Late-Night Headlines
Bloomberg:
U.S. lawmakers who helped defeat a financial-market rescue package this week are reconsidering their votes amid signs the crisis on Wall Street is spreading. At least eight lawmakers, including Republican Zach Wamp of Tennessee and Democrat Emanuel Cleaver of Missouri, now say they would support the measure. Four others say they may switch their ballots before the House votes again, at about 12:30 p.m. tomorrow, on the measure, which failed by a dozen votes Sept. 29.
- The Australian dollar fell for the seventh day and New Zealand's declined as investors sold higher- yielding assets. The New Zealand and Australian dollars also fell as the UBS Bloomberg Constant Maturity Commodity index of 26 raw materials slid yesterday. Crude oil, Australia's fourth-most valuable export fell in New York trading after the U.S. government said supplies increased more than expected as fuel consumption dropped to the lowest since 2001. Raw materials account for 60 percent of Australia's exports, and sales of commodities such as lumber make up 70 percent of New Zealand's overseas shipments.
- Latin America's fastest economic expansion in 30 years may be coming to an end as the global credit crunch stunts investment and squeezes demand for the region's commodities. ``We're in a serious economic crisis,'' Colombian Vice President Francisco Santos said in an interview in his Bogota office. ``Financing is going to get scarcer and scarcer, and that means that investment is going to be difficult to attract.'' The crisis will test Latin America's decade-old commitment to debt reduction and open markets. Mexico this week shelved plans to privatize an airport, citing the U.S. crisis, while Costa Rican President Oscar Arias warned the country's growth rate may halve as investment drops. In Brazil, lending that has powered the country's fastest expansion in more than a decade is drying up, said Ricardo Espirito Santo, head of the Brazilian unit of Portugal's Banco Espirito Santo SA. ``The last four or five years were very good for Latin America, but that cycle is coming to an end,'' said Rodrigo Valdes, chief Latin America economist at Barclays Capital in New York. ``We expect a deceleration in practically all economies.''
- Maverick Capital Ltd., Greenlight Capital LLC and The Children's Investment Fund Management LLP fell more than 12 percent in September as stock hedge funds posted record monthly losses and braced for client defections. Lee Ainslie's Maverick Capital declined 19.5 percent and Greenlight Capital, run by David Einhorn, was down 12.8 percent, according to investors in the New York-based funds. Children's Investment, overseen by Chris Hohn in London, fell 15 percent, based on a preliminary estimate. Stock hedge funds fell an average of 8.6 percent in September, the biggest one-month loss since Hedge Fund Research Inc. began collecting data in 1990.
- The Republican Party raised a record $66 million in September, helped by enthusiasm over presidential candidate John McCain's pick of Alaska Governor Sarah Palin as his running mate. The RNC's financial advantage will allow for a ``very aggressive last 30 days'' in the campaign, McCain senior adviser Greg Strimple told reporters on a conference call today. ``We are very well funded.''
Wall Street Journal: A confident, folksy Alaska Gov. Sarah Palin attacked the Democratic presidential ticket Thursday on taxes and partisanship, holding her own against her senior vice-presidential rival, Delaware Sen. Joe Biden.
- Wireless provider Sprint Nextel Corp.(S), which has been exploring a sale of its Nextel business, has received interest from Latin American carrier NII Holdings Inc. and several private-equity firms, people familiar with the matter say.
CNBC.com:
- Poll: What’s The Worst Add-On in The Senate Bailout?
MarketWatch.com: The Securities and Exchange Commission backed down on a major part of its effort to limit short selling. Late Wednesday, the regulator said that institutional investors' short positions won't be made public, a major change from an earlier ruling that had upset several prominent hedge-fund managers and short sellers including James Chanos. Until Wednesday, the SEC's emergency short-selling rules required fund managers to disclose major short positions on shares of roughly 800 financial-services stocks. The regulator then planned to make those filings public, with a two-week delay. That was due to start in mid-October. Chanos, head of leading short-selling hedge-fund firm Kynikos Associates LP, said at the time that forcing such public disclosure would be like asking Coca-Cola to reveal the super-secret formula for its popular fizzy beverage. Also Wednesday, the SEC said the disclosure requirement would be extended indefinitely as an interim final rule. But it also noted that "disclosure under the emergency order will be made only to the SEC." That may well come as a relief to short sellers and other hedge-fund managers worried that public disclosure of their bearish bets might expose them to pressure from the companies they target. "We appreciate ... that the SEC has modified its short-sale disclosure emergency order to protect the confidentiality of investors' portfolio management strategies," said the Chanos-headed Coalition of Private Investment Cos., which represents hedge funds. "Forcing public disclosure would have had serious consequences for investors." Pension funds, endowments and foundations have suggested that they may have to pull their money from some hedge funds because of the "headline risk" associated with public disclosure of funds' short positions, the Washington-based alternative-investments group warned.
NY Times: While regulators were sprinting to save the financial system last month, someone was making a lot of money — by betting against the State of New Jersey. It is not clear who. But trading records suggest that in the panicked days when exotic derivatives were bringing the American International Group to its knees, traders were using the same kinds of derivatives, called credit-default swaps, to profit from New Jersey’s rising tide of red ink. Speculators have long been able to short-sell stocks, making money when share prices fall. But derivatives are now making it possible, in effect, to short municipal bonds. If you think you are the first to determine that New York’s budget is going to suffer because of the financial crisis, then you, too, can wager on it.
Business Week:
- Lehman(LEH) Bankruptcy Gets Ugly
Forbes.com: It's official: The iPhone is more popular than Amazon.com 's(AMZN) Kindle. And not just in the obvious categories like listening to music, browsing the Web or the other applications where Kindle barely competes. Now, the iPhone is also muscling into Amazon's home turf: reading books.
MoneyWeek:
- More than 350 funds closed in the first half, and the worry now is that, with investors panicking, a spate of hurried sales could end up closing hundreds more. The industry is already bracing itself, selling off assets to build up a record $600bn cash pile, to meet potential redemptions, according to Citigroup. That's the equivalent of $1 for every $3 under management. By the end of the year, another 700 hedge funds could hit the wall, according to Hedge Fund Research. Those that have piled into the popular strategies of recent years, especially those focused on China, are due spectacular redemptions, one manager told Reuters. The recent ban on short selling has stung hedge funds in a big way. The US financial watchdog, the SEC, banned short sales on 15% of the stocks in the S&P 500, paralyzing many hedge funds that rely on betting on share prices falling. Prime brokers, the banks who lend money and stocks to hedge funds and keep track of their trades, have turned on hedge funds – charging a fortune for loans and extending them little or no credit. The cost of borrowing on convertible bonds – which can be converted into shares and are essential to hedge funds looking to exploit overvalued stocks – has risen 100% in recent weeks, while the cost of loans on stocks has jumped by 20% to 30%.
USA Today.com:
- The Southeast heads into the weekend facing less severe gas shortages than a week ago, although the Energy Department expects scarce supplies to linger for a week or two.
Reuters:
- A soaring U.S. dollar has been propelled even higher by the Senate's approval of a revised $700-billion bailout package for financial institutions and Thursday's lenient tone on inflation from the European Central Bank chief.
Financial Times: Hedge funds are embracing trading strategies designed to profit from the unwinding of large positions by their competitors, market participants say. The increasingly cannibalistic activity stems from the wave of redemptions hitting hedge funds. Because so many firms hold similar positions, forced selling by one in response to redemptions can have ripple effects, forcing other funds to sell.
- "I have come through '68, '72, '86, '87, '98 and 2002. But this is the worst. . . It is batten-down-the-hatches time." Not the words of a fearful banker, but of a hedge fund manager. As markets plunge one day and rally the next, hedge funds have made headlines and been the butt of public anger by profiting from bets that share prices will fall. But, for many hedge fund managers, 2008 has been a disaster. An industry that has benefited from cheap credit, and which is shrouded in inexplicable mystique, is on the brink of a Darwinian shake-out.
- As steel industry executives gather in Washington for their annual conference - to begin this weekend - they will find it hard to maintain their resolutely upbeat stance of recent years. In the first year of the credit crunch, most steel companies continued to ride high, continuing a remarkable upturn in the sector which started about 2002. However, since the end of June, the mood has worsened. That is likely to be reflected by sentiment at the annual meeting of the International Iron and Steel Institute, the main trade body for the industry.
TimesOnline: The European Central Bank (ECB) opened the door yesterday to its first cut in interest rates in more than five years, conceding that inflationary dangers have faded as financial turmoil saps the strength of the eurozone economy.
Telegraph:
- Exclusive: Barack Obama is ‘aloof’ says British ambassador to US. Barack Obama is a “decidedly liberal” senator “who was finding his feet, and then got diverted by his presidential ambitions,” according to a frank verdict delivered to Gordon Brown by the British ambassador to the United States.
Vidskiptabladid:
- Iceland The credit lines Iceland Currency reserves are drying up, citing Hermann Gudmundsson, CEO of N1, Iceland
The Standard:
- Hong Kong is prepared to follow its overseas counterparts in banning short selling of financial-sector stocks amid intense volatility and sweeping changes caused by the US financial tsunami, government sources said yesterday.
Nikkei:
- Three major domestic machine tool manufacturers plan to scale back production of general-purpose machine tools for the automotive industry due to slumping capital investment among autoparts companies amid sagging auto sales in Japan, the U.S. and Europe.
Late Buy/Sell Recommendations
Cowen and Company:
Night Trading
Morning Preview
US AM Market Call NASDAQ 100 Pre-Market Indicator/Heat Map Pre-market Commentary Pre-market Stock Quote/Chart Before the Bell CNBC Video Global Commentary WSJ Intl Markets Performance Commodity Movers Top 25 Stories Top 20 Business Stories Today in IBD In Play Bond Ticker Economic Preview/Calendar Daily Stock Events Upgrades/Downgrades Rasmussen Business/Economy Polling
Earnings of Note
Company/EPS Estimate
- (FDO)/.34
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for September is estimated at -105K versus -84K in August.
- The Unemployment Rate for September is estimated at 6.1% versus 6.1% in August.
- Average Hourly Earnings for September are estimated to rise .3% versus a .4% gain in August.
10:00 am EST
- ISM Non-Manufacturing for September is estimated to fall to 50.0 versus 50.6 in August.
Upcoming Splits
Other Potential Market Movers
BOTTOM LINE: Asian indices are lower, weighed down by automaker and commodity stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.
No comments:
Post a Comment