What's Important in the Financial World (12/22/2011) Nokia Europe Sales, Toyota Record Prediction

Toyota (NYSE: TM) forecasts that it will sell 8.48 million cars and light trucks worldwide next year — up 20% from 2011. The prediction is based on two factors. The first is that the Japanese manufacturer can reopen plants and supply lines hurt by natural disasters in Japan and Thailand. The other must be optimism about global vehicles sales in 2012. Toyota can count on improved production. But economic trouble in Europe and a slowing economy in China could make its forecast unreliable.

Fitch Warning

Fitch became the latest credit rating agency to warn the U.S. about its AAA rating. The firm said the deficit has become a greater problem as Congress and the White House have failed to reach agreement on a new budget. Fitch’s statements are redundant and part of a chorus of concerns about gridlock in Washington that may be combined with a 2012 slowdown in the American economy. The only factor in favor of the Treasury as it raises more money is that the yields it must pay are near record lows. The eurozone problem has caused a “flight to safety” that makes American paper attractive.

Lumia Forecast

If research by Exane BNP Paribas is correct, the new Nokia (NYSE: NOK) Lumia 800 will sell poorly in Europe. Only 2% of potential buyers will consider the smartphone, the research company reports. The Lumia must compete with an army of Google (NASDAQ: GOOG) Android-based devices and the Apple (NASDAQ: AAPL) iPhone. The Nokia phone runs the Microsoft (NASDAQ: MSFT) mobile OS, which has had little success with adoption. The lack of interest may help analysts make predictions about U.S. sales. Weak adoption in both Europe and America would doom the new product’s prospects. Nokia, barely resurrected after years of smartphone sales failures, will be buried again.

Bye-Bye Alibaba

Yahoo! (NASDAQ: YHOO) may have found a solution to the problem of the creation of shareholder value. It may undertake a series of complex transactions to reduce its stakes in China e-commerce company Alibaba and Yahoo! Japan. The deals would add several billion dollars to Yahoo!’s balance sheet. That still leaves the board, and possibly a new CEO, with the problem of how the corporation’s basic content and display ad business can be improved. Money alone will not help.

Douglas A. McIntyre