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Posted by admin on February 12th, 2011 at 02:05pm

NASDAQ is the largest U.S. electronic stock market. With approximately 3,200 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market. It is home to companies that are leaders across all areas of business, including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks.
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Infograghic Du Jour: Oilfield vs. Cornfield
Dian L. Chu
More from Dian L. Chu:
* U.S. Economy: 12 Years To Fill the 12.4 Million Job Gap?
* Rising National Debt = The Great Recession 2.0
* Expect A Gasoline Correction to Hit Refining Stocks

Posted 2/7/2011 10:50 PM from Dian L. Chu in Investing, Commodities, Economy, US Markets
Referenced Stocks: ADM, ANDE, BIOF, GPRE, MGPI, PEIX

By Dian L. Chu, EconForecast

According to CME Group Ethanol Outlook Report dated February 07, 2011, corn prices have rallied by 90% whereas ethanol prices have rallied by only 55% over the past 7 months. That has resulted in a negative ethanol-corn crush margin of -1 cent per gallon from the 20 cent profit last July. (See Chart) The spread between ethanol and raw sugar is even worse at close to -$3 .

Source: CME Group

The CME report went on noting that most of U.S. corn-ethanol producers are barely profitable at present, some are already losing money and that the profit risks remain high for ethanol producers if corn continues to rally.

Currently, the ethanol industry receives 45 cents per gallon in government subsidies — an annual payout of about $6 billion. And according to AltTransport.com, the corn ethanol industry has received over $30 billion in federal subsidies over the last three decades.

Bloomberg data show the annual market value for ethanol in the U.S. has risen to $27.1 billion since federal support began under President Jimmy Carter during the 1970s energy crisis. The industry has had at least a dozen companies seek bankruptcy protection since 2008; however, things are looking up due to a recent EPA decision.

The EPA (U.S. Environmental Protection Agency) announced in January 2011 that it will expand E15 gasoline for 2007 or newer cars, to cars and light trucks from the 2001 through 2006 model year as well. That’s up from the current permitted 10% ethanol level in gasoline. Under the terms of the 2007 Energy Independence and Security Act passed by Congress in 2007, the U.S. is required to use 11.1 billion gallons of ethanol in 2010, up to 36 billion by 2022.

Prices for many agricultural commodities have been rising primarily due to poor crop yields caused by bad weather, certain producing countries restricting exports, increase in oil prices and fluctuations in currency markets. Meanwhile, the 7-month surge of corn prices coincides with a new historical peak of world food prices, also for the seventh consecutive month, according to the FAO Food Price Index.

So far, there are very few signs of commodity price abating any time soon, while gasoline demand growth is on a downward trend. So, if ethanol producers are already barely profitable or losing money due to high corn prices, with current subsidies, it seems to suggest either more government subsidies would be needed to keep producers afloat or more bankrupt producers on the horizon (an ethanol bailout?).

Meanwhile, the EPA has been sued by industry groups including food/farm as well as automaker over its E15 decision. Food vs. Energy has long been a heated debate, and in light of these recent events, the infographic below (h/t Ashlee) pretty much sums up various arguments regarding corn ethanol.

“Corn Ethanol offers roughly 10-20% reduction in greenhouse gas emissions compared with gasoline. However, powering a car would require 11 acres of corn a year that can be used to feed at least seven people.”

“Using ethanol as an additive to fuel won’t replace much foreign oil…[but] reduces fuel efficiency and lowers fuel economy.”

Read more: http://community.nasdaq.com/News/2011-02/infograghic-du-jour-oilfield-vs-cornfield.aspx?storyid=56644#ixzz1DkoDSTg6

U.S. consumer confidence hits 8-month high
NASDAQ.com News
Posted 2/11/2011 12:30 PM from NASDAQ.com News in Personal Finance, Business, Economy, Small Business, US Markets

Consumer confidence rose from 74.2 in January to 75.1 in February.

Consumer confidence reached its highest levels in eight months in February as an improvement in the labor market and encouraging economic reports lifted Americans’ confidence in a sustained economic recovery.

The Thomas Reuters/ University of Michigan preliminary index of consumer sentiment for February increased from 74.2 in January to 75.1; that figure is in line with a median forecast of economists polled by Bloomberg News. Moreover, the sentiment figures illustrate that households’ views of the economy and labor market turned positive for the first time in seven years.

Analysts contend the uptick in consumer confidence could translate into increased consumer spending, a vital component of GDP in the U.S. “At the end of the day, people spend on how they feel about their job prospects, and additional gains in confidence are likely to provide further support for spending,” affirmed Millan Mulraine, the senior strategist at TD Securities.

Among affluent Americans - defined by the survey as those making more than $75,000 a year - confidence climbed to its highest levels since the recession began in December 2007. With the U.S. unemployment rate falling 0.8 percentage points since November - the biggest two-month drop since 1958 - Americans are readjusting their “current view and future prospects for the labor market,” a Credit Suisse report concluded.

The U.S. Commerce Department announced in January that household purchases, which account for nearly 70 percent of GDP, increased at a 4.4 percent annualized rate in the fourth quarter of 2010, the fastest rise since the first three months of 2006.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Read more: http://community.nasdaq.com/News/2011-02/us-consumer-confidence-hits-8month-high.aspx?storyid=57411#ixzz1DknrejZ7

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