Archive | April 19, 2013

Toyota Said To Plan Lexus Plant In Kentucky

As automobile companies continue to expand, Toyota wants to expand its operations at Kentucky. Currently, they have their luxury line- Lexus sedan. Rumors are, they plan to add a new line to Lexus. Kentucky offered Toyota $146.5 million in state and tax incentives because they want this automobile company to establish plants in the state. Toyota is restructuring its company to attract the younger audience with its luxury line. The new Lexus line includes better, bolder designs, safer features, and more powerful engines. These are the various aspects that younger consumers are searching for when purchasing a new automobile. Kentucky wants Toyota’s operations in the state because of the number of job opportunities it will provide. There is an estimate of 6,100 full-time jobs if Toyota decides to expand. They also plan to expand in Ontario. The focus of the company is to be consumer’s No.1 choice in the automobile industry.

If operations expand in Kentucky, Toyota will be able to reduce costs and still attract consumers. As the market expands, Toyota will also be able to increase market share within its niche.

Written By: Constantine Kostikas

Source- New York Times

 

Japan To See Inflation In The Future

A recent report stated that Japan would be expecting a 2% inflation rate in 2015. This report is causing the bank of Japan to rethink its price target for the future. The new price forecast would match Japan’s end goal for its recent currency devaluation, but some say that Japan would fail to achieve this goal. This prediction of 2% is larger than what Japan had expected. The Bank of Japan is hoping that this inflation would help Japan’s economy recover from the deflation that they have been experiencing prior to the establishment of these new policies.

Japan will be experiencing larger inflation percentages because they are pushing more money into the economy. As the cash flow increased, the value of each Yen would decrease, not to mention that its value against other currencies such as the dollar have been dropping as well. The new policies being pushed out by the Bank of Japan are making large changes in their economy.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323809304578432572438148506.html?mod=WSJ_economy_LeftTopHighlights

Automakers Spur $3 Billion Boom for Made-in-Mexico Steel

Mexico is on the verge of moving onto a much better economy, and the automakers are a huge factor in that shift. Now, the steel producers in Mexico are able to benefit from increased activity in the production of cars, and they are currently working to improve their factories so that the expected increase in demand can be met.

Mexico is in prime position to take over a very large portion of the market for cars due to its geographical location. Also, wages are fairly steady, measured at about 20 percent f the U.S.’s and Canada’s wages, and Mexico is working to provide a better environmental for businesses. In fact, Mazda plans to open a $800 million factory, expected to open in 2014.

The main issue now is that the Mexico’s steel industry is very far behind in comparison to the strength of Mexico’s automobile industry, meaning that steel producers have to quickly ensure that their steel is up to the standards and quantity demands. If they can manage that, there is no reason for automakers to import given the potential logistics and costs associated with importing.

Source:

http://www.bloomberg.com/news/2013-04-17/automakers-spur-3-billion-boom-for-made-in-mexico-steel.html

Kimberly-Clark’s Profit Rises 13%

Just as most companies are reporting positive earnings for the first quarter, Kimberly-Clark has joined the fiesta. The makers of our every day supply such as Kleenex and Huggies, reported a 13% in increase of their first quarter earnings. Kimberly-Clark’s shares hit an all-time high as a result of high profit margins and cost cuts. One of the biggest increases for Kimberly-Clark is the success of Huggies diapers sales in China, it rose 50% and also rose 10% in Russia. For the period, Kimberly-Clark reported $531 million in profits a huge increase from $468 million of last year.

Kimberly-Clark changed their strategies to focus on markets such as China, Russia and Brazil rather than a poor economy in most of Europe. I believe that Kimberly-Clark’s management team are doing a good job since their performance has been better than ever. Hopefully the trend continues for them and one day I will be a consumer for their Huggies diapers for my kids.

-Derby Ng

http://online.wsj.com/article/SB10001424127887324493704578432733047899950.html?mod=WSJ_business_whatsNews 

Hiring Slows For College Graduates

How necessary is a college degree? It seems that with so many people in college these days, you would be at a severe disadvantage without one. However, a recent survey conducted by a non-profit organization indicated only a 2.1% increase of hiring of college graduates; a huge difference from the 13% projection from last year. College graduates are out of school, having difficulty finding work and more often than not, very much in debt. This new survey reflects a time in our economy when businesses are hesitant on hiring due to a variety of factors.

The unemployment rate of our country is currently at 7.6%; a weak job report of 88,000 new jobs created in the U.S. economy reflects a slowdown which worries many economists. Growth seen in previous months has stalled even with the stimulus package of the Fed still implemented at full force; this may be due to the sequester cuts which went into effect March 1 of this year.

Evan Chang

Source:

The Wall Street Journal

http://blogs.wsj.com/economics/2013/04/18/hiring-momentum-slows-for-college-grads/

SeaWorld Shares Jump 13% in Trading Debut

SeaWorld Entertainment went public on Friday, trading at $27 per share and $31 at their highest point of the day. The publicly traded company is doing better than anticipated, trading at 13% above the initial public offering price. Despite the incident that occurred in 2010 where a trainer was killed by an orca in the middle of the theme park’s special show, the company is showing a lot of strength in moving forward. Valued at 2.5 billion, SeaWorld reported earnings four times more than their previous year raking in $77.4 million. To increase public interest in their stock, SeaWorld plans to pay a dividend of 20 cents per share even though the company just went public.

Even with strong competitors like Six Flags and Cedar Fair who charges lesser admission fees, SeaWorld is still thriving. Good news is coming from the company and their future plans seem to be pushing the company in a positive direction. The company is planning to add new attractions, offer smartphone apps and introduce a new character to represent the theme park. All these future plans with the dividend are extremely appealing to investors who want to invest in a growing company like SeaWorld.

Written by: Wilson Tang

Source:

http://dealbook.nytimes.com/2013/04/19/seaworld-shares-jump-13-in-trading-debut/

Nokia’s Turnaround Under Time Pressure

Smartphone designers are rapidly releasing new models into the market because these companies want to gain market share just like Apple and Samsung. In the past, there were more competitors. Nokia, a Finnish company, was once leading in sales of basic mobile phones. However, one of their newer models, Lumia, is unable to keep up with the pace of the market. It is unable to attract consumers to purchase this smartphone. In fact, Nokia’s basic mobile phones are more popular. Thorough restructuring of the company has allowed Nokia to cut costs. Unfortunately, their revenue continues to decrease in every quarter. Chief Executive Stephen Elop hopes to save the company by updating Lumia’s functions.

It appears that Nokia is currently unable to keep up with technological advancements. Although they were able to ship out 55.8 basic mobile phones in the beginning of this year, the company is incurring losses. Because of investors are bearish about Nokia’s performance, its stocks decreased to a five-month low. The CEO intends to invest more resources to further develop Lumia. If it is successful, it may be a driving force to help Nokia regain market share.

 

Written By: Melody Mark

Source: Rossi, Juhana, and Gustav Sandstrom. “Nokia’s Turnaround Under Time Pressure.” Wall Street Journal. Dow Jones & Company, Inc., 18 Apr. 2013. Web. 19 Apr. 2013.

Rise in U.S. Gas Production Fuels Unexpected Plunge in Emissions

As our country is making more electricity with natural gas instead of coal, the amount of carbon-dioxide emissions has decreased dramatically. Through the Energy Information Administration, the greenhouse gas that is assumed to be a factor to global warming, has fallen 12% within seven years. The biggest contribution to the decline of the carbon emissions is considered to be because of the switch from coal to natural gas for electricity generation. This beneficial change to the overall environment began in 2005 where drilling technologies have found a larger and inexpensive supply of fuel.   The United States and China are both being criticized by European officials for a lack of political involvement in reducing the carbon-dioxide emissions. Many groups in favor of reducing the green-house gas emissions, are pushing for making deeper reductions, as well as work on making process in reducing global warming.

I think that although there is a drop in carbon emissions, the release of methane from natural gas wells and pipelines should be considered since it contributes to climate change. To every shift that occurs in trying to protect our environment, there is always another downside or connection that leads to a negative affect. It is better to outweigh the pros and cons when changing the way our environment will be affected.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324763404578430751849503848.html?mod=WSJ_business_whatsNews

 

Apple Shaken To Its Core

Prices of Apple stock have fallen around 44 percent since September which leads to many wondering when it will all end. Although remaining highly profitable and being the envy of many corporations, Apple’s dramatic and swift decline has caused many to think that it is no longer a sure thing to invest in. Around seven months ago, Apple’s stock was valued at around $700, making it the most valuable company in the world, but by Thursday last week it suffered a two percent decrease and stocks closed at $392.05, which was the first time the stock closed below $400 since 2011 when founder Steve Jobs passed away.

Although people didn’t think this would happen to Apple, it is a common occurrence on Wall Street: what goes up, must come down. The same way how many view Apple’s decline as irrational, others point out Apple’s stock reaching over $700 and that it couldn’t have kept rising at that rapid pace forever either. As unbelievable as it may be, Apple is among the worst losers in the stock market right now since the past seven months, ranking next to J.C. Penny, viewed as the sick man of department stores.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/04/19/technology/after-apples-rise-a-bruising-fall.html?ref=business&_r=0

Corporate News: Carnival Invests In Fleet Upgrades

Carnival Corp. plans on investing $600 million to $700 million on their high-profile cruise ships. In recent years there has been major problems due to outdated ships. The most notable problem is the loss of energy and power. This is extremely dangerous because  the passengers and crew on the ship were essentially drifting away in the Gulf of Mexico. Since so many problems have occurred, Carnival Corp will be spending this large sum of money to repair its vessels. It will be enhancing its engine and fire systems to reduce the likelihood of ships losing power, and will invest more on emergency safety and hospitality systems.

Most of these upgrades are not simply to make their ships better, but to also repair their damaged public appeal. Since there have been multiple incidents that created bad publicity for the company, less cruise tickets have been sold. This investment is intended to renovate their ships, along with their drowning image.

URL: http://online.wsj.com/article/SB10001424127887323309604578428573836848826.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+(WSJ.com%3A+What’s+News+US)

-Jonathan Chan