UBS analysts have downgraded a number of regional banks, including Nashville market leader Regions Financial, on concerns about the pace of the recovery, specifically the rate at which problem loans will cure themselves.
UBS "continues to believe the pace of earnings recovery will fall well short of expectations. They expect earnings at the regional banks to be held back by not only a fat credit tail in residential and commercial real estate but also the impact of balance sheet shrinkage, more muted margin expansion, and lower overdraft fees on their ability to grow revenue."Elsewhere, Raymond James has begun covering shares of First Horizon with an 'outperform' rating and a $17 price target.
Apr 15, 2010 11:00 AM
The NFIB's latest small-biz sentiment survey is bleak. In short, the demand just will not materialize.
Plans to add to inventories were unchanged at a negative 7 percent of all firms (seasonally adjusted) – still more owners planning to reduce stocks than planning new orders. Only a pick-up in sales will turn this around. Seasonally unadjusted, 13 percent plan to add to stocks while 15 percent will reduce them.SEE ALSO: Just how low the NFIB's readings are on a historical basis
Apr 15, 2010 8:08 AM
Hotwire puts Nashville fifth on its list of cities with the steepest hotel room price drops in the past year. That suggests that, even though the industry as a whole is seeing prices 'snap back,' Music City appears to be lagging a bit during this recovery. SEE ALSO: A post from last fall, when Nashville's negative numbers made it a relative leader.
Apr 14, 2010 12:17 PM
The latest Ceridian-UCLA Pulse of Commerce Index shows that, for the second month in a row, economic activity as measured by fuel consumption is growing more quickly in the Kentucky-Tennessee-Alabama-Mississippi region than in the country as a whole. View the whole report here.
Apr 14, 2010 7:53 AM
Goldman Sachs analyst Steven Kent says the profits at hotel operators will grow into the sector's lofty valuations because demand is coming back more strongly than had been expected. Kent has lifted his price target on shares of Gaylord Entertainment (Ticker: GET) to $30.50, a little above its current levels.
Apr 13, 2010 1:28 PM
Reading James Cooper and Gerard Jackson, we get two very different views on the U.S. economy's employment prospects based on them paying attention to different indicators. From Cooper: "Profits and productivity go hand in hand, but the recent gains in productivity are far from sustainable. In an economy expected to grow at even a moderate 3 percent pace, businesses cannot continue to stretch their existing employees and facilities the way they did last year. They will have to add more workers." And from Jackson: "Right now the country has some very dodgy employment figures that even if accurate still do not paint an optimistic picture. There is also the fact that commercial and industrial loans continue to shrink, meaning that business is not borrowing. Then we have the situation of a contracting money supply which in itself strongly suggests an aborted recovery could be on the horizon." [poll id="10"]
Apr 13, 2010 8:28 AM
Michael Santoli at Barron's has done some thinking about what could slow or reverse the 2010 rally in stocks.
Yet a disproportionate amount of that earnings increase is anticipated to come from energy and financial stocks. These are two notoriously tough sectors to handicap, and also two of the lowest-multiple groups, implying the market wouldn't advance dollar for dollar even with such profit gains. The median stock's current 12-month-forward earnings-growth forecast is above 15% now, suggesting that expectations are getting pretty aggressive.
Apr 12, 2010 9:37 AM
Larry Kudlow is upbeat about a lot of things happening in the U.S. economy and I really want to agree with him. There's the swing in factory orders, the nice recent numbers from a lot of retailers and rising commodity prices. But when Kudlow says strong corporate profits are a good sign, he loses me. At this point, that looks to me to be the result not just of somewhat better demand, but also of continued cost cuts in the trenches of corporate America — i.e. jobs. As this chart shows, there will be no "V-shaped jobs recovery." SEE ALSO: Newsweek's hip-hip-hooray cover this week.
Apr 12, 2010 7:42 AM
Initial jobless claims rose unexpectedly last week, coming in 25,000 higher than analysts had been looking for. The number also didn't include a day's worth of activity from California, but James Picerno says there's some optimism to be found in continuing-claims numbers.
Apr 8, 2010 2:21 PM