DirecTV Jumps 6%

Here are a few quick hits this morning.

The Dow is currently down 44 points, so we may have trouble keeping the streak going.

DirecTV ($DTV) is up strongly this morning, about 6%, after the company said it won’t bid for Vivendi’s Brazilian division GVT. I think they dodged a bullet. The stock is at a new 52-week high.

More good economic news today. The Federal Reserve reported that industrial production rose by 0.7% last month. Economists were expecting an increase of 0.4%. Industrial production is one of four keys to follow to see if we’re in a recession (see how well it aligns with the grey recession bars below). The other three are non-farm payrolls (which we got last Friday), real personal income excluding transfer payments and real manufacturing and trade sales.

The Labor Department said that inflation rose 0.7% last month, but that was largely due to higher gasoline prices. That’s the biggest rise in more than three years. However, the core rate, which excludes food and energy, rose by just 0.2%.

Once again, health care inflation came in below core inflation. Core inflation rose by an annualized rate of 2.11% in February while medical inflation was up just 1.85%. That may not sound like a big deal, but consider that medical costs have risen about 2% faster than core inflation, pretty consistently, for more than 40 years. For the last six months, they have behaved very much the same.

Here’s the medical prices sub-index of the CPI divided by core inflation. The ratio looks like it a hit a brick wall a few months ago, though I’m cautious because it’s a very short time span.

Posted by Eddy Elfenbein on March 15th, 2013 at 10:42 am

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