Samsung released two pieces of information, one good and one bad. The first concerns the effect sales of its Galaxy smartphone and tablets had on its earnings in the most recent quarter. Profits rose to $5.9 billion. The data confirmed what Samsung’s place as the number one cell phone manufacturer has done for the company. The results also show the extent to which it has gained on Apple (NASDAQ: AAPL). But investors were troubled by Samsung’s guidance. The company became the most recent multinational to raise a caution flag about results in Europe. The economy there is too weak to support past forecasts, Samsung indicated. The outlook should trigger concerns among consumer electronics firms that have neither Samsung’s strong brand nor its nearly limitless access to capital to drive huge marketing budgets.
Jobs and the Presidential Election
One major question that will accompany the June jobs report is how long President Obama can hold a competitive place in national polls about who will win the presidency in November. There is no consensus about this, but it appears he has nearly run out of time, unless he can convince voters they are better off than in 2008 when he took office. Even if they are, most Americans have short memories when it comes to their jobs and financial fortunes. Very rarely has a president won reelection when unemployment is as high as it is now. While the 8.2% unemployment rate is well below the 10% it reached two years ago, with the underemployed and people who have stopped looking for jobs taken into account, the figure is closer to one in five adults in the United States. The could be too high to overcome.
Gasoline Prices Remain Low
As WTI crude prices dropped close to $85 again, Americans have more reasons to cheer lower gasoline prices, which are loosely linked to the price of oil. A gallon of regular, based on a national average according to the AAA, was $3.358 yesterday, the same as the day before. But the drop from $3.565 a month ago is still very sharp. Demand for gas should taper off now that the July 4th holiday is over and many people will return home in the next few days. With the end of heavy traffic, gas prices ought to slide even more.
Douglas A. McIntyre