Thursday, November 9, 2006

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Thursday, November 9, 2006
Presented by Priya J. Kapila
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Federal Reserve Bank

• Former Fed Chief Greenspan Worst housing woes
  behind us
• Dallas Fed Chief Fisher encouraged by slowed
  inflation

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Exchange Rates

• The dollar fell, slipping to a six-week low
  against the Euro as uncertainty over the result
  of the U.S. elections gave traders an excuse to
  take profits on the currency
• The dollar was poised for its biggest daily loss
  against the yen in more than six weeks after
  comments on interest rates from the Bank of Japan

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Exchange Rates
Dollar VS Yen
Dollar VS Euro
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International Markets

• A European Commission report criticizes China on
  fair-trade issues, including piracy, and notes a
  growing trade deficit of 106 billion a year
• In Europe, fast-rising prices and household debt
  levels could lead to trouble -- at least in some
  countries
• Soaring demand for generics and competitive
  pressures are making the region a hotbed for Big
  Pharma deals to swallowing eastern Europes
  drugmakers
• The world's second-biggest economy, Japan, is
  expected to announce record expansion. But it's
  mostly based on exports, and wages have not kept
  pace

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Stock Index - Asia
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Stock Index - Europe
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Sector Performance

• Leaders
• Energy (1.46)
• Health Care (1.14)
• Telecommunications (0.89)
• Losers
• Utilities (-1.01)
• Consumer Goods (-0.11)
• Financials (-0.01)

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Consumer Staples

• Both PG and Clorox report good quarters but
  uncertainty leads them down
• Altria faces uncertainty going into the election
• Leggett Platt down on poor outlook going forward

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Consumer Staples
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Consumer Discretionary

• Honda sales down for the month of October
• Coachs 3Q earnings up 40

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Consumer Discretionary
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Consumer Goods Staples Discretionary

• Market Cap 2670.9B (2645.1B)
• P/E 25.52 (31.31)
• ROE 17.44 (17.20)
• Dividend Yield 2.07 (2.00)
• Long Term Debt to Equity 1.26 (1.15)
• Price to Book Value -10.68 (-3.19)
• Net Profit Margin 6.83 (6.74)
• Price to Free Cash Flow 83.32 (122.20)

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Industrial - Goods

• Even as Texas Industries Inc. maintains its
  silence regarding buyout talks instigated by a
  major shareholder, insiders are selling company
  shares, suggesting a deal isn't on the horizon.
• Mexican cement giant Cemex(CX) said Friday it
  planned to make a 12.8 billion offer to buy
  Rinker Group Ltd., an Australian firm that
  derives the bulk of its profits from selling
  construction materials in the United States, even
  as the domestic housing market continues its
  recent slump.

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Industrial - Goods
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Industrials - Goods

• Market Cap 1092.8B (1390.5B)
• P/E 16.29 (20.44)
• ROE 15.02 (15.29)
• Dividend Yield 1.57 (1.90)
• Long Term Debt to Equity 0.79 (1.64)
• Price to Book Value 70.32 (-22.33)
• Net Profit Margin 5.44 (6.88)
• Price to Free Cash Flow 93.76 (-36.94)

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Industrial - Services

• Sears Holdings Corp. said on Monday that its
  subsidiary, SHLD Acquisition Corp., filed a
  revised proxy circular in connection with a Nov.
  14 meeting of Sears Canada Inc. shareholders.
• Wal-Mart's Woes Could Deflate Prices on
  Competitive Products

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Industrial - Services
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Industrials - Services

• Market Cap 3174.3B (3169.4B)
• P/E 23.37 (26.24)
• ROE 14.52 (14.09)
• Dividend Yield 1.29 (1.28)
• Long Term Debt to Equity 0.92 (1.48)
• Price to Book Value 1.21 (3.25)
• Net Profit Margin 5.93 (5.61)
• Price to Free Cash Flow -7.20 (69.36)

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Financials

• According to UBS, Wells Fargo, and other
  underwriters, subprime mortgages are
  deteriorating rapidly.
• Berkshire Hathaway shares climbed to a record on
  Monday after the insurance-focused conglomerate
  reported big third-quarter profits that were
  fueled by a benign hurricane season.

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Financials
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Financials

• Foreign Regional Banks
• Life Insurance

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Financials

• Market Cap 7258.1B (5925.2B)
• P/E 13.04 (14.58)
• ROE 17.03 (16.8)
• Dividend Yield 2.40 (2.71)
• Long Term Debt to Equity 2.46 (2.63)
• Price to Book Value 2.69 (2.91)
• Net Profit Margin 14.01 (14.75)
• Price to Free Cash Flow 17.75 (34.43)

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Utilities

• Duke Energy Corp. posted lower profits than
  expected in its latest earnings release. 
  Earnings were 48 cents/share, below the 56
  cents/share estimates of Reuters' analysts. 
  Executives for the company still claim a 4-7
  earnings growth is expected following the
  spin-off of the natural gas division to Spectra
  Energy Corp., but that remains to be seen.
• The French Parliament on Wednesday adopted a bill
  to privatize state-owned Gaz de France, clearing
  an obstacle to its proposed combination with the
  utility Suez SA that would create an energy
  powerhouse.

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Utilities
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Utilities

• Market Cap 1059.1B (1053.6B)
• P/E 36.03 (33.91)
• ROE 15.08 (16.28)
• Dividend Yield 3.89 (3.91)
• Long Term Debt to Equity 2.11 (2.13)
• Price to Book Value 2.76 (2.66)
• Net Profit Margin 8.22 (9.22)
• Price to Free Cash Flow -264.0 (-64.59)

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Health Care

• Democrats dislike the new Medicare plan that has
  been benefiting big Pharma and may revoke the law
  that bars Medicare from negotiating prices
  directly with drug companies.
• Abbot Labs to buy Kos Pharmaceuticals for 3.7
  billion, a 56 premium over market price.
• Novartis unveils plans to build a 100 million
  research center in Shanghai, China

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Health Care
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Health Care

• Market Cap 2630.2B (2647.0B)
• P/E 28.13 (34.62)
• ROE 14.73 (14.56)
• Dividend Yield 1.63 (1.59)
• Long Term Debt to Equity 0.55 (0.55)
• Price to Book Value 5.32 (5.48)
• Net Profit Margin 10.86 (11.43)
• Price to Free Cash Flow 53.75 (95.31)

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Information Technology

• Microsoft is reported to be entering an unusual
  partnership with Novell that gives a boost to the
  Linux operating system, a rival to the software
  giant's Windows software and work toward
  developing technologies to make it easier for
  users to run both Suse Linux and Microsoft's
  Windows on their computers.
• By forging a peace pact with one seller of Linux,
  Microsoft could raise pressure on Red Hat, the
  leading provider of Linux, and a Novell rival.
• Apple plans to leverage its retail stores as
  'launch pads' for the new iTV, using a few LCD
  televisions to demonstrate the features of the
  device.

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Information Technology
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Information Technology

• Market Cap 5196.3B (5702.7B)
• P/E 26.13 (22.97)
• ROE 14.87 (14.82)
• Dividend Yield 2.02 (1.94)
• Long Term Debt to Equity 0.71 (0.62)
• Price to Book Value 7.07 (6.17)
• Net Profit Margin 10.67 (10.77)
• Price to Free Cash Flow 67.67 (-27.16)

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Basic Materials

• Higher copper prices boost Wolverine Tube sales
  stock falls on Q3 loss and the company is
  considering Chapter 11
• Azco Mining Inc. , a U.S.-based mining and
  exploration enterprise focused on gold, silver,
  copper and industrial minerals, announced today
  that it had agreed with a major creditor to
  terminate a 2002 financing lease and eliminate
  all the company's outstanding debt under the
  lease.
• Royal Gold Inc., a company that buys rights to
  collect royalties from mining outfits, said
  Wednesday it raised its annual dividend 18
  percent.
• EU regulators on Wednesday reimposed a 10 million
  euro (12.7 million) fine on Arcelor SA for a
  steel beam cartel it took part in from 1988 to
  1991.

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Basic Materials
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Basic Materials

• Copper
• Steel Iron

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Basic Materials

• Market Cap 4483.5B (4408.3B)
• P/E 11.64 (13.46)
• ROE 26.98 (26.08)
• Dividend Yield 2.26 (2.31)
• Long Term Debt to Equity 0.44 (0.43)
• Price to Book Value 3.31 (3.56)
• Net Profit Margin 12.10 (11.68)
• Price to Free Cash Flow 27.68 (1.89)

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Energy

• The main reason for the increases in the Energy
  sector is due to positive earnings releases by a
  number of companies in the sector.  The majority
  of companies in the sector had a stellar 3rd
  quarter due to excessively high oil prices. 
• The outlook for the next quarter is not as
  promising however.
• OPEC has sought to cut oil production by 1.2
  million barrels per day as of November 1, due to
  the low prices and excess supplies.  Many
  investors doubt OPEC's ability to cut production
  as inventories of crude continue to rise. 
• Chevron reported a 5 billion profit in its
  earnings release, an increase of 40 from the
  last quarter. 
• Big oil companies will be a top target of
  Democratic lawmakers when they officially take
  over the House of Representatives early next
  year.

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Energy
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Energy

• Market Cap 1574.6B (1544.0B)
• P/E 8.50 (8.70)
• ROE 28.50 (27.90)
• Dividend Yield 2.85 (2.89)
• Long Term Debt to Equity 0.36 (0.28)
• Price to Book Value 2.93 (2.92)
• Net Profit Margin 11.30 (10.80)
• Price to Free Cash Flow 40.20 (45.00)

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Telecommunications Services

• FCC Delays Vote on ATT-BellSouth Deal
• Shares of the two companies, accounted for about
  a half of the industry market capitalization,
  fell last week, a reaction for the bad news.
  There was no other big news over past week.
• ATT sees growth in Indian corporate telecoms
  market
• ATT wins contract extension with Reliant Energy
• Cingular Wireless unveiled a new phone last week
  that taps into subscription music services from
  Napster, Yahoo! and eMusic and streaming radio
  from XM Satellite Radio

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Telecommunications Services - Domestic

• Market Cap 420.2B (428.3B)
• P/E 19.40 (19.00)
• ROE 13.40 (12.40)
• Dividend Yield 3.56 (3.24)
• Long Term Debt to Equity 0.78 (0.79)
• Price to Book Value 7.87 (7.62)
• Net Profit Margin 9.80 (9.40)
• Price to Free Cash Flow 52.40 (69.40)

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Telecommunications Services
Foreign
Domestic
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Week of 11/3/2006