April 30th, 2009
08:37 AM GMT
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April 29th, 2009
07:31 AM GMT
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April 27th, 2009
07:53 PM GMT
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I have a general rule in business journalism – never count dollars before lives. (Always worry about the effect on people before balance sheets or bank accounts.) I have been trying to stay close to this mantra as I cover the swine flu crisis. I am finding it hard to do so this time.

Because while the death and suffering of those who have caught the flu must be paramount, I can't forget that this crisis is taking place in the first global recession for 60 years.

The IMF is forecasting a downturn of at least 1.3 per cent globally, with much worse numbers in developed countries like the U.S. where the downturn could hit 3.5 percent this year.

According to the World Bank report two years ago, industries that are most affected are those like hotels, travel, tourism and restaurants. The very industries that have felt the brunt of the recession. So while there is never a good time to have a pandemic, this is a stunningly bad time.

When the EU health commissioner says that people should rethink travelling to Mexico AND the United States, then we are in getting into deep trouble. The transatlantic market is the most important single travel market in the world.

And, heaven forbid, if the crisis worsens in the U.S., so people are put off domestic travel – well,  the global slump which might have been slowing down, could get worse again.

A quick question for you. Have you changed your plans at all? or are you intending to take any special measures? Wear masks? I would like to know.



April 24th, 2009
07:29 PM GMT
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A Friday Profitable Moment....Just for the readers of this Blog.

All week we have reported horrible economic news – whether it's Britain's tax the rich budget, or Spain's double digit unemployment. We have been battered by US company results and beaten up by the IMF telling us it's the first global recession since the second World War. The losses will rack up to more than $4 trillion dollars. Phew. That's a lot to take in over one week.

There is so much to worry about that it's hard to switch off at the weekend. We can try and escape but there are always the nagging worried of bills unpaid, jobs at risk and financial dangers ahead.

But the weekend is now upon us, and I asked on the show, whether or not you would be worried by money this weekend. Here are some of your thoughts. Let me know whether you are worried, and what you can do about it.

I am in Paris this week, filming, but I hope that whatever you're upto this weekend (a brisk walk, some gardening, a bit of shopping) It's profitable !

======================================================

jade59@richardquest No we will not worry about money this W-E,we learn a while ago worrying won't change a thing,W-E is a break,so we'll have one

qM@richardquest I don't worry about money. I worry about the lack of money!

Gotaclue@richardquest No. It's not as though I'm going to buy a new Rolex this weekend.

swortman1@richardquest i worry about money all the time. prices keep going up and there not showing sign of going down.

healthysalone@richardquest No. Worrying is a pointless activity regardless of the situation. I know of no situation that has changed because I worried.

eastcoastjac@richardquest I do not worry about money – I have more than enough to meet my needs. Positive thought and Law of Attraction in action.

boezel@richardquest NO! From a terrace in the Netherlands

jbtorres@richardquest with all of the recent company financial reports, I should worry

ixVintageKissxi@richardquest I think that it's hard for people not to be worried about money right now. Very few people have that luxury anymore about money everyday until the recession ends.

boxtersushi@richardquest nope! About to run to the bank for our weekly cash (since beginning of year cash only excl travel) now tons of money on hand!

Gatorfitz@richardquest Not Worry, I wiiJust watch what I spend and be smart.

woodythehawk@richardquest Affirmative!!! I am on a fixed US retirement income and living in Egypt, and the end of the month is drawing near.

Tacarigua@richardquest Money is no problem - the problem IS money.

PepsiZecoon@richardquest We might be tight on budget, but we do manage. So I myself, won't.

javiaven@richardquest Worry? Why worry? I'm going skydiving! Like the economy! Gerooonimoooo!!!!

mananqureshi@richardquest We worry about money every weekeend richard1 where it goes! heaven knows! (giggle)

Rikki_ND@richardquest What's the point in worrying? Economies are cyclical and we will recover from this too, we've been through worse and survived!

R_P_Perry@richardquest They can't take money I dont have. No need to worry I have a shotgun and enough food for the weekend Should be fine come Mon

buklah@richardquest I find myself worrying,itsnot something I can help. Will I lose my job, Can I afford my standard of living? Can I pay my bills

foxybacon@richardquest I must admit that I am not majorly worried about it. Que sera, sera. Whatever will be, will be :o)



April 24th, 2009
02:50 PM GMT
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By now we are just about equal on reds and greens – which makes Thursday's crop of Apples signficant. Here we go.

 

Apple  - This was one of the easiest Greens of the week. With strong sales of 3.7 million by iPhone, and nearly 1 billion downloads from the App store, Apple easily topped expectations.

 

UPS – A solid Red as the Brown van company failed to meet expectations  This is hardly surprising, since as the recession takes its toll on business and consumers alike there is less demand to ship products. Whilst all this is obvious, we give UPS a red apple because shipping volumes continue to fall and guidance has to be lower

 

Concoco Philips – The company is the third largest US oil producer. Even though its profits fell, it was less than the consensus had believed. And there is some hope that the company is improving production which should pay dividends in the future…oil prices are likely to rise over the rest of the year so a Green apple for black gold.

 

Herschey – Any company that gives us comfort during a recession with chocolate deserves a Green apple (and the fact it managed to raise prices and hold its share is the icing on the chocolate ho hoho)



April 23rd, 2009
01:25 PM GMT
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It’s midweek and here is an update on the Q25

  

Yahoo – good numbers and a reasonable prospect for the future, along with cost cutting and a general feeling the company. A Green Apple.

 

Wells Fargo – led the way a couple of weeks ago when it gave guidance and said things were looking much better. They were right. We gave them a Green apple

 

Boeing – The raw numbers were at the top end of expectations so you might be forgiven for giving Boeing a Green apple. Unfortunately there are cost overruns on the 747-800, the 787 is two years behind schedule and hasn’t yet flown, airlines may still defer or cancel more orders because of the recession.Boeing got a Red Apple

 

AT&T – The numbers were at the top end of expectations and the company is doing a good job squeezing more revenue through texts and data useage. IN addition is has seen excellent numbers from being the launch carrier in the US for the iPhone which has been a tremendous success (we will get more on that from Apple on Thursday)  A Green Apple

 

Morgan Stanley – Of all the banks, MS broke the trend of banks and recored a bigger loss than expected.  The banks capital tier one ratio is strong, but the performance of the bank was not. At a time when it’s peers are making money, we gave Morgan Stanley a Red Apple  

 

Kimberly Clark – The household product maker includes Huggies and Kleenex. If not exactly recession proof it should be resilient. But it wasn’t. Sales and profits were down because shoppers are shunning branded products they love for generic products that might be cheaper.  A Red Apple



April 22nd, 2009
07:43 PM GMT
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The Q25 on Tuesday 

 

Caterpillar –  This proved to be one of our trickiest. Stripping out one-offs, the company actually beat expectations, (so suggested a Green apple) But the company lost money for the first time in years, and its outlook forecast was horrible. We gave it a RED apple

 

Coca-Cola – A traditional recession-proof stock, and the latest numbers showed growth in international markets, even though the U.S .fell back. It was a clear GREEN apple

 

Delta Airlines – The airline has made a loss for six straight quarters. Through cost cutting Delta managed to beat analysts' expectations so that suggests a Green. Look a bit deeper and you see Delta is still cutting capacity, and there is no sign of an upturn in premium traffic vital for a restoration. It's a RED apple 

 

Lockheed Martin – A solid defense company which made less money but still remained profitable throughout the recession. Its earnings were at the upper end of estimates.  And the defense business remains strong.  A GREEN

 

Merck – A fall in the share price after the company missed its numbers. And a poor outlook and forecast. All this in a company which has been buying up other drug makers. We felt it was a RED Apple

 

Now the jars are looking pretty equal.  Wednesday is a truly bumper day...



April 22nd, 2009
12:14 PM GMT
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HONG KONG, China – You can tell a lot about the state of the economy by what passes as positive news.

A worker works on a product line at a factory in Chengdu of Sichuan Province, China, February.
A worker works on a product line at a factory in Chengdu of Sichuan Province, China, February.

Business across the globe has gone from bad to worse, and a new phrase has crept into the lexicon of the credit crisis in recent weeks: the "less-worse" economy.

"Getting Better (or Less Worse) All the Time" was a headline last week on TheStreet.com. "From Bad to Less Worse," said a story about the German car industry from Der Spiegel earlier this month.

"I expect things to get less worse as we proceed through the year," Richard Fisher, chief executive officer and president of the Dallas Federal Reserve Bank, told CNN last week (although he also expects U.S. unemployment to eclipse 10 percent in 2009).  Watch Fisher comment on economy

Translation of a less-worse economy: It's still bad - much worse than a year ago, in fact - but still not as bad as the previous month or business quarter. Some recent less-worse news:

– The U.S. Federal Reserve released a report on April 15 that showed "overall economic activity contracted further or remained weak." However, five of the 12 districts across the United States that supply data to the Fed noted a "moderation in the pace of decline. Several saw signs that activity in some sectors was stabilizing at a low level."

– Exports from Japan dropped 46 percent last month, compared with March 2008. But that's less than the nearly 50 percent year-on-year drop the month
before

–  China's exports were down 17 percent year-on-year last month, but still $25 billion more than in February

– An Associated Press-GfK poll early this month showed that 40 percent of Americans think the country is headed in the right direction, double the percentage in October

The less-worse economy is still tumbling downhill. But when optimism is in short supply, people find hope where they can.



April 22nd, 2009
12:03 PM GMT
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A Barometer of Earnings.

This week we have had a vast raft of earnings news from top U.S. corporations to digest. Tech companies like IBM and Apple, Internet giants like Yahoo!, banks ranging from Bank of America to American Express to name just a few.

Our task at Quest Means Business has been to make sense of it all... Hence the Q25.

We have carefully chosen 25 companies reporting this week which we believe in total, show the breadth and range of the U.S. economy.

We are giving the companies either a GREEN or a RED apple...and by the end of the week we will be able to guage the strength of the economies.

How do we decide who gets a GREEN or a RED?

Our starting point is whether or not the companies have MET or BEATEN consensus analyst expectations. But that is only the start.

Then we look at whether or not the numbers were met because of special one-off factors. We then move to look at whether there is any guidance for future quarters and what the outlook it. Finally, Maggie Lake and I, along with our producers have a good debate on it... arguing one side or the other until it usually becomes obvious!

A Public Heath Warning – The Q25 is not a scientific index – it is NOT weighted or calibrated. It is anecdotal and it often relies as much on "gut feeling" of those of us at Quest Means Business as the numbers themselves. You should take NO investment decisions on the strength of this.

MONDAY

Bank of America – On the face of it BOA should have got a green, since it made good money. But look behind the numbers and a different story is told; one-off tax gains and other special items massaged the numbers. And the bank had some worrying words on future bad loan provisions. Things are going to get worse. The consensus was BOA was a RED apple

Hasbro – The toymaker saw profits fall by 47 percent, that alone didn't merit a red - but the forecast that things were not getting better led us to give the company a RED Apple

Eli- Lilly – (This is a corrected version) Of course it was a Green apple for Eli Lilly for its better than expected results and sales growth. Most important of all, the guidance was strong

IBM – Big Blue made a profit, but missed its numbers, and failed to meet expectations. Heavily dependant on global trade, it's at the mercy of currency fluctuations at a time when capex is down, world trade is falling and it is still reeling from it's failed bid for Sun Microsystems; there was little doubt it was a RED Apple



April 22nd, 2009
07:57 AM GMT
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