Update Cisco Systems (CSCO)
Cisco Systems (CSCO) rules the technology that runs the Internet, but it’s got a few things to learn about product announcements. On March 9 the company held a teleconference staged with all the hoopla of Apple (AAPL) announcing a new iPhone. But then Cisco unveiled a new core carrier routing platform with the catchy name of CRS-3.
The stock actually dropped 26 cents a share the day after the teleconference.
I can understand the investor disappointment. The CRS-3 isn’t an iPhone-like consumer product.
Update AmBev (ABV)
On March 4 AmBev (ABV) reported fourth quarter earnings before interest, taxes, depreciation, and amortization grew by 9.1% from the fourth quarter of 2008. Total net sales increased by 13.9% from the year-earlier period on an 11.6% increase in volume in Brazil.
Bad news overnight on Chinese inflation: Is it out of control?
Bad news on inflation from China last night could give global stock markets the jitters today, March 11.
Higher than expected consumer price inflation in February at an annual rate of 2.7% is likely to revive fears that Beijing will try to slow the speed of economic growth. Economists had expected an increase in inflation of 2.5%, according to a Bloomberg survey. Inflation had dropped in January to an annual 1.5% rate from 1.7% in December.
Chinese stocks fell on the inflation news. The Shanghai Composite Index was down 0.7% as of noon Shanghai time. The index is down 7.6% in 2010.
The jump in the inflation rate to 2.7% is bad news for Chinese officials who have said they aim to hold inflation to 3% or less in 2010. On the current trend inflation will be running above that target by April.
Inflation momentum is also building at the producer price or wholesale level where wholesale prices climbed at an annual 5.4% in February from a 4.3% annual rate in January. Higher prices at the wholesale level almost always lead to higher inflation in consumer prices.
So far government steps to slow bank lending and the growth rate of the money supply have had less effect than projected.
Sell GulfMark (GLF)
I’m going to take my own advice (see my post http://jubakpicks.com/2010/03/09/stocks-show-signs-today-of-having-more-fuel-in-the-tank/ ) and use this rally to sell GulfMark. I think fundamentals in the oil industry have turned, if not against, at least away from this provider of offshore service vessels to drilling operations.
Higher unemployment could soon be called full employment
You know your team’s in trouble when they start talking about moving the goal posts.
At the same time as economists are talking about the possibility that the economy will create net jobs in March, the Federal Reserve is thinking about redefining full employment for the U.S. economy.
And as you might suspect, the Fed isn’t talking about raising the bar.
Yesterday Charles Evens, president of the Federal Reserve Bank of Chicago, told a conference that the Fed is considering changing the definition of full employment from an unemployment rate of 4.75% to an unemployment rate of 5.25%.
So why does full employment mean an unemployment rate of 4.75% or 5.25% anyway?
