1. Exxon CEO: We Don't Manipulate Gas Prices

ExxonMobil chairman Rex Tillerson appeared on NBC's "Today" show this morning and disputed critics' charges that oil companies collude to illegally manipulate oil prices.

He also said that, while he sympathizes with Americans struggling with high prices at the pump, reducing gas supplies won't help the situation either – unless consumers want longer lines at gas stations.

Tillerson said that the price of oil is established on the open commodities market, and the price at the pump eventually reflects that. He also said that the bulk of gasoline prices goes to overseas oil producers – not to American oil companies.

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Meanwhile, politically, the pot is boiling over high gasoline prices.

This morning the AP said, "Politicians and the public are looking for ways to deal with rising gas prices. Republican Senator Kay Bailey Hutchison of Texas says the government must encourage alternate sources of energy besides oil. New Yorker Dominic Valente, the owner of a food distribution company, says he's passing on the costs to his customers but adds they seem to understand. Trucking companies are facing similar problems as they deliver their goods."

Today CBS News also featured a young female college student who is selling her own blood twice a week (for $45) to earn money to pay for gasoline.

Oil is trading at about $74 a gallon, according to CBS. The average price of a gallon of gas this morning was $2.92

Editor's Note:

• In April 2004, Financial Intelligence Report predicted that oil prices would skyrocket from $29 per barrel to over $60 within 12 months. That forecast was dead on. Find out what FIR thinks oil will do over the next 12 months. Go here now.

2. Top U.S. Ethanol Producer's Profits Skyrocket

MoneyNews has recently been talking up the alternative fuel ethanol as gasoline demand and prices continue to soar into the stratosphere – and even President Bush has jumped on the bandwagon, promoting greater U.S. reliance on ethanol in a recent speech.

Now Archer Daniels Midland, the world's largest grain processor, has seen its profit rise 29% for the third quarter, "as ethanol prices climbed and as margins for turning soybeans into animal feed and vegetable oil improved," according to Bloomberg News.

The profits annihilated Wall Street estimates, sending the company's shares to a record high.

ADM "reported net income of $347.8 million, or 53 cents a share, up from $269.1 million, or 41 cents a share, a year earlier. The most recent result easily beat estimates of 46 cents a share. Sales rose 7.5%, to $9.12 billion," the report confirmed.

"Shares of ADM surged $3.90, or 10.3%, to $41.90, Tuesday on the New York Stock Exchange, its biggest gain since 2000. The stock reached a record high of $42.05 earlier."

This past week, Andrew Wilkinson, head trader and financial analyst at MoneyNews, noted that investors had been relatively shortsighted in regard to ethanol.

"Just last week, I noted President Bush's new approval for alternative-energy methods – a position he announced to no less than an ethanol-producers club. Despite his speech, still that day investors were dumping the stock even though shares had been trading at all-time highs in the prior session. Wilkinson said.

"Weaker grain prices allowed for fatter margins in the corn-processing area, and clearly the company is benefiting from stronger demand for energy and ethanol."

As mentioned earlier, ADM's bioproducts business (which includes ethanol) garnered huge profits – yet it comprised merely 20% of the firm's operating profits. And according to S&P analyst Joseph Agnese, "everything's aligned the right way now" for the company.

Editor's Note:

• Archer Daniels Midland, the world's largest producer of ethanol, is just one of the stocks in an ETF that SectorTrade recently recommended. Find out what other sectors we're looking at. Go here now.

3. Toyota Soars, Grabs More U.S. Market Share

Japanese carmaker Toyota is set to announce its earnings, and things are looking excellent – not just for the company, but for Asian auto manufacturers as a whole.

According to MarketWatch: "The Japanese auto giant, which will release its results for the latest fiscal year May 10, is on track to post another record profit, driven by strong sales overseas. The [Japanese newspaper] Yomiuri Shimbun reported Tuesday that the company plans to increase its dividend by about Y20 more than the Y65 dividend it paid in the previous year."

In April, for the first time, Toyota outsold DaimlerChrysler in the U.S. market, cementing Asian carmakers' near-record take of American market share.

Toyota has become the third-ranked carmaker "by increasing sales 4.5% from a year ago to 219,965 vehicles, topping DaimlerChrysler's 211,395. Asian companies sold 39.7% of new cars and light trucks, the most since October's record 40%, according to Autodata Corp.," said a recent article from Bloomberg News.

As we have long reported here at MoneyNews, the Asian invasion of the U.S. market – among other factors – has American carmakers reeling.
Months ago, General Motors' chief executive Rick Wagoner instituted a plan that would allow GM to cut manufacturing so that it fell into line with demand by 2008. High gas prices, healthcare costs, slumping sales and loss of market share have been primary reasons for GM's woes.

While GM is taking drastic action to recover from last year's $10.6 billion loss, Toyota is tightening its grip on the industry, racking up "quality awards and relying on smaller cars and trucks for a higher percentage of sales. Toyota's Yaris, Honda Motor Co.'s Fit and Nissan Motor Co.'s Sentra all had better-than-expected sales after gasoline prices surged," Bloomberg reported.

Editor's Note:

• Forget GM. Sir John Templeton has found the company that will surpass it as the world's leading automaker. This Asian car manufacturer's stock has risen more than 115% since last year! Go here now.

4. GOP Agrees on $70B Tax-Relief Package

Majority Republicans have almost agreed to final terms on a $70 billion tax-relief package that would maintain the 15% tax rate for capital gains and dividends through 2010.

"Lawmakers are still fine tuning the plan, but Congress could pass the package later this week … It would then go to President George W. Bush," according to a Senate aide cited by Reuters.

The tax break – the focal point of the president's 2003 tax-cut plan – had been set to expire in 2008, "and the top tax rate on long-term capital gains would revert back to 20%, while dividends would be taxed the same as other income," the report said.

In addition, legislators agreed to continue offering alternative-minimum tax relief for millions of U.S. taxpayers through the end of 2006, as that relief would have expired also without intervention by Congress.

"The AMT was originally intended for only the wealthiest taxpayers, but more and more middle-income people face paying it. The bill also extends a tax break for financial services industries on their foreign income that was due to expire at the end of the year."

Meanwhile, Democrats insist that the U.S. cannot afford these cuts as the nation faces record budget deficits, astronomical spending on the Iraq war and soaring Social Security and Medicare costs with the pending retirement of 78 million baby boomers.

Editor's Note:

• The government manipulates inflation data, check out our report, "The Inflation Lie." Go here now.

Editor's Notes:

• In April 2004, Financial Intelligence Report predicted that oil prices would skyrocket from $29 per barrel to over $60 within 12 months. That forecast was dead on. Find out what FIR thinks oil will do over the next 12 months. Go here now.
• Archer Daniels Midland, the world's largest producer of ethanol, is just one of the stocks in an ETF that SectorTrade recently recommended. Find out what other sectors we're looking at. Go here now.
• Forget GM. Sir John Templeton has found the company that will surpass it as the world's leading automaker. This Asian car manufacturer's stock has risen more than 115% since last year! Go here now.
• The government manipulates inflation data, check out our report, "The Inflation Lie." Go here now.
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