Tuesday, November 27, 2007

Sun Shines On Mr.Softie

Sun Microsystems(JAVA) and Microsoft(MSFT) show how two firms can both challenge and support one another in their quest for progress.Google(GOOG) is now distributing a free version of Sun's Star Office software.It is part of the Google Pack.Star Office is Microsoft Office-compatible and is also sold by Sun in a version with technical support and free updates.Star Office provides the Open Document Format Alliance,which includes Google,Sun and IBM,with an important open product.The free Star Office has the same basic features as Microsoft Office,which goes for 150-400 dollars.Word-processing,database,graphics,spreadsheets,photo editing and Web publishing are all possible with Star Office.Sun acquired Star Office when it purchased its parent company in 1999.Sun refined the product and contributed to a free version called Open Office before the Google Pack was offered.More than 100 million copies of Open Office have been downloaded.Star Office supports the Open Document file format,which many governments have considered adopting for its free document storage.Star Office is available on Sun's Solaris Operating Environment,along with Microsoft Windows and Linux.At the same time that Sun's Star Office competes with Microsoft Office,Sun is allied with Microsoft on a number of other fronts.Sun now sells servers with factory-installed Microsoft Windows.In this connection,the two firms will even call on customers together.They are also collaborating on interactive television built on Microsoft's Mediaroom software and Sun systems.AT and T wants to use this blend for its U-verse offering.It is clear that Sun and Microsoft are fully implementing their 2004 alliance,while competing in the office software realm.Their complex relations will be of benefit to both of them into at least the next decade.Shares of both Sun Microsystems and Microsoft were up this morning.

Tuesday, November 20, 2007

Del Monte Picks Winners

Del Monte Foods(DLM) has tied itself to a couple of winners.In a coupon ad,the company celebrated Disney Pixar's(DIS) release of Ratatouille on DVD and Blue-ray Hi Def.It also offered a five dollar rebate if you buy five cans of Del Monte vegetables and a Ratatouille DVD or Blue-ray.This proved to be a clever choice,since Ratatouille promptly went to the top of the DVD chart.The ad encouraged people to eat healthier and get more exercise.The Wolfe family,YMCA members,are shown preparing a meal with Ratatouille himself."Just One More,"the Del Monte healthy living campaign,is a proud supporter of YMCA Activate America.Nor is Del Monte limiting its health promotion to humans.On the flip side of the ad,we see a cat licking its chops while imagining a shrimp."Think like a cat.Think fresh.Think Meow Mix.Made with REAL Poultry and Seafood!"Meow Mix has its own website,where you can enter a contest and win"a culinary adventure with celebrity chef Cat Coral."DLM has committed itself to the health of the whole family."Foods of Del Monte.Nourishing families.Enriching lives.Every day."These tie-ins and slogans appeal to young families.Del Monte is making itself an element of their lifestyle.With DLM's substantial distribution network and shelf space,they will have no trouble finding the Del Monte foods they want.Carl Marker of IMS lists Del Monte as one of his top five stock picks.In this morning's trading,Del Monte shares were up five cents to 10.02.This consumer staple stock looks appealing in light of a National Association of Business Economics forecast released yesterday.One in five economists surveyed sees greater than a 50% chance of a recession.The median growth forecast is 1.5% for the fourth quarter.Gross Domestic Product for 2008 is pegged at 2.5-down from 2.8.Seventy-eight percent of Americans think the economy is getting worse.

Tuesday, November 13, 2007

Wary Sentiment Wells Up

For the past several days,a wary mood has been expressed by Wall Street analysts.David Greenlaw of Morgan Stanley(MS) notes a powerful flight to the safety of government bonds.Banks are still tightening credit,which will slow the economy over the next several quarters.Peak foreclosure on homes will not occur until mid-2008.Jack Ablin of Harris Private Bank thinks the world has changed now.There is the high price of oil coupled with the weak dollar.The trend has changed.As the Federal Reserve lowers interest rates,the price of commodities spikes.Fifteen of twenty commodities have gained over the past six months.Billionaire Wilbur Ross of W L Ross and Company says we are in the fourth or fifth inning of the crisis.It will be at least a few more years until foreclosures and write-downs end.More credit card and loan delinquencies are being recorded,which suggests that consumers are tapped out.Oppenheimer's Michael Metz feels we are in for a period of very slow growth.This will last for about two years,as we've been in a leveraged economy.The big growth wasn't real.Now we will see a period of 1-1.5% growth.To Joe Battipaglia of Stifel Nicolaus,we are in a contraction from housing,and consumption will be weak for some time.It will take years to work this out.Housing prices are just beginning to fall.The biggest consumer asset is losing its value.Credit is harder to get,so the market is properly going down.We've only dropped 5% in home prices so far.The clock is ticking on 600 billion of mortgages,so he is staying in a lot of cash and some multinational stocks.Cash has been pouring into money market funds,sending them to record levels.Oppenheimer offers its customers the Advantage series of funds.Other stable funds are TIAA-Cref Instit MMF/Retail and Vanguard Tax-Exempt MMF.Procter and Gamble(PG) and Johnson and Johnson(JNJ) are favored multinational stocks.

Tuesday, November 6, 2007

Exxon Mobil Surpassed

Exxon Mobil(XOM)is no longer the largest company in the world.That distinction now belongs to Petro China(PTR).Petro China is worth an estimated one trillion dollars.In an initial public offering on the Shanghai exchange yesterday,the oil giant's shares tripled in value.Last week,Exxon Mobil reported earnings down 10%.The price of crude oil is at record levels,which means refiners such as XOM aren't able to make as much money off their refining operations,since the competitive nature of gasoline sales prevents them from raising gas prices very much.This is known as a "narrow crack spread." As well,production was down 2%,with new oil fields to replace declining ones being very hard to locate;what is more,the countries where XOM is exploring and drilling are demanding a bigger cut,and exploration and drilling costs are rising.Big oil is feeling a big squeeze.Chevron(CVX)reported nearly identical results for the third quarter.Investors will have to adjust to these smaller profits,but they are still in the many billions of dollars.According to Jerry Castellini of Castleark Management,the energy market is still in the early phase of an ascent.In order to fund enough of an investment to keep the oil flowing,a price of 100-200 dollars a barrel is needed.So far,the capital flow hasn't reached the level of a secular bull market.Oil price rose 17% in October-the biggest increase since Hurricane Ivan struck in 2004.Shares of both XOM and CVX rose on Monday,even as crude oil retreated 2.03%.This morning,shares of XOM were up in European trading,as was the price of crude.Many analysts are recommending energy stocks as a good long-term holding.