Whirlpool Corp.’s Maytag unit is recalling about 1.7 million dishwashers because of a fire hazard.
The Consumer Product Safety Commission, which announced the recall Thursday, says the company, part of Whirlpool Corp., has received 12 reports of electrical failures in the dishwasher heating element that led to fires and damage. One kitchen fire caused extensive damage, the agency said. No injuries have been reported.
Graph inside.
“If the federal government will step in to help them, they are triple-A. If the federal government won’t step in to help them, who knows what they are.”
-Warren Buffett
Yesterday was neither a good day for the Thunder Bay Bears nor the once revered definition of “American Capitalism.” As I am sure US economic historian and author of “Buffett: The Making of An American Capitalist”, Roger Lowenstein, would agree, altogether it was a historical day for finance in this country. Never before has the US portfolio patriarch, Warren Buffett, been forced to answer questions about his market positioning against his own will.
If any of us Buffett fans thought the man was going to be forthright and transparent about what it is that the ratings agencies actually do, we should think again. I felt like I was listening to a professional politician when Buffett excused Moody’s by suggesting that they simply “made a mistake that 300 million other Americans made.”
We get what Buffett gets – politicians created and perpetuated a ratings system that could be gamed. What Buffett is really doing is playing the game that’s in front of him. Current conflicts, compromises, and constrains aside, his mandate is to make money – not to make you believe how he is making money is “right.”
To contextualize Buffett’s aforementioned quote about whether or not the states of America should be rated AAA, let’s take a quick step back and understand where this designated ratings system of Perceived Wisdom comes from.
BP – Co. refuses to confirm it will maintain dividend at present level. In other news, co. said it is preparing a second attempt to cut the main pipe on a leaking oil well in the Gulf of Mexico after freeing a saw blade that became stuck during preparatory work to siphon the crude to ships on the surface. Co. overcame a snag in its latest efforts to curb the oil spill as co.’s shares stabilised and parts of the huge oil slick crept near Florida. Also, some investors in co. are beginning to question CEO Tony Hayward’s future role as co.’s share price plunged on the continuing rig crisis in the Gulf of Mexico, according to unidentified investors.
Royal Dutch Shell – Co. receives two offers for its Montreal refinery.
Royal Bank of Scotland – Co. plans to cut up to 500 jobs over three years in its UK wealth management business after a major overhaul in technology.
AstraZeneca – US FDA panel recommends against approval of co.’s Motavizumab vaccine to prevent respiratory disease in children.
BHP Billiton /Rio Tinto – Australian iron ore producers may win a 20% price increase for the steelmaking commodity during the quarter starting July 1. (Australian Financial Review)
NEW YORK (Reuters) – Private employers added 55,000 jobs in May, compared with an upwardly revised gain of 65,000 in April, a report by a payrolls processor showed on Thursday.
The April figure was originally reported as a gain of 32,000.
The median of estimates from 31 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 60,000 private-sector jobs in May.
The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which is expected to show a huge rise in nonfarm payrolls of 513,000 in May, based on a Reuters poll of analysts.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
(Reporting by Burton Frierson; Editing by Theodore d’Afflisio)
Honda Motor Co. said it has offered striking workers who have paralyzed its car-production lines in China a 24% increase in pay and benefits, a significant concession that highlights the new challenge from organized labor facing foreign investors on the world’s factory floors. Strikers were pushing for a 53% boost to bring their total compensation package to 2,300 yuan (US$337) a month, according to two strike leaders who were fired by Honda after the walkout began May 17 at a plant in southern Guangdong province, China’s export powerhouse.
The European Central Bank warned on Monday that euro zone banks face up to 195 billion euros in a “second wave” of potential loan losses over the next 18 months due to the financial crisis, and disclosed it had increased purchases of euro zone government bonds.
As the euro recouped losses but remained on the back foot after a cut in Spain’s credit rating and China warned that the global economy remained vulnerable to sovereign debt risks, Spain assured investors it would reform its rigid labor market even if employers and trade unions cannot agree.
The ECB said euro zone banks would need to make provisions for further losses this year of 90 billion euros, and 105 billion in 2011, on top of some 238 billion euros in bad debts written off by the end of 2009. That was the first time it has given an estimate for next year.
LogMein – Shares of LogMein has made a new 52 week high on Friday closing at $25.93 on heavy volume. The stock broke out the resistance at $25.44, so no resistances above now. The stock is overbought and may need to work this condition before heading higher, however history has shown that stocks can run overbought for quite some time with a bullish MACD. Keep an eye on LOGM next week.
Spreadtrum Communications SPRD recorded a new high in the last trading session. Short-term outlook for the stock is bullish. Remain invested with a stop-loss at $7.82.
Dendreon – Even after a strong market decline on Friday, the stock closed the week above its medium term trend line. Hold the stock with a stop-loss at $42.35. A close below this level could push the stock to the $38.25-40.60 range. The technical indicators are not bullish.
Citigroup – On Friday, the stock continued its correctional downside move, broke the key level support of $4 and bottomed at $3.91. From a technical perspective, this fact could trigger further downside scenario towards $3.88. If the stock breaches this level on a close basis, then it might decline to $3.70. However, if the stock sustains above its $3.88 level over the next days, then it may go to $4.23. C is in a downtrend, but that could be coming to an end soon.
Hemispherx BioPharma – Good as long as it remains above $0.74.
Medivation MDVN – Good for the long term.
Cell Therapeutics, Inc. CTIC – The stock closed below key support level of 0.51 on Friday for the first time in over six weeks, this is something worth watching. It is still a bearish signal. The next support level is 0.47 and 0.58 now becomes resistance. I am now being cautious until we close back over 0.58.
Motorola showed some nice strength on Friday despite the stock market sell off. Resistance remains at $7,14 and I would be a buyer on a break above that level.
American International Group [[AIG]] closed just above the 10-day moving average on Friday amidst crappy stock market conditions.
Hemispherx BioPharma broke resistance on Thursday, as the stock closed up $.036 or 4.9% on the day. This should be the first of a bigger move, which could occur on Friday. The technical chart is painting a bullish picture by registering big and increasing volume towards the breakout day. Also note the positive RSI divergence. We can expect now some resistance at $0.817 level followed by $0.87 level.
A move past $4.32 would be a strong indicator of a further uptrend in Melco Crown Entertainment. On the other hand, a decline below the $4.10-level would indicate further weakness in the stock.
The area comprehended between $87 and $88 represents a heavy resistance for Wynn Resorts. A close past $88 is the minimum requirement for the resumption of an uptrend.
Las Vegas Sands was one of the few winners on Thursday, as the stock closed up $.38 on the day. Thursday’s high was $24.88, which is resistance for the follow through move. If it can break through this level, expect to see heavy volume drive the stock higher.
JP Morgan has announced that it is to launch a new precious metals vault in Singapore in response to high demand for gold from investors. The vault is expected to open in the third quarter of this year.
JP Morgan’s John Bridges believes the latest breakout for gold was a huge positive sign for the metal.
Euro weakness fears, coupled with dollar weakness fears, could lead to an enormous amount of demand:
JP Morgan:
A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited.
Are we concentrating too much on sovereign debt concerns? Not according to Noriel Roubini, who can still live up to his pessimistic reputation. “Greece is bankrupt,” Roubini told CNBC.com at WEF. “Look, they have to ask China to help them out.”
Greece is trying to get trying to entice China to buy 25 billion euros ($35 billion) in bonds, according to published reports Wednesday.
If the situation becomes dire enough the European Union will be forced to help bail Greece out because it’s such a threat to the monetary union, he said.
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