Morning Business Memo…
Apple profits are likely to shrink for the first time in a decade when the company releases its quarterly report tomorrow. Analysts expect a sharp drop in iPhone sales compared to last year’s fourth quarter as well as lower profit margins. While company sales are expected to rise compared with a year ago, Apple is facing growing competition from Samsung, Google and Amazon. Apple’s stock has tumbled more than 40 percent since the glory days of last summer when the price-per-share reached more than $700. Apple may raise its dividend in a bid to keep investors happy, and there is a small but growing number of investors who say the company stock price might be under-valued after such a big drop.
Slow and steady wins the race. Oh, if only that were true for the economy. Despite the worst week for the stock market in five months and the recent disappointment over job creation, new reports out today suggest cautious improvement. When the first estimate of GDP for the 1st quarter is released on Friday it’s expected to show an annual growth rate of about 3 percent, according to a forecast of 67 economists polled by Bloomberg News. The National Association Business Economics is out with a similar forecast. Both surveys suggest growth is stronger than it was late last year. “The outlook for growth in the overall economy by these economists is more positive than we’ve seem for a while,” says Ken Simonson of NABE. And the jobs outlook could improve this summer. “More companies said they expect to be hiring over the next six months.”
Americans are far from upbeat about the economy or investing in the stock market. But a new quarterly survey released this morning says consumer views about their household finances have improved. “Overall consumers do feel upbeat overall in regard to their financial security,” says Greg McBride, senior financial analyst at Bankrate.com. “They feel as if their situations have improved over the last year. But most people are still spending cautiously and are very wary of putting money in the stock market “More than 3 in 4 Americans 76 percent say they are not more inclined to invest in stocks,” says McBride
Look for more evidence of falling gas prices when the U.S. Energy Department releases its weekly report today. The nationwide average of just over $3.50 for regular unleaded is about 25 cents below this year’s peak level early last month. West Texas crude has fallen back to $88 on futures markets. If that price holds gas costs for motorists are likely to continue falling.
Traders will gain some insight into the housing recovery today. The National Association of Realtors releases existing home sales for March this morning. There are a few companies reporting their quarterly financial results today. They include industrial giants Caterpillar and Halliburton. Also reporting are toy-maker Hasbro and the Internet movie-streaming firm Netflix.
International stock markets rose today, with Tokyo stock markets heading close to a five-year high after a meeting of global finance leaders lent support to Japan’s aggressive monetary policy
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc