USPS Loss 68% Larger Than Last Year|
On Thursday the United States Postal Service - USPS - reported a $5.2 billion
loss - 68% larger than the $3.1 billion loss reported for same period a year
earlier - for fiscal Q3 that ended June 30, showing that the agency's financial
woes are deepening. The company is unable to keep up with obligations to its
retirees as first-class mail volumes continue to decline. The USPS projects that
it will nearly run out of cash before the fiscal year ends next month and with
little funds on hand, it plans to default on a $5.6 billion retiree health-care
payment due September 30. The agency already defaulted on a $5.5 billion
pre-funding payment due earlier this month. The USPS will be forced to
prioritize payments to employees and suppliers to ensure it can deliver the
mail. The cash situation is expected to improve in the final months of 2012,
when holiday deliveries typically cause revenue to increase. Postmaster General
Patrick Donahoe again called on Congress to institute reforms to shore up the
agency's operations. The Senate passed a reform bill earlier this year, but the
House has yet to take action.
The Organization of Petroleum Exporting Countries warned of a 'horizon full of
turbulence' that could lead to a significant decline in oil-demand growth next
year, as its monthly oil market report showed the group's output fell last month
to its lowest since February. OPEC's oil demand growth forecast for 2013 faces
significant risks due to uncertainties hanging over the global economy. A
worsening of the current situation could reduce the current forecast for growth
of 0.8 million barrels a day next year by as much as 20%. OPEC's own production
declined last month to 31.2 million barrels a day, mainly due to declines in
Iranian, Saudi Arabian, Libyan and Angolan oil production. This data showed that
Iran's production in July fell by 173,000 barrels per day, the first month after
the European Union imposed a full embargo on the country's oil.
The Commerce Department said Thursday that the U.S. trade deficit narrowed by
10.7 % in June to $42.9 billion, striking the smallest trade gap since December
2010. The smaller deficit should boost Q2 GDP from the initial estimate of a
1.5% annual growth rate. In June, exports rose slightly and imports declined.
The U.S. trade deficit with China widened to $27.4 billion in June compared with
$26.6 billion in the same month 2011. The government revised the deficit in May
to $48.0 billion from $48.7 billion.
The Labor Department reported Thursday, first-time claims for state unemployment
benefits fell unexpectedly in the latest week with the number of initial claims
in the week ending August. 4 down 6,000 to 361,000. The four-week average rose
2,250 to 368,250 while claims in previous week were revised to an increase of
10,000 to 367,000 compared with the initial estimate of a gain of 8,000 to
The Commerce Department reported Thursday wholesale inventories slipped 0.2% in
June to a seasonally adjusted annual rate of $481.9 billion, mostly on a drop in
petroleum stockpiles, but also as inventories for automotive, furniture and
metals categories fell. May inventories were revised lower to a flat reading
from an initially reported 0.3% gain while the ratio of inventories to sales
moved slightly higher to 1.20 from 1.18 in May.
Google Inc. (GOOG) agreed to pay a $22.5 million penalty on Thursday, to settle
a dispute with the U.S. Federal Trade Commission. The penalty stems from charges
by the FTC that Google misrepresented users of Apple Inc.'s (AAPL) Safari Web
browser after saying it would not place tracking 'cookies' or serve targeted ads
to Safari users. Google's actions violated an earlier privacy settlement between
the FTC and Google.
The Mortgage Bankers Association reported on Thursday, mortgage delinquencies -
delinquencies include mortgages that are at least one payment past due but not
yet in the foreclosure process - rose in Q2 to a seasonally adjusted rate of
7.58% of all mortgages, up from 7.4% in Q1. Mortgage delinquencies were up only
slightly over the last quarter," said Jay Brinkmann, MBA's chief economist, in a
news release. "Perhaps more important than the small size of the increase
however, is the fact that it reversed the trend of fairly steady drops in
delinquencies we have seen over the last year. This is consistent with the
slowdown in the economy during the first half of the year and our stubbornly
high unemployment rate." In Q2, the percentage of mortgages entering the
foreclosure process was unchanged from Q1 at 0.96%. For Q2, the percentage of
mortgages somewhere in the foreclosure process was 4.27%, down from 4.39% in Q1.
The MBA survey covers about 88% of all first-lien residential mortgages
outstanding in the United States.
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Aug 9, 2012