G20 Meeting: "The Results Will Be Moderate"
As the G-20 meets in Washington, there is a lot of parsing of commentary from attending politicians. Mexican President Felipe Calderon is probably the most realistic: "This (the G20 meeting) will need to be seen as just the starting point. There will be results, but they will be moderate."
But Nick Kounis, an analyst at Fortis Bank in the Netherlands, has the most widely distributed comment: "We will probably see further falls in output in the first few months of next year, before a gradual improvement later in the year, but we think that there will be no real recovery before 2010."
There are now "official" recessions in Hong Kong, Germany, and Italy.
- Bernanke: Central Banks Ready to Act
1) It makes you wonder: what analysts have been doing with themselves in the past two months. Retailers, for example, have been signaling that consumer spending dropped dramatically in September and October, yet again today and last night FOUR big retailers gave guidance for the fourth quarter (November to January) that is WELL BELOW analyst estimates.
Two other trends are noticeable in retail: 1) third quarter comparable store sales were well below the same period last year, and 2) despite the bad times, several of the retailers went out of their way to say they were looking to take market share from their competitors.
a) Nordstrom said comp store sales decreased 11.1 percent and fourth quarter earnings would come in at $0.35-$0.40, vs. expectations of $0.70 (is seeking to "continue the international expansion of our brands")
b) Kohls said comp store sales decreased 6.7 percent and fourth quarter earnings would come in at $0.90-$1.05 vs. expectations of $1.22. ("we will be very competitive in order to gain market share")
c) Abercrombie is down 8 percent pre-open, said comp store sales decreased 8 percent and fourth quarter earnings would come in at $1.00-$1.05 vs. expectations of $1.57.
d) JC Penney said comp store sales were down 10.1 percent and fourth quarter earnings would come in at $0.90-1.05 vs expectations of $1.32 (will seek to "capitalize on opportunities to maintain and build market share")
2) Nokia is the most actively traded stock, down 13 percent pre-open, noting a "sharp pullback in global consumer spending." They said mobile device volumes will be lower than expected, to 1.24 billion units in 2008, vs. prior expectations of 1.26 billion units, and that 2009 volumes will be down compared to 2008.
3) Sun Micro, as with most companies, beat on the quarter but warned and said they would be laying off 15 to 18 percent of the workforce.
4) Cypress Semi is lowering its fourth quarter guidance as well.
- Retail Sales Take Record Drop; Import Prices Tumble
- Nokia Says Crisis Hits Mobile Phone Market
- Sun Micro to Lay Off Up to 6,000 Workers
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