U.S. Employers Report No Change in Hiring Plans, Manpower Says (Bloomberg)
If you think back to the bursting of the last bubble, one of the last measures to deteriorate was hiring. Numbers remained solid deep into 2001, even as other measures of the economy we're clearly registering trouble. So, as things start to get wobbly, it doesn't mean much that according to the Manpower survey, employers aren't intending any major hiring changes. The hiring intentions gauge, which subtracts the percentage of firms looking to reduce headcount from those looking to increase it, stands at 21%, a few points above the 10-year average.
Penny stock buyer winds up CEO (Toronto Star) (Via CrossingWallStreet)
Here's a feel-good story for you -- back in 2000, a penny stock investor plunked down a wad on a small communications equipment company. Like most penny stocks, the company raised money via massive dilution, yet the guy kept buying (probably not the brightest thing in most circumstances) eventually building up $200,000 in equity. Eventually, he got a call from the main owner, who must've been curious about what kind of anonymous person would seed a company with $200,000. After some negotiation, the pair formed their own software company (oh yeah, the original went out of business), and the share buyer got to be CEO, despite having no experience. What makes this story great is that the owner, the one who contacted the buyer, was involved with another company doing fuel cells. If you'll recall, a few years ago, the pink sheets were downright lousy with these odd fuel cell plays (don't ask us how we know), and for a while they were the market darlings. All in all, a classic penny stock story, right down to the last details.
Wal-Mart's Luxury Problem (BusinessWeek)
It may take Wal-Mart a little bit to get this whole upscale thing -- or maybe not. You could argue that there's nothing more déclassé than selling counterfeit luxury items, which the company is accused of. LVMH claims that the company is selling a counterfeit Fendi handbag for $295, an item that should cost over $900. Thus, they conclude, it must be fake, a point that Wal-Mart will dispute (this should be easy to settle). So are such allegations poisonous to their attempt to lure upscale shoppers? Maybe, though given the plentitude of the cheap rich, or the not-quite-rich-but-want-to-appear-as-such, perhaps fakes are the best way to go. The throngs of American tourists who go to China (or Chinatown), and come back with Louis Vuitton bags certainly aren't poor. Perhaps Wal-Mart knows, too well, their demographic.
Disney Stock Dips on `Cars' Opening (LA Times)
Raise your hand if you're out there making investment decisions based on the box office strength of the movie 'Cars'. The whole concept of investing in movies is a tough one for investors to wrap their heads around. Hollywood economics is a bit unique in that one movie really means nothing. Even ten don't mean much. Now it's possible that Cars represents the end of the Pixar run, and that they've lost the magic. Or, its weakness could be due (more likely) to the fact that it was a two-hour long movie, with a bunch of, um, talking cars. Imagine this, if Disney had just released The Incredibles would it be a hit today? Probably. So the idea of worrying about this movie, and judging the health of the Disney company on one weekend's box seems a tad absurd.
Federal Deficit Shows Improvement (AP)
Oh yeah, big improvement here -- two-thirds through the fiscal year, the federal deficit stands at a mere $227bn, down from $272.3 a drop of 16%. The total is likely to be around $319, which would be the third worst of all time. The media does a nice job of being complicit in the federal fiscal disarray. If, say, next year, revenues weaken and the deficit spikes once again, how about trotting out statistics showing that the deficit is getting better and better as a 'percentage of the national debt'. People will love that one.
Arcelor's rebel investors threaten to sabotage takeover defences (The Guardian)
Apparently, Arcelor shareholders have had enough of the board's deep-seated contempt for its own shareholders and the process of making money in general. Institutions in France claim the Severstal merger is a total red herring, and they're taking their complaints to the board. The company hopes to quell shareholder criticism at the upcoming meeting by increasing the size of the buybacks (always a rubbish tactic), though the company will need shareholders on board for such a plan.
Oil Prices Continue Decline in Asia (AP)
So you take a few days off from tracking the price of oil, and then you see a headline like this, trumpeting its continued decline. What do you think it's at? 68, 67 even? Nah, just cracked below 70 again. And that decline was only prompted by news that Hurricane Alberto isn't seen as hitting any oil infrastructure. If all of the predictions about hurricanes prove true this year, it's going to be really annoying from an energy perspective. We already have the daily dispatch out of Iran, now we have to follow hurricanes on a minute-by-minute basis too, just to see whether they can dance around the minefields of the nations energy assets. Gulf of Mexico? Cleared. Louisiana refineries? Cleared. Good. Sell. As we've mentioned, nobody can accuse the oil markets of being focused on the long term these days.
Nasdaq to buy press release provider PrimeZone (CNN Money)
This seems like a surprising deal. The NASDAQ has purchased PrimeZone media network, a distributor of press releases. The exchange looks to expand in the area of multi-media investor relations services. For what it's worth, PrimeZone always felt to us like the AMEX of press release houses. You always sort of get a sinking feeling when you realize that your company puts out its PR over PrimeZone, as opposed to the more stately BusinessWire (recently acquired by Berkshire Hathaway). Not that this should matter, it seems like something of a commoditized business these days. Still, interesting to see the NASDAQ looking to diversify.
Rove Won't be Charged In CIA Investigation (WSJ)
Why is this news down here? Well just imagine for a moment that Dealbreaker were bought by Rupert Murdoch and made the official site of a forthcoming Fox Business channel (we can hope). If that were to happen, this would be really big news. They'd probably get Jonathan Hoenig and that old guy from Forbes to come in and discuss exactly what this means for the stock market, why it will rally on this news, and why the recent weakness is driven by low poll numbers for President Bush, not the other way around. So in that alternate world, this is big business news -- get on the phone and buy.