Factory Orders Fumble in February

Factory Orders fell 0.1% in February, but all is not lost. While there's an inclination to fear the worst, given the latest turn in several forward looking economic indicators, our review of the latest manufacturing data does not have us up in arms, at least not immediately. However, don't get me wrong, the report does sound an alarm about the economy.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Factory Orders Fumble in February

Factory Orders fell 0.1% in February, yes, but all is not lost dear friends. As we reviewed the economic report, which required plenty of coffee in this particular case, we found appeasing factors that quelled our concern a bit. With opening day baseball playing in the background, we reviewed the relatively bland economic statistics, so forgive me if I accidentally calculate an OBA in place of an inventory ratio.

What we found is that an upward revision to January's factory orders played against February's percentage change. January orders were revised higher, to 3.3%, from the 3.1% rate initially reported. Economists surveyed by Bloomberg were looking for a 0.5% increase for this reported month, so at least some of the difference between expectations (+0.5%) and the result (-0.1%) is explainable by the prior month revision. Furthermore, we would have likely had a positive change in February, instead of a negative change, if the revision did not occur.

Also quelling our concern is the fact that January orders were so strong, so that perhaps some of what might have been ordered in early February was instead called in at the end of January. This is the reason many economic data points review several months combined, and why some companies no longer offer monthly data. With that said, perhaps we should not have expected much from February, given January’s strength.

If we exclude the big-ticket transportation sector from the order data, we find new orders actually increased by 0.1%. The transportation sector posted a big new order decrease of 1.5% in February. Transportation has been down four out of the last five months. Durable goods orders, also down 4 out of 5 months, fell 0.6% after a 3.7% increase in January. Nondurables increased by 0.3%.

Shipments increased for the sixth consecutive month, growing by 0.3% in February. That's good news. Unfilled orders rose by 0.5%, but before you get antsy, realize that this data-point will increase when economic activity is on the rise. What should be concerning is that the Unfilled Orders–to–Shipments Ratio was up to 5.64, from 5.63. When the increase is not proportional, taking into account how proportions might change as the level of activity changes, that's when we raise an eyebrow (literally in The Greek's case). Inventories increased by 0.8%, but again, we need to look at inventory in proportion to sales activity. The Inventory-to-Shipments Ratio did rise though, to 1.26 from 1.25.

Taking a closer look at the industries measured by the report, we find interesting strength in several areas. Industrial Machinery Shipments, for one, posted very impressive growth, rising 16% in February. However, closer inspection shows a significant drop in January shipments that was basically made up for in February. The same thing happened in Farm Machinery, which was up 12.7% in February. This might be part of the reason Deere (NYSE: DE) was up 2.6% today.

Aluminum and Nonferrous Metals data seems to show an interesting growth trend, with shipments up 4.4% in February, following 2.6% and 3.8% increases in the prior two months. But how much of that do you think is due to price increase? I would say it's probably a significant reason for the growth here. Hey, that shouldn’t matter for Alcoa (NYSE: AA) though, when it reports results shortly, but it matters for the economy as it distorts the view of real growth. Alcoa's shares have been moving up heading towards its EPS report. We also saw Nondurable Farm Products post shipments increases, again likely on price change.

With regard to autos, shipments increased 1.6% in February, 0.2% in January and 0.1% in December. Shipments of Light Trucks and Utility Vehicles have also gained, rising 5.4%, 5.7% and 6.3% over the last three months. The report does not provide new order activity for these segments though. Noise will clutter automobile statistics in the months ahead though, due to the logistics nightmare tied to the disruption of production in Japanese plants.

As far as orders go, when excluding transportation, there is a noticeable decelerating trend over the last three months. The trend shows orders rose only 0.1% in February, down from 0.7% growth in January, which was down from 3.0% growth in December. That is concerning, and might be more than just a lull.

Aluminum orders gained 4.2% in February, with gains also posted in the two months prior. Mining, Oil Field and Gas Field Machinery Orders were up each of the last two months, rising 22.4% in February. Given the intensification of focus on energy independence, this is more good news for these machinery makers. Computers and Electronic Products Orders have hit a dry spell, sort of meandering around limbo, with orders up just 0.1% in February.

In conclusion, I would not be too worried about the month's decrease in order activity in February, due to its following such a strong January. However, the steadily slowing pace of order activity excluding transportation over the last three months might be a warning sign that the manufacturing strength that optimists keep pointing to might be pulled out from under them.

This article should interest investors in Boeing (NYSE: BA), Raytheon (NYSE: RTN), Digital Globe (NYSE: DGI), GenCorp (NYSE: GY), General Dynamics (NYSE: GD), Goodrich (NYSE: GR), Northrop Grumman (NYSE: NOC), Honeywell (NYSE: HON), Lockheed Martin (NYSE: LMT), Rockwell Collins (NYSE: COL), L-3 Communications (NYSE: LLL), EMBRAER (NYSE: ERJ), FLIR Systems (Nasdaq: FLIR), BE Aerospace (Nasdaq: BEAV), TransDigm (NYSE: TDG), Spirit Aerosystems (NYSE: SPR), CAE (NYSE: CAE), Alliant Techsystems (NYSE: ATK), Hexcel (NYSE: HXL), Triumph Group (NYSE: TGI), Esterline Technologies (NYSE: ESL), Moog (NYSE: MOG-A), Heico (NYSE: HEI), Teledyne (NYSE: TDY), Curtiss-Wright (NYSE: CW), Cavco (Nasdaq: CVCO), Skyline (NYSE: SKY), Nobility Homes (Nasdaq: NOBH), Palm Harbor Homes (Nasdaq: PHHM), Mohawk Industries (NYSE: MHK), Interface (Nasdaq: IFSIA), Albany International (NYSE: AIN), Unifi (NYSE: UFI), Illinois Tool Works (NYSE: ITW), Tyco International (NYSE: TYC), Cummins (NYSE: CMI), Kubota (NYSE: KUB), Ingersoll-Rand (NYSE: IR), Dover (NYSE: DOV), ITT Corp. (NYSE: ITT), Flowserve (NYSE: FLS), Pall (NYSE: PLL), Dresser-Rand (NYSE: DRC), SPX (NYSE: SPW), Gardner Denver (NYSE: GDI), IDEX (NYSE: IEX), Nordson (Nasdaq: NDSN), Graco (NYSE: GGG), Actuant (NYSE: ATU), Middleby (Nasdaq: MIDD), ABB (NYSE: ABB), Eaton (NYSE: ETN), Nidec (NYSE: NJ), Rockwell Automation (NYSE: ROK), Ametek (NYSE: AME), Regal Beloit (NYSE: RBC), Thomas & Betts (NYSE: TMB), Woodward Governor (Nasdaq: WGOV), Caterpillar (NYSE: CAT), Deere (NYSE: DE), CNH (NYSE: CNH), Joy Global (Nasdaq: JOYG), Bucyrus (Nasdaq: BUCY), Agco (Nasdaq: AGCO), Emerson Electric (NYSE: EMR), Parker Hannifin (NYSE: PH), Roper Industries (NYSE: ROP), Pentair (NYSE: PNR), Waste Management (NYSE: WM), Republic Services (NYSE: RSG), Fastenal (Nasdaq: FAST), Vulcan Materials (NYSE: VMC), MDU Resources (NYSE: MDU), Martin Marietta Materials (NYSE: MLM), Owens Corning (NYSE: OC), Valspar (NYSE: VAL), Precision Castparts (NYSE: PCP), United States Steel (NYSE: X), Reliance Steel (NYSE: RS), NVR (NYSE: NVR), DR Horton (NYSE: DHI), Pulte (NYSE: PHM), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), CRH (NYSE: CRH), CEMEX (NYSE: CX), Eagle Materials (NYSE: EXP), Fluor (NYSE: FLR), McDermott International (NYSE: MDR), Foster Wheeler (Nasdaq: FWLT), Empresas ICA (NYSE: ICA), Stanley Black & Decker (NYSE: SWK), Timken (NYSE: TKR), Kennametal (NYSE: KMT), Leucadia National (NYSE: LUK), Masco (NYSE: MAS), Weyerhaeuser (NYSE: WY), Quanta Services (NYSE: PWR), Chicago Bridge & Iron (NYSE: CBI), EMCOR (NYSE: EME), Snap-on (NYSE: SNA), Toro (NYSE: TTC), GM (NYSE: GM) and Ford (NYSE: F).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

ADP Private Payrolls and Challenger Job Cuts Data Examined

Jobs Data

The latest two labor market data-points to reach the business wire offered mildly positive news that contained components of concern. We examine March's ADP Private Employment Report and Challenger's Job-Cuts Report herein.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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ADP Private Payrolls and Challenger Job Cuts Data Examined

ADP's Private Employment Report for the month of March showed another plus 200K increase in its private nonfarm payroll estimate. ADP sees private payrolls rising 201K in March, which it says was in line with economists' expectations and consistent with consensus expectations for the federal government tally of private payrolls, due Friday. ADP also revised its February estimate slightly lower, to 208K, from the 217K reported initially.

The company's commentary indicated this level of change was consistent with a decreasing unemployment rate. It also reported that the last four months of estimates have averaged 211K, which is much higher than the four months just prior, with the average for that period, ending in November, at +74K. That said, ADP has a record of mismatching against the federal government data (at least of late), based on my unscientific observation, which I'm sure plenty of market watchers would agree with. Given its proximity to the government release, just two days prior, I'm not sure the report really carries much weight anyway. Investors tend to just wait a couple days for the DOL data before directing their dollars.

Most of March's improvement was found in the service sector and in smaller sized firms, or the "sweet spot" of the American bat. ADP noted the service sector likely added 164K net jobs in March. That's a lot, but it’s less than February's 187K net job additions for the most important segment of the American economy. Growth within the segment was spread proportionally to the importance of each size segment of American business. So most of the gains came in small-sized companies (0 to 49 employees), where a net 89K jobs were added within small services businesses. Mid-sized services firms (50 to 499) added an estimated 61K jobs, while large servicers (500+) added 14K jobs.

Within the goods producing sector, an estimated 37K jobs were produced in total, spread among 13K in small firms, 21K in medium sized, and 3K by large goods producing firms. Manufacturers added an estimated 37K jobs as a group. Construction employment is also isolated out, and was estimated to have shed 5K jobs in March. Financial services supposedly added 4K employees.

Overall, small-sized firms were estimated to have added 102K jobs, while medium-sized firms were reported to have added 82K and large firms 17K. This again is in line with the spread of jobs across American firms. Thus, there is no obvious anomaly or significant skew to growth that might be inconsistent with the spread of job opportunities that exists among firms, either in goods/services or in the sizes of firms, as far as I can see based a thumbnail of this data.

We do not necessarily dispute ADP's report, but neither are we impressed by the estimated job growth. It is not stellar, and the gains in small businesses are often simply eating capital of well-funded but doomed to fail start-up businesses, like perhaps many blogs. Also, we expect the public sector will pull jobs from the economy this month, given intensifying budget situations across the country. There's evidence of this in Challenger, Gray and Christmas' report for this month, which we detail in the paragraphs that follow.

Challenger, Gray and Christmas reported on Announced Corporate Layoffs for March today as well. Challenger reported improvement, with job cuts decreasing to 41,528, versus the 50,702 noted in February. That month however, was out of place compared to the last half year or so. In fact, through the first quarter, only 130,749 job cuts were declared, which was the lowest for any quarter since 1995.

However, while the total figure came down in March, the segment that is bothering me most these days, the public sector, posted a 17% increase in announced corporate layoffs, to 19,099. That said, the public sector has been shedding jobs for some time now, and so year-over-year comparison presents a completely different view of the situation. In fact, against last March, announced layoffs are down 62% from the prior year period.

That said, Challenger Executive Vice President Rick Cobb expressed concern about upcoming layoffs at the municipality and federal level, given budget battles currently underway. Still, and as we have said before within these pages, it appears that barring a cataclysmic or game-changing event, private organizations are operating at tight workforce levels that would not easily allow for further reductions... barring some important change.

While old areas of weakness, including the Pharmaceuticals, Telecommunications and Automotive industries are much improved in terms of job shedding, there are new leaders cutting costs. The retail sector for instance has already shed 15,768 jobs this year, though that's less than at this time last year. However, the Aerospace & Defense industry cannot boast of the same comparison, as its 7.3K job cuts year-to-date compare against just 2.7K at this time last year. The Financial Sector has also reduced workforce this year by a greater amount than last year.

California leads all layoffs this year, with 22K, which should not be a surprise given its relative population size. The District of Columbia is second though, with 14K layoffs year-to-date, but we can reconcile it to federal cutbacks and related government job cuts. Also playing a role in DC, non-profits are forced to reduce workforce during tough times, as contributions dwindle. Third is Michigan, which is just sad given the tough time the state has already had to deal with due to the significant consolidation of the auto industry.

The good news this last month was that when excluding government jobs, the damage is not so deep. No particular industry had more than 2,400 job cuts. The bad news is that among the reasons for layoffs, the leaders were restructuring, closed down businesses and cost cutting. Truth be told, there aren't many digestible reasons for layoffs on the board. If the current pace holds, we'll match last year's layoff pace, but there is a marked deceleration that will likely take the count well under 2010's 530K layoffs, barring unexpected event.

One such event that we cannot necessarily call unknown any longer is the Middle Eastern unrest driven spike in gasoline prices. Fuel price increase, in conjunction with rising commodity costs and food prices driven by global demand/supply imbalance and dollar dilution, is putting consumers into a sour mood (as just discussed at our blog yesterday). As a result, a new recession may not be too farfetched of a scenario, and anecdotal evidence tells me the economy is vulnerable to a shock like the rise in gas prices. And while employers are not firing, they do not seem to be hiring either, at least based on Challenger's take and our analysis of the unemployment rate. Challenger's report shows announced corporate hiring plans at only 10,869 in March, versus 13,994 last year; though February boasted a count of 72,581. That said, the current hiring pace through 3 months, would have total job creation about matching last year, given no change for the positive.

It is as if the economy is lying in waiting, businesses carefully watching, consumers entrenching, all waiting for the cloud of uncertainty to pass over. Only the investor ventures forth, boldly, but not by courage; instead by greed, he is driven to precede economic revival.

Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM). The day’s earnings included Deere (NYSE: DE), Tiffany (NYSE: TIF), China Cord Blood (NYSE: CO) and Frontline (NYSE: FRO).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Business News: Jobs Data, FDO, CEPH, QE3, Mortgages, Japanese Autos, Canadian Inflation, Oil Inventory

Today's Coffee

Today's Business Summary highlights economic data and business news from: ADP on Private Payrolls, Challenger on Job Cuts, the Mortgage Bankers Association on Mortgage Activity, Fed indications toward QE3 completion, Family Dollar's strong quarter, Cephalon's intriguing trading and its hostile bid from Valeant Pharmaceuticals, logistical issues at Japanese automakers, Obama's energy push, the EIA Petroleum Status Report, Canadian inflation, the repercussions of Japan's disaster, Salesforce.com's acquisition and more.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: Nasdaq: CEPH, NYSE: VRX, NYSE: FDO, NYSE: TM, NYSE: HMC, Nasdaq: NSANY, NYSE: BP, NYSE: F, NYSE: GM, NYSE: WMT, NYSE: JPM, NYSE: TSN, NYSE: AYI, Nasdaq: AETI, NYSE: AMN, Nasdaq: AMCF, AMEX: BNX, Nasdaq: CWS, OTC: CDELB, Nasdaq: DSCI, AMEX: DRJ, Nasdaq: DRYS, Nasdaq: DIET, AMEX: LZR, NYSE: ES, Nasdaq: ENMD, AMEX: EVK, Nasdaq: VIFL, NYSE: GMR, Nasdaq: GAI, AMEX: GRZ, NYSE: GU, AMEX: INV, Nasdaq: JOSB, Nasdaq: LACO, NYSE: LNN, Nasdaq: MERR, NYSE: MOS, Nasdaq: PTIX, NYSE: SIG, NYSE: UNF, Nasdaq: UNTK, Nasdaq: VCGH, AMEX: WTT, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Business News: ADP and Challenger Jobs Data, FDO, CEPH, QE3, Mortgages, Japanese Autos, Canadian Inflation, Oil Inventory

By "The Greek"

ADP Private Employment Report

ADP published its best estimate today for March Nonfarm Payrolls, seeing a 201K net increase in private market jobs. The result was just slightly less than the revised February net addition of 208K jobs. ADP reports that the result was in line with consensus expectations for ADP's data and for the government's data, due on Friday. The pace of job increase was significantly better through the first quarter of 2011, versus the last quarter of 2010.

Challenger Announced Corporate Layoffs

After a spike up in February, Challenger, Gray & Christmas reported that Announced Corporate Layoffs fell 18% in March, to 41,528. First quarter job cuts, at 130,749, were the lowest measured since 1995. Job cuts were still much improved from the prior year period, down 39%. However, the public sector saw job cuts increase by 17%, as municipalities and federal government budget cutbacks force layoffs. That said, even government layoffs were down from a year ago, falling by 62%.

Mortgage Activity Eases

As rates moved back up on easing concerns about the Middle East and Japan, mortgage refinancing activity led overall mortgage activity lower. For the period ending March 25, the Market Composite Index of mortgage activity fell 7.5% on a seasonally adjusted basis. The Refinance Index dropped 10.1%, as contracted rates on fixed rate mortgages of 30-year and 15-year durations increased to 4.92% (from 4.8%) and 4.16% (from 4.02%), respectively. Purchase activity also eased, but by just 1.7% on a seasonally adjusted basis, as the spring buying season is getting underway.

Fed Men Support Completion of Quantitative Easing

Two Federal Reserve Bank Presidents, Boston's Eric Rosengren and Chicago's Charles Evans, voiced support for the full completion of the Fed's $600 billion quantitative easing program scheduled to last through June. The argument by some Fed men that the economy is on "firmer footing," and so might not need the full program, is coming into question of late, given new economic data and developments in the marketplace and global economy. The duo of Fed Presidents intimated that it was likely still too early to pull stimulus and that it appears the target figure of $600 billion is appropriate.

Obama Pushing Energy Today

President Obama is delivering a speech today to promote energy independence in the wake of disruptions abroad which highlight the vulnerability of supplies. The goal is to reduce oil imports by one-third over the next decade through the development of alternative fuels and energy. In a teaser last night, the President said, "Let's actually have a plan. Let's, yes, increase domestic oil production, but let's also invest in solar and wind and geothermal and bio-fuels and let's make our buildings more efficient and our cars more efficient."

Japan Might be Bigger Problem than Experts Suggest

Reports that the nuclear situation could drag out like the BP (NYSE: BP) oil spill did have many quick-to-speak market strategists looking foolish today. Japan's nuclear experts are now saying that it could take a substantial amount of time to stabilize Fukushima. As this catastrophe drags out, it weighs on the world's third largest economy. Uncertainty is a heavy weight for markets to bear, and it appears gurus were wrong in their overlooking what is a very complex and unique situation in Japan.

Portugal Says A-Okay for 2011

Despite bearing a downgrade by credit rating bully S&P on Tuesday, Portugal's Secretary of State for Treasury and Finance, Carlos Costa Pina, said Portugal is in position to meet its bond obligations for 2011, especially the redemptions of long-term debt that will take place in April and June. Costa Pina suggests his country will do all it can to avoid taking foreign aid, as it is viewed internally as a great burden on both public and private sector growth. Indeed, Greece also tried to avoid taking help, but the markets forced it to by pressuring its cost of borrowing beyond its ability. The recent government turnover only increased uncertainty in Portugal and pushed bond yields higher. The outlook is not a bright one for Portugal and so credit-rater S&P is probably right, but after the fact as is proving a trend on Water Street (i.e. US MBS).

Canada Contributes to Inflation Fears

Canada reported its industrial product and raw materials prices increased more than expected in February. The North reported that industrial product prices increased 0.7% in February, against expectations for a 0.3% increase. The gain followed a 0.4% rise in January and a 0.8% increase in December. Prices were up 3.4% year-to-year. The Raw Materials Price Index rose 1.8% in February, and was three times more than economists foresaw.

EIA Petroleum Status

With Saudi Arabia on its horse to make up for the supply disruption from Libya, oil inventory increased again by 2.9 million barrels in the latest week. However, for the period ending March 25, total motor gasoline inventory again dropped precipitously, by 2.7 million barrels this time. The Saudis are saying they will send more oil conducive to gasoline refining to make up for the loss of high quality oil usually delivered from Libya. Indeed, US interests are at stake in Libya, as the price of gasoline is growing intolerable to American consumers.

Corporate News Wire

Family Dollar (NYSE: FDO) reported a penny better quarterly EPS than analysts had forecast on average (even after their adjustment higher in early March), and FDO forecast annual income ahead of analysts' estimates. As a result, its shares are higher today, but down from their premarket scramble. Family Dollar sees full year EPS at $3.13 to $3.23, ahead of the analysts' consensus for $3.12.

Cephalon (Nasdaq: CEPH) is trading at a $75 and change today, above the $73 per share hostile takeover bid by Valeant Pharmaceuticals (NYSE: VRX), Canada's largest drugmaker. Valeant's bid marked a 24% premium to CEPH's closing price Tuesday. Valeant is an aggressive acquirer, and it looks like the market is anticipating Cephalon's playing hard to get might work in its shareholders' favor. Or, investors may be indicating the possibility of a bidding war. Otherwise, if the deal were accepted, CEPH's shares would be trading at a slight discount to the bid price.

Salesforce.com (NYSE: CRM) is adding a social media aspect through its acquisition of private firm Radian6, announced Wednesday. The deal, costing $326 million in cash and stock, is seen as an asset to the cloud software writer's clients ability to track customer trends on social media sites.

Japanese automakers Toyota (NYSE: TM), Honda (NYSE: HMC) and Nissan (Nasdaq: NSANY) are experiencing logistics issues tied to car parts deliveries from shutdown plants in Japan. Toyota has reportedly told its US dealers to stop ordering certain parts, for fear it will run out. Meanwhile, testing for radiation at foreign locations poses threat to further taint the Japanese automakers' brands and deliveries.

Wal-Mart (NYSE: WMT) is holding an international conference today for the investment community. The J.P. Morgan (NYSE: JPM) Global Protein Conference highlights a presentation by Tyson Foods (NYSE: TSN). The earnings schedule highlights reports from Acuity Brands (NYSE: AYI), American Electric Technologies (Nasdaq: AETI), Ameron International (NYSE: AMN), Andatee China Marine Fuel Services (Nasdaq: AMCF), Banks.com (AMEX: BNX), China Wind Systems (Nasdaq: CWS), Citadel Broadcasting (OTC: CDELB), Derma Sciences (Nasdaq: DSCI), Dreams (AMEX: DRJ), DryShips (Nasdaq: DRYS), Ediets Com (Nasdaq: DIET), Emergent (AMEX: LZR), EnergySolutions (NYSE: ES), Entremed (Nasdaq: ENMD), Ever-Glory (AMEX: EVK), Family Dollar (NYSE: FDO), Food Technology Services (Nasdaq: VIFL), General Maritime (NYSE: GMR), Global-Tech Advanced Innovation (Nasdaq: GAI), Gold Reserve (AMEX: GRZ), Gushan Environmental Energy (NYSE: GU), Innovaro (AMEX: INV), Jos. A. Banks (Nasdaq: JOSB), Lakes Entertainment (Nasdaq: LACO), Lindsay (NYSE: LNN), Merriman (Nasdaq: MERR), Mosaic (NYSE: MOS), Performance Tech (Nasdaq: PTIX), Signet Jewelers (NYSE: SIG), Unifirst (NYSE: UNF), UniTek Global (Nasdaq: UNTK), VCG Holding (Nasdaq: VCGH), Wireless Telecom (AMEX: WTT) and others.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Consumers Souring on the Economy

Consumer Shock

Two separate consumer confidence measures offered a consistent message over the last several days. Consumers are souring on the economy. Global economic recovery, combined with the pressure applied from Middle Eastern unrest, has a difficult environment further burdened by rising gasoline and other prices.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Consumers Souring on the Economy

Both the University of Michigan/Reuters measure and the Conference Board's measure published on Tuesday concurred that inflation is the main concern of consumers today. It has them very worried about the affordability of gasoline and food and other goods over the months ahead. As higher necessary gasoline expenditures cut into pocket books, other spending is threatened as well.

The Conference Board's latest take for March showed its Consumer Confidence Index fell to 63.4, a notable decline from February's measurement of 72.0. The mark was the worst in three months in fact. As we have discussed here previously, most of the last year's gains in confidence have been counted in the expectations portion of the survey. The outlook of consumers had improved, surely benefiting from a rising stock market and positive economic data. We continue to be suspicious though of the reported gains in employment, and we've suggested the true unemployment rate is closer to 9.4% then 8.9%. Expectations, however, are easily spoiled, and vulnerable to swift change, as seen in the monthly collapse here.

Last week, Reuters/University of Michigan reported its Consumer Sentiment Index fell to 67.5, from 77.5 in February. That was the lowest reading for the index in more than a year. The expectations index here fell to 57.9, from 71.6 in February; this was the lowest level for consumer expectations since March 2009. The Conference Board's report issued today showed its consumer expectations measure fell to 81.1, from 97.5.

In both cases, the surveyed consumers indicated it was inflation concerns that bothered them most. Inflation expectations moved higher in each report, and the reason is clear, as gasoline has been highly pressured by the events in Libya, Bahrain and the Middle East and North Africa generally. However, even before the turnover of government in Egypt, commodity prices had been steepening. In fact, higher food prices were at the core of the unrest in Tunisia, since the impact is felt more sensitively by these third world nations, where food costs represent a greater proportion of income than in the U.S.

The Conference Board's report has not proven positive upon close inspection, even before today's news. While it has noted better relative results, on an absolute level, the survey displays a clearly miserable state of affairs. For instance, consumers claiming business conditions are "good" increased, but only to 15.1% of those surveyed. Those claiming business conditions were "bad" decreased, true, but only to 37.0%, from 39.3%. And some 44.6% of consumers said jobs are "hard to get", while just 4.4% said jobs were "plentiful".

Study of the numbers shows a pitiful confidence environment, that much is clear. Just 20.6% of consumers expect business conditions to improve over the next six months, and that is down from a still sad 25.2% last month. The numbers are not any better with regard to the jobs outlook or for income expectations. Representing 70% of the American economy, consumer spending is threatened, as is the housing recovery and GDP. Thus, concern is heightening about the possibility of another recession, and the likelihood of QE3 is increasing.

I noted Larry Kudlow Tuesday pointing to manufacturing strength and Jim Cramer spoke recently of the good health of the American multinational. Both statements are true. However, manufacturing alone will not survive the American economy, and the good health of American multinationals will neither support significant US job growth.

Article interests investors in: S&P Retail ETF (NYSE: XRT), Wal-Mart (NYSE: WMT), Pier 1 Imports (NYSE: PIR), Ethan Allen (NYSE: ETH), Hooker Furniture (Nasdaq: HOFT), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Apple (Nasdaq: AAPL), Best Buy (NYSE: BBY), The Limited (NYSE: LTD), Chicos (NYSE: CHS), Ann Taylor (NYSE: ANN), The Gap (NYSE: GPS), Macy’s (NYSE: M), JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), TJX Company (NYSE: TJX), Kohls (NYSE: KSS), Costco (Nasdaq: COST), Target (NYSE: TGT), Wet Seal (Nasdaq: WTSLA), Hot Topic (Nasdaq: HOTT), American Eagle Outfitters (NYSE: AEO), Aeropostale (NYSE: ARO), Abercrombie & Fitch (NYSE: ANF), Saks (NYSE: SAK), Tiffany (NYSE: TIF), Talbots (NYSE: TLB), Lumber Liquidators (NYSE: LL), Builders Firstsource (Nasdaq: BLDR), Fortune Brands (NYSE: FO), Leggett & Platt (NYSE: LEG), Tempur-Pedic International (NYSE: TPX), Acuity Brands (NYSE: AYI), La-Z-Boy (NYSE: LZB), Select Comfort (Nasdaq: SCSS), Sleepy’s (NYSE: ZZ), Furniture Brands (NYSE: FBN), Natuzzi (NYSE: NTZ), Sears (Nasdaq: SHLD), Dillard’s (NYSE: DDS), Bon-Ton (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Baker’s Footwear (Nasdaq: BKRS.OB), Bebe Stores (Nasdaq: BEBE), The Buckle (NYSE: BKE), Cache (Nasdaq: CACH), Casual Male (Nasdaq: CMRG), Cato (Nasdaq: CATO), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Collective Brands (NYSE: PSS), Destination Maternity (Nasdaq: DEST), Dress Barn (Nasdaq: DBRN), DSW (NYSE: DSW), Finish Line (Nasdaq: FINL), Footlocker (NYSE: FL), Gymboree (Nasdaq: GYMB), Guess (NYSE: GES), J. Crew (NYSE: JCG), Jones New York (NYSE: JNY), Jos. A Banks (Nasdaq: JOSB), New York & Co. (NYSE: NWY), Men’s Wearhouse (NYSE: MW), Syms (Nasdaq: SYMS), The Children’s Place (Nasdaq: PLCE), Bank of America (NYSE: BAC), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), J.P. Morgan (NYSE: JPM), Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC).

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Rock'n in Tokyo

Image via Wikipedia

This is a letter i received from a good friend of mine living in  Japan. It was so compelling I asked if he would share it which he agreed. 

Hi,

Just wanted to touch base. Just started a job on the 28th and was at the office in downtown Tokyo when it hit. Was on the 22nd floor of a 54 story building and the building was swaying in what I would call a spectacular fashion. This was much worse than the 89 Loma Prieta quake in the San Jose Ca area by far. Standing upright was very challenging. The quake itself lasted more than 3 minutes and the building continued to move much longer. Have had almost 3 major aftershocks per hour ever since and just writing my recollections about this gives me vertigo. No one panicked probably because we have temblors here all the time (1 or 2 a month). After the the first minute and the shaking didn't stop I thought maybe it was just the building movement but that motion usually subsides this however was different in that it just wasn't slowing down. Power, internet, water and gas service incredibly were not interrupted at all in the area both during and after the quake. We were wondering how bad things were because looking out the window you couldn't tell. Probably because all the other buildings were swaying the same way. I was glad that no smoke was visible through the office windows and no other signs of damage were visible and was vainly hoping that it was just another slightly larger than the average event. This view of course would change as hours later we learned the true extent of the damage.

After the swaying stopped some of the staff wanted to get back to work not really realizing what had happened. People were trying to use there cell phones Those of us who have experienced major events or watched the buildings attacks on 9/11 unfold knew that getting out quickly when it seemed safe was the prudent course of action. Entering the stairwell I was surprised that not many people were evacuating and incredibly some were going up the stairway. While the buildings structure held up really well in the office area and no obvious damage was visible. The stairwell on the other hand had a lot of masonry on the edges of the floor. This was dislodged by the difference in motion of the stairs and the main structure. The walk downstairs as you can imagine was a long one and we began to see many people as we got to lower levels. Once in the building lobby it was packed with folks but there was no sense of panic just anxiety as to whether it was all over or more was yet to come. Going outside was a real sight, the usually bustling walkways with folks were now overcrowded with people going every which way or gazing up at the many skyscrapers that line the streets. Not many cars were on the road yet but lots of  pedestrians were.

We ducked into a cafe and sat down to get our wits together and wait things out for awhile. We heard passersby's saying that all train service had shut down and that most road ways were filled with people and cars at a virtual stand still. The streets outside were very crowed with folks too afraid to stay in the skyscraper office building in the area. After about an hour I went to Shinjuku station which is the one I use now and one of the major train hubs in town and found all train lines were shutdown (no shock there). I was concerned about getting home and could tell that about 2 million others were as well based on the size of the crowds. This station has about 3 million pass through it on an average day in which this was turning out to be anything but average. Train officials using loud speakers were calling out and numerous signs were posted saying that, yes indeed, everything was stopped indefinitely. It was here for the first time we could see TV news reports of what was happening and that it was truly bad. We went back to the cafe and stayed there for a few hours and after dark two of our group decided to walk back home and the rest of us decided to go back up in the building. The aftershocks had subsided a bit and were now only about one per minute as opposed to 5. It was getting really cold so a warm well lit environment was a welcome respite.

Once up in the build which was functioning again I was able to contact the family and let them know I was ok and that they had all gotten home. All but my youngest (a 4th grader) were home when the quake hit. He was walking home from school with a number of others and he was found they were all safe and sound. My oldest son then guided them home. They not know how I was or exactly where we naturally concerned and it was more than six hours I was able to contact them using a skype internet connection. In the past I had casually mentioned that I could walk if push came to shove in such a situation and were worried that I had. Knowing as I do that you don't go wandering off after night fall in near freezing weather after a major disaster had decided against such a move. I had confirmed that train service was still down I and the other employees were resigned to spending the night at the office on the 22nd floor. Not my first choice of places to be but considering the shivering tired faces of those at the station decided it was probably the best place.

It wasn't till after 1am that one of the managers learned some segments of the train lines had reopened and with some planning could navigate his way to his home station. He knowing that we lived nearby suggested I come with him and that he and his wife could drive me home once we arrive. Well after a long night of train connections and waiting in line we were able to get to his station and his wife was waiting for us. It was by far the most tiring journey of my life and was thankful to see it finally come to an end. We arrive at my house about sun up and was grateful that while there was visible damage it wasn't anywhere near as bad as we had seen other areas. Finding my family safe at the neighbors house was a welcome sight to see. 

The house we are renting is pretty far outside of Tokyo but had damage and some older homes are in pretty bad shape. Fortunately we had long ago planned for this and had things bolted, locked and strapped down so nothing had fallen or been broken. Our neighborhood watch group had helped everyone shut off gas and power until it could be determined it was safe to have on. Our house like others in the area unfortunately will require some work to get it back to the way it was before. Our landlord has advised us that we will have to leave the house temporarily. With having been under employed for more than a year now this is going to be a major hardship and we have no way to pay for the temporary relocation amongst other things needless to say. I know others however were not so fortunate, loss of loved ones and as you saw on the news escaped only with their lives and clothes on their back. We are however in dire straights at the moment.

The sheer scale of the damage is not (nor can it) accurately portrayed in the news. Food now in stores is almost non-existent right now and the prices of everything have shot up. With the disruption of transport and the like it is not known how or if this will be short or a longer term issue.

--
Best Regards,

David Forncrook

Related articles

• 2 new quakes rattle Japan's northeast, Tokyo (salon.com)
• 2 new quakes rattle Japan's northeast, Tokyo (sfgate.com)
• Another Large Quake Rattles Tokyo (spectrum.ieee.org)
• Letter from Tokyo (everwas.com)
• Tsunami: L.A. executives experience quake in Japan (latimesblogs.latimes.com)
• Locals living in devastated Japan fear the next big one (windsorstar.com)
• 'Skyscrapers were swaying like the masts of yachts' (theage.com.au)
• 2 new quakes rattle Japan's northeast, Tokyo (seattletimes.nwsource.com)
• An Aftershock as Large as a Regular Quake (zwingliusredivivus.wordpress.com)
• 2 new quakes rattle Japan's northeast, Tokyo (foxnews.com)

TSUNAMI IN JAPAN KILLS THOUSANDS

An 8.9 earthquake off the shore of Japan triggered a 23-foot tsunami killing thousands. People were running for their lives, but they could not escape the massive wave of water and debris. The Tsunami carried away
homes, ships, cars and people. The people living in Onahama Japan where the nuclear power plant is were told to move back two miles from the nuclear power plant in case of leakage. Now the people are evacuating because the unclear power plant is leaking. The Tsunami that hit Japan was horrific, it could have been devastating if would have happened at night. Not only did it affect Japan it also affected the Hawaiian Islands and the Western Coastal States. Hawaii and the West Coast had a warning unlike
Japan. Crescent City California harbor and docks were destroyed and damage is in the multi millions. Santa Cruz California was hit hard by this tsunami, there docks and harbor were damaged as well. Boats were swept out
to sea, but some people did not heed the warning to stay away from the beach. People were walking their dogs and had their children on the beach. These people have to be some of the stupidest idiots I have ever seen.Three men  decided to take their cameras to the Klamath River in Del Norte County to get pictures. All three were swept away by a surge two made it back to shore, but the other one is still missing. The traffic was a nightmare on highways 17 and 152. Streetwise Special Delivery Courier driver was caught in the traffic this morning it took him two and a half
hour to get back to San Jose. He saw people camped out on the side of the roads with their families they were still in their pajamas under blankets. People of California are you ready for a tsunami as big as the one that hit Japan; it is going to happen one day.


LM


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