More Burgers, Less Burritos

More Burgers, Less Burritos

Fast food hamburger chain, Wendy's International (WEN), is contemplating ways to offload its struggling subsidiary, Baja Fresh Mexican Grill. Dublin, Ohio based Wendy's acquired the Thousand Oaks, California based Baja Fresh in June 2002. Since the acquisition, Wendy's has closed over 20 Baja Fresh stores, reconfigured the menu several times and taken a $190 million dollar charge to write down the value of the underperforming Mexican grill. The ultimate decision to sell came under mounting pressure from major Wendy's investor, Nelson Peltz, to make better corporate returns in 2006. Wendy's International has also announced plans to spin-off their coffee and doughnut subsidiary, Tim Hortons, Inc. Tim Hortons, Inc. has indicated an anticipated IPO of 29 million shares at approximately $19.00 a share. Most of the funds raised from the IPO will be used to pay-down debt owed to its parent company, Wendy's International. For the week, shares of Wendy's International, Inc closed at $60.50.

Intel on the Outside

Intel Corporation (INTC) revised its first quarter forecast on Friday to reflect weaker than expected consumer demand and the loss of some market share to arch rival Advanced Micro Devices (AMD). Intel informed investors that it expects to earn between $8.7 and $9.1 billion for 2006, down from previous estimates of between $9.1 and $9.7 billion. The revision is the largest drop in anticipated earnings since the tech market crash in 2001. While Intel acknowledges inroads made by AMD, it is not saying just how much the increased competition affected its bottom line. The news of the decrease in anticipated earnings lead to a drop of 2% in Intel share value. Intel shares finished Friday at $20.32. AMD shares finished at $39.37.

The Dow started the week at 11,061 and ended at 11,021. The NASDAQ began the week at 2,287 and finished at 2,302. The S&P 500 started at 1,289 and ended at 1,287.

North to Alaska Air

The month of February was good to Alaska Airlines (ALK). Traffic on the commercial airline rose by 6.4% from the same period in 2005. The number of passenger revenue miles (the number of miles paying passengers flew) increased from 1.184 billion in February 2005 to 1.26 billion in February 2006. The number of passengers also increased in February to 1.21 million from 1.17 million a year ago. 1.21 million passengers translates into nearly 74% capacity on available seats. Alaska Airlines is a Seattle, Washington based corporation. For the week, Alaska Airlines finished at $30.34.

The Perfect Interest Rate Storm

The Perfect Interest Rate Storm

Japanese consumer price information increased over the past week raising concerns that the Bank of Japan will soon remove their policy of easing interest rates. The European Central Bank lifted its key interest rate and suggested that more rate hikes lay ahead. U.S. data reports on unemployment, consumer spending and production have the market bracing for increased interest rate hikes by the Fed. The anticipation that the three key banks of the industrialized world may raise interest rates during the same period sent Treasuries lower Friday. The simultaneous rise in economic conditions in Japan, America and Europe has not occurred since the 1980s and has some analysts concerned about the risk of a recession. The 10-year note yield was up to 4.681% from 4.637% Thursday while the 30-year note yielded 4.655%.

For the week, the 10-year Treasury note began at 4.57% and finished at 4.68%. The 30-year Treasury bond began at 4.52% and finished at 4.65%.

The Mortgage Rate Rollercoaster Continues

The Mortgage Rate Rollercoaster Continues

The national average for the 30-year mortgage fell for the second consecutive week this week. The 30-year fixed rate mortgage averaged 6.24% on Thursday, down from 6.26% the previous week. However, the two-week decline comes on the heels of a four-week straight increase in mortgage rates that saw the highest average this year of 6.28% in the second week of February. "Our forecast calls for rates on 30-year fixed rate mortgages to increase about one-quarter of a percentage point by the end of the year," said Freddie Mac's chief economist and vice president, Frank Nothaft. The 15-year fixed rate mortgage, often used as a refinancing tool, remained unchanged this week at 5.89%. The single year adjustable rate moved slightly up to 5.34%.

For the week, the 30-year loan started at 5.86% and finished at 5.86%. The 15-year loan began at 5.48% and finished at 5.48%. Money market funds began at 2.90% and finished at 2.90%. The $10,000 money market fund started at 3.08% and ended at 3.08%. The one-year CD started at 4.24% and finished at 4.24%. The three-year CD started at 4.32% and finished at 4.32%.

Stocks - H&R Block Botches Its Own Taxes
Bonds - Treasuries Fall on Weaker than Expected Durable Goods Orders
Interest Rates - Mortgage Rates Ease for First Time in Five Weeks

Stocks - Dell Down in the Doldrums
Bonds - Producer Price Increases Trump Up Treasuries
Interest Rates - Mortgage Rates Move to Annual Highs

Stocks - Selling Slumber
Bonds - Treasury Yield Inverts
Interest Rates - Mortgage Rates Inch Higher

Stocks - Kodak Develops Fourth-Quarter Losses
Bonds - Bond Yields Rise as Unemployment Rates Fall
Interest Rates - The Mortgage Rate March Continues

Stocks - Nike Gives CEO the Boot
Bonds - Treasuries End Week Up
Interest Rates - Mortgage Rates Stop Declining