Tuesday, May 19, 2009

Quick Notes & Articles for the Day - May 19

Housing Starts Hit Record Low - New construction of single-family homes and apartments fell 12.8% to a record-low annual rate of 458,000. This is the weakest level since the government began publishing the series in 1959. Starts are now 79.9% below their peak in January 2006. The drop was caused by a slump in construction of multifamily housing, which fell 46.1% to a record low 78,000. This was the biggest drop since January 1994. Starts of single-family homes rose 2.8% to a seasonally adjusted annual rate of 368,000. Single-family starts have shown some stability in the past four months, averaging 360,000 starts per month. Building permits for single-family homes also rose 3.6% to 373,000. *** NOTE - Many economists and experts have said this is part of the bottoming of the market. Working off the inventory that still exists will ultimately lead to a demand for housing.

Crude Oil Slowly Moves Higher - The housing data (above) put a damper on oil this morning as the demand for oil is predicted to still be somewhat sluggish. Oil inventories were expected to have fallen though, so this made the move higher possible. Trading that focuses on the fundamentals (supply-demand, economic environment, etc.) is a welcomed change and shows normality coming back to the market. Trades over the past few months have been fed by emotion.

TJX Companies Beat Estimates - The TJX Companies (TJ Maxx, Marshalls, etc.) said Tuesday that first-quarter earnings were $209 million, or 49 cents a share, compared to $194 million, or 43 cents a share, in the same period a year ago. Sales rose to $4.4 billion from $4.3 billion. Same-store sales rose 2%. Analysts polled by FactSet Research estimated, on average, earnings per share of 45 cents and sales of $4.3 billion. The retail company sees second-quarter earnings of 43 cents to 49 cents.


Obama's Auto Plan Is Capitalism at Work - By Scott Sperling - The Wall Street Journal - An interesting take on the restructuring of Chrysler. "Contrary to what many pundits claim, the Obama administration's approach to the auto industry is not anticapitalist. Without a drastic restructuring neither Chrysler nor GM would have a chance for long-term success. Not only would thousands of workers lose their jobs, but the government would lose tens of billions of taxpayers' dollars. So rather than simply writing a check to the auto industry -- the policy of the previous administration -- the Obama team is focused on fundamentally restructuring these two businesses."

In Praise of Dullness - By David Brooks - The New York Times - "In other words, warm, flexible, team-oriented and empathetic people are less likely to thrive as C.E.O.’s. Organized, dogged, anal-retentive and slightly boring people are more likely to thrive."

Bankers Share Whining Rights With Fed-Up States - By Ann Woolner - Bloomberg - "From Alaska to Oklahoma, states are declaring themselves fed up with the bossing around they get from Washington. Sick of being told do this, don’t do that, they sound like banks."

No comments: