More disturbing than the figure that politicians, the media and economists debate are the ones that show joblessness by state and city. In some geographic areas, more than one person in five is still out of work. The improvement in those numbers does not match the overall national improvement. The jobs problem is more local than it is national.

A new set of data from Gallup shows that unemployment was 21% or higher in 2011 in five states: California, Florida, Nevada, Mississippi and Michigan. Five states does not seem like many. It just so happens, though, that the total population of these states is just over 70 million. Some 23% of all Americans are among their residents. And figures are not much better in several other states.

No federal program address joblessness in the regions that have been hardest hit by the recession. Most of the states with the greatest trouble do not have the money to help. As a matter of fact, states including Michigan and California have their own budget problems, as do many of their cities.

Whatever the national unemployment numbers show, underemployment and people who drop out of the job market are not as acute a problem as they are in California, Florida, Nevada, Mississippi and Michigan.

Methodology: Results are based on telephone interviews conducted as part of Gallup Daily tracking January to December, 2011, with a random sample of 214,822 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre

The 24/7 Wall St. Top Analyst Calls of the Week were in shares of the following: AT&T Inc. (NYSE: T); Automatic Data Processing, Inc. (NYSE: ADP); Best Buy Co., Inc. (NYSE: BBY); Chesapeake Energy Corporation (NYSE: CHK); Dendreon Corporation (NASDAQ: DNDN); E*TRADE Financial Corporation (NASDAQ: ETFC); J.C. Penney Company, Inc. (NYSE: JCP); J.P. Morgan Chase & Co. (NYSE: JPM); Goldman Sachs Group Inc. (NYSE: GS); Morgan Stanley (NYSE: MS); Jefferies Group, Inc. (NYSE: JEF); KLA-Tencor Corporation (NASDAQ: KLAC); Life Technologies Corporation (NASDAQ: LIFE); McDonald’s Corporation (NYSE: MCD); Michael Kors Holdings Limited (NYSE: KORS); Netflix, Inc. (NASDAQ: NFLX); Vistaprint NV (NASDAQ: VPRT); and Zynga Inc. (NASDAQ: ZNGA).

We have covered these in more detailed summaries below and some of these will have links to broader coverage calls.  

AT&T Inc. (NYSE: T) has been a bit under pressure and frankly its earnings did not help the situation for the bulls despite some positive metrics.  Now there is a bit more caution as the stock was reinstated in coverage on Friday at Credit Suisse: with a NEUTRAL and a mere $30.00 price target. This was one of Jim Cramer’s 4 FAVORITE DJIA PICKS FOR 2012 and it is the highest yield of the DJIA. 

Automatic Data Processing, Inc. (NYSE: ADP) met its second quarter earnings estimates this last week but apparently there are some valuation concerns despite the CFO seeing some continued positive trends in the economy.  On Thursday there were two downgrades: Cut to NEUTRAL at Citigroup and Cut to MARKET PERFORM at Wells Fargo.  Shares were around $57.oo pre-earnings and ended the week down at $55.34 and that may be another failed break-out attempt on the chart as the year high is $57.10.

Best Buy Co., Inc. (NYSE: BBY) is supposed to be down and out with absolutely nothing going for it.  In fact, its real risk is that no one under 30 or so may ever go there again.  Not so fast, according to Credit Suisse as the firm reinstated coverage with an OUTPERFORM rating and with a call of almost 30% upside to its $32.00 price target (versus $28.21 target from Thomson Reuters. This drove shares up 1.7% on Friday when the broad market was down.

Chesapeake Energy Corporation (NYSE: CHK) is the pure-play when it comes to investing in natural gas.  It is no secret that nat-gas is in the tank.  Apparently J.P.Morgan just couldn’t take the pressure any longer.  The analyst team there cut Chesapeake to UNDERWEIGHT on Thursday… That is just a “Sell” masqueraded by vocabulary.

Dendreon Corporation (NASDAQ: DNDN) was given two calls of caution or at least calls with no enthusiasm despite its shares having more than doubled from the lows.  Zacks maintained a NEUTRAL rating with a $14.00 target, while the team at Cantor Fitzgerald started it with only a HOLD rating.  Both calls came on Wednesday and Wednesday’s was Dendreon’s highest price of the week.

E*TRADE Financial Corporation (NASDAQ: ETFC) is still supposed to be a buyout target according to the great analyst predictions of 2012, even though the company’s review ended with nothing.  Earnings stank up the joint and the promise (or forecast) of exceptionally low rates through 2014 offers no comfort for earnings at online brokers.  The stock was cut to NEUTRAL at Goldman Sachs this week.  Keep in mind that Goldman Sachs was the firm hired to go find a buyer for E*TRADE.  Not promising at all.

A new Gallup poll shows that:

The majority of Americans, 58%, prefer that the government act to prevent foreclosures, whereas 34% prefer the housing market resolve its problems on its own. A sharp partisan divide exists, with 76% of Democrats and 61% of independents favoring government action and 64% of Republicans opposing it.

Since so many Americans are homeowners who have watched the value of their homes drop — in some cases sharply — the poll’s conclusion is predictable.

Gallup’s researchers point out what is also already obvious. Home value improvement will not take hold until unemployment improves. Unemployment will not improve until American consumers and businesses increase their economic activity. Both groups continue to be concerned about the future of the U.S. economy. That circle still has not been broken.

The investment that government would have to make to have a meaningful impact on the housing market would be colossal and incalculable. Research firm Zillow reports that home values fell by $681 billion in 2011. How even part of that hole could be filed is nearly beyond imagination.

It is only natural that Americans would like to turn somewhere other than the free markets to fix the home-value disaster. But the solution will have to come through those free markets. It is too large for the government to afford an intervention.

Methodology: “Results for this Gallup poll are based on telephone interviews conducted Jan. 5 – 8 and Jan. 14 – 15, 2012. Each poll included a random sample of 1,000 adults, aged 18 and older, living in the continental U.S., selected using random-digit-dial sampling.”

Douglas A. McIntyre

About two-thirds of NABE Industry Survey panelists expect that real GDP will grow at a rate exceeding 2% between the fourth quarter of 2011 and the fourth quarter of 2012. Over 80% of respondents reported unchanged or rising sales and profit margins.

That sentiment was more than offset by another observation from the survey:

Although the share of respondents expecting increasing employment over the next six months continues to fall relative to prior quarters, almost two-thirds of respondents expect no change in employment — the highest percentage of panelists holding such a view in recent quarters.

The economy continues to strengthen but the job market does not. The jobless recovery is supposed to have ended as increased business activity requires a larger labor force. That assumption apparently is not true.

The NABE Industry Survey also showed that increasing numbers of economists see price stability and few are worried about the European debt crisis or trouble in Washington. That means most of those surveyed think that the U.S. recovery will be so overwhelmingly strong, even at a modest pace, that there is insufficient imminent trouble to cause another slowdown.

The NABE members certainly are aware that productivity in the U.S. must be close to its limits. It is now nearly four years since companies began aggressively to squeeze more work out of fewer people. Data continue to show that corporations have increased investments in automation as they keep work forces small. But there is a point at which machines cannot completely duplicate human work.

The NABE data illustrate the remaining schizophrenia about how American companies think they can operate. The economy can improve, steadily and gradually. Corporations can benefit from this without adding costs. The recovery can be jobless. As long as businesses believe that, jobs will not be added until employers think it is absolutely necessary. That, in turn, hurts that chances that the NABE is right about the recovery. Those unemployed people are not consumers, or will not be for long.

Douglas A. McIntyre

Producers like Chesapeake Energy Corp. (NYSE: CHK), Exxon Mobil Corp. (NYSE: XOM), and others support increased exports. Large consumers like Alcoa Inc. (NYSE: AA) and E.I. du Pont de Nemours & Co. (NYSE: DD) will see a sharp increase in fuel costs, and generally oppose exporting natural gas in large quantities.

According to the EIA’s summary of its full report, there are four significant impacts of increasing natural gas exports:

1. Increased natural gas exports lead to increased natural gas prices.
2. Natural gas markets in the United States balance in response to increased natural gas exports largely through increased natural gas production [from shale gas deposits].
3. The remaining portion [of increased gas production] is supplied by natural gas that would have been consumed domestically if not for the higher prices.
4. Even while consuming less, on average, consumers will see an increase in their natural gas and electricity expenditures.

It is worth noting that in point 3, the increased gas available for domestic consumption comes from fuel-switching. Electricity now generated using natural gas will be generated in coal-fired plants (mostly) and, to a lesser extent, from renewable sources.

Booming production from shale fields and expected warmer weather is sending natural gas prices lower again today, down more than -6% to $2.32/thousand cubic feet, the lowest level in 10 years.

Under any of the EIA’s scenarios, domestic natural gas prices rise, it’s just a question of how fast and how much.

Paul Ausick

Rentals of physical discs have dropped by -11% in the US in 2011, and the leading provider of rentals is the ubiquitous Redbox vending machine from Coinstar Inc. (NASDAQ: CSTR). The Redbox’s share of rentals rose to 37% in 2011, up from 25% in 2010. Netflix’s disc rentals remained stable at 30%. Blockbuster stores, now owned by Dish Network Corp. (NASDAQ: DISH), saw disc rentals fall by -6% to 17% of the total.

An NPD executive noted a “sea change” in viewing habits:

The movie-rental market is clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options. Even so renting physical discs from now-ubiquitous kiosks in grocery stores and other venues has taken the lead as the most popular movie-rental method in the U.S.

Shares in Netflix are up more than 5% at $103.33 in a 52-week range of $62.37-$304.79. Coinstar shares are up nearly 2% at $47.61 in a 52-week range of $37.43-$60.71.

Paul Ausick

A new Gallup poll shows that:

Americans’ satisfaction with the size and power of the federal government is at a record-low 29% and their satisfaction with the size and influence of major corporations remains near the all-time low at 30% — making both highly susceptible targets for politicians and presidential candidates in this election year.

Yet, big business must be relied upon, to a large extent, to rebuild the U.S. private employment base. It often has been pointed out that America’s largest companies hold hundreds of billions of dollars in cash. So far, little of that money has been used to hire new workers. That should change, perhaps gradually, as the economy improves. The advancements in productivity that have done so much to allow corporations to get more from each worker have a natural limit. And small business does have a significant part of the U.S. worker base, but these businesses have very little access to capital. Huge corporations can still borrow money at near-record low interest rates.

Big government is part of the American deficit problem. The cost of it drives up national debt obligations. Decisions by the federal government have extended the deficit trouble, and ongoing increases in spending have swollen America’s debt. But these government entities are led by people who may decide to drop the rate of borrowing and create a climate for job creation. The Gallup poll results suggest that people do not think big government will take that course.

The Gallup research also suggests that Americans do not believe they can solve their own problems, or put into action a series of decisions that will allow them to. Instead, they view big government and big business as the problems — problems that they are helpless to correct. The extent of this feeling of powerlessness may be as large a hurdle to an economic recovery and deficit reduction as anything else.

Methodology: Results for this Gallup poll are based on telephone interviews conducted Jan. 5 to 8, 2012, with a random sample of 1,011 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre

Here’s how the US stacked up generally:

[T]he United States competed with virtually the entire world and fared poorly, losing two-thirds of the decisions that were resolved. Facilities involving large numbers of jobs, high-end work, and groups of activities located together moved out of the U.S. much faster than they moved in.

Respondents also had opinions on what was causing the problem:

[The] greatest current or emerging weaknesses [were perceived] to be in America’s tax code, political system, K-12 education system, macroeconomic policies, legal framework, regulations, infrastructure, and workforce skills.

The study’s authors, Michael Porter and Jan Rivkin, define US competitiveness as “the extent to which firms operating in the U.S. are able to compete successfully in the global economy while supporting high and rising living standards for Americans.”

Respondents from firms that manufacture goods are more pessimistic than respondents who work in fields like financial services, public administration, or other sectors less exposed to international competition. As the authors point out, “[I]t will be hard for America to tackle its competitiveness problem if leaders in the country lack a shared perspective on the issue and a common sense of urgency.”

Of more than 1,000 decisions that respondents were directly involved in and that had to do with locating company facilities, 84% of the decisions were made to locate outside the US. Another bit of bad news about offshoring: 42% of decisions to move US activities offshore include high-value activities like research & development and engineering.

When the study turns to cause for the loss of American competitiveness, the US political system is judged to be falling behind foreign competitors as is the K-12 education system. Areas where the US is considered to be strong are in university education, entrepreneurship, innovation, management talent, property rights, and capital markets. No surprises there.

In fact, the surprising thing about the study is that there really are no surprises. The value of the study lies in its attempt to quantify the impact of some elements related to US competitiveness or its lack as viewed by a highly educated and successful portion of the US population (Harvard Business School graduates).

The press release is here and the executive summary is here. A more detailed statistical analysis is scheduled to be included in the March issue of the Harvard Business Review.

Paul Ausick

Google’s brand value increased by 27%, the third largest gain among the top 100 brands. The second largest gain was posted by Amazon.com (NASDAQ: AMZN), which jumped 32% and moved up from 36th on the list to 26th.

The biggest loser was Nokia, which fell -15% and from 8th to 14th in the league table. Another smartphone maker, Samsung Electronics, moved up from 2 places, from 19th, on the strength of a 20% jump in brand value.

Toyota, ranked 11th, is the top automaker, barely ahead of Mercedes-Benz, with BMW in third. Among US carmakers only Ford Motor Co. (NYSE: F) made the top 100 with its ‘Ford’ brand, at 50th place behind Honda Motor Co. (NYSE: HMC) and Volkswagen.

Three brands made the list for the first time: Nissan, John Deere & Co. (NYSE: DE), and HTC Corp.

The Interbrand study ranks the top ten brands by dollar value in this order:

1. Coca-Cola Co. (NYSE: KO) – $71.86 billion
2. IBM Corp. (NYSE: IBM) – $69.91 billion
3. Microsoft Corp. (NASDAQ: MSFT) – $59.09 billion
4. Google Inc. (NASDAQ: GOOG) – $55.32 billion
5. General Electric Co. (NYSE: GE) – $42.81 billion
6. McDonald’s Corp. (NYSE: MCD) – $35.59 billion
7. Intel Corp. (NASDAQ: INTC) – $35.22 billion
8. Apple Inc. (NASDAQ: AAPL) – $33.5 billion
9. Walt Disney Co. (NYSE: DIS) – $29.02 billion
10. Hewlett-Packard Co. (NYSE: HPQ) – $28.48 billion

Paul Ausick

• Spain is “A” rated
• Italy is now rated BBB+
• Portugal was downgraded to Junk with a “BB” rating

It was back in early December that S&P put these nations on CreditWatch Negative. This news was telegraphed throughout the trading day and was largely responsible for the market sell-off today.

JON C. OGG