Finance & Business World

China’s inflation rate slowed slightly to 3.4 percent in April, down from 3.6 percent a month earlier, giving the government greater leeway to ease policy to boost the economy.

The National Bureau of Statistics announced the figure Friday, which comes after China’s economy grew in the first quarter by its slowest pace since 2009.

The figure also comes a day after China announced that its trade surplus widened in April as imports barely budged, sharpening fears that the world’s second-biggest economy is not doing enough to stimulate domestic demand and counter a slowdown.

China grew by a still-robust 8.1 percent in the three months ending in March, down from the previous quarter’s 8.9 percent, but above the government’s 7.5 percent target for the year.

Growth has fallen steadily since 2010 as a slump in global demand battered its exporters and Beijing tightened lending and investment curbs to cool an overheated economy and surging inflation.

Already, there are signs that the slowdown is hurting demand for oil, industrial components and consumer goods at a time when U.S. and European growth are weak.

Last year’s unexpectedly steep plunge in demand for China’s exports due to U.S. and European economic woes prompted communist leaders to reverse course and ease controls on bank lending to help struggling manufacturers.

Further easing measures are expected, especially now that inflation appears to be under control, economists say.

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Clayton-based Furniture Brands has named Vance Johnston as its new chief financial officer.

He is currently the company’s senior vice president for growth and transformation. He will begin the new position on May 18.

He will replace Steven Rolls, who is resigning business card.

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The Canadian company trying to build the disputed Keystone XL pipeline in the U.S. submitted a new application for the project Friday after changing the route to avoid environmentally sensitive land in Nebraska.

TransCanada said it applied again to the State Department for permission to build the pipeline to carry oil from so-called tar sands in western Canada to a company hub in Steele City, Neb. From there, the project would link up with other pipelines operated by the company to carry oil to refineries on the Texas Gulf Coast.

President Barack Obama blocked the pipeline earlier this year, citing uncertainty over the Nebraska route - a decision that drew fire from Republicans and industry groups.

TransCanada had proposed a new route last month that would veer east around the groundwater-rich Sandhills region before looping back to the original route.

State Department approval is needed because the $7 billion pipeline would cross a U.S. border. The department confirmed Friday the application for the new route had been received.

The pipeline filing came on the same day as a disappointing report on U.S. job growth. The Labor Department said employers pulled back on hiring in April for the second straight month, evidence of an economy still growing only sluggishly, though the overall jobless rate slipped to 8.1 percent as more people gave up looking for work.

Obama is under pressure to support the pipeline from Republicans and business and labor leaders who argue it would create jobs; the State Department estimates it could result in up to 6,000 new jobs.

“The multi-billion dollar Keystone XL pipeline project will reduce the United States’ dependence on foreign oil and support job growth by putting thousands of Americans to work,” said Russ Girling, TransCanada’s president and chief executive officer. “Keystone XL will transport U.S. crude oil from the very large Bakken supply basin in Montana and North Dakota, along with Canadian oil, to U.S. refineries.”

The pipeline’s opponents, including Democrats and environmental groups, say it would transport “dirty oil” from tar sands in Alberta, Canada, that would require huge amounts of energy to extract. They also worry about a possible spill. The pipeline would travel through Montana, South Dakota, Kansas and Oklahoma, in addition to Nebraska.

In blocking the pipeline in January, Obama said there was not enough time for a fair review before a looming deadline forced on him by congressional Republicans. The action did not kill the project but put off a tough choice on the once-obscure pipeline, which has become a flashpoint in the bitter partisan political fight over jobs and the environment and a focus of the presidential campaign between Obama his likely Republican opponent, Mitt Romney. Romney has called on Obama to approve the pipeline.

Nebraska Gov. Dave Heineman signed a bill last month that allows the state to proceed with its review of the proposed pipeline through his state, regardless of what happens at the federal level.

A senior State Department official said U.S. officials would conduct a thorough review of the new application, with a final decision not expected until early next year _ well after the presidential election.

Officials will use previous studies to the extent possible, the official said, but will need to complete a new environmental assessment, especially since the route has changed since TransCanada first applied for the pipeline in 2008.

The State Department review is likely to include hiring an outside consultant, a point of contention in the original review conducted by the agency. Democratic lawmakers complained that the firm that conducted the review, Cardno Entrix, had a conflict of interest because of previous work with TransCanada.

The department’s acting inspector general found no conflict of interest or improper political influence but said the State Department could have done a better job of evaluating some concerns about the project and should improve its oversight of contractors.

Jane Kleeb, executive director of Bold Nebraska, a group that opposes the pipeline, said the new route still goes through an aquifer that serves eight states and should not be approved.

“The fundamental facts remain: Americans are being asked to put clean water at risk for an extreme form of energy that will add nothing to our energy security,” Kleeb said.

But Girling, the TransCanada CEO, said the company’s proposal builds on more than three years of environmental review already conducted for Keystone XL, “the most comprehensive process ever for a cross-border pipeline.”

The earlier work should allow the new proposal to be processed “expeditiously,” Girling said, with a federal decision made after a final route through Nebraska is approved by state officials.

TransCanada expects to begin construction of the pipeline next year.

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Jens Weidmann is no longer his master

China is slowing, inflation is sleeping, bank stocks are slipping and Google is splitting. Got all that?

There’s a lot of economic and market news to digest on this frenetic Friday the 13th. Stocks were lower after a big move up Thursday.

Here’s why.

China’s gross domestic product grew at an 8.1% annualized pace in the first quarter. While that’s obviously a fantastic level of growth, it’s down from the 8.9% pace in the fourth quarter. And it’s disappointing, considering that Thursday’s market rally was partly due to whispers that China’s growth may not slow after all. Oops.

The China GDP number may not be a cause for alarm yet. But it will not silence the chorus of China critics who think that nation’s economy is destined for a hard landing.

The slowdown may also put more pressure on China’s central bank to lower its reserve requirement ratio for banks again — or even cut interest rates.

"It is important for global sentiment that China’s growth remains strong," said John Derrick, director of research for U.S. Global Investors. "If China were to be more aggressive with easing, that would be good for stocks."

Speaking of interest rates, the Federal Reserve has more justification to leave rates near zero for awhile thanks to the March consumer price report. Consumer prices rose 2.7% year-over-year through March, down from a 2.9% pace a month earlier.

The Fed can continue to keep monetary policy loose as long as inflation remains low. But while the latest round of job market data — a pullback in hiring in March and a pickup in weekly unemployment claims — is disheartening, those numbers are probably not weak enough to give the Fed good reason for further bond buying.

Correction? Perhaps. But investors shouldn’t panic

What’s more, even though inflation is low, the price of consumer goods is still rising at a higher clip than wages. So the Fed can’t completely write off concerns about inflation just yet. The market seems to sense that, and that may be another reason why stocks are down Friday.

"The Fed can keep current policy in place, but there is nothing hinting at deflation. So there is no ammunition for more easing right now," Derrick said.

Finally, there’s earnings. Profits at JPMorgan Chase (, Fortune 500) and Wells Fargo (, Fortune 500) did both top estimates. That’s the good news. But both stocks were lower Friday, as were shares of Citigroup (, Fortune 500) and Bank of America (, Fortune 500), which are each set to report results next week.

Investors may be looking beyond the first-quarter results and worrying about whether credit quality is deteriorating once again. The level of so-called non-performing assets at JPMorgan and Wells rose slightly from the fourth quarter. That could be an ominous sign, especially if the job market loses more momentum in the coming months.

"Earnings quality is poor and non-performing assets are up, which will scare people. Charge-offs and credit costs could go up," said Christopher Whalen, senior managing director with Tangent Capital Partners, a New York firm that focuses on banks.

And then there’s Google (, Fortune 500). The company’s sort-of evil stock "split" is overshadowing its latest earnings. When you look at those numbers closely, there is cause for concern.

Sure, earnings topped estimates. But sales narrowly missed forecasts. And a key gauge of how much advertisers are paying Google, the cost per click, fell from both the end of the fourth quarter and the first quarter of last year.

Sell in April and hide under the table?

Shares of Google slipped nearly 3% Friday. Combine Google’s lackluster numbers with the banks’ and it is reasonable to wonder if first-quarter earnings won’t be as strong as some people thought they might be after Alcoa (, Fortune 500) reported a surprise profit and much better sales Tuesday.

"Profit levels are already at record highs. So Corporate America has to start showing sustainable revenue growth to justify current stock valuations. That is key. And there are considerable headwinds for companies to digest," said Adrian Cronje, chief investment officer at Balentine in Atlanta.

Add this all up — slowing growth in China, worries about the U.S. economy and concerns that earnings can’t get that much better — and it’s clear that investors still have plenty to worry about this year. And we didn’t even tackle the fact that Europe’s debt crisis is rearing its ugly head again.

The recent slump may still turn out to be a correction as opposed to a major market rout. But anyone that still thinks there’s nothing but blue skies ahead for stocks and the economy is kidding themselves.

"There was too much enthusiasm about the economy at the beginning of the year," said Milton Ezrati, senior economist and market strategist with Lord Abbett in Jersey City, N.J. "This is a plodding recovery and earnings should reflect that. This is a wake-up call."

Best of StockTwits and reader comment of the week: The Google stock split has made some investors angry while others don’t seem to care too much about it.

bradloncar: $GOOG supposedly worrying about shareholder activism is such a red herring. It’s a $200B company!

The new C class of non-voting shares is strange. As I said in today’s Buzz video, it may not be "evil" but it is "devious." Google’s co-founders and chairman Eric Schmidt already have voting control of the company through the B shares — which is why there is virtually no way the plan to split the stock will be defeated.

And with a $200 billion market cap, who could really buy up enough of the A shares — with limited voting power by the way — to make a difference? This isn’t Yahoo (, Fortune 500).

OptionsHawk: $GOOG trades like 8X earnings ex-cash - that is about all u need to know…

JoshPritchard: $GOOG saw 34% growth in FCFO, but no one’s talked about it. Great Fundamentals. At 12% discount rate, current mkt cap implies <5% LT growth

That is true. As I wrote in my Google earnings preview piece Wednesday, the stock is cheap and the company is still growing rapidly. But the latest results show some cracks. Anyone who’s worried about competition from Facebook and Apple still has reasons to be doubtful.

Nokia launched its new Lumia smartphone in the United States on Easter. A few days later, it warned that it would report a bigger quarterly loss. Shares plunged, leading some to wonder if CEO Stephen Elop, who joined the company from Microsoft (, Fortune 500) last year, can really turn the ship around.

Douglas Blake gets the reader comment of the week award for referencing a blunt term that Elop used in a memo to Nokia () employees last year.

"$NOK forgot to jump off the burning platform!," he tweeted.

Ouch. I keep waiting for Research in Motion () to come up with a disaster metaphor of its own as well to describe the BlackBerry. Iceberg straight ahead!

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks. 

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Nike is suing rival Reebok for selling New York Jets uniforms and other Jets apparel with the name of its new quarterback Tim Tebow on them.

Nike (, Fortune 500) says it is the only company authorized and licensed to use Tim Tebow’s name on clothing. Reebok, a unit of German sporting equipment and apparel-maker adidas (), did not respond to requests for comment.

Tebow was traded from the Denver Broncos to the Jets on March 21, creating a media frenzy and a huge spike in demand for Tebow-related Jets apparel in the New York market.

But the trade came during a rare month when no company has the rights to sell licensed NFL apparel with both the team’s name or logo and a player’s name on it.

That’s because the rights deals are in the process of switching from Reebok to Nike. Two different agreements cover licensing: one for players’ names, which switched over on March 1; and one for the NFL teams, which goes into effect on April 1.

Lin merchandise booms

"There’s generally nothing going on this time a year," said Matt Powell, analyst with SportsScanINFO, which tracks sales of licensed apparel. "A dead zone like this normally wouldn’t matter in March, unless there’s Tebow-mania."

Lin files to trademark ‘Linsanity’

To sell a piece of licensed apparel with both a team’s name and a players’ name, a company needs a rights agreement with both the National Football League and either the licensing arm of the NFL Players Association or the player himself cash advance america.

Nike’s suit says that it already has such a deal with Tebow, as well as with the union. But the NFL’s own 10-year licensing deal doesn’t change from Reebok to Nike until Sunday, April 1.

So right now Reebok can sell uniforms and other apparel with team name and logo, but not with a player’s name, unless it has a deal with that player, according to Nike’s suit. But Nike can’t sell any apparel featuring any team names or logos until this Sunday.

Tebow’s uniform was the second most popular of any NFL player last season, according to Nike’s suit. And according to SportsScanINFO, demand for Jets apparel soared last week after the trade was announced.

Tebow’s Super Bowl appearance

"Reebok has sought to take advantage of this unique, short-lived opportunity by supplying, without authorization or license, Tebow-identified New York Jets apparel to retailers in New York and elsewhere around the country," said the suit.

NFL spokesman Brian McCarthy said the league does not have a comment on the suit.

Nike’s suit, which was filed in federal court in New York, seeks to block Reebok from further sales, de story any existing Tebow-Jets apparel not yet sold, and compensate Nike with triple damages based on Reebok’s sales of the Tebow-Jets items. 

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Confidence among U.S. homebuilders held in March at the highest level since June 2007 as sales expectations climbed for a sixth month.

The reading of 28 in the National Association of Home Builders/Wells Fargo index of builder confidence was less than projected and followed a February figure that was lower than initially reported, figures from the Washington-based group showed today. The median forecast of economists surveyed by Bloomberg News called for a rise to 30. Readings below 50 mean more respondents said conditions were poor.

Cheaper homes and mortgage rates close to all-time lows are helping drive record housing affordability, benefiting builders such as Toll Brothers Inc. At the same time, the real estate market remains challenged by distressed properties and the threat of more foreclosures that could push down values further.

Last Tuesday the Dow Industrials popped firmly above 13,000, surpassing the peaks of mid-2011. Most remarkable is the stunning recovery of the Dow Industrials up 23.67 per cent from its 52-week low of 10,655 posted on Monday, Oct. 3, 2011.

Dow 13000 also means a 90 per cent retracement of the losses sustained during the great 2007-2008 financial crisis.

Quite a remarkable reward for the brave who elected to be invested, and quite a frustrating letdown for the bears who are still waiting for the double dip recession and the related test of the 2009 lows. The bears still argue that current stock prices are not sustainable because of the unresolved issues of the eurozone, the U.S. housing and employment problems and a slowing of the Chinese economy.

Now according to the financial media it appears even bullish investors are beginning to question the ability of the Dow and most of the world bourses to hold at these lofty levels. Should they listen to the bears and cash in, or should they remain fully invested?

The latest worry served up by the bears is the failure of the Dow Transportation average to

Viacom Inc.’s Philippe Dauman led the list of America’s top-paid CEOs in 2010 but his pay package for 2011 was nearly halved, mainly because he didn’t get stock bonuses for renewing his contract as he did a year ago.

Still, an Associated Press tally values Dauman’s pay package at $43 million, down from $84.5 million a year ago.

The figures were contained in a securities filing the media company filed Friday.

Another reason he won’t be the highest paid CEO last year: Apple Inc.’s Tim Cook was awarded a package valued at a whopping $378 million for replacing the late Steve Jobs at the helm.

Dauman’s base salary rose 33 percent to $3.5 million, but the bulk of his pay came in the form of a $20 million bonus for good performance, a 78 percent increase from a year ago. The company said operating profits came in above the mid-point of its target range and free cash flow generation was near the top of its range.

Dauman’s annual grant of stock awards was 68 percent smaller than a year ago at $13.3 million, and new stock options he was granted were valued at $6 million, down 79 percent from fiscal 2010.

He also received other compensation of $262,636, mainly for personal use of the company aircraft.

New York-based Viacom’s executive chairman and 88-year-old founder, Sumner Redstone, saw a 39 percent boost to his pay package to $21 million.

Redstone, who controls the company through a special class of voting shares, pulled down a base salary of $1.75 million, up a third from a year earlier, and a performance bonus up 78 percent at $10 million. New grants of stock and stock options came to about $8 million, the same as the previous year.

Redstone also benefited from a preferential executive pension plan that grew by about $1 million, with other compensation totaling $30,955 quick payday loan.

Over the fiscal year that ended Sept. 30, Viacom’s widely traded Class B shares rose 7 percent to $38.74 from $36.19. The company said its total shareholder return in fiscal 2011, comprised of $417 million in dividends and $2.5 billion in share buybacks, was 8.7 percent, compared to 0.8 percent for the companies of the S&P 500 Index.

Viacom owns pay TV networks such as MTV, Nickelodeon and VH1 and the Paramount Pictures movie studio.

The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

The value that a company assigned to an executive’s stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options

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The war of words between Europe and private investors heated up Tuesday as talks to reduce Greece’s massive debt burden hit an impasse.

While the finance ministers of the countries that use the euro as their currency adopted a tough stance on how much rescue money they would pump into the Greek economy, the head of the group that represents the country’s private creditors _ banks and other investment firms _ warned that the future of Europe was being threatened if a voluntary debt reduction deal over Greece was not agreed.

Charles Dallara, the managing director of the Institute of International Finance, warned that Europe was putting “decade of progress at risk” over the management of Greek debt-reduction talks, which stalled over the weekend.

“European stability is at stake as well,” Dallara said in Zurich in a press conference.

On the front line of Europe’s sovereign debt crisis, Athens is trying to get its private creditors to swap their Greek government bonds for new ones with half their face value, thereby slicing some euro100 billion ($130 billion) off its debt. The new bonds would also push the repayment deadlines 20 to 30 years into the future.

However, the main stumbling block over the past few weeks to securing this deal has been the interest rate these new bonds would carry. A high interest rate could buffer losses for investors, but would also require the eurozone and the International Monetary Fund to put up more than the euro130 billion ($169 billion) in rescue loans they promised in October.

Dallara said the private creditors, which include banks, insurance companies and hedge funds, were acting in good faith and that the proposal made last week was in the spirit of last October’s agreement. At that time, Europe’s leaders said Greece should look to reduce the value of its private sector debts by 50 percent, or euro100 billion ($130 billion).

In the early hours of Tuesday, eurozone politicians drew a firm line on the Greek debt restructuring.

Jean-Claude Juncker, the Luxembourg prime minister who chaired a meeting of finance ministers on efforts to fight the crisis, said the average interest rate over the lifetime of the new Greek bonds must be “clearly below 4 percent,” with an average rate of less than 3.5 percent for the period until 2020. That is far below the 4 percent demanded by the Institute of International Finance, which has been leading negotiations for the private bondholders.

The European ministers’ tough stance on the interest rates underlines how the eurozone and the IMF are unwilling to increase new rescue loans above the promised euro130 billion, even though Greece’s economic situation has deteriorated. After already granting Greece a euro110 billion bailout in May 2010, the eurozone and the IMF are threatening to withhold further funding for the country, which has repeatedly failed to hit budget and reform targets required in return for the financial aid.

The interest rate caps will also seriously test the willingness of private bondholders to agree to a debt deal voluntarily.

Dallara said talks would continue over the coming days, adding that he was confident there would be “large-scale” participation by the private sector if a “voluntary” deal is clinched.

However, he refused to put a deadline on the discussions.

Given the complexity of the negotiations and the legal consequences that would ensue, many analysts think a deal has to be agreed soon if Greece is to meet a vital bond repayment deadline in March.

If it can’t pay its bond, Greece would be in default of its debts, a scenario that could lead to renewed panic in financial markets and potentially derailing a feeble global economic recovery.

Dallara said Europe must keep the support of the private sector, given the massive amounts of debt that have to be refinanced from France to Portugal.

He added that there wasn’t a country that didn’t need investment from the private sector.

“Investors need to feel confident in their investments … in sovereign debt,” he said.

Before Dallara’s latest comments, German Finance Minister Wolfgang Schaeuble said the current impasse was a normal part of difficult negotiations.

“We continue the negotiations (with investors) as happily, but also as little susceptible to blackmail as possible,” he told reporters in Brussels. “That exists in every bazaar _ a final offer _ one shouldn’t let oneself be overly impressed by that.”

The alternative to a voluntary deal would be to force losses on to investors _ a move that the eurozone has so far been unwilling to make. Some officials fear that a forced default could trigger panic on financial markets and hurt bigger countries like Italy, Spain or even France.

But several ministers indicated that they might be willing to accept a forced default if it puts Athens in a position where it can eventually repay its remaining debt _ including the rescue loans from the eurozone and the IMF. The eurozone has said that Greece’s debt is sustainable if it falls to some 120 percent of gross domestic product by 2020. Without a restructuring it would reach close to 200 percent by the end of the year.

Even Olli Rehn, the EU’s Monetary Affairs Commissioner, said that forcing some holdouts to accept a restructuring that has the support of the majority of bondholders would be acceptable.

“That is possible within the framework of achieving a voluntary agreement on private sector involvement,” Rehn said, referring to so-called collective action clauses that Greece could write into its old bond contracts to allow majority decision making. The Commission has so far always been opposed to any forced losses for investors.

But ministers also put the pressure on Greece to reach a manageable debt level by bolstering its reform and austerity measures.

“Greece and the banks have to do more in order to reach a sustainable debt level,” Dutch Finance Minister Jan Kees de Jager told reporters as he arrived for a second day of meetings with his European counterparts. “We have to await the discussions about that because a sustainable debt level is absolutely a precondition for the next (rescue) program.”

Schaeuble also insisted that firm support for new austerity measures from all major Greek parties _ including after elections expected in April _ was a precondition for a new bailout.

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Pan Pylas in Zurich and Nicholas Paphitis in Athens, Greece, contributed to this story.

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