Week Dec 6 2012 – Weekly Recap & The Week Ahead
“Winners never quit and quitters never win” — Vince Lombardi
1. China PMI Grows — MarketWatch, The privately compiled version of China’s manufacturing Purchasing Managers’ Index (PMI) rose to 50.5. The official PMI increased to 50.6 from 50.2, marking a seven-month high for the index.
2. House, White House aim for $32-$35 billion in farm bill cuts — Reuters, both sides believe that spending in the 2012 farm bill should be slashed by $32-35B, with major cuts for subsidies and soil conservation. However, the GOP wants reductions for food stamps, a move the White House is opposed to. Under the fiscal cliff, money for farm programs would fall by up to $10B.
3. Senate Passes $631 Billion U.S. Defense Legislation — Bloomberg, the Senate passed unanimously a measure authorizing $631.4 billion for U.S. defense programs this fiscal year. Huntington Ingalls Industries Inc., Boeing Co. (BA) and General Dynamics Corp. (GD) are among defense contractors that would benefit because the legislation increases funding over this year’s levels for fighter jets, missiles, submarines and other programs.
4. Germany faces possible recession — the Bundesbank has warned that Germany may be entering recession, saying that the economy could contract in FQ4 and FQ1. The bank also cut its 2012 and 2013 GDP predictions to +0.7% and +0.4% respectively from prior forecasts of +1% and +1.6%.
5. Generic Drug Accords Face Review by U.S. Supreme Court — per Bloomberg, the Supreme Court could say today whether it will review a case involving a “pay for delay” agreement in which a pharmaceutical company pays generic rivals tens of millions of dollars to hold off from launching copycat versions of medicines. The FTC says the practice costs customers $3.5B a year, while drug firms argue that it protects innovation. Companies that could be affected include Abbott (ABT), Watson (WPI), Merck (MRK), Bristol-Myers Squibb (BMY) and Teva (TEVA).
The week ahead — Economic data from Econoday.com:
