Opening Bell: 8.15.06

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U.S. Stock-Index Futures Rise on Lower Oil, Lebanon Cease-Fire (Bloomberg)
Now that a sustainable, lasting peace has been achieved in the Middle East, it's rally time for US markets (in theory). Yesterday started off with strong gains, but it pretty much fizzled out at the end of the day. It seems that the concept of a "peace dividend" has simply given way to a "peace sucker rally", which we'll still take. And while a few months ago, the words of Ahmadinejad were the guiding force to the market, now it's his proxy terrorist organization Hezbollah which sets the tone for trading each day. It sort of makes us sentimental for the heat wave, when (for a brief period) that seemed to be the most important issue facing the markets. And in case you haven't heard, Ahmadinejad has his own blog now. Ok, now that we've linked to it, we're really hoping for a reciprocal. Oh, Mahmoud you don't do link trading? Jerk.
Wal-Mart Reports First Profit Decline in More Than a Decade (Bloomberg)
You might think that Wal-Mart fared badly in the last quarter, or at least the worst it's done in over a decade. But it's not Wal-Mart that's messed up, it's the screwy way that writers write earnings stories. For some reason, the common method is to first talk about the earnings with the one-time event factored, and then to bury the meaningful results somewhere near the bottom. So Wal-Mart took an earnings hit on the sales of its German operations. Few people would actually identify this is as a meaningful profit decline. When you exclude that one-time event, there was no drop, and the string of growth is intact.
Is Bill Miller a Monkey (Infectious Greed)
Ah, Wall St. loves eat to its own, and a gossip blog is always in need for a good takedown, which is why we joined the Bill Miller pile-on yesterday, noting that he was likely to miss the S&P this year by a wide margin. But is this unfair? Paul Kedrosky does some simple stats that look at whether Bill Miller's run is just the product of luck (i.e. a monkey could have done it) or a product of skill. Admittedly, the odds look pretty steep that a run such as this could last 15 years could be based simply on luck -- .003% likelihood by Kedrosky's calculation. Fine, but what's his Sharpe ratio? Last year he barely beat the index, and he had a huge bet on Google.
Chinese Firm Drafts NBA's Shaq (WSJ)
Shaquille O'Neill has signed a deal with Chinese sportswear company Li Ning to promote a new sneaker to that market. More and more athletes are shilling for Chinese brands, which are trying to improve their image at home. It's yet more evidence of the Kessler theory of the trade deficit. Yes, the Chinese sell a lot of stuff, but it's all at very low margins, while the fat margins flow to the US. And yeah, being the endorser of shoes is a fat margin deal. Of course, the success of the deal may hinge on the Chinese forgetting what Shaq once said about their superstar Yao Ming. In case they forgot, here's a refresher. When asked about Ming, back in 2003, Shaq put it simple: ""Tell Yao Ming, 'ching-chong-yang-wah-ah-soh." If this sportswear brand has any sense of humor at all, they'll make "ching-chong-yang-wah-ah-soh", their version of Just Do It.


Immigrants Swell Numbers Near New York (NYT)
According to new numbers, 60% of the population of New York City is comprised of foreign born people and their children. Undoubtedly to some, this is striking evidence that America is not really America anymore. But they say that shoe who live in the presence of immigrants are much more tolerant of them, ,and don't get all worked up about 'em, the same way Congressmen from Colorado do. Indeed the New York example would beem to be a pretty good case in point. How many times have you heard people say "gee, I really wish New York were a bit too diverse" or "New York's great, but all those different ethnicities, who can stand 'em?" And our economy and wages are holding up pretty nicely as well.
Use a Google map, get store coupons (CNNMoney)
Google is pulling out all of the stops in a bid to shed its one-trick pony label. Last week it placed a link to its video site on its homepage, immediately doubling the traffic of that property. It's seen as a laggard to sites like YouTube, but the company believes it will be an important space for it to win. Now it wants to beef up its maps service, and take down sites like Yahoo and Mapquest. The company is offering a coupon service for local businesses that can be distributed and printed through maps. A lot of web companies have tried to tackle coupons, but none have really emerged dominant. Clipping up the weekend paper is still the preferred route for most people.
Appearance Isn’t Everything but It’s a Good Place to Start (NYT)
Here's a few things you probably didn't know about Court TV's general manager Mark Juris. When he travels, he has a second suitcase complete with a backup set of clothes sent to his hotel. He also carries at least one outfit on his carry on bag. He also once grabbed the wrong bag at JFK and took it home. When he realized he had made a mistake he called the owner and, "He was grateful for the call but insisted that I not dip into his supply of Ambien." And with that we'll ask, is Ambien the new Viagra? The new pill-turned-punchline? It appears to be. Now go figure out the cultural implications of that.
FDIC to Seek Public Feedback On Expanding Industrial Banks (WSJ)
Already so-called industrial banks, banks owned by primarily non-banking entities for the purpose of financing, exist and don't seem to have created many problems. Even the big box menace Target has one (oh wait, people like Target). But now that Wal-Mart and Home Depot want to get into the same game, there's an outcry, and the FDIC will seek further public input. So we can expect another round of warnings about how Wal-Mart could devastate local banks, and how it's not good for unions etc. Although the fact that Target has one, and people don't seem to mind, really makes it hard to believe that Wal-Mart would be denied one.
Inco May Open Talks With Vale on Hostile Takeover Bid (Bloomberg)
Though Inco's official stance is that shareholders should vote in favor of a planned buyout from PhelpsDodge, the company may be close to starting talks with Brazil's Cia. Vale do Rio Doce (or just simply "Vale"). In addition to these two, Teck Cominco still has its hat in the ring, so it's a three way deal. We'll keep up, but you can also cover the action at any of the excellent mining gossip blogs out there.

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