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  • FCHI (Euro) FTSE (UK)
  • FCHI (Euro) FTSE (UK)
  • Transcript

    • 1. Thursday, November 9, 2006 Presented by: Priya J. Kapila
    • 2. Federal Reserve Bank
      • Former Fed Chief Greenspan: Worst housing woes behind us
      • Dallas Fed Chief Fisher encouraged by slowed inflation
    • 3. Exchange Rates
      • The dollar fell, slipping to a six-week low against the Euro as uncertainty over the result of the U.S. elections gave traders an excuse to take profits on the currency
      • The dollar was poised for its biggest daily loss against the yen in more than six weeks after comments on interest rates from the Bank of Japan
    • 4. Exchange Rates Dollar VS Yen Dollar VS Euro
    • 5.
      • A European Commission report criticizes China on fair-trade issues, including piracy, and notes a growing trade deficit of €106 billion a year
      • In Europe, fast-rising prices and household debt levels could lead to trouble -- at least in some countries
      • Soaring demand for generics and competitive pressures are making the region a hotbed for Big Pharma deals to swallowing eastern Europe’s drugmakers
      • The world's second-biggest economy, Japan, is expected to announce record expansion. But it's mostly based on exports, and wages have not kept pace
      International Markets
    • 6. Stock Index - Asia
    • 7. Stock Index - Europe
    • 8. Sector Performance
      • Leaders
        • Energy (1.46%)
        • Health Care (1.14%)
        • Telecommunications (0.89%)
      • Losers
        • Utilities (-1.01%)
        • Consumer Goods (-0.11%)
        • Financials (-0.01%)
    • 9.
      • Both P&G and Clorox report good quarters but uncertainty leads them down
      • Altria faces uncertainty going into the election
      • Leggett & Platt down on poor outlook going forward
      Consumer Staples
    • 10. Consumer Staples 0.77%        Personal Goods 1.33%           Personal Products -0.94%        Tobacco 0.72%           Durable Household Products -0.01%        Household Goods 0.18%     Personal & Household Goods -2.43%        Food Products 0.11%           Soft Drinks -0.34%           Brewers 0.04%        Beverages -0.95%     Food & Beverage -0.11% Consumer Goods
    • 11.
      • Honda sales down for the month of October
      • Coach’s 3Q earnings up 40%
      Consumer Discretionary
    • 12. Consumer Discretionary 0.54%           Footwear -0.11%           Clothing & Accessories 0.77%        Personal Goods 5.96%           Toys 2.54%           Recreational Products -5.72%           Consumer Electronics 2.91%        Leisure Goods -4.18%           Home Construction -0.95%           Furnishings 0.82%           Nondurable Household Products 0.18%     Personal & Household Goods 0.98%           Tires 2.41%           Automobiles -0.11%     Automobiles & Parts
    • 13. Consumer Goods – Staples & Discretionary
      • Market Cap: 2670.9B (2645.1B)
      • P/E: 25.52 (31.31)
      • ROE: 17.44% (17.20%)
      • Dividend Yield: 2.07% (2.00%)
      • Long Term Debt to Equity: 1.26 (1.15)
      • Price to Book Value: -10.68 (-3.19)
      • Net Profit Margin: 6.83% (6.74%)
      • Price to Free Cash Flow: 83.32 (122.20)
    • 14.
      • Even as Texas Industries Inc. maintains its silence regarding buyout talks instigated by a major shareholder, insiders are selling company shares, suggesting a deal isn't on the horizon.
      • Mexican cement giant Cemex(CX) said Friday it planned to make a $12.8 billion offer to buy Rinker Group Ltd., an Australian firm that derives the bulk of its profits from selling construction materials in the United States, even as the domestic housing market continues its recent slump.
      Industrial - Goods
    • 15. Industrial - Goods 0.82% Industrials -0.24%        Industrial Machinery -0.38%        Commercial Vehicles & Trucks -0.32%      Industrial Engineering 1.01%      Electronic & Electrical Equipment 0.74%      General Industrials 2.44%      Aerospace & Defense 0.78%    Industrial Goods 3.01%        Heavy Construction 0.76%        Building Materials & Fixtures 1.37%    Construction & Materials
    • 16. Industrials - Goods
      • Market Cap: 1092.8B (1390.5B)
      • P/E: 16.29 (20.44)
      • ROE: 15.02% (15.29%)
      • Dividend Yield: 1.57% (1.90%)
      • Long Term Debt to Equity: 0.79 (1.64)
      • Price to Book Value: 70.32 (-22.33)
      • Net Profit Margin: 5.44% (6.88%)
      • Price to Free Cash Flow: 93.76 (-36.94)
    • 17.
      • Sears Holdings Corp. said on Monday that its subsidiary, SHLD Acquisition Corp., filed a revised proxy circular in connection with a Nov. 14 meeting of Sears Canada Inc. shareholders.
      • Wal-Mart's Woes Could Deflate Prices on Competitive Products
      Industrial - Services
    • 18. Industrial - Services 1.40%        Waste & Disposal Services -4.02%        Industrial Suppliers 0.39%        Financial Administration 2.04%        Business Training & Employment Agencies 1.79%        Business Support Services 0.86%      Support Services 1.40%        Trucking -0.54%        Transportation Services 0.86%        Railroads -1.99%        Marine Transportation 0.02%        Delivery Services 0.41%      Industrial Transportation 0.82% Industrials
    • 19. Industrials - Services
      • Market Cap: 3174.3B (3169.4B)
      • P/E: 23.37 (26.24)
      • ROE: 14.52% (14.09%)
      • Dividend Yield: 1.29% (1.28%)
      • Long Term Debt to Equity: 0.92 (1.48)
      • Price to Book Value: 1.21 (3.25)
      • Net Profit Margin: 5.93% (5.61%)
      • Price to Free Cash Flow: -7.20 (69.36)
    • 20.
      • According to UBS, Wells Fargo , and other underwriters, subprime mortgages are deteriorating rapidly.
      • Berkshire Hathaway shares climbed to a record on Monday after the insurance-focused conglomerate reported big third-quarter profits that were fueled by a benign hurricane season.
      Financials
    • 21. Financials 0.05%           Investment Services 1.15%
        • Mortgage Finance
      3.42%
        • Insurance Brokers
      -0.01% Financials 0.22%           Specialty Finance 1.29%           Consumer Finance -1.07%           Asset Managers 0.30%        General Financial -3.94%        Real Estate -1.10%     Financial Services 1.58%        Life Insurance 1.15%        Nonlife Insurance 1.26%     Insurance 0.27%     Banks
    • 22.
      • Foreign Regional Banks
      • Life Insurance
      Financials
    • 23. Financials
      • Market Cap: 7258.1B (5925.2B)
      • P/E: 13.04 (14.58)
      • ROE: 17.03% (16.8%)
      • Dividend Yield: 2.40% (2.71%)
      • Long Term Debt to Equity: 2.46 (2.63)
      • Price to Book Value: 2.69 (2.91)
      • Net Profit Margin: 14.01% (14.75%)
      • Price to Free Cash Flow: 17.75 (34.43)
    • 24.
      • Duke Energy Corp. posted lower profits than expected in its latest earnings release.  Earnings were 48 cents/share, below the 56 cents/share estimates of Reuters' analysts.  Executives for the company still claim a 4-7% earnings growth is expected following the spin-off of the natural gas division to Spectra Energy Corp., but that remains to be seen.
      • The French Parliament on Wednesday adopted a bill to privatize state-owned Gaz de France, clearing an obstacle to its proposed combination with the utility Suez SA that would create an energy powerhouse.
      Utilities
    • 25. Utilities -3.87%           Water -1.79%           Multiutilities 0.47%           Gas Distribution -0.94%        Gas, Water & Multiutilities -1.03%        Electricity -1.01%     Utilities
    • 26. Utilities
      • Market Cap: 1059.1B (1053.6B)
      • P/E: 36.03 (33.91)
      • ROE: 15.08% (16.28%)
      • Dividend Yield: 3.89% (3.91%)
      • Long Term Debt to Equity: 2.11 (2.13)
      • Price to Book Value: 2.76 (2.66)
      • Net Profit Margin: 8.22% (9.22%)
      • Price to Free Cash Flow: -264.0 (-64.59)
    • 27.
      • Democrats dislike the new Medicare plan that has been benefiting big Pharma and may revoke the law that bars Medicare from negotiating prices directly with drug companies.
      • Abbot Labs to buy Kos Pharmaceuticals for $3.7 billion, a 56% premium over market price.
      • Novartis unveils plans to build a $100 million research center in Shanghai, China
      Health Care
    • 28. Health Care 1.50%           Pharmaceuticals 0.23%           Biotechnology 1.19%        Pharmaceuticals & Biotechnology 1.39%           Medical Supplies 1.82%           Medical Equipment 0.43%           Health Care Providers 1.05%        Health Care Equipment & Services 1.14% Health Care
    • 29. Health Care
      • Market Cap: 2630.2B (2647.0B)
      • P/E: 28.13 (34.62)
      • ROE: 14.73% (14.56%)
      • Dividend Yield: 1.63% (1.59%)
      • Long Term Debt to Equity: 0.55 (0.55)
      • Price to Book Value: 5.32 (5.48)
      • Net Profit Margin: 10.86% (11.43%)
      • Price to Free Cash Flow: 53.75 (95.31)
    • 30.
      • Microsoft is reported to be entering an unusual partnership with Novell that gives a boost to the Linux operating system, a rival to the software giant's Windows software and work toward developing technologies to make it easier for users to run both Suse Linux and Microsoft's Windows on their computers .
        • By forging a peace pact with one seller of Linux, Microsoft could raise pressure on Red Hat, the leading provider of Linux, and a Novell rival.
      • Apple plans to leverage its retail stores as 'launch pads' for the new iTV, using a few LCD televisions to demonstrate the features of the device.
      Information Technology
    • 31. Information Technology 1.06%        Telecommunications Equipment 0.01%        Semiconductors 0.27%        Electronic Office Equipment 0.19%        Computer Hardware 0.41%      Technology Hardware & Equipment 0.37%        Software -0.08%        Internet 0.67%        Computer Services 0.36%      Software & Computer Services 0.39% Technology
    • 32. Information Technology
      • Market Cap: 5196.3B (5702.7B)
      • P/E: 26.13 (22.97)
      • ROE: 14.87% (14.82%)
      • Dividend Yield: 2.02% (1.94%)
      • Long Term Debt to Equity: 0.71 (0.62)
      • Price to Book Value: 7.07 (6.17)
      • Net Profit Margin: 10.67% (10.77%)
      • Price to Free Cash Flow: 67.67 (-27.16)
    • 33.
      • Higher copper prices boost Wolverine Tube sales; stock falls on Q3 loss and the company is considering Chapter 11
      • Azco Mining Inc. , a U.S.-based mining and exploration enterprise focused on gold, silver, copper and industrial minerals, announced today that it had agreed with a major creditor to terminate a 2002 financing lease and eliminate all the company's outstanding debt under the lease.
      • Royal Gold Inc., a company that buys rights to collect royalties from mining outfits, said Wednesday it raised its annual dividend 18 percent.
      • EU regulators on Wednesday reimposed a 10 million euro ($12.7 million) fine on Arcelor SA for a steel beam cartel it took part in from 1988 to 1991.
      Basic Materials
    • 34. Basic Materials 6.42%        Platinum & Precious Metals 1.45%        Gold Mining 0.41%        General Mining -1.05%        Coal 0.18%      Mining -0.24%        Steel 2.24%        Nonferrous Metals -0.12%        Aluminum 0.47%      Industrial Metals -3.53%        Paper -0.85%        Forestry -2.32%      Forestry & Paper -0.08%    Basic Resources 0.71%    Chemicals 0.34% Basic Materials
    • 35.
      • Copper
      • Steel & Iron
      Basic Materials
    • 36. Basic Materials
      • Market Cap: 4483.5B (4408.3B)
      • P/E: 11.64 (13.46)
      • ROE: 26.98% (26.08%)
      • Dividend Yield: 2.26% (2.31%)
      • Long Term Debt to Equity: 0.44 (0.43)
      • Price to Book Value: 3.31 (3.56)
      • Net Profit Margin: 12.10% (11.68%)
      • Price to Free Cash Flow: 27.68 (1.89)
    • 37.
      • The main reason for the increases in the Energy sector is due to positive earnings releases by a number of companies in the sector.  The majority of companies in the sector had a stellar 3rd quarter due to excessively high oil prices. 
        • The outlook for the next quarter is not as promising however.
      • OPEC has sought to cut oil production by 1.2 million barrels per day as of November 1, due to the low prices and excess supplies.  Many investors doubt OPEC's ability to cut production as inventories of crude continue to rise. 
      • Chevron reported a $5 billion profit in its earnings release, an increase of 40% from the last quarter. 
      • Big oil companies will be a top target of Democratic lawmakers when they officially take over the House of Representatives early next year.
      Energy
    • 38. Energy 1.05%           Pipelines 1.82%           Oil Equipment & Services 1.73%        Oil Equipment, Services & Distribution 1.77%           Integrated Oil & Gas 0.32%           Exploration & Production 1.37%        Oil & Gas Producers 1.46%     Oil & Gas
    • 39. Energy
      • Market Cap: 1574.6B (1544.0B)
      • P/E: 8.50 (8.70)
      • ROE: 28.50% (27.90%)
      • Dividend Yield: 2.85% (2.89%)
      • Long Term Debt to Equity: 0.36 (0.28)
      • Price to Book Value: 2.93 (2.92)
      • Net Profit Margin: 11.30% (10.80%)
      • Price to Free Cash Flow: 40.20 (45.00)
    • 40.
      • FCC Delays Vote on AT&T-BellSouth Deal
        • Shares of the two companies, accounted for about a half of the industry market capitalization, fell last week, a reaction for the bad news. There was no other big news over past week.
        • AT&T sees growth in Indian corporate telecoms market
        • AT&T wins contract extension with Reliant Energy
      • Cingular Wireless unveiled a new phone last week that taps into subscription music services from Napster, Yahoo! and eMusic and streaming radio from XM Satellite Radio
      Telecommunications Services
    • 41.
      • Market Cap: 420.2B (428.3B)
      • P/E: 19.40 (19.00)
      • ROE: 13.40% (12.40%)
      • Dividend Yield: 3.56% (3.24%)
      • Long Term Debt to Equity: 0.78 (0.79)
      • Price to Book Value: 7.87 (7.62)
      • Net Profit Margin: 9.80% (9.40%)
      • Price to Free Cash Flow: 52.40 (69.40)
      Telecommunications Services - Domestic
    • 42. Telecommunications Services Foreign Domestic 4.29%        Mobile Telecommunications 0.06%        Fixed Line Telecommunications 0.89% Telecommunications
    • 43. Week of 11/3/2006

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