Big picture call for a bottom

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Record £22bn profits for Shell

More on NewsNews in pictures Quirky news News blogs UK news World news Royal Dutch Shell posted record annual profits of $31.4 billion (£22bn), despite a slide in earnings over the final quarter of the year.

The figure, a record for a European company, is up 14 per cent on last year and comes despite the economic slump which forced the price of Brent crude down to an average of $55 a barrel from $147 in the summer.

Shell reported profits of $4.78 billion (£3.35bn) for the fourth quarter of 2008, against $10.9 billion (£7.7bn) in the third quarter and 28 per cent lower than a year earlier.

Despite the fourth-quarter pressure, unions said there remained a compelling case for a windfall tax on energy companies. BP is due to report annual figures next week.

Derek Simpson, joint leader of Unite, added: 'Working families are struggling in the face of the recession, the redistribution of windfall profits would help support Britain through these difficult times.'

Shell chief executive Jeroen van der Veer described the fourth-quarter performance as satisfactory given the impact on demand caused by the weaker economy.

He pledged to maintain net investment at near to last year's level of $32 billion (£22.5bn) in order to safeguard future profitability.

Mr van der Veer added: 'Industry conditions remain challenging, and we are continuing the focus on capital and cost discipline in Shell.'

Shell recently postponed some Canadian oil sand projects as they required high oil prices to justify their development. The price of oil recently fell below $40 a barrel as a result of global economic conditions.

Earnings in the company's exploration and production division were down 24 per cent to $3.71 billion (£2.6bn) in the quarter, a performance which reflected the impact of hurricanes on its North American operation last summer.

Full-year oil and gas production was slightly lower than the previous year, the company added.

:whistling

 

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Feb. 6 (Bloomberg) -- Canadian employers shed a record number of jobs in January, pushing the jobless rate to a 4-year high of 7.2 percent, as the country continues to suffer the effects of the global recession.

Employers cut a net 129,000 workers after a drop of 20,400 in December, Statistics Canada said today in Ottawa. It was the largest monthly job loss since the methodology of the employment survey was last changed in 1976.

Economists surveyed by Bloomberg anticipated the unemployment rate would increase to 6.8 percent and employers would cut 40,000 positions, the median of 22 responses.

Today's job losses may undermine the Bank of Canada's contention that the economy will recover more quickly than in previous recessions as credit markets and exports rebound. The economy will contract 1.2 percent this year and then grow 3.8 percent in 2010, the central bank predicts. Economists in a Bloomberg News survey last month predicted just a 2 percent expansion next year.

Canada is in its first recession since 1992 as the country suffers from plunging U.S. demand, tighter credit conditions and a drop in commodity prices. The Bank of Canada predicts the economy will shrink at a 4.8 percent annualized pace in the first quarter.

Employers shed 113,900 full-time positions in January, most of them in manufacturing, which lost 101,000 jobs. The health care and social assistance industries led gainers, with an increase of 30,800 jobs.

Canadian wage growth in December advanced at a pace of 4.8 percent, faster than 4.3 percent in December.

December's job loss had originally been reported as 34,400 jobs, but was later revised to 20,400.

 

[breadman]

big picture, I think we will make a new low this year by the end of May. If I was to pick a figure it would be somewhere around 650 on the S&P.
S&P 500 earnings for 2009 are going to come in somewhere between $40 and $45 dollars, and it might even come in at less than $40 dollars, with a p/e of 15 that would be 600/675 with a p/e of 10 that could take the S&P to 400/450 although I don't think it will go that low.
Once we hit a low in the first half this year I think we will have a 1/3 year size ways move range bound between 650 to 1100 on the S&P 500 before we make a double bottom or a new low maybe down to 400/500 on the S&P.

By the time this slow down is over I think it will go down in history as the worst recession since 1929.
The stock market falls 40/50% in most recessions but fell 90% in 1929 so I expect the bottom to be somewhere between 50% to 90% falls.

Now we have had the bounce where do we head in 2010. I expect the top to be between the 50% and 61.8% retrace levels 10350 and and 11250.I think one more leg up then we could top, the start of the year 6th of January 2010 or 14th of January 2010. If this leg of the rally is the same length as the rally from March to June the S&P500 could top around the 1160 level. the Dow has allready hit it's level at 10500, but if the S&P500 goes higher so will the Dow. Looking back in history I would suggest having a look at the 1937-1942 pattern in the Dow as we could repeat a similar pattern 2007-2012, 80 years later. a top at the start of the year a correction and a double top later in the year. maybe.