The Banking and Strategy Initiative

Chillin' out till it needs to be funded

US Morning Report: PMI at the lower end of the consensus range, really we need the Economic data?


250 (Photo credit: Wikipedia)

The House price Index starts the boot on the housing recovery that has lasted a minor 20% uptick at the bottom of the cycle(Its a much repeated chart and there is another 50% in most urban indices to catch up to 2007 levels and 5-10 times in most other Housing starts/Sales data and yet it is the only positive this year instead of showing strength odf a strong demand gap. Fortunately, China’s manufacturing PMI is the best of a bad six month run and is barely below the critical 50 mark and retail sales despite the slowing growth still positive here and in the BRICs where they are nearly double digits and as good a sprevious month including South Africa , 6% and Mexico 8% the last two to report.

Chicago Fed also posted a fourth negative CFNAI indicator though it was much better than May, pulled down by both Sales, Orders & Inventories and Consumption spends. However production and income have picked up a bit in the CFNAI and even other wise in the ECRI indicators both leading indicators needing a much stronger boost fpr the continuing recovery to have a meaningful impact.

The Monthly Redbook report was worse than in May from -1.1% to -1.30%

Biogen Idec

Biogen Idec (Photo credit: Wikipedia)

In Results, Sprint Airlines reported a good $0.50 Cents EPS for the quarter ahead of estimates andd smalltown pharma scored with Biogen IDEC (BIIB:US) up on a $1.39 EPS score on $1.5B sales,. Delta is trending don after we heeded the downgrade by Goldman Sachs on retail downticks reported in June.  Bloomberg reports, for good or for bad, Airlines collect upto $50 per passenger in ancilliary revenues from baggage to cobranded cards. That’s $2.5 B for delta in 2011($36 per passenger), $5.2B for United and $2 B for American. American is also investing in new Airbus A321s to replace its aging Boeing 767s fleet meaning uptick for itself as passengers start paying dollars for Service and definitely new aircraft. Even Southwest earned more than $200 m from charging for Early Boarding and welcome drinks, totting up $1 B in ancilliary revenues only despite charging for everything, showing the impact of buying a low fare ticket to be finally whacked out of proportion by travellers.

Spirit Airlines, the ultra low fare carrier in US Carribean and Latin America flew to a Bahamian profit(SAVE:US) doubling its profits to $34 M a margin of almost 10% and on top of its first $1 B year in 2011. Its Q2 revenues are $346 M. Equity has doubled in a year too but earnings beat estimates

AT&T was the other morning bite of joy reporting $37 B revenues and improving profits as it dropped iPhone subsidy amounts on iPhones

Meanwhile Moody’s ascribed bailout possibilities to more Euro nations indirectly by putting the remaining A rated Euro economies on a negative ratings watch with Germany , Netherlands and Luxembourg asked to show how they expected to support so many other struggling members of the Currency Bloc on their balance sheet. France and Austria are on negative watch already and Finland survives with its ratings affirmed with stable outlook today.




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