The Federal Open Market Committee (FOMC) meets again this week to review economic conditions and set monetary policy. On whether the Fed should end quantitative easing or extend it, Atlanta Fed chairman Dennis Lockhart recently said that the Fed should remain flexible given the rising energy prices, which could be a sign of coming inflation. Either at this meeting or the next, the Fed could signal that interest rates will rise as a hedge against inflation.

Inflation will also be the focus when the Department of Labor releases the Producer Price Index (PPI) and Consumer Price Index (CPI) this week. Back in January the core PPI (which excludes energy and food costs) had its biggest jump in two years, and the core CPI had its largest uptick in more than year, the second month in a row in which consumer prices jumped.

Continue reading Week in Preview: Inflation, the FOMC and Nike Earnings

Week in Preview: Inflation, the FOMC and Nike Earnings originally appeared on BloggingStocks on Sun, 13 Mar 2011 12:30:00 EST. Please see our terms for use of feeds.

Continue reading U.S. Stock Futures Down as Investors Await Economic Data

U.S. Stock Futures Down as Investors Await Economic Data originally appeared on BloggingStocks on Thu, 13 Jan 2011 08:30:00 EST. Please see our terms for use of feeds.

Alcoa (AA), Intel (INTC) and JPMorgan Chase (JPM) will kick off a new earnings season this week when they report their results for the fourth quarter of 2010. Here's a quick look at what analysts surveyed by Thomson Reuters expect to see, followed by a glance at what's coming up on the economic calendar.

Alcoa

During its fourth quarter, Alcoa saw increased demand in emerging markets, sold surplus properties, and shared revenue targets with investors. Analysts forecast that earnings for the period will come to 19 cents per share, up from just a penny per share in the same quarter of last year. The New York-based aluminum producer also is expected to post revenue of $5.7 billion for the three months that ended in December, which is 4.5% more than a year earlier.

Continue reading Week in Preview: Alcoa, Intel, JPMorgan Kick Off New Earnings Season

Week in Preview: Alcoa, Intel, JPMorgan Kick Off New Earnings Season originally appeared on BloggingStocks on Sun, 09 Jan 2011 12:30:00 EST. Please see our terms for use of feeds.

FedEx Corp. (FDX), the world's leading package delivery service and an ostensible bellwether of the U.S. economy, will dance its way onto the earnings stage this week. Also, with the holiday shopping season well underway, Best Buy Co. (BBY) and Discover Financial Services (DFS) are scheduled to offer up their most recent quarterly results.

Here's a closer look at what the analysts surveyed by Thomson Reuters are expecting from these three, plus a peek at the week's economic calendar.

Continue reading Week in Preview: FedEx, Best Buy, Discover to Deliver Earnings

Week in Preview: FedEx, Best Buy, Discover to Deliver Earnings originally appeared on BloggingStocks on Sun, 12 Dec 2010 12:30:00 EST. Please see our terms for use of feeds.

According to the Labor Department, U.S. producer prices increased a seasonally adjusted 0.4% during October thanks mainly to an increase in energy prices.

Energy prices increased 3.7% during the month, the largest monthly increase since January. This increase was driven (so to speak) by a 9.8% increase in gasoline prices. Food prices dropped 0.1% during the month, with plunge led by a drop of 8.1% in the government's index for fresh and dry vegetables.

Continue reading U.S. Producer Prices Increase During October

U.S. Producer Prices Increase During October originally appeared on BloggingStocks on Tue, 16 Nov 2010 13:00:00 EST. Please see our terms for use of feeds.

U.S. Federal Reserve Chairman Ben Bernanke gave his reasons for more quantitative easing, dubbed QE2, in a speech at the Federal Reserve Bank of Boston, and reported in the Wall Street Journal.

The linchpin of his thesis is that inflation is too low, currently running at 1.1%. This is lower than the 2% level that the Fed had previously set.

Bernanke gave a rather gloomy assessment of the economy, saying that business spending has slowed, consumer finances are improving unevenly, housing remains depressed and job growth isn't enough to bring down unemployment.

Continue reading Bernanke: Inflation Too Low and Economic Growth Too Slow

Bernanke: Inflation Too Low and Economic Growth Too Slow originally appeared on BloggingStocks on Fri, 15 Oct 2010 12:30:00 EST. Please see our terms for use of feeds.

The earnings season kicked off last week with better-than-expected results from Alcoa (AA) and Yum! Brands (YUM), while Marriott (MAR) and Pepsico (PEP) met consensus EPS estimates. This week, bellwether companies Intel (INTC), General Electric (GE), Google (GOOG) and JPMorgan Chase (JPM) are scheduled to report their third-quarter results, and analysts polled by Thomson Reuters are looking for earnings growth from all of them.

Santa Clara, Calif.-based Intel announced the acquisition of McAfee and joint ventures with General Electric and Nokia (NOK) during its third quarter. Analysts forecast earnings for that period to come to 50 cents per share, which is up 34.0% from the same period of last year. The number one semiconductor maker's revenue for the three months ended in September is expected to total $11.0 billion, or 17.1% more than a year earlier. Looking ahead to the full year, the forecast thus far is for earnings of $1.94 per share (+44.8%) and $43.3 billion in revenue (+23.4%). The per-share earnings topped analysts' expectations in the past four quarters, by as much as a dime per share.

Continue reading Week in Preview: Earnings Expectations for Intel, GE, Google and JPMorgan

Week in Preview: Earnings Expectations for Intel, GE, Google and JPMorgan originally appeared on BloggingStocks on Sun, 10 Oct 2010 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Producer Prices Rose in August

Producer Prices Rose in August originally appeared on BloggingStocks on Thu, 16 Sep 2010 10:00:00 EST. Please see our terms for use of feeds.

Last week, the Fed's Beige Book report confirmed that the economy continues to grow, but at a slower pace than in previous periods. This week will bring plenty of economic data to either support or contrast with the Fed's findings.

• Monday: Federal government budget balance for August
• Tuesday: Business inventory numbers from July, TIPP Economic Optimism Index for September, retail sales data from August
• Wednesday: Industrial production in August, Empire State Manufacturing Survey for September, Import Price Index for August
• Thursday: Producer Price Index for August, Philly Fed Survey for September, the Current Account Balance in the second quarter, jobless claims for last week
• Friday: preliminary University of Michigan Consumer Sentiment Index, Consumer Price Index for August, real earnings data for August

Continue reading The Week in Preview: FedEx, Best Buy, Oracle and Lots of Economic Data

The Week in Preview: FedEx, Best Buy, Oracle and Lots of Economic Data originally appeared on BloggingStocks on Sun, 12 Sep 2010 12:30:00 EST. Please see our terms for use of feeds.

The inflation hawks, hard-pressed to find inflation in either the consumer price index or the producer price index, or their core rates, have not given up their mission to find inflation when it doesn't exist, and isn't likely to for a long time.

CPI is running at a 2.2% annual rate, and the core rate is 0.9%. PPI is running at a high annual rate, 5.5%, but exclude food and energy, and the core rate is up just 1.0%.

The typical, alternate argument forwarded? When cash-flush banks start lending in a big way again, we'll have many more dollars chasing essentially the same amount of goods, and inflation will zoom to much higher levels.

Continue reading Is U.S. Inflation About to Heat-Up?

Is U.S. Inflation About to Heat-Up? originally appeared on BloggingStocks on Wed, 26 May 2010 13:00:00 EST. Please see our terms for use of feeds.

Continue reading Is Inflation Threat on The Horizon?

Is Inflation Threat on The Horizon? originally appeared on BloggingStocks on Tue, 18 May 2010 18:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Europe Keeps Feeding the Bears (HPQ, VRSN, WMT, HD, LOW)

Closing Bell: Europe Keeps Feeding the Bears (HPQ, VRSN, WMT, HD, LOW) originally appeared on BloggingStocks on Tue, 18 May 2010 16:30:00 EST. Please see our terms for use of feeds.

The most compelling statistic, so far in 2010, from an investment standpoint? Arguably, it's inflation, or the lack thereof.

More than 12 months in to the biggest fiscal stimulus in the history of the modern world, and more than 15 months into the Fed's quantitative easing program, inflation, as measured by the Consumer Price Index, is running at ... about 2.3% since April 2009, according to data compiled by the U.S. Labor Department. Further, take away the volatile food and energy component, and inflation at the retail level is running at a minuscule 1.1% since April 2009.

Continue reading Despite March's PPI Jump, U.S. Inflation Remains Tame

Despite March's PPI Jump, U.S. Inflation Remains Tame originally appeared on BloggingStocks on Thu, 22 Apr 2010 12:20:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Moving beyond cost cutting (XOM, HD, SPWRA, SMTL, AMAT, PLA)

Closing Bell: Moving beyond cost cutting (XOM, HD, SPWRA, SMTL, AMAT, PLA) originally appeared on BloggingStocks on Tue, 17 Nov 2009 16:00:00 EST. Please see our terms for use of feeds.

Markets were mixed and downish Tuesday, but there was some good news to be found.

Housing starts and building permits soared, causing a big pop in shares to battered homebuilders. Whether this is a false start or a real jump, its hard to get anything but good news out of a housing market so beaten down.

On the industrial side, the Produce Price Index remained relatively stable, walking the narrow path between two evils -- deflation and inflation.

Continue reading Green Shoots Scenario: Onshoreable jobs

Green Shoots Scenario: Onshoreable jobs originally appeared on BloggingStocks on Wed, 17 Jun 2009 08:00:00 EST. Please see our terms for use of feeds.

New jobless claims jumped unexpectedly last week by 32,000 to 637,000, much worse than economists predicted. And we have another disappointing number: Continuing claims for unemployment rose to a record high of 6.56 million, up from 6.34 million the previous week. The insured unemployment rate rose by .1% to 4.9%.

Obviously, these numbers are throwing cold water on any claims of reaching bottom. Last week, the Labor Department reported that unemployment rose to 8.9%, the highest level in 25 years.

U.S. wholesale prices also rose in April, led by rising food costs. This is a weird fact because it indicates that we are not spiraling into deflation, but it doesn't help the average person. The increase was led by the price of eggs, beef and milk. The price of gas rose by 2.6% but residential fuel costs eased.

Continue reading U.S. jobless claims rose 32,000 to 637,000

U.S. jobless claims rose 32,000 to 637,000 originally appeared on BloggingStocks on Thu, 14 May 2009 11:30:00 EST. Please see our terms for use of feeds.

DailyFinance today: Smith & Wesson, Ruger shares up, new PPI numbers, Jack Welch appeals for AIG calm, and activists hound CNBC originally appeared on BloggingStocks on Tue, 17 Mar 2009 18:45:00 EST. Please see our terms for use of feeds.

On Tuesday, the Federal Reserve's FOMC holds two-day meeting on interest rates and will announce its decision on Wednesday. The Fed's Ben Bernanke will still be out and about this week, discussing the failure of Lehman Brothers later today, and ending up the week speaking at the Independent Community Bankers of America National Convention and Techworld.

Manufacturing will be in focus this week, starting with industrial production numbers for February and the Empire State Manufacturing Survey Diffusion Index for March scheduled to be released Monday morning. Tuesday morning will bring us the Producer Price Index for February, and Thursday morning comes the Philadelphia Fed Outlook Survey -- Diffusion Index Manufacturing for March.

Continue reading The week in preview: Interest rates, manufacturing, earnings gainers

The week in preview: Interest rates, manufacturing, earnings gainers originally appeared on BloggingStocks on Sun, 15 Mar 2009 12:30:00 EST. Please see our terms for use of feeds.

This morning's Producer Price Index (PPI) numbers suggest that the stagflation is in full force. PPI was expected to rise 0.3% for January, and it came in way above at 0.8%. This result, which was much bigger than expected, was due to a 3.7% surge in energy prices with gasoline prices jumping by 15% -- the biggest gain in 14 months. Core PPI -- excluding gasoline and food -- was forecast to creep up 0.1% and it came in at +0.4% in January.

I was expecting PPI to rise but core PPI to drop. Unfortunately, it turns out that many companies were raising prices even as sales slumped. Auto, computer and pharmaceutical makers were among the industries boosting prices in January even as sales fell. Why did they do this? It could be because they needed to make up the revenue that they knew they would lose due to declining unit sales by raising prices on people who had to buy their products.

Continue reading Producer Price Index: Wholesale inflation spikes on stagflation

Producer Price Index: Wholesale inflation spikes on stagflation originally appeared on BloggingStocks on Thu, 19 Feb 2009 10:00:00 EST. Please see our terms for use of feeds.

2008's economy can be divided into two parts. The first is the period between January and July when oil prices ran up to $147 thanks to a speculative trade to short the dollar and buy oil and other commodities. The second part is the post oil's July peak where oil prices have featured a 60% to $55. Today's wholesale price report shows what happens to prices when supply exceeds demand and banks stop lending money to traders trying to profit from anticipated inflation.

Today's wholesale price report is a doozy. The Producer Price Index (PPI) fell 2.8% in October -- much more than the 1.8% decline economists had anticipated. The PPI decline was fueled (pun intended) by a 12.8% decline in energy prices in October. And as long as those energy prices keep falling, inflation will be in full downswing mode. (I am happy to report that I won my bet that gasoline would drop below $1.99 a gallon in Eastern Massachusetts by February -- I went to a station Sunday that charged $1.97.)

But there's more to it than simply declining oil prices. The entire economy was producing goods and services based on an assumption about demand that depended on easy access to debt. By shutting off the debt flow, goods are simply too expensive for consumers and businesses to pay the price. This means businesses will cut back on production and slash prices to clear their shelves of inventory. Then they'll shut down factories and lay off workers. And the lower demand from those poorer former workers will start the cycle anew.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Deflation in full swing originally appeared on BloggingStocks on Tue, 18 Nov 2008 09:43:00 EST. Please see our terms for use of feeds.