YouTube in Turbulent Times

YouTube in Turbulent Times

Google Inc.-owned YouTube.com received a demand letter from Viacom Inc. on Friday. Viacom demanded YouTube take down more than 100,000 videos currently contained on YouTube's web site. Without a licensing agreement, Viacom has refused to allow YouTube to use the video clips. Most of the clips are from Viacom's youth-oriented Music Television station, commonly referred to as MTV. Viacom's demand letter comes just weeks after News Corp. subsidiary, Fox Television, subpoenaed YouTube for the names of parties who illegally uploaded episodes of popular television shows. A spokesman for News Corp. indicated that they do not plan to ask YouTube to remove all unlicensed material but will continue to review uploads on a case-by-case basis. Shares of Google (GOOG) finished the week at $481.50 while Viacom (VIA) rounded the week out at $41.08 and News Corp. (NWS) closed at $24.44.

American Axle Turns Up a Loss

The number one supplier of axles and driveshafts for General Motors reported a loss of more than $188 million during the fourth-quarter of fiscal year 2006. American Axle Manufacturing (AAM) produces the essential components of driveshafts, axles, spindles and other metal formed products for the vast bulk of GM's North American fleet. With the American automotive industry in flux, parts suppliers like AAM have seen profits dwindle and costs rise. When GM, Ford and Delphi all cut their workforce numbers and embarked on ambitious restructuring plans, AAM followed suit. Focusing on employee buyouts and early retirement packages for personnel, the black ink flowing from AAM's pens slowed to a trickle and eventually turned red as a $188 million loss came to fruition. AAM shares (AXL) finished the week at $22.35.

This Margin Walker Has a Clear View

Questions about Amazon.com's profit margin plagued stock prices Friday. While sales rose by nearly 35% and exceeded $4 billion for fiscal year 2006, concerns surrounding Amazon's free-shipping program, competitive price cuts and large outlays of funds to purchase new technologies abound. While no one is questioning their ability to bring in revenue, investors and analysts alike have voiced concern about Amazon's rate of spending. Even with revenue growth up as much as 35%, profit was cut in half from 2005's figures. "We had a record holiday season, with accelerating revenue growth and significant sequential improvement in operating leverage," said Amazon's chief executive, Jeff Bezos. Mr. Bezo's focus for 2007 and beyond is on cutting costs and maintaining growth. Amazon is predicting a drop of 20 basis points in margins by the end of fiscal year 2007. Amazon expects 2007 sales to come in between $13 and $13.7 billion. Amazon shares finished the week at $37.39.

The Dow started the week at 12,487 and closed at 12,653. The NASDAQ began the week at 2,435 and finished at 2,476. The S&P 500 started at 1,422 and ended at 1,448.

Jobless Rate Jubilee

Jobless Rate Jubilee

After the Department of Labor released figures showing the number of new jobs declining, Treasury prices rose higher. Nonfarm payrolls for the month of January rose by 110,000 while analysts project an increase of 170,000. The jobless rate also increased but only slightly higher to 4.6%. News of volatility in the labor market is good news for bonds. When labor figures slide investors look for the Federal Reserve to relax monetary policy. When monetary policies are loosened, investors look for low risk investments and Treasury bonds fit the description. Yet the rise in Treasury prices may prove to be short lived. Also included in the labor report was upwardly revised numbers for November job growth. In a separate report, the Commerce Department announced that December factory orders rose by nearly 2.5%. A steadily improving economic outlook translates in to low bond prices and higher yields.

The 10-year Treasury note began the week at 4.88% and finished at 4.83%. The 30-year Treasury bond began at 4.98% and finished at 4.93%.

Movin' On Up!

Movin' On Up!

Mortgage rates continued their climb as positive economic news fueled the fire. With the economy continuing to grow and unemployment still at historically low levels, lenders raised the rates on the 30-year fixed rate mortgage to 6.34% on average and the 15-year fixed rate mortgage to 6.06%. "Interest rates moved higher following the latest upbeat economic news," said Frank Nothaft, Freddie Mac vice president and chief economist. "The strong 3.5% annualized growth in the economy over the final quarter of 2006 occurred while inflation moderated. Solid economic growth and tepid inflation contributed to the Fed's decision to leave the target short-term interest rate unchanged." Even with the intermitted rise in mortgage rates, 2006 proved to be one of the hottest years for the American housing market. Many analysts have predicted a return to normalcy in 2007 and a few predict this year to be another boom for the real estate investor.

The 30-year loan started at 5.85% and finished at 5.85%. The 15-year loan began at 5.61% and finished at 5.61%. Money market fund began at 3.57% and finished at 3.57%. The $10,000 money market fund started at 4.04% and finished at 4.04%. The one-year CD started at 4.83% and finished at 4.85%.

Stocks - GM Delays Financial Results Again...
Bonds - Treasuries Fall with Data Release
Interest Rates - Mortgage Rates Mixed

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Bonds - Survey Sends Treasuries Up
Interest Rates - Mortgage Rates Fly High

Stocks - Cisco Takes a Bite Out of Apple
Bonds - Treasuries Hit Hard By Retail
Interest Rates - Mortgage Rates Get a Lift

Stocks - Interest Rates Sac Freddie Mac
Bonds - Employment Increases, Treasuries Trail
Interest Rates - Mortgage Rates Remain Flat

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Bonds - Treasury's Fall with Stronger then Expected Reports
Interest Rates - Mortgage Rates Jump with Consumer Spending