Trucking company Ryder cites weak market for profit.
Ryder System Inc (R) cut its profit forecast on Monday saying that softness in the U.S. economy has spread beyond the housing sector, sending the truck leasing and logistics company's shares down more than 6 percent. "Economic conditions have softened considerably in more industries beyond those related to housing and construction," Ryder said in a statement.
Ryder cited less-than-expected demand in its commercial rental product lines and lower prices for used vehicles. Ryder's commercial rental business fluctuates with market demand and is more directly affected by a soft market than Ryder's long-term rental operations.
The U.S. trucking sector has been hit by weak volumes since the third quarter of 2006, with some analysts describing this slowdown as a "freight recession."The Ryder announcement affected other trucking companies as well. J.B. Hunt (JBHT), YRC Worldwide (YRCW), Con-Way (CNW), and iShares Dow Jones Transportation Average (IYT) all look vulnerable.The housing recession has now spawned off a "freight recession".
It can't be too much longer before prefixes like "freight" and "housing" are removed from the R word to be replaced by the dreaded "consumer-led" prefix.
MISH'S TREND ANALYSIS
Monday, October 8, 2007
U.S. Stock Market Stumble Presaged by S&P 500 Options
By Jeff Kearns and Michael Tsang
Oct. 8 (Bloomberg) -- Skittishness over the U.S. stock market's record-setting rally is reaching a crescendo among options traders who are preparing for a crash.
Investors are paying the most ever to protect against a drop in the Standard & Poor's 500 Index, data compiled by Morgan Stanley show. The gap between the price of so-called put options on the benchmark for U.S. equity and the cost to wager on further gains has averaged about 8 percentage points since August. That's more than the previous high in July 2001, before the index dropped 34 percent and fell to the lowest this decade.
The widening spread is a warning for OppenheimerFunds Inc. and Harris Private Bank, which oversee more than $300 billion and say the bearish bets indicate stocks may fall. The S&P 500 rebounded 10 percent since Aug. 15 on speculation the worst is over for banks and homebuilders hurt by the collapse of subprime mortgages. Shares in developed markets outside the U.S. have done even better, climbing 14 percent from their trough.
``Battle-scarred investors are buying some insurance this time around, having the benefit of hindsight,'' said Jack Ablin, who oversees about $50 billion as chief investment officer at Harris Private Bank in Chicago. Ablin said he bought put options for clients during the rally. BLOOMBERG
Oct. 8 (Bloomberg) -- Skittishness over the U.S. stock market's record-setting rally is reaching a crescendo among options traders who are preparing for a crash.
Investors are paying the most ever to protect against a drop in the Standard & Poor's 500 Index, data compiled by Morgan Stanley show. The gap between the price of so-called put options on the benchmark for U.S. equity and the cost to wager on further gains has averaged about 8 percentage points since August. That's more than the previous high in July 2001, before the index dropped 34 percent and fell to the lowest this decade.
The widening spread is a warning for OppenheimerFunds Inc. and Harris Private Bank, which oversee more than $300 billion and say the bearish bets indicate stocks may fall. The S&P 500 rebounded 10 percent since Aug. 15 on speculation the worst is over for banks and homebuilders hurt by the collapse of subprime mortgages. Shares in developed markets outside the U.S. have done even better, climbing 14 percent from their trough.
``Battle-scarred investors are buying some insurance this time around, having the benefit of hindsight,'' said Jack Ablin, who oversees about $50 billion as chief investment officer at Harris Private Bank in Chicago. Ablin said he bought put options for clients during the rally. BLOOMBERG
Bank of Japan Likely to Keep Rate at 0.5% This Week
By Mayumi Otsuma
Oct. 9 (Bloomberg) -- The Bank of Japan will probably refrain from raising interest rates this week after confidence at small companies deteriorated and as policy makers assess the effect of the U.S. housing recession on economic growth.
Governor Toshihiko Fukui and his colleagues will leave the benchmark overnight lending rate at 0.5 percent on Oct. 11, according to all 39 economists surveyed by Bloomberg News.
Companies with capital of 1 million yen ($850,000) or less account for almost half of Japan's corporate revenue. Waning investment and profit growth at small businesses and a U.S. slowdown were cited as risks by Deputy Governor Kazumasa Iwata last week. BLOOMBERG
Oct. 9 (Bloomberg) -- The Bank of Japan will probably refrain from raising interest rates this week after confidence at small companies deteriorated and as policy makers assess the effect of the U.S. housing recession on economic growth.
Governor Toshihiko Fukui and his colleagues will leave the benchmark overnight lending rate at 0.5 percent on Oct. 11, according to all 39 economists surveyed by Bloomberg News.
Companies with capital of 1 million yen ($850,000) or less account for almost half of Japan's corporate revenue. Waning investment and profit growth at small businesses and a U.S. slowdown were cited as risks by Deputy Governor Kazumasa Iwata last week. BLOOMBERG
Banks' new refrain: "We're not doing this anymore"
By Jen Benepe
Shifts in the New York real estate market aren't as drastic as in the rest of the country, but credit questions are getting tougher to answer. The Real Deal looked at the moving target of credit offerings and its effect on the residential market as part of an in-depth series of stories this month examining the shifting climate.Property buyers and real estate brokers in Manhattan, Brooklyn and Queens watched with increasing disbelief as mortgage lenders and bankers walked away from previous rate commitments, further tightened borrowing restrictions or suddenly eliminated previous mortgage programs."Every day is changing," said Barbara Ladesou, a mortgage broker for Manhattan Mortgage Company. "Every day we get a message from the banks, and the catch phrase is, 'We are not doing this anymore.'" REAL DEAL
Shifts in the New York real estate market aren't as drastic as in the rest of the country, but credit questions are getting tougher to answer. The Real Deal looked at the moving target of credit offerings and its effect on the residential market as part of an in-depth series of stories this month examining the shifting climate.Property buyers and real estate brokers in Manhattan, Brooklyn and Queens watched with increasing disbelief as mortgage lenders and bankers walked away from previous rate commitments, further tightened borrowing restrictions or suddenly eliminated previous mortgage programs."Every day is changing," said Barbara Ladesou, a mortgage broker for Manhattan Mortgage Company. "Every day we get a message from the banks, and the catch phrase is, 'We are not doing this anymore.'" REAL DEAL
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