Interview: Thinkequity
>> expect isolated showers in the city clearing in the afternoon with increasingly sunny periods. ron madison joins us in tokyo with news outside the business world. good morning, ron.
>> u.s. lawmakers begin a push to enforce sanctions against iran. a house committee held hearings on a bill that would punish foreign countries from doing business in that country. iran and syria say they will work together to confront threats against them. this is video of iran’s vice president meeting syria’s prime minister in tehran. tehran’s foreign minister talked about the alliance.
>> iran and syria have some common interests. this does not mean that they’re going to establish a united front. but we have all to help and cooperate with each other from european side, from countries in the middle east to solve the problems and crisis that the whole middle east is facing.
>> the united states has accused iran of seeking to produce nuclear weapons. in lebanon, now,, hundred dollars of thousands turn out to pay respects to the country’s former prime minister. weeping mourners marched along side the coffin carrying the body of rafik hariri, killed two days ago in a blast that left at least 14 others dead. many blame syria for having a hand in harari’s killing. syria has instead condemned the assassination. the u.s. did recall its u.s. ambassador to syria in response. the associated press says philippine troops took control of a rebel stronghold in the country’s south. the a.p. says hundreds of government soldiers seized a training camp that was used by islamic fighters on the island. the camp trained followers of jailed muslim leader ezrati, whose group is blamed for bombings that killed at least 10 nationwide this week. north korea marks the birthday of its leader with pageantry and a feast. plenty of dancing as the nation celebrated kim jong il’s 63rd birthday. the associated press reports that they dined on venison as part of the cell celebrations. that’s the latest look at world news. back to you.
>> thank you, ron. an unprecedented ad blitz just before christmas and some deep discounts likely gave wal-mart’s fourth-quarter profit a lift by some 15%. that kind of growth would be the biggest in three quarters for the world’s largest retailer. wal-mart is scheduled to report before new york trading on thursday.% the company will probably say profit rose to $3.13 billion or 74 cents a share, the average estimate of analysts surveyed by thomson financial. sales likely rose 11% to $82.8 billion. analysts and investors say it was the ad blitz and price cuts that saved the quarter. for the full year, wal-mart’s same-store sales growth was its lowest in a decade. a year some called a disappointment.
>> they didn’t have ipod this past holiday. they didn’t offer warranties on their expanded program and projection screens and televisions and consumer electronics so there are issues there. they’re not as fast at checkout as i’d like them to be. there are issues they need to address.
>> buchanan rates wal-mart a buy, saying inventory controls and rising gross margins will lead to 14% earnings growth this year but that’s less than what long-time wal-mart investors are used to. profit growth averaged 14% for the past four years, down from 19% growth during the previous four years. wal-mart’s stock price is little changed this year and has underperformed the standard & poor’s 500 index for three of the last five years. shareholders say the stock reflects the challenge of maintaining historic growth rates at a company with $287 million annual sales.
>> here’s a company that was growing their earnings in excess of, call it 20%. and then also, now, we’re seeing those numbers come down. that’s really effectively part of the law of large numbers.
>> koskuba says wal-mart’s global expansion generating 35% of those sales will be key interest during the conference call. the dollar rises the most in more than three weeks against the yen after alan greenspan signals further rate increases. we’ll discuss the outlook for the dollar and rates with the administrative strategist in boston.
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Listen Market briefing --- Brian (slow)
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welcome to “live” from hong kong, i’m catherine yang. we’ll have some of greenspan’s comments and new york market reaction for you in a moment. also coming up on the show, in the middle of our week-long focus on japan, economic figures show the nation is in the midst of its fourth recession in 13 years. still, the man some call mr. yen says, don’t use the r-word.
>> i don’t think we have entered recession again. it is a slowdown and slowdown was faster than anticipated.
>> find out when mr. yen expects japan to recover when we hear from the former vice minister for international affairs in 50 minutes. the dollar strengthens after greenspan’s comments. and later, moody’s chief executive will look ahead for what’s next in interest rates and the u.s. economy. the dollar gained and bonds fell as investors interpreted greenspan’s remarks as an indication the fed has no intention of ending its string of interest rate increases.
>> in the seven months since i last testified before this committee, the u.s. economic expansion has firmed, overall inflation has subsided, and core inflation has remained low.
>> the dollar jumped to its biggest gain against the yen in more than three weeks and strentsened against the euro, as well. these are live market quotes on the screen. greenspan also urged congress to cut the nation’s record budget deficit.
>> besides market pressures which appear poised to stabilize and over the longer run, possibly to decrease the u.s. current account deficit and its attendant financing requirements, some forces in the domestic u.s. economy seem about to head in the same direction. central to that adjustment must be an increase in net national savings. this serves to underscore the imperative, to restore fiscal discipline.
>> greenspan’s calls to cut the deficit failed to spur the bond market . treasuries fell after greenspan said interest rates are fairly low. traders interpreted the message to mean the central bank may raise rates higher than some have anticipated. the chief investment officer of% the world’s largest bond fund expects the fed to remove the reference to measured rate hikes when the benchmark reaches 3.25%.
>> my sense is that, given recent economic statistics and the rather optimistic nature of his presentation this morning, that that measured clause will continue to be within the context of fed statements for at least the next meeting and maybe one after that.
>> the fed’s next policy meeting is march 22. hewlett-packard’s first-quarter profit remains almost unchanged as competition intensifies. revenue rose on holiday sales of printers and personal computers. net income rose .7% to $943 million or 32 cents a share. sales rose nearly 10%, only half the gains that rival dell achieved in the same period. the world’s biggest printer maker and number two personal computer maker company struggled to boost sales and profit after dell took over the biggest p.c. maker and began selling printers. hewlett-packard ousted chief executive carly fiorina as she failed to produce the profits she promised. in after-hours’ trading, hewlett-packard is up 2%. oil rises to more than $48 a barrel after opec says global oil consumption will increase more than expected this year. china is expected to lead the surge in demand. opec predicts world oil use will rise to 84 million barrels a day. chinese oil consumption is expected to rise to seven million a day. boone pickens, whose hedge fund has more than $1 billion in energy investment, sees growth in china outpacing that in japan and says global oil production will not increase.
>> the world supply today is about 83 million barrels a day, that’s it. you can’t―there’s nothing you can reach back, pull it off the shelf and say, you know, got another million here, two million here. i don’t think it’s there. i think you have it maxed out.
>> opec last year did not predict the jump in demand from china and lowered production quotas in march, increasing targets too late in june and august and oil currentlied to more than $55 a barrel in october. the surge in oil prices boosted energy-related shares on wall street. u.s. stocks closed near where they started the day. the dow, s&p 500 and nasdaq were little changed. asian stocks fall in u.s. trading after a government report showed japan’s economy unexpectedly fell into recession last year and oil prices surged to more than $48 a barrel. advantest and mitsubishi tokyo financial group led declines while the rise in crude helped oil-related stocks like petrochina. the bank of new york indexes are all down and nikkei futures are pointing to a lower start when the tokyo market begins trading. japan will probably keep interest rates near zero today to pull the economy from its fourth recession in 13 years. economists we surveyed expect the bank of japan will maintain% -a policy of boosting the money supply to spur spending. that survey came before figures showed japan’s economy contracted three straight quarters. policymakers have promised to keep rates near zero until the six-year bout of falling prices ends. the bank of japan announces the decision around noon tokyo time. japanese stocks fall in new york trading. some of the stocks to watch today, vican industries cut to in line from outperform at goldman sachs. daikin rose on wednesday. mitsui engineering wins a contract to build a plastics plant in iran. the contract award from iran’s national petrochemical. iran is expanding its petrochemical industry to meet rising demand in asia. mitsui fell three yen on wednesday in tokyo. another stock reaction to watch is yahoo japan. the operator of the portal will split shares two for one. and in other asian markets , watch australia’s largest life insurer, turning to profit for the first time since 2001. a.m.p. had a full-year profit after earnings investments rose and costs fell. shares fell .9% on wednesday. and singapore, mandarin oriental international says profit rose sevenfold last year to $27.8 million. increased sales and recovery in hong kong business boosted earnings at the hotel chain. profits surged 13fold with sales in the stake of a european logistics company helping earnings and in hong kong, standard chartered profit increased 35%. the company set aside less money for loans that may have not been repaid. the lender makes 2/3 of its profits in asia. a.m.p. turns to profit, saying sales in investment earnings increased and costs fell. it will pay a second-half dividend of 13 cents a share. full-year net income came in at $934 million. that compares to a 5.5 billion australian loss in 2003. chief executive officer has slashed debt and cut costs. australia’s asx 200 index surged 25% last year, boosting a.m.p.’s investment, income and funds. the world’s largest retailer may report its biggest profit increase in three quarters. what analysts are expecting wal-mart to say.
