Stock Preacher

The signs of an improving economy are on your kitchen or bathroom shelves, as US consumers are showing a willingness to pay a little more to get big-name brands, including Colgate toothpaste, Kellogg’s Frosted Flakes and Gillette Fusion shavers. That is good news for the economy and the multibillion-dollar companies that make those products and have been battling to keep shoppers from trading down to store brands to save money. Procter & Gamble Co., Colgate-Palmolive Co. Estee’ Lauder and Kellogg Co. all gave upbeat earnings reports last week and even stronger outlooks for Y 2010. “The strongest brands are the most resilient to economic stress and the first to bounce back as soon as consumers can pay for it because they don’t want to trade down,” said Allen Adamson, managing director of San Francisco-based branding firm Landor Associates. P&G said sales were rebounding faster than expected after a year of declines — and following price cuts to narrow gaps with cheaper competitors biting into its market share. P&G is an economic bellwether as the world’s largest consumer products maker and seller of a broad range that includes cleaners, baby, grooming and beauty products. Read more

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Asian auto makers sharply lifted their USA market share last month due to a trend towards smaller vehicles under the cash-for-clunkers scheme and consumers’ continuing concern about the health of General Motors and Chrysler. Toyota reported a 6.4% sales increase from a year earlier, bringing it within 21,000 vehicles of GM, which has held the # 1 spot for decades. The cash-for-clunkers scheme pushed GM’s sales up by 30% from July, but they remained a 5th lower than August 2008. Among other Asian auto makers, Honda’s sales reached an August record, while Hyundai reported a 47% surge and Subaru posted its best month ever. Read more

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Dell Inc.’s Q-2 Y 2009 results reinforce what other tech giants have shown recently about the health of the personal computer industry: it was wounded by the recession, but is getting back on its feet, thanks to consumers, bargain prices and little “netbook” laptops for surfing the Internet. Dell’s message was similar to those offered by rival Hewlett-Packard Co., the world’s No. 1 PC seller, and supplier Intel Corp., the world’s biggest computer chip maker, in their latest quarterly reports: consumers are coming back to the stores to buy PCs, but corporations are still being stingy. Read more

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Wal-Mart Stores Inc. reported Q-2 earnings Thursday that beat Wall Street expectations, and they said that they are preparing for the US consumers’ newly adopted frugality to be the “new normal” as they do not expect consumer spending to recover in the near term. Lower-priced stores may be suffering less than other retailers during the recession, but that still presents big challenges. Wal-Mart saw an unexpected drop in same-store sales at its U.S. stores for the quarter. Spokesman John Simley said the quarterly decline is believed to be Wal-Mart’s first ever, but noted that same-store sales would have been flat without food price drops. Same-store sales is a Key industry indicator comparing year-over-year sales at stores open more than a year. Customers at Wal-Mart, the world’s largest retailer, are paying for more of their purchases in cash or with debit cards than with credit cards, and they keep buying less expensive products and smaller amounts.

Popularity: 2% [?]

Goldman Sachs and JPMorgan Chase Co. have emerged two bellwethers of the US finance sector in the post-bailout Wall Street, leading the surge of optimism with their strong profits in the Y 2009 Q-2. Six major US banks have reported their second-quarter profits in the past two weeks, vastly beating analyst predictions. The business of Goldman has little to do with common consumers, its quarterly earnings of more than US$3.4B posted were buoyed by record results in its trading and underwriting business. According to the quarterly report, the Wall Street giant generated a record US$6.8B in revenue from fixed income, currency and commodities trading during the quarter. Revenue from equity underwriting jumped to US$736M form UD$ 48M in the first quarter compared with US$616M last year. JP Morgan Chase, the largest US bank by market value, posted a US$2.72B earnings, and made its profits mainly from investment-banking services including bond and equity trading, and underwriting debt to help companies issue shares and bonds, not commercial loans and consumption credit.

Popularity: 2% [?]

Dutch electricity grid companies have agreed to build a national network of charging stations for electric cars to encourage the purchase of this type of clean vehicles. Eleven companies which manage the regional electricity grids decided to build at least 10,000 such charging stations by 2012. The whole country will be covered with charging stations with the exception of the region of Rotterdam. The cost of the project is estimated at some 15 million Euros (US$20MM) and will be paid by the grid companies themselves. The grid companies want to end “the chicken and the egg” dilemma in which consumers do not buy electric cars because there are no recharging points, and power companies do not want to build recharging points because no one has electric cars. Hardly any electric cars are being sold in the Netherlands now and it is hoped the new initiative will help stimulate the market. Fact: It takes the amount of power an average home uses in five days to recharge an electric car.

Popularity: 5% [?]