By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It's Friday so "It's Only Money," a review of the big and not-so-big stories of the week. I'm Maxine Shapiro with KERA Marketplace Midday.
Two pieces of economic data were released today and economists surveyed were wrong again on both. Which says, they, like the rest of us, don't have clue what's going on. The Producer Price Index, a measure of selling prices received by domestic producers of goods and services from the perspective of the seller, was down four-tenths of a percent - the lowest decline in six month. That squelches any inflation worries. Last month, the PPI was up one-and-a-tenth percent. The closely watched University of Michigan's consumer-sentiment index rose to 87. Wow. Expectations were for 85, just slightly higher from November. And yesterday, retail sales figures revealed what we all know - we're still buying lots of stuff.
In a very bold move today, Coca-Cola announced they will no longer give guidances, or forecast their quarterly or annual earnings. You know the game. A guidance comes out before the earning, the stock price moves. A change in the guidance comes out, the market moves. The real earnings come out, the market moves in accordance to the guidance. And you've got one fluctuating market that reflects only the short-term. "We are managing this business for the long term," said Coke's CEO, Douglas Daft. Sounds pretty sane to me, and analysts are already beginning to applaud this move.
Who will follow suit? Right off the bat, I suggest the airlines.
And following in the footsteps of Martha Stewart, Richard Secord might have done the same thing with his company stock, Computerized Thermal Imaging. Name sound familiar? Secord is the retired Air Force major general who played a key figure in the Iran-Contra scandal in the 1980's. Well, according to the Wall Street Journal, "Mr. Secord sold a large chunk of stock in his medical-devices company shortly before the FDA denied approval for one of the company's devices." That's a no-no.
And speaking of Martha, Ms. Stewart was the most asked-about executive in 2002 at the website AskJeeves.com. Why? For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m. To contact Maxine Shapiro, please send emails to mshapiro@kera.org.