Late-Night Headlines
Bloomberg:
- Jamie Dimon, chief executive officer of JPMorgan Chase & Co.(JPM), said the U.S. can rescue its banking system by the end of the year if officials start cooperating and stop the “vilification” of corporate America. “When I hear the constant vilification of corporate America, I personally don’t understand it,” Dimon said in his speech. “I would ask a lot of our folks in government to stop doing it because I think it’s hurting our country.” Dimon said he was “very optimistic” about JPMorgan and its ability to work through the financial crisis.
- Freddie Mac, the mortgage-finance company thrust into a leading role in President Barack Obama’s homeowner rescue plans, said it will tap an additional $30.8 billion in federal aid after loan holdings and other assets deteriorated. More capital may be needed, and the $200 billion in total financing pledged by the U.S. Treasury may not be enough, the McLean, Virginia-based company said today in a Securities and Exchange Commission filing.
- EBay Inc.(EBAY) expects its PayPal online- payment system to become the company’s biggest moneymaker as the business outpaces growth in its Internet marketplace. PayPal aims to overtake credit-card companies and become the top processor of online payments globally, company executives said today in a meeting with investors in San Jose, California.
- Discrimination claims filed with the U.S. Equal Employment Opportunity Commission last year rose to the highest in the agency’s 44-year history, after a Supreme Court ruling that changed the way complaints may be filed. A record 95,402 claims were filed during the year ended Sept. 30, the EEOC said. That was 15 percent more than in 2007. More than 25 percent of claims filed contained an allegation of age discrimination while more than 34 percent of the filings included complaints of retaliation, according to the agency.
- U.S. regulators sued investment firms in California and Virginia for running Ponzi schemes totaling $51 million, adding to a list of alleged frauds exposed after the Dec. 11 arrest of money manager Bernard Madoff.
- Wilbur Ross, the billionaire investor, said regulation isn’t the key to solving the U.S. financial crisis and may have contributed to the problem. Government responses that were “panicky” and mistakes in monetary and fiscal policy contributed to a “crisis in confidence,” Ross said in an interview today on Bloomberg Television. “I’m not sure that the answer is more regulation,” said Ross, chairman and chief executive officer of New York-based WL Ross & Co. “That sounds more like a political solution than a real solution to me.”
- The yen will fall to a five-month low versus the US dollar and weaken against the euro as Japan’s currency loses its appeal as a refuge and the economy contracts 6.1 percent, Goldman Sachs Group Inc. said. The currency will decline 7.2 percent to 105 per U.S. dollar and weaken by 8.5 percent to 136.5 per euro, the bank said, revising earlier three-month forecasts for 90 and 117, respectively.
- Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, advanced to a record, according to figures on the company’s Web site. The fund held 1,038.17 metric tons of bullion as of yesterday, up 0.9 percent from March 10. The fund’s holdings are just behind the 1,040.1 tons held by Switzerland, the sixth- largest stockpile.
- China’s agricultural prices may fall further this year, slowing growth in rural incomes in the world’s most populous nation, said a government official. “The pressure from declining agricultural prices is high,” Yin Chengjie, vice chairman of agricultural and rural affairs of the National People’s Congress, said in Beijing at China’s annual parliament meeting. “We cannot be optimistic about growth” in farm incomes this year, he said. Prices of agricultural products, including cotton, soybeans and corn have fallen in China after bumper harvests while restaurant sales and output in food processing declined. Collapsing exports have dragged the world’s third-largest economy to its weakest growth in seven years, costing the jobs of 20 million rural migrant workers and raising concerns of social unrest.
- Global cotton consumption this year will be lower than forecast in February as a deteriorating economy reduces purchases from textile mills worldwide, the U.S. government said. World use will total 111.1 million bales in the marketing year ending July 31, down 1.3 percent from 112.6 million forecast in February, the Department of Agriculture said today in a report. The figure is 9.5 percent less than last season, the largest drop in at least 71 years, USDA data shows. The agency has cut its estimate for nine straight months. Reports from various Asian mills suggested a decline larger than 9 percent, Sharon Johnson, a senior cotton analyst at First Capitol Group in Atlanta, said before today's report.
- The Defense Department is closely monitoring possible North Korean preparations for a ballistic missile test, department spokesman Geoff Morrell said. The U.S. would view any such test as a violation of a United Nations resolution, Morrell said today at a Pentagon briefing. That would be the case even if the missile is used to launch a satellite into space because of the “dual-use” nature of the technology involved, Morrell said.
Wall Street Journal:
- Is Warren Buffett Wrong? Four Reasons the Recession May Be Easing. President Obama’s favorite deal maker has offered more morose pronouncements on the recession. You might recall that in April 2008, after the fall of Bear Stearns, Buffett predicted the recession would be worse than feared. This week, he upped the ante, calling the recession “an economic Pearl Harbor,” and suggesting it would last for five more years, or longer than World War II. (Of course, Buffett may be going by the old saw that a recession is when your neighbor loses your job and a depression is when you lose yours; the Oracle lost over $5 billion last year in the worst performance in his 44 long years in the business.)
- U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey. The economists' assessment stands in stark contrast with Mr. Obama's popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration's economic policies. On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71. Economists' main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. "They overpromised and underdelivered," said Stephen Stanley of RBS Greenwich Capital. "Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone's head." Mr. Geithner unveiled the Obama administration's plans Feb. 10, but he offered few details, and stocks sank on the news. The Dow Jones Industrial Average is down almost 20% since the announcement, as multiple issues have weighed on investors' confidence. The economists didn't just single out the U.S. for criticism; 70% of participants said the response of governments around the world to the global recession has been inadequate. "The Europeans or Japanese don't seem to be doing near enough to kickstart their economies," said Nariman Behravesh of IHS Global Insight.
MarketWatch.com: The Republican Study Committee, a group of conservative GOP lawmakers, believe that instead of pumping billions to bail out banks, lawmakers could save the economy by simply eliminating controversial mark-to-market accounting rules, which require daily revaluing of assets. The panel's effort failed last year as Congress approved $700 billion for banks in October. However, seven months later, their efforts seem to be advancing on Capitol Hill. Indeed, even fierce opponents to changing the methodology are now beginning to think about some mark-to-market alternatives. As the markets continue to slide, pressure is building in Washington to find a bipartisan consensus on the issue. The first step is a hearing Thursday, hosted by House Securities Subcommittee Chairman Paul Kanjorski, D-Penn.
NY Times:
- Since Mr. Tian migrated from China’s Sichuan province, the multibillion-dollar recycling industry has gone into a nosedive because of the global economic crisis and a concomitant fall in commodity prices. Bottles now sell for half of what they did in the summer. “Even trash has become worthless,” Mr. Tian said recently as he made his way to a collection center, his sacks nearly bursting.
Forbes.com:
The richest people in the world have gotten poorer, just like the rest of us. This year the world's billionaires have an average net worth of $3 billion, down 23% in 12 months. The world now has 793 billionaires, down from 1,125 a year ago. After slipping in recent years, the U.S. is regaining its dominance as a repository of wealth. Americans account for 44% of the money and 45% of the list's slots, up seven and three percentage points from last year, respectively. Bill Gates lost $18 billion but regained his title as the world's richest man. Warren Buffett, last year's No. 1, saw his fortune decline $25 billion as shares of Berkshire Hathaway fell nearly 50% in 12 months.
Washington Post:
- U.S. engineers have found a way to make lithium batteries that are smaller, lighter, longer lasting and capable of recharging in seconds. The researchers believe the quick-charging batteries could open up new applications, including better batteries for electric cars. And because they use older materials in a new way, the batteries could be available for sale in two to three years, a team from Massachusetts Institute of Technology reported on Wednesday in the journal Nature.
IBD:
- California helped lead the country into the housing debacle. Could it now be leading the nation out? Existing-home sales in the Golden State doubled in January from a year ago, pacing an overall 29% gain in the West. Meanwhile, the time it would take to sell the inventory of California homes at the current sales rate dived to 6.7 months from 16.6 months a year ago. That's close to the five or six months' supply deemed consistent with a stable market, and well below the nationwide figure of 9.6 months.
Politico:
- Caught between Big Business and Big Labor in the midst of a deepening recession, moderate Democrats are washing their cars, polishing their silver, rearranging the pictures on their desks — anything they can do to buy some time while hoping that EFCA somehow goes away. Eleven Democratic senators and 22 Democratic House members who cosponsored the 2007 version of EFCA — or “card check,” as its opponents call it — have steered clear of the version unveiled this week by Education and Labor Committee Chairman George Miller (D-Calif.) and Sen. Tom Harkin (D-Iowa).
Miami Herald:
- South Carolina Gov. Mark Sanford on Wednesday became the first governor to reject some of his state's share of President Barack Obama's economic stimulus money, spurning $700 million that he said would harm his state's residents in the long run. Sanford, a Republican who served in Congress in the 1990s, made his announcement at three sites across South Carolina
Boston Globe:
- An executive at Lowe's Cos. Inc.(LOW) said the home improvement chain hopes to grow its fleet of stores by 50 percent -- though it could take a decade. Larry Stone, the company's president and chief operating officer, told analysts at the Raymond James Institutional Investors Conference on Wednesday that officials at the chain believe it can expand its U.S. store operations to include 2,400 sites. The company now operates about 1,650 stores in the U.S.
Reuters:
- The regulator for some of the biggest U.S. banks expressed opposition on Wednesday to suspending mark-to-market accounting rules to value bank assets, but said some tweaks might be needed. Kevin Bailey, deputy comptroller of the currency, said in prepared testimony for a congressional hearing on Thursday that the accounting rules, also called fair value, provides the best estimate of the value of many types of financial instruments as of the measurement date. "While additional steps can and should be taken to enhance existing standards, the OCC believes that it is inappropriate to suspend current fair value measurement," Bailey said. Fair value rules have led to huge write-downs of mortgage- related securities and other instruments at banks at a time when markets are thin or nonexistent for some assets. Write-downs can reduce earnings and affect regulatory capital.
- The global economy is on track for its worst recession since the 1930s with output likely to shrink by 1-2 percent this year, World Bank President Robert Zoellick told the Daily Mail newspaper. Central and eastern European countries were particularly vulnerable, he said, urging rich nations to do more to fill the financing gap left by an exodus of capital from the developing world.
The Independent: Hedge funds have resumed the practice of short-selling UK financial stocks with a vengeance in recent weeks, raking in billions of pounds by betting on share price falls at banks and insurers since an FSA-imposed ban expired in mid-January. While the strategy faces a crackdown worldwide as countries try to stabilize their financial systems, funds such as Odey and Lansdowne are piling into trades in UK financial companies. Both banks and insurers face additional strain on their finances and the possible need for more share issues in coming months.
Xinhua News Agency:
- China National Petroleum Corp. has started work at the Al-Ahdab oilfield in Iraq China National Petroleum will explore and develop the field in the next 23 years and boost the field’s output to 110,000 barrels a day in six years, it said.
Late Buy/Sell Recommendations
Citigroup:
- Rated (SHW) Buy and (ETFC) Sell.
- Reiterated Sell on (AXP), target $9.
Night Trading
Morning Preview
US AM Market Call NASDAQ 100 Pre-Market Indicator/Heat Map Pre-market Commentary Pre-market Stock Quote/Chart Global Commentary WSJ Intl Markets Performance Commodity Futures Top 25 Stories Top 20 Business Stories Today in IBD In Play Bond Ticker Economic Preview/Calendar Earnings Calendar
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Earnings of Note
Company/EPS Estimate
- (ARO)/1.00
Economic Releases
8:30 am EST
- Advance Retail Sales for February are estimated to fall .5% versus a 1.0% gain in January.
- Retail Sales Less Autos for February are estimated to fall .1% versus a .9% gain in January.
- Initial Jobless Claims for last week are estimated to rise to 644K versus 639K the prior week.
- Continuing Claims are estimated to rise to 5140K versus 5106K prior.
10:00 am EST
- Business Inventories for January are estimated to fall 1.0% versus a 1.3% decline in December.
Upcoming Splits
Other Potential Market Movers
BOTTOM LINE: Asian indices are lower, weighed down by financial and automaker stocks in the region. I expect US
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