Daily Financial Market Outlook UK MPC member Tucker speaks in Brussels and we wonder what he will say about the UK economy.We know that price inflation is above the 2% target at 3.5% in the year to January.That prompted an open letter Daily Financial Market Outlook 18-3-2010

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Daily Financial Market Outlook 18-3-2010

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More States Delay Income Tax Refunds

Gold and Greece Sovereign Debt Concerns over the ongoing Greek sovereign debt helped buoy gold up again, as it is the primary mover of gold prices at this time, decoupled from the usual movement in opposite directions with the U.S. dollar. This has become a consistent theme over the last several weeks as the usual inverse relationship between gold and the U.S. dollar continues to weaken. The

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Gold Up on Greece Sovereign Debt Concerns

� � According to an official with the China Council for the Promotion of International Trade yesterday, a rise in the yuan would be a disaster for Chinese exporters. “If the yuan rises, these companies will face the immediate risk of going bust as their profit margin is already very narrow,” said Zhang Wei, vice-chairman of the association,”So for these companies, the consequences would be disastrous.” And therein lies the rub, especially as Washington pressures Beijing to let the yuan appreciate threatening tariffs in the absence of action. Its Chinese jobs vs. American jobs as the advantages of China’s mercantilist policies reveal a tilted playing field. And while some insist that China is holding all of the cards in this game, I’m not one of them. Of course, how all of this acrimony ends is anyone’s guess. In the short, though, it sure does seem to have the making of a trade war. Meanwhile, James Rickards, former general counsel for Long-Term Capital Management, joined James Chanos and Kenneth Rogoff calling China one of histories biggest bubbles. From Bloomberg by Bei Hu entitled: China in Midst of ‘Greatest Bubble in History,’ Rickards Says “China is in the midst of “the greatest bubble in history,” said James Rickards, former general counsel of hedge fund Long-Term Capital Management LP. The Chinese

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Rickards: China is "The Greatest Bubble in History"

Fast food giant Burger King Holdings, Inc. ( BKC ) was upgraded to a “Buy” on Thursday by analysts at Deutsche Bank. The analyst also raised its price target for BKC shares, which had closed at $20.17 on Wednesday, to $24 from $19. Deutsche analyst noted that “BKC shares have underperformed the market by ~60% over the past year. While the stock has bounced a bit recently, we see room for further upside from here as sales and margins remain well below cyclical peaks and as investors may begin to seek out cheaper names that can still benefit from a recovering economy.” “While management still has work to do to rebuild credibility, we see several positives emerging in the BKC story, including: (1) signs of a bottom in sales trends, (2) easing compares (US & Canada segment SSS compares ease ~600bps in F4Q10), (3) an improving macro-economic backdrop for core consumers, (4) renewed focus on breakfast (planned for later in 2010), (5) increased M&A activity in the sector, (6) a thawing in franchisee relations, (7) compelling valuation (~7.5x EBITDA), and (8) still-negative Street sentiment (14 Holds vs. 4 Buys; 11% short interest), leaving plenty of room for more constructive views. Our recent channel checks also support management’s commentary that sales trends improved in Mar relative to Jan/Feb, with our checks pointing to SSS down 3-4% in Mar vs. the -8% reported for Jan/Feb.” In addition, Deutsche Bank raised its 2010 and 2011 full-year earnings estimates for the company. Burger King shares rose 53 cents, or +2.6%, in premarket trading Thursday. The Bottom Line We have avoided shares of BKC since our early June 2008 coverage began, when the shares were trading at $28.25. The company has a dividend yield of 1.24%, based on last night’s closing stock price of $20.17. The stock has technical support in the $17-$18 price area. If the shares can firm up, we see overhead resistance around the $23 price level. We would remain on the sidelines for now. Burger King Holdings, Inc. ( BKC ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars. Be

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Burger King Upgraded to “Buy” at Deutsche Bank (BKC)

TOKYO, March 18 – U.S. Treasuries were steady in Asia as investors awaited figures on consumer inflation and weekly jobless claims to assess the state of the economy. * A hefty drop in producer prices lifted longer-dated Treasury prices the previ Steady in Asia; CPI jobless claims eyed

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Steady in Asia; CPI jobless claims eyed

We the people have given away our sovereign money-creating power to private, for-profit lending institutions, which have used it to siphon wealth from the productive economy. Some states are moving to take that power back. WRH permalink

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The Growing Movement for Publicly Owned Banks

An Italian judge on Wednesday ordered four foreign banks and 13 people to stand trial over a complex derivatives deal involving Milan in a criminal test case for cities facing heavy losses from derivatives deals. WRH permalink

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Four banks face trial derivatives test

Gold prices and InflationGold prices dropped $2 today in response to data showing in February that inflation was still under control; at least for now, and gold responded as expected with a slight drop in price.On the Comex division of the New York Mercantile Exchange gold for April delivery dropped to $1,120.50 an ounce.The U.S. dollar index predictably rose, gaining 0.04 percent to $79.70. With

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Gold Down on Tame Inflation

Embedding consumer protection in the Fed could be worse than imperfect. By giving the imprimatur of a consumer protection office to an agency that has long resisted consumer protection, Congress risks creating a false sense of security among policymakers and the public. The Fed’s politically reactive posture is the exact opposite of the sustained care that consumer financial protection demands. WRH permalink

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Why Consumers Can’t Trust the Fed

Ratings agency Fitch Ratings has assigned a “BB+” rating to United States Steel Corporation’s ( X ) $500 million debt issued recently, reports AP. According to Fitch, “BB+” rated debt is non-investment grade or junk bond and is more vulnerable to changes in the economy. The company plans to use the proceeds from the notes due 2020 for general corporate purposes. Fitch had earlier downgraded US Steel’s rating on similar debt to “BB+” from “BBB-“, citing a lack of visibility of both an economic recovery and the company’s return to profitability. The downgrade included the possibility that the company, one of the world’s largest steel producers, would need financing in the near term for part of its capital spending over the next two to three years. However, Fitch’s rating outlook on US Steel is “stable”, reflecting the agency’s view that the company’s liquidity is sufficient to support operations, should the recovery remain weak for the next few months. In contrast to Fitch’s downgrade, Moody’s Investor Services ( MCO ) has upgraded the ratings on US Steel’s senior unsecured notes, pollution control revenue bonds and convertible notes due 2014 to “Ba2″ from “Ba3″. The agency seems to be more positive on US Steel’s  capital structure changes, which now has a lower proportion of secured debt and administrative and priority claims in total liabilities. Moody’s judges obligations rated “Ba” to have questionable credit quality. Moody’s has also affirmed the company’s “Ba2″ corporate family rating and the probability of a default rating. The upgrade on the corporate family rating is driven by Moody’s expectation of an improvement in US Steel’s debt protection and leverage ratios this year, although it expects the ratios to continue to be relatively weak. The rating outlook remains “negative.” Zacks Recommendation US Steel’s debt-to-equity ratio has remained above 65% in the last three quarters. As of December 31, 2009, long-term debt totaled $3.35 billion. The company’s net cash position (total cash less long-term debt) as of December 31, 2009 was a deficit of a significant $2.13 billion or $15.8 per share. Yet, the long-term positive outlook for steel makes us optimistic. We believe that US Steel is poised to show significant improvement in margins and profitability in the coming quarters. Raw material costs for steelmaking are rising, and US Steel is a leading beneficiary of this trend because of its integrated business model. The company’s capacity utilization rates have improved faster than expected, following the recent restart of its blast furnaces. Of its 15 idled furnaces, 13 are now up and running. We believe that improving capacity utilization should return the company to

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US Steel: More Debt, Same Rating – Analyst Blog

How to Profit from the 3D TV Boom! Panasonic Sells Out the First Week… People scoff at the idea of 3D television. The hangover from a ton of bad revenge of the zombie movies back in the day leave the general public with the idea that its nothing more than a gimmick to sell schlock B movies. But the recent blockbuster Avatar in S3D not only made it the best selling movie of all time, but sent the company IMAX’s shares through the roof… Take a look: Up 700% in 13 months! IMAX has a lot of 3D technologies and could do very well in the future. But as a general rule, I don’t buy at the top. The next big thing is to bring the 3D experience into the home. Panasonic Corp is one company making 3D TVs. The company announced today that they sold out in the U.S. in their first week. Panasonic is already the world’s largest plasma TV maker. The surging demand from retailers for 3D TVs is forcing them to take back orders. We all know that Avatar is the biggest selling movie of all time… but what is really surprising is that the critically panned Alice in Wonderland became the sixth-biggest debut in box office history, boasting the biggest opening for a 3D film. This technology has legs and is going to run. Many expect that sporting events will continue to drive 3D TV sales. The 2010 FIFA World Cup will be broadcast in 3D this summer. (For readers in the United States, that’s a big soccer tournament… ) ESPN will broadcast 85 live events in this technology a year starting in June. Discovery, Disney, Sony are all on board with their own plans. According to Bloomberg, 12.9 million TV sets are expected to ship by 2011�— tripling this year’s growth figures. Without a doubt, these sets will be the next “must own” device. Don’t Knock the Glasses The big knock against this new viewing medium is that you need glasses to see it. If you are going to have a big party, you need a bunch of glasses. You can’t show off…

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3D TVs Sell Out – Here’s How to Profit