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Morning Notes For September 14th 2010 at Trader’s Narrative




Morning Notes For September 14th 2010


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The following is a guest post by a buy-side analyst working in a US asset management firm. The author’s comments are in italics. I welcome your feedback in the comments:

  • August retail sales were a touch better than expected when revisions are factored in. Bottom line: In an echo of the employment report, today’s retail sales news was a little better than expected but still not good enough. Sales increases were not broad based and many of the segments which rose – like apparel – were up for the first time in months thanks to big discounts. Sales tax holidays were widespread this year, too, and included states which did not use them last year. Housing related sales, not surprisingly, were weakest. Finally, the ICSC reported a very uneven sales pace over the course of the month, with early strength giving way to later weakness. – FTN Financial

retail sales yoy change Sep 2010

  • MSFT - Bloomberg article says MSFT planning debt sales to pay for dividends/buybacks; tech, according to Barron’s, has the lowest valuation vs the sp500 since ~1991 and is suffering from massive levels of overcapitalization – JP Morgan/Barron’s
  • For the first time, more women than men received PhDs last year, the culmination of decades of change in the status of women at colleges across the United States. – WP
  • Cuba is laying off 500k state workers and will try and create private sector jobs in a move toward capitalism, according to the WSJ. Castro himself recently told a reporter that the Cuban system is not working any more, though he later recanted. – FTN Financial – is our system “working”? Perhaps capitalism is the worst form of economy…except for all the others that have been tried.
  • Oil Drilling – an Interior Dept official acknowledged that it has been taking longer than expected to approve new shallow water drilling permits; while there isn’t an outright ban on shallow water drilling, there are stringent new approval processes that are holding up permits. – CNBC
  • Gulf oil spill environmental damage may be a lot smaller than first feared; scientists feel that the damage to the surrounding beaches and marshes is less than even the much smaller Exxon Valdez spill of 1989 – NYT
  • Euro-Area Economy to Slow Sharply in 2011 - The German ZEW survey for September is signaling a sharp slowdown for the euro-area economy.

ZEW expectations Euro GDP Sep 2010

  • “US risks losing superpower status unless it tackles the deficit,” Henry Paulson warns – “I can’t think of any time in history of a superpower continuing to be one if they don’t have a strong economy and fiscal system. Our problems are obvious. Ones that we can fix and got to fix”. - London Telegraph
  • US, eyeing Iran, moves on $60B Saudi arms deal – The Obama administration is expected to notify Congress of an arms sale to Saudi Arabia worth up to $60B, which may help counter Iran’s growing regional clout. Reuters – the enemy of my enemy is my friend.

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