What We’re Reading

by CC May 19, 2011 9:10 am • Commentary

S&P Futures: 1344.0  +5.40 Last Updated: 09:04:51 AM


New U.S. claims for unemployment benefits fell more than expected last week, but a rise in the four-week moving average to a six-month high indicated the labor market recovery will remain painfully slow.

Initial claims for state unemployment benefits fell 29,000 to a seasonally adjusted 409,000, the Labor Department said on Thursday, continuing to unwind the prior weeks spike.

Economists polled by Reuters had forecast claims dropping to 420,000. The prior weeks figure was revised up to 438,000 from the previously reported 434,000.


Japan’s economy shrank 0.9 percent in January-March from the previous quarter, marking a second straight quarter of contraction, Cabinet Office data showed on Thursday, as the March earthquake and tsunami and ensuing nuclear crisis weighed heavily capital spending and private consumption.

The quarter-on-quarter contraction in Japan’s gross domestic product was bigger than the average forecast of a 0.5 percent contraction in a Reuters poll of economists.


Federal Reserve Bank of St. Louis President James Bullard said in an interview in New York that the central bank may keep its monetary policy unchanged until late this year, and that declining inflation expectations have lessened the need to begin withdrawing record stimulus. Gold futures have declined 5.4 percent since reaching a record earlier this month.


Apple has signed an agreement with music label EMI to offer its music through Apple’s upcoming new cloud music service. This means that Apple now has agreements in place with two of the four major labels (Warner signed last month). And Sandoval believes that deals with the remaining two, Sony and Universal, could be wrapped up as early as next week. Again, rock and roll.

With those deals in place, it means that Apple will be free to launch their cloud service anytime they please. And while we had heard the initial plan was to do so at their annual music event in the early fall, Apple could indeed move the launch up to WWDC in early June (just a few weeks from now). We haven’t heard anything definitive about this either way, but you can bet that Apple is thinking about it.

It would be a pretty savvy move. One that would make their rivals look bad. Really bad.


LinkedIn and its investors are selling $352.8 million worth of stock in its IPO, marking the Facebook-for-work as the biggest U.S. Internet IPO since Google.

According to data provider Capital IQ, the amount of money LinkedIn is raising makes it the fifth-biggest-ever U.S. IPO in the Internet software and services sector.

Just for some context: Google’s 2004 IPO — which at the time seemed like a bit of bungle — ended up raising $1.67 billion. The offering valued Google at $23 billion, a dollar figure The Wall Street Journal pointed out was bigger than the market value of General Motors.


Federal Reserve policy makers neared agreement on the sequence of tools they will use to withdraw record monetary stimulus, with little accord on when to start.

The central bank should first end its policy of reinvesting proceeds from maturing securities and later raise interest rates and sell assets, majorities of policy makers said at their April 26-27 meeting, according to minutes released yesterday. The caveat: Talks about the exit strategy don’t mean that tightening “would necessarily begin soon,” the report said.


Shares of Intel (INTC) are down 45 cents, almost 2%, at $23.44, after Goldman Sachs’s James Covello cut his rating on the stock this morning to Sell from Neutral, according to a write-up this morning by StreetInsider.com.

Covello warns that the recent run-up in the stock price is unwarranted given that Street estimates are too high and are bound to be ratcheted down.

Covello sees high capital expenditures impacting Intel’s chip prices and cost of goods, and reiterates a view that chips based on ARM Holdings (ARMH) designs will be formidable competition for Intel in tablet computers and smartphones.


NetEase.com Inc.’s (NTES, K3MD.SG) first-quarter earnings rose a greater-than-expected 63% on top-line growth at the Chinese online video-game company.

As in the previous quarter, revenue strength has been driven by continued growth of “World of Warcraft,” alongside higher revenue contributions from self-developed games like “Tianxia II,” “Heroes of Tang Dynasty”


Brain Bonus

MIT Technology Review

Today, Dimitar Ouzounov at the NASA Goddard Space Flight Centre in Maryland and a few buddies present the data from the Great Tohoku earthquake which devastated Japan on 11 March. Their results, although preliminary, are eye-opening.

They say that before the M9 earthquake, the total electron content of the ionosphere increased dramatically over the epicentre, reaching a maximum three days before the quake struck.

At the same time, satellite observations showed a big increase in infrared emissions from above the epicentre, which peaked in the hours before the quake. In other words, the atmosphere was heating up.

These kinds of observations are consistent with an idea called the Lithosphere-Atmosphere-Ionosphere Coupling mechanism. The thinking is that in the days before an earthquake, the great stresses in a fault as it is about to give cause the releases large amounts of radon.


Bonus Fun

In-N-Out vs. Five Guys vs. Shake Shack