Monday, September 28, 2009

Monday morning (XRX, ACS, ABT)

AlphaNinja - US stock futures are up this morning, driven by a couple of buyouts. Xerox (XRX) agreed to buy Affiliated Computer Systems (ACS) and Abbot Laboratories (ABT) will purchase Solvay SA's pharmaceutical unit. Stocks look to open up about half a percent. Oil is down below $66 per barrel, on worries about high inventories and weakened demand.

Kiplinger's editors share some of their best and worst investment experiences.

Enormous cash balances in investor accounts may enter the market, driving shares higher still.
Even after reducing money-market accounts by 11 percent this year, investors have cash equal to 73 percent of Standard & Poor’s 500 Index companies’ net assets, according to data compiled by the Investment Company Institute and Bloomberg. At the peak of the bull market in 2007, the measure of buying power was 62 percent.

The exorbitant spending at Conde Naste comes under scrutiny.
A three-month McKinsey & Company project advising the publisher how to reduce costs is drawing to a close, and several magazines have been told to cut about 25 percent from their budgets. But cost-cutting at Condé Nast is not quite like cost-cutting at other publishers. For example, on Oct. 13, the men’s magazine GQ will host a party in Washington to promote its list of powerful capital players, to appear in its November issue. The party is upscale: it will be held at the 701 Restaurant, known for its caviar and live piano music.
That is not the only expense involved. Several editorial employees will travel from New York for the evening. And they received an e-mail message recently reminding them to limit their expenses for the night — to $1,000 a person.

Yet another shot across out bow - World Bank President to warn that the dollar is at risk of losing its "reserve currency" status.
World Bank President Robert Zoellick is expected to hit a few nerves in Washington, DC, today with a speech warning the dollar is in danger of being booted as the world's go-to currency. "The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," "Looking forward, there will increasingly be other options to the dollar," he says, according to excerpts of the speech provided by the World Bank.

The unemployment rate for young Americans has exploded to nearly 52%.
The unemployment rate for young Americans has exploded to 52.2 percent -- a post-World War II high, according to the Labor Dept. -- meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time. And worse, without a clear economic recovery plan aimed at creating entry-level jobs, the odds of many of these young adults -- aged 16 to 24, excluding students -- getting a job and moving out of their parents' houses are long. Young workers have been among the hardest hit during the current recession -- in which a total of 9.5 million jobs have been lost.

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