Joseph Lazzaro
New York - http://
Joseph Lazzaro is a veteran financial editor with more than 10 years in financial news and financial publishing. Lazzaro served as Managing Editor of New York-based financial news web site WallStreetItalia.com / WallStreetEurope.com for four years. Lazzaro, who holds an ABD/Ph.D. in American Government and International Economics from the University of Connecticut, also served as a News Editor for the Pulitzer Prize-winning Hartford [Connecticut] Courant, prior to graduate school. He is based in New York.
Posted May 15th 2008 4:44PM by Joseph Lazzaro
Filed under: Oil, Stocks to Buy
Oil driller
Transocean, Inc. (NYSE:
RIG), whose shares have probed, but have been unable to move and stay permanently above $160 -- may have received the catalyst it needs to reach loftier price levels.
Transocean's shares jumped $8.34, ending at $155.54 after
Bloomberg News reported that
Petroleo Brasileiro (NYSE:
PBR), Brasil's state-controlled oil company, leased about 80% percent of the world's deepest-drilling offshore rigs to explore prospects. That included the Western Hemisphere's biggest discovery in decades, the Tupi field. Further, the activity of Petroleo, also known as Petrobras, is forcing up day-rates for oil rigs. PBR also closed higher Thursday, up $2.00 to $68.27.
Further, Petrobras is in talks with Transocean to extend leases as much as three years ahead of expiration, Robert Long, chief executive officer for the Houston-based RIG,
told Bloomberg News. Also, Petrobras plans to start pumping oil from Tupi in Q1 2009. Tupi is the largest oil find in North America since the 1976 Cantarelli field discovery in the Gulf of Mexico.
Continue reading Petrobras needs more oil rigs, Transocean's shares surge
Posted May 15th 2008 2:12PM by Joseph Lazzaro
Filed under: Bad news, Housing, Recession
The U.S. housing slump is creating another negative ripple effect, this one by extension, or by association, if you will, as in condo/co-op association.
Owners in condo associations are having to chip-in to pay for unexpected association maintenance, tax, and related fees when other residents enter foreclosure or are substantially behind in payments,
The New York Times reported Thursday. The Times cited the case of condo owners in a 43-story Miami, Florida condo having to ante up more money after 1 in 6 residents battled foreclosure. The additional charge: an additional $1,000 assessment and $50 more a month for cable and internet fees, on top of the regular $450 monthly maintenance.
Connecticut-based appraiser Lawrence Schmidt, not a realtor but a former 15-year condominium owner with extensive knowledge of the sector, told BloggingStocks Thursday prospective buyers need to fully-research a condo association's membership status, including record of tax payments of individual members, in addition to the standard evaluation of the condo association's maintenance fees, contractor services, and quality-of-life issues, etc. Co-op buyers must do even more research on the co-op's balance sheet, monthly budget, cash flow, outstanding mortgage, and other related financials, he said.
Continue reading Warning for condo owners: A neighbor's financial problem could be yours
Posted May 15th 2008 2:00PM by Joseph Lazzaro
Filed under: International markets, Forecasts, Good news, Economic data
Europe's economy grew more than forecast in Q1 2008,
the European Union's statistics office announced Thursday, as Germany's economy continues to bolster the continent's results.
Euro-zone GDP increased 0.7% in Q4 2008, 0.2 percentage points above the
Bloomberg News survey consensus estimate.
Germany served as the primary economic engine, recording 1.5% in the quarter – its fastest growth in 12 years,
Bloomberg News reported Thursday. Meanwhile, France registered 0.6% GDP growth. Together, Germany and France account for about 50% of the euro-zone's GDP.
On a year-over-year basis, euro-zone GDP increased 2.2% in the 15-nation group. Growth in the 27-nation European Union increased 2.4%.
However, despite the upside GDP surprise from both the euro-zone and Germany, key economic officials downplayed the results. European Central Bank President Jean-Claude Trichet
told Reuters the news, while positive, simply confirmed what he had expected – that Q1 2008 would be good and the ensuing period slower.
A hint by Trichet?Economist David H. Wang told BloggingStocks Thursday there could be a glimmer of hope for those who favor an interest rate reduction by the ECB. It was unusual for the ECB's Trichet to reference slower growth after the release of a GDP report, he said. Trichet, an inflation hawk, regularly speaks of Europe's industrial capacity and price pressures in the context of GDP, Wang said.
"I don't know if this was a hint, or perhaps a mini-hint, regarding monetary policy," Wang said. The currency market shrugged-off Trichet's comments, with both the
euro and
British pound remaining at essentially the same levels they were earlier in the day versus the
dollar, at $1.5440 and $1.9445, respectively.
Continue reading Euro-zone Q1 GDP growth beats estimate, but slowdown still seen
Posted May 15th 2008 11:30AM by Joseph Lazzaro
Filed under: Bad news, Industry, Economic data, Recession
U.S. industrial production plunged 0.7% in April 2008,
the U.S. Federal Reserve announced Thursday, as a spectrum-wide contraction took place in the nation's factories.
Economists
surveyed by Bloomberg News had expected industrial production to decline 0.3% in April 2008.
Further, factory output plummeted 0.8% - - the largest drop in factory output since September 2005, a month that reflected the abnormal, irregular factory output reduction caused by Hurricane Katrina in the late summer of 2005. Excluding autos and auto parts, factory output declined 0.4%.
Also, capacity utilization increase declined to 79.7% in April 2008 from 80.4% in March 2008. Economists
surveyed by Bloomberg News had expected capacity utilization to total 80.1% in April 2008. Capacity utilization totaled 80.3% in February 2008.
Industrial output evaluationEconomist David H. Wang said the April 2008 industrial production statistic reflects a familiar theme in the current U.S. economic slowdown: a contracting factory sector.
Continue reading April U.S. industrial production plunges - biggest drop since Hurricane Katrina
Posted May 15th 2008 9:09AM by Joseph Lazzaro
Filed under: Bad news, Employees, Economic data, Recession
Initial U.S. jobless claims increased 6,000 to 371,000 for the week ended May 10 -- slightly above the consensus estimate,
the U.S. Labor Department announced Thursday. Claims for the previous week remained at 367,000.
Economists
surveyed by Bloomberg News had expected this week's initial jobless claims to total 370,000.
Also, the 4-week moving average decreased 1,000 to 367,000. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.
Economist Peter Dawson said this week's job report "shows that labor conditions continued to soften. We're seeing little to no evidence that small or large companies have picked-up their hiring pace."
Continue reading Jobless claims rise as job market continues to soften
Posted May 14th 2008 5:15PM by Joseph Lazzaro
Filed under: Stocks to Buy
Readers of this space know that in addition to oil / oil services, one of my preferred sectors is: infrastructure / public services. That's because despite the U.S. economic slowdown, global growth proceeds at a better-than-adequate pace, with infrastructure work playing a significant role. And with the aforementioned in mind, The Shaw Group is worth an evaluation.
The Shaw Group (NYSE:
SGR) is a leading supplier of industrial piping systems, including engineering, pipe erection and construction / maintenance services.
Analysts really like the fact that Shaw Group has also positioned itself as one of the largest engineering and construction contractors for the power generation market and as a top environmental services company. Another positive: SGR's large geographic footprint.
Analysts see 7-11% revenue growth for F2008, and 9-12% for F2009, with adequate margins.
The Reuters F2008/F2009 EPS consensus estimates for SGR are $2.30/$3.32.
Continue reading For Shaw Group, the developing world is a lucrative world
Posted May 14th 2008 4:47PM by Joseph Lazzaro
Filed under: International markets, Forecasts, Good news, Federal Reserve
Macroeconomic factors are beginning to hint about a
change in the dollar's fortunes, pun intended, if a new survey is any indicator.
Still, that doesn't mean that the United States does not have work ahead to right its economic ship of state, so says one economist.
The Bloomberg Professional Global Confidence Index's dollar expectations component rose to 57.6 in May 2008 from 42.87 in April 2008, and 30.3 in March 2008. A reading above 50 indicates respondents expect the currency to appreciate in the next six months. The poll surveyed 3,447 Bloomberg terminal users.
In late Wednesday afternoon trading, the
dollar rose slightly against the world's other major currencies, rising about a fifth-cent to $1.5446 against the
euro, and a quarter-cent to $1.9435 against the
British pound. The dollar also rose about one-half yen to 105.35 against
Japan's yen. The dollar hit an all-time low versus the euro of $1.6018 on April 21, 2008. The euro has appreciated about 100% versus the dollar since 2000.
Continue reading Sentiment toward dollar turning bullish, survey reveals
Posted May 14th 2008 3:55PM by Joseph Lazzaro
Filed under: International markets, Commodities, Agriculture
Don't blame agricultural economists if they're feeling somewhat befuddled right now concerning wheat.
After two years of
record price increases among grains -- including wheat -- and amid a global commodities price surge, and more than a month after predictions of wheat and bread shortages capable of producing social unrest, the U.S. Government is now predicting a global wheat production recovery for 2008.
U.S. wheat production to riseThe
U.S. Department of Agriculture's latest estimate predicts that 2008 world wheat production will increase considerably, including an 8% increase in U.S. production to 656 million tons.
The USDA said good weather and record-high prices that have increased incentives to plant and farm effectively are the primary factors behind wheat's expected large harvest this year,
Reuters reported Wednesday.
Wheat traded down 22 cents at $7.73 per bushel in Wednesday afternoon trading. Wheat has declined more than 20% since hitting a record-high $12.82 per bushel on March 12, 2008.
Continue reading Large wheat harvest unlikely to lower U.S. bread, pasta, pizza prices
Posted May 14th 2008 1:15PM by Joseph Lazzaro
Filed under: Commodities, Stocks to Buy
Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, El Paso Corp. is worth a review.
El Paso Corp. (NYSE: EP) operates the largest natural gas transportation system in the United States, with a host of attractive, lateral business lines including natural gas production, gas storage, power generation, and trading.
El Paso is in a sweet spot, of sorts, concerning energy. Record-high oil prices -- plus the unknown regarding how high the price of oil will rise ($150?, $175?, $200?) -- means that a good number of businesses and residences will convert to natural gas, where possible, which, of course, benefits transmitters and producers of natural gas. The U.S has experienced two other periods with mass defections from oil to natural gas, during the two previous oil shocks, in 1973-74 and 1979-80.
Continue reading As the U.S. converts to natural gas, El Paso Corp. will be smiling
Posted May 14th 2008 12:25PM by Joseph Lazzaro
Filed under: Commodities, Oil
Oil is treading water at a near-record $125 per barrel after a U.S. Energy Information Administration report indicated that weekly crude oil inventories rose a considerably smaller-than-expected 200,000 barrels. Economists surveyed by Bloomberg News had expected crude oil inventories to increase by 2.25 million barrels last week.
Gasoline supplies fell 1.7 million barrels.
The modest increase in oil inventories had little affect on oil prices, for the moment. Oil was down 87 cents to $124.93 per barrel in Wednesday morning trading. The other major energy commodities were also virtually unchanged. Unleaded gasoline fell 1 cent to $3.18 per gallon. Heating fell about 2 cents to $3.66 per gallon. Natural gas gained 10 cents to $11.52 per million BTUs.
Meanwhile, refineries operated at 86.6% of capacity for the week ended May 9, 2008, the EIA report indicated, up from 85.0% in the week ended May 2, 2008.
A bright spot: Refinery utilization
Independent energy trader Jim Dietz told BloggingStocks Wednesday the increase in refinery utilization was the report's lone bright spot.
Continue reading Oil stable near $125 after small weekly inventory build
Posted May 14th 2008 9:40AM by Joseph Lazzaro
Filed under: Good news, Economic data, Federal Reserve
Consumer prices rose 0.2% in April 2008,
the U.S. Labor Department announced Wednesday, a statistic below the consensus estimate as oil prices moderated during month, offsetting rising food prices.
Economists
surveyed by Bloomberg News had expected April 2008 consumer prices to increase 0.3%. Consumer prices increased 0.3% in March 2008.
Also, the core rate, which excludes the frequently-volatile food and energy component, rose just 0.2% in April 2008, inline with the
Bloomberg News survey 0.2% consensus estimate.
On a year-over-year basis, consumer prices have risen 3.9% and the core rate has risen 2.3%. The core rate remains slightly above U.S. Federal Reserve's 'comfort zone' for inflation. The Fed uses the core CPI rate as one of its primary gauges of consumer-based inflation.
April 2008 CPI: 'Surprisingly tame'Economist David H. Wang said the April 2008 CPI report was a bit of a surprise -- one that may help the U.S. economy. "The report was surprisingly tame. We do see rising food costs, but the energy component was not as bad as expected," Wang said. "Also, core year-over-year inflation is not too bad, and the Fed [U.S. Federal Reserve] will look favorably upon this, if it remains moderate."
Continue reading April U.S. CPI rises 0.2%, lower than expected
Posted May 13th 2008 5:26PM by Joseph Lazzaro
Filed under: Forecasts, Bad news, Housing, Recession
Median home prices fell in two-thirds of American cities in Q1 2008,
the National Association of Realtors announced Tuesday. The median price fell 7.7% to $196,300 in Q1 2008 down from $212,600 for the same period a year ago,
the NAR said. It was the largest year-over-year decline since the NAR started keeping comprehensive records of median home prices in 1979.
Median prices declined 12.3% in the West, 7.9% in the Midwest, 7.5% in the South, and 3.32% in the Northeast.
Continue reading U.S. median home prices fall the most since 1979, NAR says
Posted May 13th 2008 3:45PM by Joseph Lazzaro
Filed under: International markets, Forecasts, Commodities, Oil
An economic slowdown in the United States and other industrial nations will continue to damper oil consumption growth,
the International Energy Agency announced Tuesday, as it again trimmed its global oil demand estimate for 2008.
The IEA lowered its forecast for 2008 global oil demand by another 390,000 barrels to 86.8 million barrels per day from about 87.2 million barrels, the association announced in its latest monthly report. At the same time, the IEA revised its analysis of 2007 oil usage, saying the world used about 85.8 million barrels per day last year.
Oil traded $1.50 higher to $125.70 per barrel in Tuesday afternoon trading. Oil hit an all-time high of $126.98 in electronic trading earlier in the day and has risen about 100% in the past 12 months.
Continue reading IEA again cuts 2008 global oil demand forecast
Posted May 13th 2008 1:57PM by Joseph Lazzaro
Filed under: Boeing Co (BA)
Airbus has again delayed delivery of selected A380 superjumbo jets, saying the company's transition to automated production is behind schedule.
Airbus now expects to deliver 12 A380 planes in 2008, down from 13, and 21 planes in 2009, down from 25, the company announced Tuesday.
Promoted as the world's most economical, large aircraft, the A380 is about two years behind schedule. The A380 will seat 525 passengers in a normal configuration, at least 50-120 seats more than its chief competition, Boeing's (NYSE: BA) 747, the wide-body industry standard.
In Europe, shares of Airbus's parent EADS were virtually unchanged on the news, down just 2 euro cents to 12.72 euros in afternoon trading. Boeing's shares gained five cents to $84.87.
Continue reading Airbus delays delivery of some A380s
Posted May 13th 2008 11:45AM by Joseph Lazzaro
Filed under: Industry, Economic data, Recession
U.S. business inventories
rose a scant 0.1% in March 2008 (pdf), the U.S. Commerce Department announced Tuesday -- the smallest inventory rise in a year.
Economists
surveyed by Bloomberg News had expected March 2008 inventories to rise 0.5%.
Also, the March 2008 inventory-to-sales ratio declined to 1.27. Meanwhile, the February 2008 business inventory statistic was revised higher to an increase of 0.2%.
Inventories: Two-sided statEconomist David H. Wang told BloggingStocks Tuesday the March 2008 inventory data can be interpreted two ways, with positive and negative dimensions.
On the one hand, businesses are keeping inventories at a bare minimum -- a fact that typically is bearish, short-term, for the U.S. economy, Wang said. "It can reflect a lack of business confidence in the economy's ability to grow in the short run," he said.
On the other hand, those same lean inventories mean that any sustained increase in demand will require businesses to ramp-up production quickly -- a phenomenon that generally limits the length of a recession / economic downturn, Wang said.
Another positive dimension to lean inventories: companies will not have to trim as many employees if the U.S. economy slows further. "In all, this month's inventory report contained a lukewarm stat," Wang said. "The best aspect of it is, businesses are prepared for a further downturn in the economy, should it occur."
Next Page >
JC Penney (JCP) gets hit by economic slowdown, but beats analyst estimates
Ford (F) recalls over 650,000 pickup trucks
The Toyota (TM) Prius turns one million
