Luxury Retail:What Coach Has Going For It

We've seen our company improve about 20 points,said Coach CEO Victor Luis.We have continued growth in Europe and are doubling our China business.We're really pleased with the Chinese consumer internationally.Tourist flows are up in Europe and Japan.The consumer is looking for quality at great value,and Coach is uniquely situated to meet that need.*
In general,we see ourselves taking share from the traditional European luxury players.Our number one priority is the Coach brand,remodeling our store fleet.By the end of June,we will be 40% remodeled.We have tremendous confidence in the handbag and accessories space.It's the number one investment that women-and increasingly,men-make in their wardrobe.*
Our Stuart Weitzman brand is helping us in the footwear space.In spite of the warm holiday,they were number one in boot sales.*
Coach offers accessories and gifts for men and women,from handbags and men's bags to women's and men's small leather goods;footwear;outerwear;watches;fragrances;and jewelry.*
Coach,Inc (COH)

Market Fears:It Could Be a Long Way Down

Major global markets largely continued their decline on China and oil collapse fears Monday,although US stock exchanges were closed for the Martin Luther King,Jr. Day holiday.The one exception was the Shanghai Composite Index,which rose 0.47%.The Japanese Nikkei slumped 1.45%,approaching bear territory along with the Australian ASX.The Hong Kong HSI tumbled 1.45%.In Europe,the German DAX fell 0.25%,,while the London FTSE dropped 0.42% and the Paris CAC 40 lost 0.49%.In the commodities space,light sweet crude was down 1.63% and Brent lost 0.55% in anticipation of Iranian production re-entering the market.Natural gas was cheered,however,by the arctic outbreak sweeping into the US East Coast,rising to 2.124,up 1.14%.Gold was virtually flat at 1088.90 an ounce,just a hair down at -0.17%;but silver climbed to 13.94,or 0.32%.
I think there's much more to go,said Bill Fleckenstein,president of Fleckenstein Capital.My real fear is,there's going to be a dislocation,when the market breaks hard and fast.So far this year,it's been sort of a rolling dislocation.I think it's entirely possible to take out the lows of last summer,accelerate and go lower until such time as the Fed panics.*
Intel has been held up by slowing data centre growth.They've got tons of capacity in the place.If people start to waffle over growth,they'll really be in trouble.The world economy is weak.It's a very potent mix and the Fed can't help unless the market goes much lower-so guess what?The market's going much lower.This is much worse than a market correction.I think all these things are in a feedback loop and it's going to get much worse,Mr.Fleckenstein warned.*
iShares Silver Trust(ETF) (SLV)

Strong Dollar,Appreciation Recasts Investing Strategies

Chipmaker Qualcomm will buy back 15 billion in stock,10 billion of that over the next 12 months.It has 31.6 billion in cash on hand,and will increase its dividend by 14%.It is contemplating a debt issue plus use cash for the buyback.Shareholders have been pushing for this bigger return on investment.Along with this accelerated repurchase,the company has just announced some new chips that are going to be important to its business.*
General Motors will be executing a five billion dollar stock buyback in the near term.*
The soaring US dollar makes it the worst of times for big American companies with an overseas presence,said Larry Glazer of Mayflower Advisors.There's actually a shortage of stocks out there.You have to change your investment strategy.Ultimately,the strong dollar is a good thing,but a volatile currency is not a good thing.It is hurting the emerging markets.*
Small cap stocks,as well as domestically-oriented US companies and European stocks,which have not appreciated nearly as much as US issues in recent years,are being recommended in these conditions.Margins of the big multinationals are likely to be hit by the strong dollar.*
iShares Small Cap Core ETF (IJR),iShares S&P Europe 350 Index Fund (IEV),Qualcomm Inc (QCOM)

Asia This Day:China Manufacturing;Singapore Grand Prix

Japanese markets are closed Monday for the autumnal equinox holiday.Hong Kong's market was closed until after lunch because of Typhoon Usagi,which crossed the territory without causing serious injury or damage.*
Steve Brice,chief international strategist at Standard Charterd,said the tapering will happen at some point,and that will drain liquidity from the market.Expect continuing volatility for the Indian market.We're not convinced that the Chinese authorities want a significant rebound in Chinese growth.There's been good data,but we're not convinced and haven't bought into a major bull market in China just yet.*
We like the European stock market for a 6-12 month time horizon.We're still relatively constructive on the US.We're waiting for the earnings.We want to see what happens on the cost side.*
The HSBC flash PMI showed that China manufacturing data beat its estimate,causing stocks to rise in early Monday trading.The unofficial index rose to 51.2 in September from 50.1 in August,reaching its highest level since March.The official data comes out in October.*
Sebastian Vettel of Germany won the Formula One Singapore Grand Prix,which was held at night on a challenging street course,solidifying his overall lead for Red Bull Racing in the championship race.Spain's Fernando Alonso was second for Ferrari,and Kimi Raikkonen of Finland finished third for Lotus.A big fireworks display was held immediately the race ended.*
The MSCI Asia Pacific index was up 0.32% in early Monday trading.

Kerry Gathers His Thoughts Before First Overseas Trip

Our lives as Americans are more entwined than ever before with the lives of those in other countries we may never have visited.My friends,no politicians can put this genie back in the bottle,said new Secretary of State John Kerry at the University of Virginia in Charlottesville on the eve of his first overseas trip,to Europe and the Middle East.Our citizens deserve a strong foreign policy to protect our place in the world.
This is a time to continue to engage for the sake of our safety and economy-95% of the world's customers live outside our own country.These investments in foreign engagement are paying for themselves.Indonesia is placing the largest order for aircraft that Boeing has ever filled.China is out second largest trading partner.Eleven of our fifteen largest trading partners used to be beneficiaries of US foreign assistance.
We are a country without any permanent enemies.Senator John McCain and I worked for 10 years to bring about relations with Vietnam.Our trade with Vietnam has increased more than 700% since then.
Our foreign service personnel screen for potential security threats on far shores before they can reach the homeland.A transatlantic partnership will match the scope and ambition of our transpacific partnership talks.
Jobs and trade are not the whole story;nor should they be.Failed states are among our greatest security threats.Deploying diplomats today is much cheaper than deploying troops tomorrow.It's national security insurance that we're buying,as Senator Lindsey Graham said.Diplomats fight corruption overseas and support the rule of law.All of that danger and risk that they take makes us more secure.
Countries are more secure and prosperous when women and girls are afforded more opportunities.Today more than a quarter of the Afghan parliament is women.
Foreign assistance is an investment in a stronger America.For the first time in history,young people around the world act as a global cohort.We need to help them and us use this remarkable network in a positive way.There is no pause button on the future.Responding is the American thing to do.
The greatest challenge is not in the hands of diplomats,but of Congress.We can't be strong in the world if we are not strong at home.My credibility as a diplomat is strongest when America puts its own fiscal house in order-and that has to be now.Let's not lose this opportunity because of politics.
After World War II,we didn't spike the football;we created a more level playing field,and we are stronger for it today.Now we face a similar crossroads as new markets bloom in every part of the world.Our sense of responsibility has to be exercised.What happens over there matters right here,and it matters that we get this right,Secretary of State John Kerry concluded before departing for the UK,Germany,France,Italy,Turkey,Egypt,the UAE,Saudi Arabia and Qatar this weekend.

Economy Disappointing,But Not In Recession-the view from Barclays Capital

Recent economic reports serve to refute the notion that the US is in a recession,according to Dean Maki,PhD,Chief US Economist at investment bank Barclays Capital.We believe Q3 will be stronger than Q2.Profits were by and large flat in Q2.That's really disappointed people.
We think people have to trim their expectations.They have to hire,and that cuts into profit growth.That's where we are right now.It could be a rocky road,in our view,within Europe.Ultimately,we do think they will put a handle on things.
Our view is that the Federal Reserve will not launch QE3 in September.With a significant rise in gas prices, spending will be crimped in coming months.Housing is one of the pieces we find we're most sure of in terms of a recovery.We think it will continue.
Dr.Maki has a PhD in economics from Stanford University.The Minnesota native worked as a Senior Economist at the Federal Reserve with former Chairman Alan Greenspan.
QE3 would be a further effort by the Federal Reserve to stimulate the US economy.
Barclays(BCS)

Asia This Day:Australian Fund Exec Urges Spending Restraint

Ripple effects from the slowdown of growth in China and Europe will be felt in the Australian mining sector.The CEO of Australian Foundation Investment Company,Ross Barker,urged mining companies to curb their spending on infrastructure projects while commodity prices fall in the difficult global environment.That is obviously something we would encourage,because we don't want to spend large amounts of money and not get good returns,Mr.Barker told the Australian Broadcasting Corporation.There is much more economic growth to feed through China and other emerging economies,but on the other hand,the period of huge cash flows from very high commodity prices will be coming to an end.There are still an enormously large number of mining projects in train.The big question for intermediate to long term investors is,how many of them will actually get up,the Australian fund executive asked.
AFI has a market capitalisation of some 4.7 billion dollars Australian,or 4.5 billion American.It owns shares of big miners BHP Billiton and RioTinto.
Asian shares rose in early Monday trading on renewed confidence in the resolution of Europe's debt crisis,and Australian shares were no exception.Japan's falling industrial production number was brushed aside by investors.
At the London Olympics,China led the medals count with 12 total and 6 gold.The U.S. was second with 11 total and 3 gold,while Italy was third with 7 total and 2 gold.
Australian Foundation Investment Company,Ltd.(ASX:AFI)

Xerox the Consistently Underrated

Despite the impression its low share price may convey,Xerox is both a services and a technology company.The company has been using data to broaden the solution set that we have,said CEO Ursula Burns.We see uptick in the developing economies;while in America,we started to see growth in large enterprises.Europe is totally uneven.We're still profitable there.Uncertainty is one of the worst things you can have for business,and we certainly have that in Europe right now.The prospects for growth in Europe are high for our services business.They will need to engage.They can't be in austerity forever.Most of our contracts are written;83% of our business is an annuity business,so I think we're gonna be O.K.As those contracts come to fruition,we will be able to progress to a strong margin base.Initial public offerings are as much media events as they are real events.Facebook will settle in and become a normal trading company.They will have to get women and diversity on the board,or it will hurt them,Ms.Burns observed. Xerox is trading at well below book value,and paid a 2.4% dividend as of the close of trade on Friday. Xerox(XRX)

Experts: Inside the Tough Job Search-plus who is hiring now

The Labor Department posted a November jobs gain of 120,000-below the 125,000 estimate.At this point in our recovery,it's a disappointing number,said John Allison,Professor at Wake Forest School of Business and former CEO of BB&T.It's not a bad number,but at this point in the cycle we ought to be creating more jobs.
Businesses are concerned about Europe,rising taxes and regulations.Businesses create jobs through innovation,which is hindered by regulation,Mr.Allison pointed out.
It's very expensive to hire and fire,adds Jeanne Branthover of Boyden Global Executive Search.It's also very expensive to hire and wait for new workers to add value.That's why it's those who are already working who are being hired.
If things are better,they are ready to expand hiring.Plans are already in place so they are ready to immediately pull the trigger if things keep looking up,Ms.Branthover revealed.
Among large companies who are hiring now in spite of these factors are Wells Fargo(10,000+ jobs);Sears Holdings(1,000+);and Morgan Stanley Smith Barney(1,000+).
Branch Banking and Trust(BBT)

Inside Google's Good Quarter

Google beat its earnings consensus by 11%.Sales rose 37%,and they remain the search market leader.Android search is growing.Google+ has 40 million users.The company continued its robust hiring,generating controversy with the expense of adding 8.2% to its headcount.
According to analyst Gene Munster of Piper Jaffray,the core search business is doing well.The display business is also still doing well.Our price target's gonna be going up.There is some risk in terms of Europe,but the growth in Android is positive for our price target.Android handsets were a huge drive for clicks.
You've got to give them credit:a 13 year-old company hitting those metrics.There could be some big surprises with the MMI acquisition affecting capital expenditures,but there are broader positives for the advertising business,Mr.Munster indicated.
Google(GOOG)

Life on the Financial Plateau

Stephen Wood,PhD,Chief Market Strategist at Russell Investments,thinks it could be an O.K. year.Earnings estimates are gonna decelerate,but the S&P 500 index is doing real well in terms of earnings per share.A 13% gain for the year will be predominantly based on earnings.From a corporate perspective,the U.S. looks relatively healthy.
The consumer is not dead;just deleveraging.Just lean into the consumer a little bit.Consumers saving is something we've seen for some time.
We've recovered and kind of plateaued out.It's not a recession,but it's not gonna be strong growth,either.Look at what's happened to the Treasury in the U.S.
Ultimately,we've got a long time to solve the problems-and they can be solved,which isn't necessarily the case in Europe.The collapse of Lehman Brothers on September 15,2008 really caught everyone by surprise.In Europe,it's not gonna be that startling.The question is,who's gonna be the one who gets hit,in Dr.Wood's view.
As its purpose,Russell Investments improves financial security for people.Founded in 1936,it has 163.4 billion dollars in assets under management for individuals,institutions and financial professionals.It also creates performance benchmarks in the form of the Russell indexes.

Research in Motion Isn't Dead

With the ascent of the Apple iPad,many have abandoned Research in Motion as hopelessly behind in the telecom space.We've seen a total catharsis of the stock,says analyst Kevin Smithen of the Macquarie Group.The sentiment has never been worse.Yet its international business grew 68% year over year and has never been healthier.
The Chinese,Asian and European markets are largely prepaid.RIM is more competitive in those markets.Foreign carriers do not have the spectrum the U.S. does.
We're frankly perplexed at the valuation at a multiple typically reserved for companies that are highly leveraged and cyclical at the trough of the cycle.We rate the stock as an outperform.
We're not optimistic about their hope for the U.S. consumer business,but our 12 month price target for the stock is 40.00.They have tremendous Blackberry momentum in Indonesia and Thailand.We think it's the product of choice in those areas,Mr.Smithen noted.
Macquarie Group,Ltd. is a full service financial firm operating in 28 countries.It cites its expertise,performance and growth as strong points for its global clientele and investors.The Australia-based company has 320 billion dollars U.S. under management.
Research in Motion(RIMM),Apple(AAPL),Macquarie Group,Ltd.(MQG)

Leading Analyst Disturbed By D.C.'s Tax Cuts

To Ed Yardeni,the analyst who coined the term "bond vigilantes,"there seems to be a coincidence between today's rising bond yields and D.C.'s tax cut plans.D.C. is making it all too easy to increase the deficit by readily cutting taxes and hence decreasing revenue.As the deficit balloons,the government must pay more and more interest to skeptical investors who buy government bonds,which ultimately stresses the budget even more.
There's also a fear Federal Reserve Chairman Ben Bernanke may overshoot in his QE2 policy of buying Treasury bonds:another reason to lighten up on the bond holdings.The bond vigilantes have woken up in Europe,and are now waking up in the U.S.,Mr.Yardeni thinks.They're in the position to shut the bond market down unless the U.S. changes its policy.
Rising bond yields means retirement portfolios stuffed with bond funds will lose value,since bond prices fall as yields rise.
The U.K.'s making tremendous progress in cutting the deficit,and Europe's moving in the right direction,Mr.Yardeni said.He certainly doesn't like what he's been seeing in the U.S. recently,however,and neither do the bond vigilantes.
Bond vigilantes are big traders who insist on ever-higher interest rates to cover their risk as governments sink deeper into debt,making the cost of money increase even more.
Other observers disagree with Mr.Yardeni's assessment,saying the increase in bond yields is simply the bond market adjusting to better economic data and growing national debt,rather than the bond vigilantes waking up,and will not be disastrous.
Nonetheless,most financial advisors are urging their clients to move away from a bond market that is seen as being toppy now,and toward an improving stock market.

What GM Has To Do

GM has been reborn as a public company,exceeding its listing price of 33.00 a share last week.Behind the shares is a business model with a level playing field between union costs and management costs.
Each of GM's four regions has a different set of challenges and objectives,according to CEO Dan Akerson.The North American blueprint is how GM will address the European issues:reduce costs;match capacity with demand;offer the best vehicles.GM has a great auto portfolio in Europe.They hope to see profitability there in 2012.
The great car that GM has today is based on the resilience of the GM employee.GM has the resident expertise to provide the best cars you can buy.They have a pretty good balance sheet right now,in Dan Akerson's opinion.
Mr.Akerson wants to make GM more of a consumer marketing company.Their goal is to have zero debt on the balance sheet,and even pay down their entire pension liability to the extent possible.
GM is much more global than Ford.They have to have the ability to make a car unique for the particular market,Mr.Akerson feels.
General Motors(GM)

Double Dips Are Rare

The economic data do not reinforce the idea of a double dip recession,says Tony Crescenzi,Senior Strategist and Portfolio Manager at PIMCO.Yet sustainability is in question.Job creation doesn't match labor force growth today.Double dip recessions are rare,however;there have only been three in the past 150 years.
It really probably emanates from the sovereign debt crisis:if Europe stays stable,perhaps the escape velocity for growth will be reached.There is income growth at this time.The money market has improved and then moved sideways since May.Hopefully there will be clarity and transparency in Europe on the bank stress tests.In the meantime,consider Treasury securities as insurance for portfolios,Mr.Crescenzi suggests.
Apart from another recession,a slow growth environment is quite harmful in itself,hindering employment prospects and straining all levels of government.In that scenario,tax revenues may not recover fast enough to avert fiscal train wrecks.

Early Edition:Geithner Sees Better Times

Treasury Secretary Timothy Geithner took a message of optimism to the weekend's G-20 meeting of finance ministers and central bankers in Busan,South Korea.Mr.Geithner says the Europeans have the ability and the political will to solve the debt problem.We're in a much stronger position today to get through this.He thinks we have in place a moderate but pretty strong recovery to deal with this.
These new rules on capital and liquidity are gonna be the most important elements of reform around the world,Mr.Geithner believes.We want these financial firms to run much more conservatively,yet support businesses.We want to bring the world to higher standards and a level playing field.U.S. firms have much stronger capital positions today.The economy has been growing now for four quarters.All the indicators suggest improving job growth.The broad numbers show steady strong improvement and confidence that will translate to better times for the average American,in Timothy Geithner's opinion.
Mr.Geithner called for other countries to re-balance growth in order to create sustainable growth.The U.S. is moving aggressively to fix things we got wrong and to strengthen our economic fundamentals.Americans are strengthening their savings,so other countries must generate more internal consumption to take up the slack.
Mr.Geithner was warmly greeted by Jean-Claude Trichet,President of the European Central Bank,at the international conclave in Busan,South Korea.

Templeton Global Finds Value

Gary Motyl,Chief Investment Officer at the Templeton Global Equity Group,says they find value in virtually every country and industry.They're not really finding over-valuation to any great degree.The emerging markets are being quite astute.You have to give them credit.Templeton has a fair amount of exposure to both Chinese and Indian stocks.
In total,Mr.Motyl believes,things are back on track for the global economy.He thinks the recent pullback in Europe does give one an opportunity.They like BP,regarding it as a great total return stock.BP has a strong balance sheet,with a good management team setting themselves up for the next 5-10 years.Templeton also likes Sanofi Aventis,a pharmaceutical company that has positioned itself to be a primary player in the diabetes market.There will be a great demand for those products,Mr.Motyl observed.

The Nature of Progress

America and Europe must reach out to the vast majority of Muslims who seek only peace and a better life,President Obama thinks.We can't get there alone.Progress is slow;it comes in fits and starts.We've just emerged from an era of irresponsibility.It is a revolutionary world that we live in.We must renew this relationship for a new generation in a new century.I am confident we can achieve the promise of a new day,the President concluded.Wearing a gray suit,white shirt and light blue tie,the tall leader took questions from the audience at Rhenus Sports Arena bfore shaking hands with them to the accompaniment of "Stars and Stripes Forever."Not since President John F. Kennedy in the early 1960s has a president been so in touch with foreign crowds.The Europeans couldn't believe they got to greet Mr.Obama,congratulating each other on the singular occasion.

Security and Prosperity

I've come to Europe this week to renew our partnership,Mr.Obama continued.Together we must forge common solutions,he urged.America is changing,but it cannot be America alone that changes.All of us are moving forward.We are ushering in a new era of responsiblity.Trade wars have no victors.As we restore our common prosperity,we must stand up for our common security.Those terrorists of 9-11 are still plotting today.We have no interest in occupying Afghanistan.Now we need an alliance that is even stronger than when it brought down a mighty wall in Berlin.This is one of our central tasks.This is the generation that must also stop the pollution that is threatening our planet.We all know that time is running out.Let us meet that responsibiliy together.I am confident we can meet it,but we have to begin today,Mr.Obama feels.

A Drifting Alliance

The European Union buildings of Strasbourg were born of the blood of the first half of the 20th century,President Obama recalled.The Marshall Plan was an unprecedented effort that secured prosperity.Without firing a single shot,the NATO alliance would prevent the iron curtain of communism from descending across Europe.This generation cannot stand still.This is our generation;this is our time,and I am confident we can meet any challenge-as long as we are together.In recent years,we've allowed our alliance to drift.In America,there is a failure to appreciate Europe's leading role in the world.In Europe,there is an anti-Americanism that is casual,but can also be insidious.These attitudes are not wise;they do not represent the truth,the new president instructed.