Thursday Morning News, Views, And Links -- Part III -- Analysts Way Off Again Re: Jobs; Also,Egg Prices In California

Jobless claims fall to six-year low, and consumer prices rising. Both point to Fed tapering.

The number of Americans filing new claims for jobless benefits fell to a near six-year low last week and consumer prices rose broadly in July, which could draw the Federal Reserve closer to trimming its massive bond buying program.

The government reports on Thursday painted a slightly upbeat picture of the labor market and hinted at pockets of pricing power in the sluggish economy. U.S. stock index futures and prices for U.S. Treasury debt fell on the data, which was viewed as increasing the chances of the Fed tapering its purchases in September.

"The data continues to improve and impress the marketplace and I think the data will continue in this direction. Then the question becomes not whether they are tapering in September, but how much," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York.

Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 320,000, the lowest level since October 2007, the Labor Department said.

Economists polled by Reuters had expected first-time applications to come in at 335,000 last week.

It boggles my mind that economists could be off by this much.

The four-week moving average for new claims, which irons out week-to-week volatility, fell 4,000 to 332,000, the lowest level since November 2007.

If these great numbers continue, maybe I can quit tracking "job watch."

It appears that last week's number must have been revised UP 2,000.

Another One Bite The Dust

For the list of the DOE-backed "green" companies that bit the dust, like Solyndra, click here.  Now, there's another one, Bloomberg is reporting:

The auction may also mark a path for the government to offload non-performing loans made to other troubled, taxpayer-backed companies, including hybrid sports car maker Fisker Automotive, which owes the DOE $192 million and has so far failed to secure a buyer.

The auction will be held on Thursday, according to a auction notice posted on govsales.gov, which tracks government asset sales. 

VPG, a maker of wheelchair-accessible vans that run on compressed natural gas, shut down in May after running out of cash. The DOE and VPG have been in talks with potential buyers for the company.

I wonder if the company would have done better if the wheelchairs had been powered with natural gas? Propane?

Oil hits four-month high as tensions grow. Rigzone is reporting:

Brent crude prices rose to a 4-month high over $110 a barrel on Wednesday on concerns about supply disruptions in Libya and escalating violence in Egypt.

Brent erased early losses after the Egyptian government declared a state of emergency following clashes between riot police and supporters of ousted President Mohamed Mursi in which dozens were killed.

Remember: now that WTI and Brent are near parity, it is likely world events will have more effect on price of Bakken oil. 

WSJ Links

Wal-Mart revenues are down, but it might not be simply because of the economy.

Gaining share by displacing smaller retailers isn't the opportunity it once was—many of them have already been displaced. Other large retailers have become more competitive on price, with dollar stores, in particular, threatening to steal away lower-income customers. Meanwhile, a recent Cowen & Co. survey shows that affluent customers, many of whom traded down during the downturn, are souring on the Wal-Mart shopping experience. Internet retailers continue capturing an ever-larger share of spending.

How timely. I just sent an e-mail suggesting that Wal-Mart was losing customers to Target and Amazon. That was before I saw this article.

It looks like the retail investor is jumping in just as the market begins to tank.

Total estimated inflows to long-term mutual funds were $2.63 billion for the latest week, as investors added money to equity and hybrid funds but took money out of bond funds.

Equity mutual funds have recorded weekly gains for most of 2013, after investors had avoided them for several years after the 2008 financial crisis. Bond funds recorded an outflows in recent weeks amid a recent run-up in interest rates.

For the week ended Aug. 7, equity funds recorded estimated inflows of $3.41 billion, compared with estimated inflows of $711 million in the previous week. Domestic equity funds had estimated inflows of $355 million, while estimated inflows to world equity funds were $3.05 billion.

A little late it might seem.

The specter haunting pay TV:

Instead, as more consumers are priced out of the pay-TV market and alternatives such as Netflix proliferate, such hopes don't appear to be holding up.

Total video subscribers were down 0.10 percentage point annually in the second quarter, while occupied households grew 0.40 percentage point, according to UBS.

The U.S. pay-TV market lost about 208,000 subscribers in the first half of 2013, against a net gain of 27,000 in the first half of 2012. As a result, UBS estimates the industry will finish the year with a net loss of 250,000.

Granted, these are small numbers in the context of 104 million U.S. pay-TV households and cord cutting could falter, especially if the jobs market continues to improve. Still, if UBS's estimate holds, 2013 would mark the first annual decline in pay-TV subscribers ever.

Tractor sales riding high:

Spurred by federal tax breaks and rising incomes, he and other farmers have pushed sales volumes in the $20 billion annual U.S. farm-equipment market to their highest levels in three decades. That boom has enriched equipment makers like Deere & Co., which on Wednesday reported a 26% increase in fiscal third-quarter profit, earning $996.5 million, or $2.56 a share, with its profit from farm machinery rising 32%.

The bountiful times for equipment sales may be nearing an end, though, as prices fall for corn, soybeans and wheat, crimping farm income. Perhaps more important, the tax breaks are scheduled to shrink next year.

Ya think? Going into the next election cycle?

This was reported yesterday, Cisco cutting 4,000 jobs, or 5% of its workforce. The interesting thing is that its profit jumped 18%. The CEO says he is concerned about the economy. One wonders how much O'BamaCare entered the discussion. His bean counters have no doubt increased the cost for each employee based on new health care mandates.

 This was also reported yesterday, but I don't recall the source, so here it is again, from The WSJ perspective: many health insurers will limit choices of doctors, hospitals. Memo to self: update medical directive. Include an "assault and battery clause" if wishes not adhered to.

This is interesting on so many levels: Exxon is looking to sell some of its Iraqi assets to China.

Not one story in the front section interested me. Egypt is the story du jour. Whatever happened to Syria?

There are some nice op-ed articles including these two: are liberal judges too soft on crime which begs the question: can liberals be trusted with control of urban security and homeland security. The op-ed has to do with "stop and frisk."

The second op-ed: California tries to raise egg prices. US Congress objects. Yet to be played out. There are implications here that include more than just eggs.