Tax watch: from the follow the money and watch what we do, not what we say manual: Vale, the world’s biggest iron ore miner, has spent the best part of $200 million buying control of the Belvedere underground coking coal mine in Queensland. The final deal, done yesterday, came the same day as Xstrata and its noisy CEO Mick Davis put more projects on hold in Queensland because of the proposed resources super tax. Aquila went into a trading halt this week, but overnight Vale said it had bought the 24.5% stake in the Belvedere mine that Aquila Resources owned. That was after it bought a 25% stake in the mine from American Metals and Coal Industries for $US92 million earlier this week.
US job watch: be careful when hailing what is expected to be another big month for the American job market when May’s employment data is released tonight. Most forecasts say at least 500,000 new jobs will be created. But most of this seemingly huge number will come from the hiring splurge for the forthcoming US census. The Census Bureau this week said that it had 573,779 workers on its payroll in mid-May, up from about 160,000 in mid-April. The agency hired has hired hundreds of thousands of temporary workers to help with the once-a-decade census, and economists have been expecting that to provide a large, if short-lived, lift to the still-weak job market. Excluding the census boost, US forecasters expect about 200,000 new jobs to have been added in May. The April jobs report highlighted 66,000 census-related jobs.
US car watch: don’t believe the headline story of US car sales rising 22% in May and the boost being attributed to the improved confidence among consumers. Two factors stand out, the Memorial Day long weekend (last weekend) is a key car-selling period with up to half the monthly sales made that weekend, which signals the start of the US summer and so-called summer driving season. A year ago GM was on the verge of collapse on the Memorial Day weekend and went into bankruptcy the day after. GM is healthier this year and its sales rose. US sales rose 19% and topped 1.1 million vehicles, the seventh consecutive month that sales have gained from year-earlier levels. That’s an annual rate of about 11.6 million units, with 8.8 million of those retail sales, down from the 8.9 million in April. The remainder are sold to either corporate or ental fleets.
US car watch 2: as well, Chrysler was bankrupt a year ago and selling few cars. Its sales last month jumped 33%. And finally Ford and GM recorded sales growth of 22% and 17% respectively, but sales to rental companies were up 32% and 38% respectively. An analysis shows that discounting for the rental sales impact, sales to retail customers were basically flat across the industry, with the likes of Volkswagen, Hyundai and Kia doing better than the others. Toyota sales rose 7%, thanks to a 31% jump in sales of Lexus models. Strip those out and Toyota’s sales were up just 3.6%. Moreover, sales of its big-selling Avalon and Camry models actually fell in the month, despite company incentives for dealers and buyers.
US car watch 3: in fact that rise in Lexus sales meant that it continues to out-sell its posher rivals in Mercedes and BMW. The monthly figures show the following in the US luxury car segment: Lexus sold 22,216 vehicles in May, pushing its year-to-date total to 90,098 cars and trucks, up 23% from the first five months of last year. Mercedes sales rose 23% to 18,548 in May and are up 22% to 85,405 so far this year. BMW’s sales fell 3% to 17,859 for May as it runs out its 5 series. They are up 6% for the year at 81, 450. Cadillac, the best US luxury brand, reported a 54% increase in May with sales of 12,328. Volkswagen, AG’s Audi division sold 9205 cars in May, up 23%, for the company’s best May ever in America.
Australia car watch: in Australia the Federated Chamber of Automotive Industries said 89,218 new passenger cars, off-roaders and commercial vehicles hit the road, an increase of 13,777 or 18.3% on May last year, and eclipsing the previous May record of set in 2008 — before the global financial crisis hit — by 578 vehicles. May’s sales were also more than 7800 up on April’s figure, which was close to an all-time high as well for that month. Diesel continues to make advances with 27% share in the May sales and 25% of all sales so far in 2010. They continue to outsell hybrids by a huge margin.
Germany car watch: production was up 10% because exports (especially of Audis, Mercedes and BMWs to China and the US) are going well, but registrations fell 34% from May last year as private and business demand remains weakened by the stunning success of the €five billion car scrappage scheme in 2009. German registrations also fell by more than 2% in May from April, in contrast to the US and Australia were sales rose both on a month-to-month basis and on a year-on-year basis.
Not impressed, Dickie: this is from an RBS brokers report on Virgin Blue, which last week shocked the market with a very sharp profit downgrade that has still to be properly explained. RBS analysts hopped around for a chat to try and find out the skinny. Here’s their initial remarks: “We met with senior management today and were left underwhelmed given the short-term challenges facing the business while another strategic change is being considered.” Naturally, RBS likes Qantas.
Vegie watch: another story on an official Chinese government news website telling readers that inflation won’t be a problem because vegetable prices are falling. Quoting the the National Development and Reform Commission, China’s top economic planner, the report said the average retail prices for 15 kinds of vegetables, including tomatoes, cucumbers and eggplants, dropped by 10.15% in May from April. Prices for some vegetables fell drastically when the peak supply season came by the end of May. “NDRC monitoring showed prices of cucumbers on May 26 averaged 4.04 yuan (59 US cents) per kg, 22% down from a month earlier while green yu choy dropped 20.1% in price month on month to 7.82 yuan per kilogram.” This was the fourth report of its kind in the past week and indicates the extreme sensitivity the government has to high food prices and the rising CPI, which is tipped to hit 3% in May, from 2.8% in April.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.