Monday, July 27, 2015

Commodity Price Slump;Biogen Idec;RBC Canadian Open

Oil production is running sky high.Chinese growth is less than optimal and the grain growing season has been ideal,pointed out Dennis Gartman,editor of The Gartman Letter.You have the makings of a protracted commodity downturn.The dollar is so strong,it's cast a pall on all commodities.Everything is under pressure because of the strong dollar.*
Michael Yee of RBC Capital Markets likes Biogen Idec stock.We're telling people to buy the dip,he said.The stock will go higher and we continue to be positive here.The data on their candidate Alzheimer's drug will be out two years from now.The drug will hit the market in 2018.It looks like a very good risk-reward to us.The Biogen data looks very positive.*
The RBC Canadian Open was held before large and supportive crowds at Glen Abbey Golf Club in Oakville,Ontario over the weekend.Jason Day of Australia won his fourth PGA title,with American Bubba Watson taking second and Canadian David Hearn coming in third on the leader board.Canada's Graham DeLaet had to withdraw from the tournament because of a thumb injury.*
Biogen Idec (BIIB)

Monday, July 20, 2015

Lockheed Buys Sikorsky,May Divest Some Businesses

Lockheed Martin,the world's largest defence contractor,announced today,20 July,that it has entered into a definitive agreement to acquire Sikorsky Aircraft from United Technologies for 9 billion dollars.After a tax break,Lockheed said the final cost would be 7.1 billion.*
Sikorsky is a natural fit for Lockheed Martin and complements our broad portfolio of world-class aerospace and defence technologies,said CEO Marilyn Hewson.I'm confident this acquisition will help us extend our core business into the growing areas of helicopter production and sustainment.Together,we'll offer a strong portfolio of helicopter solutions to our global customers and accelerate the pace of innovation and new technology development.*
Pending regulatory approval,the deal is expected to close by late Q4 2015 or early Q1 2016.Despite the acquisition,Lockheed will continue on course to pay dividends and buy back shares.*
Sikorsky will become part of Lockheed's Mission Systems and Training segment.Through MST,Lockheed and Sikorsky are already partners on the VH-92 Presidential Helicopter,Combat Rescue Helicopter and Naval MH-60 Helicopter.*
Lockheed is also exploring the option of spinning off or selling its government IT and technology services businesses,which comprise about 6 billion of its estimated 2015 annual sales.As global security market dynamics shift,this review will strengthen our competitive posture,enabling sustained,profitable growth and positioning Lockheed Martin to deliver value for customers,shareholders and employees,Ms.Hewson added.*
Certain defence and intelligence programmes in the Information Systems&Global Solutions segment will not be included in the review.*
Lockheed Martin (LMT),United Technologies (UTX)

Monday, July 13, 2015

With Global Economy Still Suffering,GDP Forecast Lowered

The International Monetary Fund has lowered its global GDP growth forecast for 2015 to 3.3% on a number of factors,including China's stock market turbulence and the Greek debt crisis.As well,both the US and Canadian economies have been downgraded by the IMF.A 20% surge in the U.S. dollar brought on by investors taking refuge in US assets has been crimping exports;while in Canada,falling commodity prices have hindered that natural resource-rich country's economic performance.Still,in 2016,the IMF is predicting global growth to rise to 3.8%.
The end result is not a very impressive number,said IMF chief economist Olivier Blanchard,but it's not a catastrophe,either.We're very much where we expected to be.
The Fed can wait a bit longer to raise rates.We're not very far from where we want to be in the US.Take one step back,the US is doing fine.
There has always been a disconnect between the Chinese stock market and the Chinese economy.It may have an effect on spending,but it's more or less octagonal.When you have exchange rates and stock prices moving quickly as they do in China,you don't know how you can handle it.
Any deal in Greece has to have two parts:
1.The Greeks have to do something.
2.There must be aid and debt relief.
The post-financial crisis world is one of high debt,and it doesn't take much,with these debt dynamics,to go wrong.We have to be ready to see other episodes of that kind.*