Thursday, September 4, 2014

Morning Journal--Regulations are stifling the economy

 News on Stocks in Our Portfolios
·         AbbVie (ABBV +0.8%) lowers its GAAP Q3 EPS guidance to $0.41 - 0.43 from $0.68 - 0.70 but reiterates its non-GAAP EPS guidance of $0.77 - 0.79.
·         It lowers its 2014 GAAP EPS guidance to $2.11 - 2.21 from $2.69 - 2.79 but reiterates non-GAAP EPS guidance of $3.06 - 3.16.
·         The downward adjustments are due to its recent investments in Calico and Infinity Pharmaceuticals. The revised guidance also excludes the impact of the Shire transaction

Economics

   This Week’s Data

            August vehicle sales were strong.

            The International Council of Shopping Centers reported weekly sales of major retailers flat versus the prior week and up 4.8% on a year over year basis; Redbook Research reported month to date weekly chain store sales up 0.7% versus the comparable period a month ago and up 4.9% versus the similar timeframe last year.

            July factory orders rose 10.5% versus expectations of +10.9%; ex transportation, they fell 0.8%.

            The last Beige Book reflected growing economic activity in all districts, low price pressure, improving employments and lackluster real estate activity.

            The August ADP private payroll reported showed job growth of 204,000 versus expectations of 223,000.

            The July trade deficit was $40.5 billion versus forecasts of $42.3 billion.

            Weekly jobless claims increased 4,000 versus estimates of up 2,000.

            Second quarter nonfarm productivity came in at +2.3% versus expectations of +2.4%; however, the first quarter number was revised from +2.5% to -4.5%.  Unit labor costs fell 0.1% in the second quarter versus an anticipated rise of 0.5%; however, first quarter was revised from +0.6% to +11.6%.  This ought to keep those econometric models busy for a while.

   Other

            Why are yields so low if manufacturing is doing so well? (medium):

Politics

  Domestic

Regulations are stifling the economy (medium):

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