A Strong U.S. Dollar vs. Corporate Profit

It's a miserable day for U.S. equities, but the U.S. dollar continued its climb, rising to its highest level against the Euro in almost two years.

That's great news for some. But the folks at Briefing.com bring up an interesting point. What does a strong U.S. dollar mean for corporate profit?

Remember, while membership in the S&P 500 requires a U.S. domicile, more than half of the revenue generated by its members comes from outside the U.S. A strengthening U.S. dollar can squeeze overseas revenue and dim earnings prospects.

As Briefing.com writes:

The US Dollar Index has seen a huge move in the third quarter, rising 6.9% to leave it up 6.5% for the year.  The bulk of that quarterly gain has come in the latter half of the quarter as the euro, pound, and yen have fallen out of bed with currency traders.

The latter point notwithstanding, the average value of the euro and British pound is still higher than it was in the third quarter of 2013.  Accordingly, we wouldn’t expect US companies with exposure to those currencies to cite the dollar’s strength as a real drag on third quarter results.

We would, however, expect them to suggest ongoing strength in the dollar will be a headwind in the fourth quarter.   To that end, bear in mind that the US Dollar Index averaged 80.39 in the fourth quarter of 2013 and 80.36 in the first quarter of 2014.

With the euro dropping to a 22-month low today against the greenback, it’s little surprise to see companies like McDonald’s (MCD), Philip Morris International. (PM) and Pall (PLL),  which derived more than 40% of their revenue from Europe over the last 12 months, put in some lackluster showings.

Technical Update: Gold Remains In Trouble

Related GOLD Morning Market Losers Benzinga's Top #PreMarket Losers Signs of the Times: 'We Buy Gold' (Fox Business)

Gold futures continued to trade bearishly this week, even as they churned sideways.

Technicians now believe that gold is in wave “(iii) of iii” lower with potential support at 1205.70 and 1137.70.

As gold is oversold, technicians note that selling at current levels could be dangerous. They recommend aspiring sellers wait to for rallies into which to sell.

The technicians note that such "selling into rallies" by aggressive traders may ramp up at or near 1265 in conjunction with overbought readings on the %R indicator.

Meanwhile, technicians note that big money buyers are likely to stay away until the extreme low target of 1137.70 is tested.

Stock chart: 

Posted-In: Long Ideas Short Ideas Futures Technicals Commodities Markets Trading Ideas

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Related Articles (GOLD) Technical Update: Gold Remains In Trouble Morning Market Losers Benzinga's Top #PreMarket Losers Bear of the Day: Randgold (GOLD) - Bear of the Day Morning Market Losers Benzinga's Top #PreMarket Losers Around the Web, We're Loving... We're Now Hiring Journalists for our Newsdesk! Better Manage Your Personal Finances

Labor Shortage Alert: How the Desperate Trucking Industry Can Find Workers

A recent survey by National Retail Systems, or NRS, a privately owned third-party logistics company, reveals interesting insights into truck drivers' job preferences, including answers to key questions like what attracts them to a job and what compels them to leave one. The results could come in handy for American trucking companies that have been spending sleepless nights trying to figure out the best ways to recruit and retain drivers even as the industry battles a severe workforce shortage. It turns out that drivers don't really care about a company's reputation as long as they get a hefty paycheck, and that a sign-on bonus fails to do what it's meant to do: attract drivers. Here are some interesting highlights from the survey.

Building a loyal team is possible
If you think truck drivers are frequent job-hoppers, you might be surprised by what the NRS found out: Out of the thousands of drivers that it surveyed, nearly 47% have either been at the same job or have changed jobs only once over the past 10 years. Yes, loyalty runs high among truck drivers. 

Data source: NRS Survey. Chart by author.

On the other side of the coin, nearly 41% of those polled have experimented with three to five jobs over the past decade, indicating that it's just as easy to find a job in this market if you're not happy with your current one. That perhaps explains the high driver turnover rates in the trucking industry: According to the American Trucking Association, large carriers reported an annualized turnover rate of 92% for the first quarter this year, making it the ninth consecutive quarter with rates topping 90%.

So what compels a driver to look for another job?

Nothing draws workers like money does
Who doesn't like good pay? Salary tops the list of reasons that truck drivers hop jobs. Nearly 79% of those polled by NRS rated salary as the most attractive factor about a job, and roughly 43% left their last job in search of better pay.

Source: NRS Survey.

That isn't surprising, given the long hours and the challenges that truck drivers have to endure behind the wheel. While high turnover rate is not a new problem for the industry, it's only now that companies are realizing the need to increase wages. Swift Transportation, for instance, announced this past July that it intends to invest more in its drivers now through "enhanced pay packages."

The more interesting takeaway from the above graph is how close home time is to salary as a deciding factor in selecting a job. Family and home are greater priorities for truck drivers now, which means not many are willing to go on long-haul trips that require them to stay away from home, often in solitude, for several days or even weeks at stretch. Perhaps paying out more could again be the solution here, especially for companies that rely heavily on long hauls for revenue.

And if trucking companies believe that their new and sophisticated equipment or intensive on-job training can attract the best of the lot, they may want to reconsider their strategies if the above information is anything to go by.

Relying on technology is a good idea
An equally important question is: What medium should companies use to attract the maximum number of applicant interests for a job? The NRS survey made one thing clear: If you're still relying on the good old newspaper, you're not keeping up with times.

Data source: NRS Survey. Chart by author.

According to the survey, a meager 4% of those polled look at newspapers or magazines to find jobs. Technology has caught up swiftly with truck drivers -- a whopping 79% rely on the Internet as their primary job-search tool. Referrals are a distant second, with 11% share. In other words, trucking companies could consider giving job fairs and newspapers a miss and spend more time on the Internet instead when they're looking to fill their vacancies.

Foolish takeaway
NRS' survey may not provide a definite solution to the driver shortage problem, but as an attempt to delve deeper into the root cause of the problem, it could provide direction to trucking companies as they deal with it. After all, if companies can figure out what drivers look for in a job, they'll be able to create jobs that can find more takers.

You can't afford to miss this
"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made In China" for good. Click here!

Can You Guess the 5 States That Rake in the Most From Tobacco Taxes?

Image source: Philip Morris.

Tobacco is big business in the U.S. and around the world, and the companies that produce tobacco earn strong profits. Over time, federal and state governments have increasingly shared in the revenue from cigarettes and other tobacco products. In the two decades between 1992 and 2012, total federal tax collections on tobacco tripled to $15.6 billion, while net state tax collections have risen at almost the same pace to more than $18.2 billion in 2012. For producers, taxes have risen in concert, with Altria Group (NYSE: MO  ) having paid $6.8 billion in excise taxes on tobacco products in 2013, while Reynolds American (NYSE: RAI  ) paid $3.7 billion and Lorillard (NYSE: LO  ) added almost $2 billion more.

The most recent version of the compilation The Tax Burden on Tobacco  -- for which subsidiaries of Altria, Reynolds American, and Lorillard provided financial support -- goes into much greater detail about how tobacco gets taxed across the nation, shedding some light on which governments reap the most from tobacco taxes. Let's take a look at the five states that bring in the most tax revenue from tobacco.

Coin images courtesy U.S. Mint.

5. Michigan
Michigan collected $972 million in net tobacco taxes in 2012, with the vast majority of those revenues coming from cigarette sales. According to figures from the Tax Foundation, Michigan ranks just outside the top 10 in terms of cigarette excise taxes per pack at $2, and while that's less than half of New York's per-pack amount, Michigan residents smoke more than two and a half times as many packs of cigarettes, helping bolster tax revenue. With other sources of taxation facing challenging times within the state, Michigan's tobacco taxes represented more than 1.5% of overall state revenue three years ago -- the second largest proportion in the nation.

4. Pennsylvania
Pennsylvania collected $1.12 billion from taxes related to tobacco in 2012. The Keystone State is the only one of the top five states not to impose taxes on tobacco products other than cigarettes. But on a per-person basis, cigarette smoking is more prevalent in Pennsylvania than in any of the other states on this top five list, with the typical Pennsylvanian smoking 55 packs of cigarettes over the course of a year. Recently, lawmakers looked to impose an additional $2 per pack excise tax in Philadelphia in order to help close a budget gap for the local school district, but delays in the vote forced schools to open without a resolution to the financial issues.

Image Source: Nikita2706, Wikimedia Commons.

3. Florida
The state of Florida pulled in almost $1.24 billion from taxes on tobacco products, with cigarette taxes making up 92.5% of that total and taxes on loose tobacco, chewing tobacco, and snuff making up the difference. Florida doesn't have a state income tax, so the importance of other revenue sources is magnified in order to keep the state's budget flush with cash. Interestingly, though, Florida consumers pay less than the national average for cigarettes, with total taxes adding less than $2.70 per pack to the cost smokers pay. That helped Florida sell 875 million taxable packs of cigarettes in 2012. A proposal to boost cigarette taxes further sparked debate earlier this year, but with the state looking to roll back taxes in other areas, tobacco users probably can breathe easy, at least for now.

2. Texas
The largest state in the lower 48 by size raised $1.48 billion in tobacco taxes in 2012, but what makes Texas stand out is its success in getting tax revenue from forms of tobacco other than cigarettes. The $185 million in taxes on cigars, snuff, chewing tobacco, and loose tobacco that Texas imposed was nearly double what the next highest state collected. Texas also gets a big portion of its overall tobacco taxes in the form of general sales tax, ranking second only to California on that front. Modest prices help contribute to Texas selling 943.5 million packs -- the second-most in the nation -- and only 7.5 million packs behind California despite having a smaller population.

1. New York
New York tops the list of tobacco-taxing states, pulling in $1.63 billion and being responsible for close to 10% of the entire state-level taxes imposed on tobacco products across the nation. Interestingly, New York has been able to sustain those receipts despite having the highest average price per pack of cigarettes in the U.S., topping out at nearly $10. Of that amount, state and federal taxes make up more than $5.75, ranking New York No. 3 behind Rhode Island and Connecticut in the percentage of the total consumer price paid in tobacco taxes. In addition to state-level taxes, New York City collects more in local tobacco taxes than any other city in the U.S., with revenue of $126 million in 2012. Put together, those factors give New York the lowest volume of packs sold, at just 18 packs per person annually.

New York has also been the biggest beneficiary of settlement payments from Altria, Reynolds American, Lorillard, and other tobacco companies. Payments of almost $738 million even inched out California despite New York's smaller population.

Take advantage of this little-known tax "loophole"
Tobacco taxes aren't the only way that the government has hit Americans in the wallet lately. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

Why Atlanta is ripe for innovation

Rohit Malhotra, far right, with a group of people from the mayor's office and city council. NEW YORK (CNNMoney) Atlanta is one of the best cities in the country to be an innovator.

It's the second most affordable city in the country, while entrepreneurs in other cities cram themselves into small "hacker hostels" to make ends meet. Over the past five years, the city attracted over $700 million in private investment through InvestAtlanta, and Atlanta added nearly $100 million to its cash reserves.

Equally notably, the city is re-embracing the social movements embedded in its history and is investing in historic landmarks, as seen through the launch of the Center for Civil and Human Rights and the expansion of the Sweet Auburn Curb Market on Edgewood. Even Outkast is back!

But some boats aren't rising with the tide. Children in Atlanta have only a 4% chance of upward mobility, and Atlanta has the highest income inequality in the United States. This creates a tale of two cities within the city I call home.

Civic entrepreneurs can help close the gap.

A civic entrepreneur is someone with a product or service that solves a public challenge. In Atlanta, civic entrepreneurs are finding new ways to solve local challenges -- like Jason Martin, who built the STE(A)M Truck, a mobile education lab for teaching science and math to students, and Brian Preston, who runs Lamon Luther, a high-end furniture company that transforms homeless men into craftsmen.

Public organizations in Atlanta, both government and nonprofits, can help grow the market of civic entrepreneurs immediately by doing two things: First, open up more government data, and second, make it easier to invest in local civic entrepreneurs.

Because government data is usually messy and disorganized, the decisions to keep or cut important programs are often left to gut reactions. Opening the data can open up a new economic opportunity and help public organizations make more informed decisions.

As the Open500 project showcases, hundreds of national companies use open government data as part of their business model. This includes seven Georgian companies, ranging from powerhouses like the Weather Channel and Blackrock to startups like Atlanta's own Department of Better Technology, which brings government into the 21st century through more sensible RFP processes.

The more data that is opened up, the more entrepreneurs will be inspired to launch businesses that solve th! e city's problems. States like Massachusetts, California and New York have strong open data standards and, consequently, a large number of businesses built on public data.

Civic entrepreneurs are not building charities: They are building businesses with the strategy of a private enterprise but the limited resources of a nonprofit. They need seed capital to test and prove their ideas. This is where public organizations can step in.

Public organizations and local governments can provide first contracts to civic entrepreneurs, which lets public agencies experiment with new ways of delivering services, often at a rate far below market.

In Philadelphia, City Hall partnered with Wharton, social accelerator GoodCompany Group and Code for America to create FastFWD, a competition that helps civic entrepreneurs secure government contracts on pertinent community challenges like public safety. One of the winners was Atlanta-born Village Defense, an easy to use, neighbor-to-neighbor communications tool that curbs crime by up to 80%.

In order to bring those kind of partnerships to Atlanta, I am launching the Center for Civic Innovation. It will serve as a lab for civic entrepreneurs to test new ideas on public challenges. The work of CCI is guided by a Civic Innovation Council made up of young leaders from across sectors in Atlanta.

The center's first initiative is a partnership with the Atlanta Community Food Bank to find new approaches to tackling food security in the city, where almost 800,000 people require the support of food pantries and meal service programs. Lessons from this pilot program can be applied to systemic issues impacting Atlanta, including workforce development, education and transportation.

If Atlanta can create a strong ecosystem for civic innovators, it will create a ripple effect for other cities with high levels of income inequality. Civic innovators will redefine the way donors and taxpayers expect their money to be used, and ci! ties can ! reinvent the way services are delivered to their residents. This is a moment for leaders in Atlanta to, once again, redefine history for the rest of the country.

Rohit Malhotra is the executive director and founder of the Center for Civic Innovation in Atlanta, his hometown. Most recently, he served as an Ash Innovation Fellow in the White House Office of Management and Budget.

The Coca-Cola Company To Acquire 16.7% Stake in Monster Beverage Corp (KO, MNST)

Shares of Monster Beverage Corp (MNST) surged over 20% in premarket trading on Friday morning following reports that The-Coca-Cola Company (KO) will acquire a 16.7% stake in the company.

Coca-Cola has agreed to purchase a 16.7% stake in the beverage company for $2.15 billion. With this partnership, Coca-Cola will transfer its energy based beverages including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless to Monster. The deal will also include Monster transferring its non-energy based beverages including Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products to Coca-Cola.

This deal is in-line with KO’s plan to diversify its product range as soda sales continue to decline. KO’s CEO Muhtar Kent commented: “The Coca-Cola Company continues to identify innovative approaches to partnerships that enable us to stay at the forefront of consumer trends in the beverage industry. Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category.”

Monster Beverage Corp (MNST) shares were up $14.83, or 20.70% during premarket trading Friday. The stock is up 5.73%.

The Coca-Cola Company shares were up 72 cents, or 1.79% during premarket trading Friday. The stock is down 2.74% YTD.