Via The New York Times
Despite recent improvement in the job market, the Federal Reserve needs to continue its stimulus efforts to avoid endangering the recovery, the Fed chairman, Ben S. Bernanke, told Congress on Wednesday.
While acknowledging the risks of historically low interest rates and the Fed’s aggressive policy of buying government bonds to help stimulate the economy, Mr. Bernanke said in testimony that “a premature tightening of monetary policy could lead interest rates to rise temporarily but also would carry a substantial risk of slowing or ending the economic recovery.”
After his opening statement, however, Mr. Bernanke seemingly opened the door a bit wider to tapering down.
Under questioning by Representative Kevin Brady, a Texas Republican who chairs the Joint Economic Committee, Mr. Bernanke said the Fed could prepare to “take a step down” in the next few meetings if the outlook for the labor market improved.
“It’s dependent on the data,” he said. “If the outlook for the labor market improves, we would respond to that.”
Mr. Brady asked if the tapering could begin before Labor Day, prompting Mr. Bernanke to say, “I don’t know.”
“We are buying a certain amount of assets each month,” he continued. “We are looking for increased confidence and in steps respond to that.”
[Full article here]
Google (GOOG) got a pass from U.S. antitrust regulators in January, when the Federal Trade Commission closed an investigation of the search giant, saying there was no evidence it had tried to stifle competition.
Elsewhere in the world, the company may not be so lucky.
In hopes of settling a probe by the European Union’s competition czar, Google has proposed several measures to address complaints that it has abused its market dominance in Europe. A person familiar with the proposal, who asked not to be identified because the details haven’t been made public, told Bloomberg News that Google has offered to provide additional labeling of search results so that users can more easily find services offered by its competitors. The company also suggested it would supply links to rival search engines, the person said.
Even that may not be enough. The EU says it will give the plan a test to see how it affects Web users’ surfing habits, but rivals are already complaining that it doesn’t go far enough to restore competition in the market. “When the market test goes ahead, we will try and be constructive,” says David Wood, a lawyer for Brussels-based industry group Icomp, which includes Microsoft (MSFT). But, he says, at first glance the plan appears to be “a nonstarter.”
EU antitrust regulators typically conduct such test runs for a few months, and often require companies to make “quite significant changes” in their settlement proposals based on the test results, says Nicolas Petit, a professor of competition law at the University of Liège in Belgium. Google would have little choice but to accept the changes, he says, because European law gives considerable leeway to regulators, and European courts, unlike their U.S. counterparts, rarely overturn regulators’ orders. Companies “know they’ll face a hard time if they decide to resist” the regulators’ demands, Petit says.
[Full article here]
The old adage says a person can’t be too rich or too thin. Given Tata Motors’ (TTM) disappointing experience with the Nano, the $2,000 compact it introduced with great fanfare in 2008, it’s clear a car can be too cheap—at least for consumers who don’t want to be associated with a low-end ride. Ratan Tata, then chairman of parent Tata Group, made headlines a decade ago when he ordered up a “people’s car” that would appeal to Indian families who previously could only afford to travel by scooter. But Tata Motors has sold just 229,157 Nanos since deliveries began in 2009, and sales in March were off by 86 percent from a year earlier.
Tata Managing Director Karl Slym insists the company won’t kill the tiny, egg-shaped car. It will soon add improvements to breathe new life into the model, a move that would ultimately bring its price closer to those of rivals. The Nano’s marketing “didn’t jell with anybody,” Slym says. Scooter drivers weren’t attracted because others “don’t think I’m buying a car, they think I’m buying something between a two-wheeler and a car. Anyone who had a car didn’t want to buy it, because it was supposed to be a two-wheeler replacement.”
Slym points to the Pixel, a Nano-based concept vehicle Tata first showed in 2011, as an example of how the brand could evolve. The two-door hatchback takes the skeleton of the Nano and adds innovative doors that rotate up rather than open out, automatic transmission, and a diesel engine. Yet Haritha Saranga, an associate professor at the Indian Institute of Management in Bangalore, says in an e-mail that “just creating variations is not going to help increase sales. It is important to change the current image of Nano as a cheap car.”
[Full article here]
A low-cost iPhone could see unit sales of 75 million in 2014, projects Piper Jaffray analyst Gene Munster.
In an investors note released today, Munster said he expects Apple to sell a $300 non-subsidized iPhone starting in September. Such a device is likely to trigger a 30 percent cannibalization rate, which means that for every three low-cost iPhones sold, one full-price iPhone is cannibalized.
As such, Apple’s share of the high-end smartphone market may dip to 37 percent next year from 43 percent last year. But its share of the low-end (under $400) market will rise to 11 percent in 2014 from nothing in 2012.
Nearer term, Munster is eyeing flat iPhone growth for the current quarter ending in June, down from his prior forecast of a 15 percent gain. That would mean unit sales for the iPhone of around 26 million. As a result, Apple’s overall revenues for the quarter are expected to reach $35.1 billion, down from Munster’s previous estimate of $37.6 billion.
Wall Street in general is more optimistic, eyeing around 33 million in iPhone sales this quarter and around $39.6 billion in total revenue.
Rumors have been flying lately that Apple will unveil a low-cost, non-subsidized iPhone this year geared toward developing markets such as China. Some of those rumors have been driven by Apple analysts.
[Full article here]
New-home construction in the U.S. jumped more than forecast in March as multifamily projects climbed to the highest level in more than seven years.
Starts climbed 7 percent to a 1.04 million annual rate, the most since June 2008, after a revised 968,000 pace in February that was larger than previously reported, Commerce Department figures showed today in Washington. The median estimate of 80 economists surveyed by Bloomberg called for 930,000. Building permits, a proxy for future construction, fell.
Builders are rushing to satisfy growing demand for rental units, propelling the jump in construction that will help support economic growth. Work began on fewer single-family houses last month, adding to evidence that part of the market is pausing.
“Whether it’s driven by demand from homebuyers or renters, it doesn’t really matter because it’s roofs over peoples’ heads,” said Aneta Markowska, chief U.S. economist at Societe Generale in New York, who had the highest starts forecast in the Bloomberg survey. “There’s still a lot of room for improvement in housing, both for activity and for prices. This is critical for the U.S. economy.”
The cost of living in the U.S. declined in March for the first time in four months as cheaper gasoline and clothing kept inflation in check, another report today showed. The consumer- price index dropped 0.2 percent after a 0.7 percent jump in February, according to data from the Labor Department.
[Full article here]
Via The Wall Street Journal
Goldman Sachs Group Inc. GS -1.88% posted higher profits for the first quarter, but the bank’s cautious tone sapped investors’ confidence for a strong 2013.
First-quarter net income rose 7.2%, as revenue gains from the underwriting businesses overcame a drop in trading results. Goldman posted a profit of $2.26 billion, compared with a year-earlier profit of $2.11 billion. Earnings per share—reflecting the payment of preferred dividends—stood at $4.29 from $3.92.
Net revenue, including net interest income, edged up 1.4% to $10.09 billion. Analysts polled by Thomson Reuters expected per-share earnings of $3.88 on revenue of $9.72 billion.
But Goldman’s shares slipped $4.17, or 2.9%, to $142.29 in midmorning trading in New York, as Wall Street dialed into the bank’s conference call to hear its chief financial officer, Harvey Schwartz, describe a quarter that began with very promising economic data that emboldened clients. By March, Mr. Schwartz said, concerns for Europe’s economies and a prolonged budget impasse in the U.S. “impacted client activity and risk appetite.”
Although investment-banking revenue rose sharply from a year ago and more trading clients returned to the markets in early 2013 from late last year, Goldman officials sounded wary. The New York-based bank pared its expenses, including compensation costs, during what is typically one of the busiest quarters for Wall Street.
[Full article here]
Amazonian tea company Runa recently closed what it described as a successful found of seed funding. The oversubscribed round was headed by lead investor Luke Weil with additional input from a private group of investors. Runa provides consumers with a new, natural energy drink, entering the market in the same way that all-natural coconut water products entered the sports drink market. Lead investor Luke Weil says that Runa is poised for success with the growing market for energy drinks and the opening for an all-natural product to make an impact.
Runa founder Tyler Gage says, “Runa believes it’s time for a new kind of energy. Energy that allows us to live a stimulating life, to do more of what we love and are called to do and that propels us into the world with a clear mind and open heart.”
The guayusa tea can be found in over 2,500 stores around the country, such as Whole Foods, The Vitamin Shoppe, and Fairway. Runa’s products include ready to drink bottles, a zero calorie drink, Runa Infusers, and loose leaf tea.
“The social mission at the heart of the Runa enterprise and business model – which today supports over 2,000 independent family farms in the Amazon and plays a vital role in preserving Amazonian land – makes it even more of an honor to lead this round of financing and serve on the Runa board of directors,” said Luke Weil.
Tyco International Ltd.’s slimmed- down focus on commercial fire and security products coupled with its projected 52 percent profit growth is making the company takeover bait, again.
Tyco spun off its home-security and flow-control units in September, the company’s second breakup in five years. The separation whittled Tyco down to a business providing video- surveillance systems and smoke detectors in hotels and office buildings that analysts estimate will boost net income by 52 percent in the next two years. That’s the second-fastest rate among the 60 industrial companies in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
The Swiss company’s dominant market share would bolster complementary building services at Schneider Electric SA, Siemens AG or General Electric Co., said FBR & Co. Almost two years ago, Bloomberg News reported Schneider weighed a bid for Tyco. The company now may fetch at least $34 a share, according to Langenberg & Co., implying a takeover value of about $17 billion including net debt. While data compiled by Bloomberg show that would be the biggest industrial acquisition since Goodrich Corp. in 2011, Citigroup Inc. said a deal makes sense because U.S. commercial construction is starting to rebound.
[Full article here]
Via CNN Money
The tech bellwether announced Wednesday that it earned $2.7 billion on $12.1 billion in sales for the second fiscal quarter. Both up single-digit percentages over the year. Both figures beat analysts’ expectations. Cisco (CSCO, Fortune 500)shares lost about 2% in after-hours trading.
Cisco also continued to grow its impressive cash hoard, which now sits at $46.4 billion.
Cisco’s core switching and routing businesses make up roughly half the company’s revenue. But those sectors are declining, and the real story is in Cisco’s strategic services. Those divisions, which include data centers and online video services, are a smaller part of Cisco’s overall business, but they’re growing at a rapid clip.
That has helped Cisco, whose stock is trading right around its 52-week high, fare significantly better than its main rivals.
[Full article here]
Luke Weil currently serves as Vice President, International Business Development – Latin America for Scientific Games Corporation, a supplier of technology-based products, systems and services to gaming markets worldwide.
Andina Acquisition Corporation (Nasdaq: ANDAU) (the “Company”) announced last week that its Board of Directors has appointed Luke Weil as the Company’s new Chief Executive Officer. Luke Weil will replace Eduardo Robayo as Chief Executive Officer, who is resigning from his position due to his other business responsibilities.
Luke Weil served as a member of the Company’s Board of Directors from September 2011 until March 2012. Since 2008, Mr. Weil has been Vice President, International Business Development – Latin America for Scientific Games Corporation, a supplier of technology-based products, systems and services to gaming markets worldwide.
‘Regrettably, my other business responsibilities now preclude my continuing to serve as Andina’s Chief Executive Officer, but I am pleased to remain on Andina’s board,” said Eduardo Robayo. “My fellow board members and I are fortunate that Luke was available take over my responsibilities, and we believe he is well qualified to assist us in consummating an attractive business combination”, Robayo added.
“It is an honor to be named CEO of Andina Acquisition Corporation. I believe Latin America, particularly the Andean region, is rife with growth opportunities right now, and I look forward to exploring and expanding business opportunities for Andina,” remarked Luke Weil on his recent appointment.
From January 2004 to January 2006, Weil served as an associate at Business Strategies & Insight, a public affairs and business consulting firm. Weil currently sits on the Board of Directors of SkuRun, RUNA, and several early stage companies.
The Company has filed a Current Report on Form 8-K with the Securities and Exchange Commission relating to Mr. Weil’s appointment.