Wal-mart's shares drop in early trading as profit falls. US industrial output skids. GM faces another recall. Investors move into bonds. Porsche stops live tiger displays in promotion of its new Macan.
Wal-Mart’s profit falls by 5 percent
Wal-Mart reported that its profit fell by 5 percent compared to the same period a year ago, according to the New York Times. First quarter sales increased only 0.8 percent. The retailer earned $3.6 billion or $1.10 per share, down from $3.8 billion or $1.14 per share a year ago. Cuts to the federal food stamp program and poor weather are blamed for the lower sales. Traffic in Wal-Mart’s US stores decreased 1.4 percent, a problem that Wal-Mart has reported in several recent quarters. Wal-Mart’s stock is down in early trading.
US industrial output slides at fastest rate in 2 years
US industrial output fell at its fastest rate in more than 1.5 years in April as factory production slumped, according to CNBC. Production at the nation’s mines, factories and utilities slipped. 0.6 percent last month, the largest decline since 2012, after an upwardly revised gain of 0.9 percent in March. Economists had expected output to hold steady. US industry operated at only 78.6 percent capacity, down from 79.3 percent in March.
GM recalls and additional 2.7 million vehicles
General Motors announced an additional 2.7 million vehicles that need to be recalled for a range of faults, according to Bloomberg. This recall is on top of the existing 2.59 million cars recalled for a defective ignition switch linked to 13 deaths. This recall includes the 2004-2012 Chevrolet Malibu, 2004-2007 Chevrolet Malibu Maxx, 2005-2010 Pontiac G6 and 2007-2010 Saturn Auras. The purpose of the recall is to modify the brake lamp wiring harness on some of the vehicles. GM’s actions are putting the industry on track to recall the most vehicles since 31 million in 2004 and 22 million last year. So far, the industry has recalled 17.2 million vehicles this year.
Bond buyers believe stimulus will continue
The Wall Street Journal is reporting that investors are piling into US, German and British government bonds, causing the yields to drop as low as 2.523 percent, the lowest level in more than 6 months. The sluggish economies in Europe and the US signal to bond buyers that the central banks will continue to inject money into the world’s bond markets and keep interest rates low. Despite the fact that the Federal Reserve has diminished its tapering somewhat, it is still buying $45 billion of Treasuries and mortgage bonds each month. The bond market is seen as a safe have for investors who remain uncertain about the US economy due to tepid economic data in recent weeks.
Porsche stops tiger displays for new model
The new Porsche Macan was to be rolled out along with the ability to view live tigers, however, animal rights advocates have caused the company to warn dealerships about using live animals. According to USA Today, the word “macan” is derived from the Indonesian word for tiger. Apparently, Porsche dealerships in North Carolina and other states had made inquiries about renting tiger cubs for a promotion for the new crossover SUV. The animal-rights community frowns upon such promotions. Porsche’s corporate office assured the animal rights community that its dealers, who are independent, are being strongly encouraged not to use live animals in their promotions.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.