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Tonight’s Agenda • Competition • Earnings • China: hard or soft landing…
Competition • $10 to enter • $9.99 commission for trades • No Margin/ No Options • 5 min delay on trades • $1 minimum on stock share price • 50% diversification rule • 1% interest on cash
The Market Last Week • S&P up 1.14% on the week • Positive Earning Results • Mixed Economic Data
“There is still a dichotomy between robust earnings growth and global economic uncertainty”
Thu 20 Oct 11 | 01:17 PM ET Rockets to Planet Stability in Europe
AT&T • Wireless customers spent less than expected in the quarter • The No. 2 U.S. mobile provider added 319,000 subscribers in the quarter, compared with expectation of 406,000 • This could reflect people waiting for the new iPhone • wireless profit margin was better than expected
Meets Earnings Expectations but Shares Fall • beat expectations for revenue driven by: • Increased activity on the online marketplaces • Rising transactions through its PayPal payments network • Shares fall on restrained outlook for rest of year
Earnings top estimates aided by accounting • Debit Value Adjustment (DVA)-allowed the company to push credit spreads out • Core revenue in trading, banking and wealth management operations all fell • Gross exposure to Greece, Ireland, Italy, Spain and Portugal was $5.69 billion, while the bank's equity was about $60 billion.
Revenue rose across its: • Big energy • Aviation • Healthcare • Transportation arms. • Expects to increase operating earnings per share at a double-digit percentage rate next year General Electric
Macau Casinos Post Solid Earnings, Shares Fall on Outlook • Wynn Macau logged an 84 percent gain in third-quarter net profit • “Macau's thriving industry would suffer a blow in the event of a hard landing for China”
Miss stunned Wall Street • It was the first earnings miss for the company since 2004 • Sales were hurt by customers waiting for the new version of the iPhone. • Product performance • iPadsales more than doubled • Mac sales jumped 26 percent • iPod sales fell 27 percent
The shortfall underscores the growing importance to Apple for the iPhone, which accounted for 39 percent of revenue last quarter • Apple says that while iPhone sales fell off last quarter, the holiday quarter will be its best yet
Union Pacific Railroads The rails are generally a pure play on the U.S. economy
Earnings rose 16 percent as the railroad charged higher prices • The nation's largest railroad said it expects business to continue to grow despite an uncertain view of broader U.S. economy • Amount of cars and parts moved on its lines grew the most of any category
Reported a third-quarter profit, helped by accounting gains and asset sales • The bank's main businesses showed signs of weakness as lending profit fell and expenses rose • Mortgage unit lost $1.1 billion in the quarter, nearly triple the $392 million loss a year ago.
Halliburton: the world's second-largest oilfield services company
Halliburton profit tops views on gas drilling demand • Demand for shale energy continues to climb across the U.S. despite low natural gas prices • shale boom expected to last at least through 2012
Earnings Summary • Changes in earnings estimates may just be catching up to sentiment already priced into stocks. • Much of the third-quarter profit strength stems from still-strong international revenue growth • Prospects for corporate earnings are dimmer in the coming quarters, even though reports so far this quarter have been relatively bright
Freeport-McMoRan • Copper and Gold miner • Market Cap: $32 Billion • Hit 52 week low last Tuesday
Thu 20 Oct 11 | 05:40 PM ET Buy the Dip in Freeport?
Soft Landing A term used to describe a rate of economic growth high enough to avoid recession, but slow enough to avoid high inflation. When the economy is growing at a strong rate, the Fed will try to engineer a soft landing by raising interest rates enough to slow the economy down without putting it into recession. Alan Greenspan, the former chairman of the Federal Reserve Board, was a master at the soft landing. http://www.investopedia.com/terms/s/softlanding.asp#ixzz1bdyRRYrs
Hard Landing A term used to describe an economy going into recession as the government attempts to slow down inflation. The Fed will try to avoid a hard landing by raising interest rates only enough to slow the economy down without putting it into recession (a soft landing). http://www.investopedia.com/terms/h/hardlanding.asp#ixzz1bdz84bXH
Soft or Hard Landing? • Growth in China’s economy slowed to an annual 9.1 percent in the third quarter from 9.5 percent in the three months through June • Can slowing down to 8% be considered a soft landing?
NourielRoubini • American Economist • NYU Professor • Chairman and co- founder of Roubini Global Economics LLC. • Most known for publications predicting the U.S. housing bubble
NourielRoubini’s Opinions • China’s efforts to prop up economic growth won’t help it escape the hard landing that will probably arrive in 2013 or 2014 • The prospect of a soft landing in China is a “mission impossible” • Policy makers will “do anything possible” to keep growth in national output at rates above 8 percent and ensure a “delicate” political transition isn’t hampered by an economic downturn