The Banking and Strategy Initiative

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US Economy: Newt Press monologues misfire in Florida, Chicago PMI up on new order data

The Chicago PMI came first in the morning as US House price data also reported weakness and the Chicago area PMI at 60 showed a significant lossses from a 63 score in November. But even then, new orders maintained a rosy 78 on the Chicgo index

The Case Shiller Index is down 3.7% yoy over last November, but raises hopes for housing sales data to follow. The Goldman ICSC store Sales index is up a healthy 3.8% for last week even as Radioshack and Sears fall like nine pins. The Chicago PMI was brought donw on the weakness in the pipeline or backlogs that fell below 50 to 48.3 froma 57 score last month. The PMI report also fires a cautionary salvo for those expecting the Friday Jobs reports to bring that 8.6% unemployment any lower.

While the falling of Consumer confidence index to 61 instead of the promised 68 was not so shocking for the markets, what we found shocking was the Institutional Investor confidence that was revised downward to 94 for Decemebr from 99 and fell further to 92 indicating deep seated risk aversion staying for the long run. Though the Institutional confidence will impact Europe more, US banks ahve started to carve out new ” empires” in strife torn Europe, just like the Deutsche Bank and ING and HSBC wars on the US earlier driven though by wholesale funding and aborted in no small measure since.

The indices have lost most of the deep cuts made in the early session with the NASDAQ even trading in the green while America gets ready for tomorrows’s Job cuts report and the Auto numbers expected to come above the 1 mln mark but happy enough for investors at a nearly 13.4 mln run rate. According to today’s number from RL Polk, the avaerage age of an american Car has increased to 10.8 years as people wait for consistency in income and economic certainty before making the trade, even going for a ussed car replacement in many cases.

A PMI of 60 is still great growth speak for the Economy while Romney has run ahead with $15.4 bln in negative Super PAC spend against $3.8 bln in Newt’s Florida PAC spend, riding a 15% leadin the primaries results today..

Healthcare Earnings

Pfizer reported a massive drop in earnings by half to a $1.44 bln or 19 cents a share from $2.89 bln for the year ago quarter in its frirst report without the Lipitor sales boost as it went off patent on Nov 30. The one month without patent lost the company 42% in Lipitor Sales for the quarter in the US and 24% worldwide

However Pfizer (PFE:US) sales fell by just 3.5% topping expectations at $16.7 bln and adjusted Income was 47 cents a share at $3.86 bln

Read their travails here

Eli Lilly reported a 35% drop in earnings to $858 mln on Sales of $6.05 bln as it lost patent protection on Zyprexa ( anti-psychotic) whose sells fell 44% in the quarter and its mainstays Cymbalta and Humalog that filled up the gap are due to lose patent protection next year. Lilly’s anti cancer treatment Gemzar lost 62% of its sales after having lost patent protection in 2010. It also exited its marketing arrangement for Byetta / Bydureon with Amylin in November

Read its earnings report here

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This entry was posted on January 31, 2012 by in Financial Markets and tagged , , , , , , , , , .


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