One of the classic indicators that determine if people believe they are in a recession is retail sales. This ties into consumer confidence and jobs data that help determine the health of the economy.
Today we learn that both Wal-Mart & Costco reported sales data that increased more than analysts estimated. How does this show that we’re in a recession? (or at least acting like we are)
When consumers believe that times are tough, they will make decisions that help them build an economic cushion. Luxury goods will be cut, frivolous spending reduced, and penny pinching will begin.
Where do consumers go to penny pinch? Wal-Mart & Costco!
These companies are often coined as defensive stocks because they tend to hold their own during economic downturns. People still need to consume, just at bargain prices.
So ultimately this shows that consumers are tightening their belts and therefore behaving as if times are tough. And that’s the bottom line, isn’t it? Do you need an economist of government official proclaim that you’re in a recession to feel it? No. All that maters is how you feel and currently, Americans clearly feel like they are.
A couple of quickies on Bell Canada Enterprises this morning:
-BCE Reported “steady” earrings for the first quarter. Net profit came in at 258M compared to 499M a year earlier. Adjusted EPS (earnings per share) at $0.57 actually topped Thomson’s analyst poll of $0.54. Translation: We took no risks and didn’t mess up.
- -Investment Bank Genuity Capital is predicting the BCE takeover is will close. No surprises there as this has been the market’s view since the courts gave the bond holders the big heave ho. [via Seeking Alpha, CBC]
Apple released the following earnings summary:
“APPLE REPORTS RECORD SECOND QUARTER RESULTS
APPLE INTERNATIONAL CO LTD Q2 SHR $1.16
SEES Q3 2008 SHR ABOUT $1.00
Q2 REVENUE $7.51 BLN
SEES Q3 2008 REVENUE ABOUT $7.2 BLN
SAYS QUARTERLY IPHONE(TM) SALES WERE 1,703,000
SAYS APPLE SHIPPED 2,289,000 MACINTOSH COMPUTERS DURING THE QUARTER
SAYS SOLD 10,644,000 IPODS DURING THE QUARTER”
This info was pulled from the news release off the wire service, sorry for the weird format.
It should be noted that Apple’s shares slipped about 1% during after hours trading. Apparently, their projections for the upcoming third quarter were a bit lower than expected.
Bloomberg has an article this morning detailing Microsoft’s reaction to Yahoo!’s earning results reported last night.
Essentially, Microsoft stated that it will not be raising its bid to aquire Yahoo, even though the company came through with decent earnings. Good. Great. Super. Now all we need are the Yahoo shareholders to reject this offer.
Yahoo’s board of directors is recommending that this hostile takeover is rejected. Normally, I think board of directors are full of it, but I do agree with this opinion.
Microsoft would ruin Yahoo. It’s not really because they would want to ruin them, I’m sure they have some great ideas that make complete business sense. The problem is that Microsoft has already become too big. The entire company can easily be compared to the disaster that is Vista. Vista, for those fortunate enough to not be aware of, is Microsoft’s newest operating system. It is slow, bloated, frustrating and seemingly has a split personality.
A merged Microsoft/Yahoo offering would be equally bloated, frustrating and definitely possessing a split personality. The thought of Microsoft’s marketing team frothing at the mouth over the cross marketing potential of the world’s #1 website makes my stomach turn. For Yahoo! shareholders, it should make yours too.
Vote No. Vote often.
“Google Inc. blew past Wall Street expectations this quarter, posting revenue of $5.19-billion (U.S.), a 42 per cent jump over the same period in 2007 and 7 per cent higher than the previous quarter.
Net income – adjusted for generally accepted accounting practices – for the first quarter was $1.31-billion compared to $1.21 billion in the fourth quarter of 2007. Earnings per share amounted to $4.12 on 317 million diluted shares, compared to $3.79 for the fourth quarter of 2007.” Via [Globe & Mail]
I find this a bit curious. Very interesting.
Google’s bread and butter is advertising, it’s their only real source of revenue. They have made a killing doing the best job and using the brightest people. I think its great.
What’s curious and interesting is this unexpected increase. Usually in a economic downturn, marketing and advertising are the first costs to be cut. Firms would rather trim those budgets than fire workers. It’s much easier to later increase spending compared to training new staff.
So now in the midst of all this economic doom and gloom, here’s feisty Google posting up some big numbers. So is the doom and gloom over exaggerated? Or is Google just that good? Very interesting…..
