.m. ET, the Russell 2000 (NYSE:IWM) was up 6.71, or 0.91%, at 743.56.

The consumer price index (CPI) headline figure came in at 0.2%, which was below the forecasted 0.3%. The “core” reading, which excludes food and energy costs, came in at 0.1%, also below the median forecast of 0.2%. The CPI report suggested inflation wasn’t out of control, which means the Federal Reserve can keep interest rates low in response to the sputtering economy.

“Headline consumer inflation rose moderately in April because a sharp rise in food prices was partially offset by no change in energy costs,” Steven Wood, chief economist with Insight Economics, said in an email. “Meanwhile, core consumer inflation rose only slightly with largely offsetting price accelerations and decelerations in the various expenditure categories. Although energy prices are expected to rise sharply over the next several months, weakening economic activity over the next several quarters should help cap the gains in core inflation. Although the Fed is currently on hold, at least temporarily, they have heaved a collective sigh of relief with the release of this data,” Wood said.

The market appeared to take away a perception of a hawkish tone from the array of Federal Reserve speakers that were out and about Tuesday, and the CPI . . .

Small-cap shares edged higher on the opening, supported by a reversal rally that was triggered ahead of the opening by a tame inflation report. At 9:53 a.m. ET, the Russell 2000 (NYSE:IWM) was up 3.24, or 0.44%, at 740.09.

The CPI (Consumer Price Index) headline figure came in at 0.2%, which was below the forecast of 0.3%. The “core” reading, which excludes food and energy costs, came in at 0.1%, also below the median forecast of 0.2%. The CPI report suggested inflation wasn’t raging out of control, which sparked a reversal in fortune for equities in the overnight session, and the buyers remained in place for the regular opening.

“Headline consumer inflation rose moderately in April because a sharp rise in food prices was partially offset by no change in energy costs,” Steven Wood, chief economist with Insight Economics, said in an email. “Meanwhile, core consumer inflation rose only slightly with largely offsetting price accelerations and decelerations in the various expenditure categories. Although energy prices are expected to rise sharply over the next several months, weakening economic activity over the next several quarters should help cap the gains in core inflation. Although the Fed is currently on hold, at least temporarily, they have heaved a collective sigh of relief with the release of this data,” Wood said.

The market appeared to take away a perception of a hawkish tone from the array of Federal Reserve speakers that were out and about Tuesday, and the CPI . . .

Small-cap shares are expected to open slightly higher, erasing mild overnight losses on the release of CPI data this morning, which came in relatively tame. S&P 500 futures jumped about six handles on the CPI report, moving from negative territory to positive. If the Russell 2000 (NYSE:IWM) matches the early climb in S&P 500 futures, then the Russell should open about 0.2% higher near 738.20.

The CPI headline figure came in at 0.2%, which was below the forecast for a gain of 0.3%. In addition, the ex-food and energy component was pegged at 0.1%, which was below the median projection for a gain of 0.2%.

In overnight trading, big caps on the move include Whole Foods Market Inc. (Nasdaq:WFMI), which tumbled nearly 10% when earnings failed to meet expectations. Deere & Co. (NYSE:DE) was off nearly 6% despite a 22% jump in quarterly profits. The world’s largest maker of tractors cautioned that rising raw material costs could crimp operations the rest of 2008, which sparked the pullback in shares . . .

In the movie “I, Robot,” most of the androids in the Will Smith flick are good, serving their human masters even to the detriment of their own safety. But one robot develops a sense of self-preservation that worries Smith’s character, a cop who doesn’t trust the technological wonder to do no harm.

At the company iRobot Corp. (Nasdaq: IRBT) (which takes its name from the same Isaac Asimov book), an army of automated autonomous robots serves the military selflessly, to the point of letting themselves be blown up in order to prevent improvised explosive devices (IEDs) from doing the same to U.S. soldiers in Iraq and Afghanistan.

It’s the domestic robots that are not serving shareholders so well. The better-known consumer division at the Massachusetts company, which produces the Roomba robotic vacuum series, currently accounts for about 60% of the company’s revenues. The Roomba is a disc-shaped vacuum-cleaner robot on wheels that can slip under sofas while cleaning the floor.

The Russell 2000 (NYSE: IWM) is leading a rally that includes the Dow Jones Industrial Average (INDU) as investors digest news of low July core inflation.

At 10:28 a.m. ET the Russell 2000 had added 8.39 points, or 1.10%, to 771.26. The Dow was up 60.32 points, or 0.46%, to 13,089.24.

The consumer price index added 0.1% in July, below the expected rise of 0.2%, the U.S. Labor Department reported before the opening bell. Overall prices increased 0.2% in June.

The core inflation index, which excludes the volatile costs of food and energy and is the U.S. Federal Reserve’s preferred measure of inflation, rose 0.1% in July, while economists were expecting an increase of 0.2%. Core prices added 0.25 in June.

On a year-to-date basis, overall consumer inflation is up 2.4%, while core inflation has increased 2.2%.

The data suggest that inflation is moderating but has not fallen low enough to justify cutting interest rates. The Fed has previously stated that it wants to see core prices stay in an annual range of between 1% and 2%.

Contributing positive news is agricultural equipment maker Deere & Co. (NYSE: DE), which reported that its third quarter profit increased 23% to $537.2 million, or $2.37 per share, for the third quarter ended July 31, compared with $436.0 million, or $1.85 per share. Analysts were expecting the Moline, Ill.-based company to announced earnings of $1.99 per share.

“Global farm conditions remain positive, driven by growing economic prosperity, relatively high commodity prices, and robust demand for renewable fuels,” Deere said statement before the start of trading.

The following are the most actively traded company's with market capitalizations under $500 million: