SALES SEASON ROUNDUP

By Annaly Capital Management

Seasonally adjusted greetings to Annaly Salvos readers around the world!

In the commercial spirit of the season (and a day early for our blog post this week), we thought we’d go down a level from the headline retail sales numbers, which have been trending strongly of late. In November, retail sales rose 0.8%, and October and September were both revised upwards. Many economists are pointing to the relative strength of this three-month set to predict a decent 4^th quarter GDP number. Macroeconomic Advisors has raised its estimate to over 3%. “The report on retail sales through November,” they write, “was much stronger than expected, and even with offsets to our assumptions for imports and inventories, we revised up our current-quarter tracking forecast of GDP growth by four tenths on this report.”

The results for selected line items were consistent with the theme that Americans are starting to spend a little bit more on things that fall more into the “discretionary spending” category, while cutting back on most purchases related to buying new houses. So to begin at the top, total retail sales (less food and autos) were approximately $338 billion at a seasonally adjusted rate in November, up 8.1% from a year ago and within shouting distance of the cyclical peak of $342 billion in November 2007. (All retail sales data are through November 2010.)

Sales at furniture and home furnishing stores, which rose along with the strong housing market, are still languishing below the cyclical peak and bumping along the cyclical trough.

Likewise, sales at electronic and appliance stores, which we would put in the same general “new home sales” category as furniture, are also skittering along the cyclical bottom.

In contrast, building materials, garden equipment and supply dealers, more reflective of the do-it-yourself category of housing-related consumption, are registering double-digit year-over-year sales growth. After the collapse in this category’s sales over the last two years, and with prospects for the housing market still weak, perhaps people have capitulated on maintenance and upgrades.

Recreational purchases are rising faster than the cohort. Sporting goods, hobby, book and music stores are rising impressively on a year-over-year basis, perhaps reflecting the trend towards staycations and the tentative beginnings of the resumption of discretionary spending.

Likewise for the “miscellaneous” category of retail sales, which encompasses stationery, gift, novelty, souvenir and used merchandise stores. They are rising at a double-digit year-over-year pace.

The lump of coal in the sales stockings is new home sales, which are still at generational lows after the mid-decade top. The population of the United States has about doubled since the 1960s, and yet new home sales are less than the run rate of that era. Moreover, it is the first time that new home sales have continued to decline after the official end of a recession. The question before the market is whether or not we can have a sustainable recovery without the important contribution of the housing sector.

——————————————————————————————————————————————————

The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured site: So, Why is Wikileaks a Good Thing Again?.

View the original article here

SEMICONDUCTOR SALES FLAT ON MONTH, UP 19.8% VS 2009

5 December 2010 by TPC 2 Comments

Strong sales in semiconductors on a year over year basis though seasonality is beginning to show some sequential moderation in growth (Via SIA):

“The Semiconductor Industry Association (SIA) today reported that worldwide semiconductor sales in October were $26.3 billion, staying flat from the prior month when sales were also $26.3 billion. Sales increased by 19.8 percent from October 2009 when sales were $22.0 billion. Sales for the year through October were $248.2 billion compared to $181.2 billion for the same period in 2009, an increase of 37.0 percent. All monthly sales numbers represent a three-month moving average.”As expected, we are experiencing moderation in sequential sales growth rates in line with seasonal patterns, a trend that will likely continue through year end,” said SIA President Brian Toohey. “Future growth will be increasingly driven by demand in developing markets where rapid adoption of semiconductor end use products such as mobile devices and consumer electronics continues,” Toohey concluded.”

Source: SIA

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

CAR SALES RISE $23B

By Annaly Capital Management

Okay, so this wasn’t the exact headline after GM’s record setting capital raise this week. Including over-allotment option, the offering of common and preferred stock should bring the total dollars raised to $23 billion, making it the biggest IPO ever done. Of that amount, approximately $4.8 billion will be netted by the company, with the balance going to the selling stockholders, ie, the US Treasury. The use of proceeds of that $4.8 billion is to fund the company’s pension plans.

This $23 billion is a big headline number, and it is significant for the many things it represents, not least of which is the progress the company is making towards paying back the $49.5 billion it received as part of its bailout last year. But as we step back and look at the relative value decisions that are made by equity investors on behalf of themselves and their clients, we guess that most equity investors did not make their “buy” decision because they wanted to be an instrument by which taxpayer money is paid back or the company pension plan is replenished. Since virtually none of the capital raised is being handed to the company for investment in the car business itself (leaving aside for a moment the concept of fungibility), one thing it represents is a desire on the part of equity investors to put their capital (and their clients’ capital) into the fractional ownership of an American competitor in the global car industry. New CEO Daniel Akerson has a story to tell, and clearly his 80-odd investor meetings during the two-week road show worked to convince investors that this recapitalization is a step toward better things for the beleaguered carmaker.

There is a lot going on in the world today, and if investors were to think about all of it when making an investment decision they may simply choose to not get out of bed in the morning. There is a game-changing shift in the power structure in Washington DC, rising concerns in Europe over Irish contagion and draconian plans for budget cuts at the national, state and local levels. Just today, the head of the Federal Reserve gave a speech in Frankfurt in which he not only made a robust defense of monetary policy but also articulated—in blunt terms for a central banker—how he essentially had no choice because of the actions of policymakers at home and around the world. With this backdrop, to paraphrase from Casablanca, it doesn’t take much to see that the problems of what to do with $23 billion in equity capital doesn’t amount to a hill of beans in this crazy world.

But investors have to do something with their money, and those who bought (and held) in the GM deal may be right and they may be wrong about the future of GM, but everyone’s bet is now on the table. However, as we think of all the things that $23 billion could be used for, purposes that may go to more than just filling a hole in someone’s capital structure, we’d like to see this money go towards growing the US economy. At the end of the day, buying an ownership stake in GM today because it eventually will rebound, start hiring and investing and growing to earn a decent return for investors is just an economic transmission mechanism, just like QE2. And as the graph below shows, GM could be an ineffective one: It has been sinking in the sales tables for the past decade.

——————————————————————————————————————————————————

The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

CAR SALES RISE $23B

By Annaly Capital Management

Okay, so this wasn’t the exact headline after GM’s record setting capital raise this week. Including over-allotment option, the offering of common and preferred stock should bring the total dollars raised to $23 billion, making it the biggest IPO ever done. Of that amount, approximately $4.8 billion will be netted by the company, with the balance going to the selling stockholders, ie, the US Treasury. The use of proceeds of that $4.8 billion is to fund the company’s pension plans.

This $23 billion is a big headline number, and it is significant for the many things it represents, not least of which is the progress the company is making towards paying back the $49.5 billion it received as part of its bailout last year. But as we step back and look at the relative value decisions that are made by equity investors on behalf of themselves and their clients, we guess that most equity investors did not make their “buy” decision because they wanted to be an instrument by which taxpayer money is paid back or the company pension plan is replenished. Since virtually none of the capital raised is being handed to the company for investment in the car business itself (leaving aside for a moment the concept of fungibility), one thing it represents is a desire on the part of equity investors to put their capital (and their clients’ capital) into the fractional ownership of an American competitor in the global car industry. New CEO Daniel Akerson has a story to tell, and clearly his 80-odd investor meetings during the two-week road show worked to convince investors that this recapitalization is a step toward better things for the beleaguered carmaker.

There is a lot going on in the world today, and if investors were to think about all of it when making an investment decision they may simply choose to not get out of bed in the morning. There is a game-changing shift in the power structure in Washington DC, rising concerns in Europe over Irish contagion and draconian plans for budget cuts at the national, state and local levels. Just today, the head of the Federal Reserve gave a speech in Frankfurt in which he not only made a robust defense of monetary policy but also articulated—in blunt terms for a central banker—how he essentially had no choice because of the actions of policymakers at home and around the world. With this backdrop, to paraphrase from Casablanca, it doesn’t take much to see that the problems of what to do with $23 billion in equity capital doesn’t amount to a hill of beans in this crazy world.

But investors have to do something with their money, and those who bought (and held) in the GM deal may be right and they may be wrong about the future of GM, but everyone’s bet is now on the table. However, as we think of all the things that $23 billion could be used for, purposes that may go to more than just filling a hole in someone’s capital structure, we’d like to see this money go towards growing the US economy. At the end of the day, buying an ownership stake in GM today because it eventually will rebound, start hiring and investing and growing to earn a decent return for investors is just an economic transmission mechanism, just like QE2. And as the graph below shows, GM could be an ineffective one: It has been sinking in the sales tables for the past decade.

——————————————————————————————————————————————————

The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here