End of the U.K. Slump?
The United Kingdom may have pulled out of a downward economic cycle. At least that is what official government data shows. For the third quarter of this year, gross domestic product rose 1% compared with the second quarter. The only dark spot was construction, where economic activity fell 2.5%. Based on this, the U.K. is no different from any other large developed economy that is still staggered by real estate problems — both commercial and residential. The preliminary data from the Office of National Statistics:
- GDP was estimated to have increased by 1.0 per cent in Q3 2012 compared with Q2 2012
- Output of the production industries was estimated to have increased by 1.1 per cent in Q3 2012 compared with Q2 2012, following a decrease of 0.7 per cent between Q1 2012 and Q2 2012
- Construction sector output was estimated to have decreased by 2.5 per cent in Q3 2012 compared with Q2 2012, following a decrease of 3.0 per cent between Q1 2012 and Q2 2012
- Output of the service industries was estimated to have increased by 1.3 per cent in Q3 2012 compared with Q2 2012, following a decrease of 0.1 per cent between Q1 2012 and Q2 2012
- GDP in volume terms was estimated to have been flat in Q3 2012, when compared with Q3 2011
Expectations for Apple Earnings
The earnings of Apple Inc. (NASDAQ: AAPL) may be the most important of the season. It is not only the largest company by market cap, its growth has stayed phenomenal for a large company. And, with the number of products it sells to businesses and consumers, it is something of a proxy for the overall economy, particularly in the United States. Earnings from AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) offered some glimpse into iPhone 5 sales, although each said it ran out of supply and could have sold many more units in September. Apple management said that iPad sales reached 100 million this month. The overall tablet sector has shown no sign of a slowdown. Mac sales could be a problem as the overall personal computer market is in trouble, but the Mac is an increasingly smaller part of the company’s total sales. The financial performance will be another test of how CEO Tim Cook is doing more than a year after the death of Steve Jobs, although it is assumed the many new products were in the pipeline before his death and therefore bear his fingerprints. The other information that Wall St. will watch is guidance. Apple is usually conservative in this respect, but the critical holiday season is about to begin, and the expectations for Apple’s success with both a new iPhone and iPad in the field are unbelievably high.
New Sprint Data Plan
Sprint-Nextel Corp. (NYSE: S) will release a new 4G data plan for tablets. It should be in place by November 11. The cost of the plan has been set, it seems, to take iPad and iPad mini sales from AT&T and Verizon. Sprint announced:
Sprint smartphone customers can add a tablet to their account with a specially discounted rate plan that includes 1GB of data for only $15 per month or as little as $10 per month for 100MB of data on the Sprint network. For a limited time, Sprint is waiving the Activation Fee on all 3G/4G LTE tablets.
Additionally, Sprint offers four plans designed specifically for 4G LTE tablets, starting at $14.99 for 300MB of data, $34.99 for 3GB of data, $49.99 for 6GB of data and $79.99 for 12GB of data.
With billions in capital coming from new majority owner SoftBank, Sprint is likely to get even more aggressive with rates to steal share from the two market leaders.
Douglas A. McIntyre