Trader Talk

Jobs Number Hits Futures, Consumer Cos. Talk Price Hikes

Futures dropped at 8:30 ET because jobless claims numbers higher than expected havesomewhat hopes that the nonfarm payrolls report tomorrow will be stronger than expected.

There are two noteworthy trends from companies announcing earnings:

1) Once again, consumer companies have talked about higher costs and price increases. Today it was Colgate and Proctor & Gamble.

2) Both Ann Taylor and Starbucks have talked this morning about limiting store growth in response to the slower economy. Starbucks CEO Howard Schultz said "the consumer is in a recession."

On earnings:

1) Colgate beat, and announced a repurchase of 30 m shares. Note that Colgate generates less than 20 percent of its sales in North America. Their global market shares of key products like toothpaste, soap, and toothbrushes are all at record highs.

2) P&G beat by a penny and confirmed they were splitting off their Folgers business.Their guidance for the current quarter is just a tad below analyst expectations.

3) Like Centex , Pulte Homes recorded a huge loss of $3.54, much greater than the loss of $0.76 expected. Like Centex, the bigger than expected mix was related to land-related impairment charges. Their guidance for the quarter is a loss of $0.15 to a loss of $0.30, analyst estimate is loss of $0.33.

4) What's up with the oil service stocks? First, Smith International , then Baker Hughes, now Cooper Cameron is getting hammered on disappointing guidance. Down 7 percent pre-open.

Street estimates seem overly optimistic.

5) Aerospace giant Goodrich beat and talked about "steady growth" in aerospace, and reaffirmed 2008 guidance of $4.15-$4.30, though that is below analyst expectations of $4.33 (Reuters). They also note that Boeing's delay in the 787 would not have a material impact on earnings in 2008 or 2009.

6) Buried in the William Ackman letter so criticalof Ambac   and MBIA was an interesting argument for eliminating the purpose of the bond insurers altogether, that is, to try to create what he calls "Open Source Research" where "all market participants can have equal access to the primary source data and construct their own views of losses without reliance on the analytical judgment of rating agencies or the bond insurance industry."

European banks like UBS ,Deutsche Bank , and AXA are all weak today.

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