Silgan’s Price on our Buy List page
Posted by Eddy Elfenbein on August 2nd, 2022 at 10:39 am

Shares of Silgan Holdings recently started trading on the NYSE. For some reason, the Google Finance quote isn’t working correctly on our Buy List page. This is usually taken care of in a few days.

Morning News: August 2, 2022
Posted by Eddy Elfenbein on August 2nd, 2022 at 7:07 am

UK Corporate Insolvencies Jump 81% to the Highest Since 2009

Analysis Deems Biden’s Climate and Tax Bill Fiscally Responsible

Is the US Economy in Recession? Here Are Eight Offbeat Indicators to Watch

The Crypto Market Crashed. They’re Still Buying Bitcoin.

Crypto Firm Nomad Loses Nearly $200 Million in Bridge Hack

They Quit Goldman’s Star Trading Team, Then the Bank Raised Alarms

Demand for Workers Eased in June, Economists Estimate

Snack, Deodorant Makers Target Cost-Conscious Shoppers With New Brands and Sizes

BP Is the Latest Oil Giant to Report a Huge Quarterly Profit

Uber Turns Cash Flow Positive For The First Time, Shares Surge

TD Bank Nears Deal to Buy Cowen

Stephen King Is Set to Testify for the Government in Books Merger Trial

Wells Fargo Revives Policy That Led to Fake Job Interviews, With Tweaks

Amazon Wants Its NFL Coverage to Come in Different Flavors

Amgen Fights IRS Over $10.7 Billion Tax Bill

Ben & Jerry’s, Unilever Fail to Resolve Israeli Dispute

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AFLAC Earned $1.46 per Share for Q2
Posted by Eddy Elfenbein on August 1st, 2022 at 4:36 pm

Good news from AFLAC (AFL). After the close, the duck stock reported operating earnings of $1.46 per share for Q2. That’s an 8.2% decrease from last year’s Q2. Wall Street had been expecting $1.28 per share. The exchange rate pinged AFLAC for nine cents per share.

Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: “The company generated solid earnings for the first six months, supported in part by the continuation of low benefit ratios associated with pandemic conditions and better-than-expected returns from alternative investments, despite the weakening yen. We continue to remain cautiously optimistic as our efforts focus on growth and efficiency initiatives amid this evolving pandemic backdrop.

“Looking at our operations in Japan, persistency remained strong in the second quarter, but sales were constrained as we continued to operate in evolving pandemic conditions. This impacted our ability to meet face-to-face with customers, which continues to be key to a recovery in sales. Within this context, we continue to expect stronger sales in the second half of the year assuming that those conditions subside, productivity continues to improve at Japan Post, and we execute on our product introduction and refreshment plans.

“In the U.S., I am pleased with the continued momentum in our core voluntary business and contribution from newly acquired growth platforms of dental, vision, and group benefits. We continue to work toward reinforcing our position and generating stronger sales for the year, while we keep an eye on potential headwinds.

“As always, we are committed to prudent liquidity and capital management. We continue to generate strong investment results while remaining in a defensive position as we monitor evolving economic conditions. In addition, we have taken proactive steps in recent years to defend cash flow and deployable capital against a weakening yen. We treasure our 39-year track record of dividend growth and remain committed to extending it, supported by the strength of our capital and cash flows. At the same time, we remain in the market repurchasing shares with a tactical approach, focused on integrating the growth investments we have made in our platform. By doing so, we look to emerge from this period in a continued position of strength and leadership.”

The shares are up about 4% in after-hours trading.

ISM Index Falls to Two-Year Low
Posted by Eddy Elfenbein on August 1st, 2022 at 11:07 am

The stock market is up a bit as I write this. Growth stocks are leading value but not by much. The only group that’s an outlier is energy, with many energy stocks down over 2.5%.

Since today is the first day of the month, this is when the ISM Manufacturing Index is released. For June, the ISM fell to 52.8. That’s the lowest reading in two years. However, any number above 50 means that the factory sector of the economy is expanding. This morning’s report was a little better than expectations of 52.0.

July turned out to be the best month for the S&P 500 since 2020. For the month, the index gained 9.1%. On Friday, the S&P 500 closed 12.6% above its closing low from June 16. This makes it the largest rally in this bear market. The previous record holder was an 11.05% gain from March 8 to March 29. The S&P 500 still needs to gain another 16% to make a new high.

On our Buy List, AFLAC (AFL) is due to report after today’s close. Wall Street expects earnings of $1.28 per share. The duck stock hasn’t missed earnings in more than five years.

You’ll have to forgive me for the unpardonable sin of not mentioning Hershey’s (HSY) dividend increase from last Thursday. This is especially bad on my part because I told you it was coming soon. The quarterly dividend was increased by 15% to $1.036 per share. This makes the annual rate $4.142. This is the company’s 13th consecutive annual dividend increase.

Two of our Buy List stocks came together today as Silgan Holdings (SLGN) started trading on the NYSE. The exchange is owned by Intercontinental Exchange (ICE). Nearly 300 companies have switched their listings to the NYSE since 2000.

Morning News: August 1, 2022
Posted by Eddy Elfenbein on August 1st, 2022 at 7:09 am

Global Firms Halt Over $250 Billion in Financing Plans This Year

Gold Investors Face Bind Over Bars from Tarnished Russia

China’s Stumbling Manufacturing, Property Sectors Show Long Road to Recovery

Germany Has Three Months to Save Itself From a Winter Gas Crisis

U.S. Eyes Sanctions Against Global Network It Believes Is Shipping Iranian Oil

War, Climate Change, Energy Costs: How the Wheat Market Has Been Upended

Consumers Have Powered Through the Pandemic and Inflation—Until Now

The Disastrous Record of Celebrity Crypto Endorsements

The U.S. Is Investing Big in Chips. So Is the Rest of the World.

Silicon Valley Lurches Between Deep Cuts and Bold Spending

How JetBlue Prevailed in Fight With Frontier for Spirit Airlines

Retail’s ‘Dark Side’: As Inventory Piles Up, Liquidation Warehouses Are Busy

Spotify Thrived Where Facebook, Snap and Roku All Slipped

Will the Biggest Publisher in the United States Get Even Bigger?

HSBC Hangs Up on Ping An Break-Up Call, Lifts Payout and Profit Goal

From Profits to Pay, JPMorgan’s Gold Secrets Spill Out in Court

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Jobs Growth and Recessions
Posted by Eddy Elfenbein on July 31st, 2022 at 4:23 pm

Here’s something I wanted to look at in more depth and found that there’s really not much there. Unfortunately, this happens a lot with research. Despite the results, I thought I’d share it with you.

I wanted to see how well jobs growth aligned with official recessions. The answer is “kind of, but not really that well.”

I took the last 1,000 months of nonfarm payroll data. I then sorted the data into 10 buckets of 100 months each based on monthly jobs gain.

To make the jobs data easier to read, I changed it from a percentage gain to an actual result that’s based off the current jobs number (151,980 jobs). That way, it will line up with this Friday’s jobs report.

For example, I found that there were 100 months in which the economy added 775,000 or more jobs. Just one of those months was an official recession.

At the other end, there were 100 months when the economy shed 275,000 or more jobs. Of those, 72 were in an official recession.

Here’s what the data looks like. The “From” and “To” columns are the boundaries of the 10 buckets. The jobs numbers are in thousands.

Not surprisingly, actual jobs gains and losses appears to be an inflection point for recession calls.

For example, there were 224 months when the economy lost jobs, or jobs growth was flat. Exactly half of those months came during official recessions.

There were 776 months when the economy added jobs. Just 20 of those months (less than 3%) came during official recessions.

Part of the problem is that jobs tend to be a lagging indicator. For example, here’s jobs growth during the Great Recession. Notice how jobs growth was still negative several months after the recession ended (the gray areas).

The recession in the early 2000s is an especially good example. The official recession was only eight months long, but the jobs market was weak for a long time afterward.

You may recall that the phrase “jobs-less recovery” was very popular at the time.

If this Friday’s NFP report is positive, then it’s historically unusual for this to be a recession. For now.

PCE Price Index Jumps to 40-Year High
Posted by Eddy Elfenbein on July 29th, 2022 at 12:37 pm

As is often pointed out, the Federal Reserve prefers to follow the Personal Consumption Expenditures price index for its inflation figure rather than the Consumer Price Index.

Today we learned that the PCE price index increased by 6.76% in the 12 months ending in June. That’s the steepest increase in 40 years.

The CPI and PCE had been showing a divergence. The PCE increases had peaked in March. That is, until we got today’s report for June.

The core PCE price index is up 4.79% over the last year. That’s still below its peak of 5.31% which is hit in February.

In single-month terms, PCE was up 0.95% in June while the core rate was up 0.59%.

Morning News: July 29, 2022
Posted by Eddy Elfenbein on July 29th, 2022 at 7:02 am

Euro-Zone Inflation Hits Record, Backing Calls for Larger Hikes

U.S. GDP Fell at 0.9% Annual Rate in Second Quarter; Recession Fears Loom Over Economy

How Goes the War on Inflation?

Manchin-Schumer Deal Would Have Moderate Inflation-Fighting Effect, Economists Say

US Banks Passed the Latest Stress Test, But Are Still Unhappy

Exxon Profit Soars to All-Time High as Energy Markets Convulse

How Spirit Airlines CEO Christie Did His JetBlue Deal U-turn

Big Tech Is Proving Resilient as the Economy Cools

Apple Profit Drops 11%, but iPhone Escapes Economic Slump

Amazon Posts Net Loss for the Second Straight Quarter as It Manages Slower Demand

Mark Zuckerberg’s Bid to Reinvent Facebook Parent Meta Hits Early Snags

Which Intel CEO Is to Blame for the Current Woes? Or Is It Actually AMD’s CEO?

Sony Trims Profit Forecast after Games Business Falters

Jack Ma Escapes Beijing’s Crosshairs by Giving Up His Power

Diageo Boosted by Drinkers’ Growing Thirst for High-End Spirits

The Crypto Collapse Has Flooded the Market With Rolex and Patek

The Country That Wants to ‘Be Average’ vs. Jeff Bezos and His $500 Million Yacht

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Morning News: July 28, 2022
Posted by Eddy Elfenbein on July 28th, 2022 at 7:06 am

They Flocked to China for Boom Times. Now They’re Thinking Twice.

Semiconductor Subsidies, Tariffs Are the Price of Reducing Dependence on China

Jack Ma Plans to Cede Control of Ant Group

Climate Change Is Probably a Drag on Growth, but It’s Unclear How Much

The Strong Dollar Is Wreaking Havoc Globally — And It’s Just Getting Started

Fed Fights Inflation With Another Big Rate Increase

Fed Watchers Say Markets Got It All Wrong on Powell ‘Pivot’

Inventory Swing Is a Key Culprit Behind U.S. Recession Talk

JetBlue Agrees to Buy Spirit Airlines for $3.8 Billion

Boeing Profit Falls as Executives Point to Turnaround

F.T.C. Sues to Block Meta’s Virtual Reality Deal as It Confronts Big Tech

Facebook Parent Meta Platforms Reports First Ever Revenue Drop

Shell Smashes Record Again With $11.5 Billion Profit

Ford CEO Farley Says Automaker ‘Absolutely Has Too Many People’

Ford Wants Cops to Go Electric By Buying Its New F-150 Pickup Truck

Comcast Fails to Add Broadband Subscribers for First Time Ever as Economy Slows

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Morning News: July 27, 2022
Posted by Eddy Elfenbein on July 27th, 2022 at 7:06 am

U.S., Europe Dig In for Long Economic Standoff With Russia

US Risks Losing Billions in Taxes as Congress Spurns Global Deal

A $9.4 Trillion Results Day Looms in a Test for Stock Market

Inflation Is High. How Will Rate Increases Fix That?

How Bacon and Costco Fish Shape America’s View of Inflation

Biden Insists There’s No Recession as He Confronts Latest Economic Risk

What Is Stagflation? What to Know About the Combination of High Inflation and Stagnating Economic Growth

After Fed Raises Interest Rates Wednesday, Investors to Look for Clues About What’s Next

Cathie Wood Dumps Coinbase Shares for First Time This Year

Don’t Expect Big Consumer Brands to Lower Prices Soon

Homebuilders Are Boosting Incentives as They Suddenly Struggle to Sell Homes

‘Operating With Increased Intensity’: Zuckerberg Leads Meta Into Next Phase

General Motors’ Income Tumbles 40% on China Loss, Parts Shortages

Everybody Into the Hotel Pool! That’ll Be $200.

This Fast-Food Restaurant’s Founder Bought a Lottery Ticket for the $810 Million Mega Millions Jackpot for All 50,000 of His Employees

Unilever Boss Tells Ben & Jerry’s to Stay Out of Geopolitics After Israel Flap

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