1. Bidding on Equity
Top priority goes to Monday’s shareholders meeting for Equity Office Properties Trust, the Chicago real estate conglomerate controlled by tycoon Samuel Zell. On Friday, Zell and his board expressed their continued support for a $38.3 billion all-cash buyout bid from private-equity giant Blackstone Group. A higher bid came from rival Vornado Realty Trust, at $41 billion in cash and stock. Zell and his board apparently want to maximize the amount of cash in hand.
2. Blame it on the weather
The week’s scariest development would be a sudden, unwelcome return of oil to the $60-a-barrel level only a few weeks after it plummeted below $50. On Friday, it topped $59, as analysts blamed bitter wintry blasts that have gripped the nation’s midsection and the Northeast. Concerns also have been stoked by threats of strike by oil workers unions in Nigeria.
3. Slowing productivity
More-than-the-usual attention will be paid to Wednesday’s report of fourth-quarter labor productivity and costs. Although output grew a mere 0.2 percent in the third quarter, the new report is expected to show gains running about 2 percent. “Labor productivity growth in 2006 was the lowest in more than a decade,” said The Conference Board, a business research group. A problem may be that technology has reached the saturation level, making further productivity growth tenuous. Productivity in Europe has been growing at a slim 1.5 percent, while in China and India it has been zooming forward at 7 percent.
4. Ringing up sales
If buying fervor is starting to suffer from a midwinter chill, the evidence will be provided Thursday, when the nation’s retailers offer January discount and department store sales. Economist Carl Tannenbaum of LaSalle Bank says consumers are setting a hot pace, mainly because of steamy job formation and bigger paychecks. Additionally, he says, “gift redemption and some very large year-end bonuses in some industries should aid consumption growth considerably in the current quarter.”
5. GM’s cruising
The corporate profit train is slowing, but few on Wall Street envision it screeching to a halt. This week’s big number: a profit for General Motors Corp., which is in a revival mode. That’s unlike Ford Motor Co., which reported a full-year loss of $12.7 billion. For now, overall earnings growth has been running well into double digits. Robust results have helped the Dow Jones industrials move ahead for a seventh straight month, the longest winning streak since 1995. The S&P 500 has risen for an eighth consecutive month, the best stretch since 1996.
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William Sluis, wsluis@tribune.com
