Late-Night Headlines
Bloomberg:
- Dendreon Corp.’s(DNDN) prostate cancer therapy Provenge, the first malignancy-fighting immune booster, extended men’s lives by four months in a study. Shares fell as much as 65 percent as investors waited for the data. Dendreon plunged $9.74, or 45 percent, to $11.81 before trading was halted at 1:27 p.m. New York time, and fell as much as $14.05. The Nasdaq Stock Market said it is investigating 2 minutes worth of transactions in Dendreon because they may have resulted from a brokerage error. Men with advanced tumors had median survival of 25.8 months with Provenge, compared with 21.7 months with a placebo in a 512-patient trial the company presented today at a meeting of the American Urological Association in Chicago. The company won’t present safety information for the drug until later today.
- Hedge-Fund Bubble Bursts in Time for Swine Flu.
- The investment chief of the California Public Employees’ Retirement System, the biggest U.S. pension fund, is pushing for lower hedge fund fees and a closer link between manager compensation and performance. “We’re happy to pay fees when managers succeed on our behalf, but we don’t like to pay for failure,” Joseph Dear, Calpers’s recently appointed chief investment officer, said today in a Bloomberg Television interview. “We’re a large hedge fund investor and we’ve been extremely distressed at the misalignment of interest,” Dear said. “Compensation schemes that pay off for the managers but not for the investor, lack of transparency, lack of control -- we want to change all those things.”
- The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan The Markit iTraxx Australia index was quoted 5 basis points lower at 326 as of 10:15 am in Sydney
- China Imports may fall to 350 million metric tons, Zou Jian, chairman of the China Metallurgical Mining Enterprise Assoc., said today at a Metal Bulletin conference. Prices may fall more than expected as suppliers seek to maintain sales levels, Zou said.
- Oliver Stone will rejoin Michael Douglas to direct a sequel to “Wall Street,” the Oscar-winning film that made famous the phrase, “Greed is good.” Douglas, 64, will return as the unscrupulous Gordon Gekko for the film in development at News Corp.’s Twentieth Century Fox, studio spokesman Gregg Brilliant said today. Hollywood is looking to Wall Street for villains to tap the public’s anger over the recession.
Wall Street Journal:
- Citigroup Inc.(C), soon to be one-third owned by the U.S. government, is asking the Treasury for permission to pay special bonuses to many employees, according to people familiar with the matter.
- More evidence of the global spread of a deadly flu emerged Tuesday, with new cases reported on four continents and a growing number of people in the U.S. requiring hospital treatment. Health authorities said they have found possible cases of the new strain of A/H1N1 swine flu in the Middle East and Asia. In the U.S., the number of confirmed cases rose to 64, including five people in California and Texas being treated at hospitals, according to the Centers for Disease Control and Prevention. Another case was reported in Indiana.
- Thousands of indecency complaints have been on hold at the Federal Communications Commission over the past three years, waiting for the courts to decide on the "fleeting expletives" case and a complaint about Janet Jackson's 2004 Super Bowl "wardrobe malfunction." The Supreme Court's decision to send the "fleeting expletives" case back to a lower court to address First Amendment issues --which the court will also likely do with the Janet Jackson case if it takes it -- means it could be months before the FCC begins tackling its growing backlog of cases. There have been about 820,000 indecency complaints filed with the agency since 2006, FCC records show. The number of unique complaints is likely far lower because the agency routinely double-counts complaints. It only takes one email to launch an FCC investigation. Most of the complaints involve instances of unbleeped four-letter words on TV and radio broadcasts, as well as partial nudity or other sexually suggestive scenes on network TV shows.
- The restructuring of Chrysler LLC may look like an unprecedented, unruly negotiation between labor, government and the ailing car maker. But in many ways it's following a three-part strategy devised by Ron Bloom, a 53-year-old investment banker turned labor activist, over the past 20 years. Officially, Mr. Bloom is second in command on the president's auto task force. But, according to many people directly involved in the talks with Chrysler and General Motors Corp., his strategy so far has been key. Step one in Mr. Bloom's playbook, say bankers and lawyers who have worked with him over the years: Squeeze commercial creditors, namely banks or bondholders, and wring concessions from them.
MarketWatch.com: With Henry Paulson at Treasury earlier, Goldman Sachs(GS) had absolute power, with the absolute backing of the party then in control of Washington. Flash forward: Now, with all their people, programs, lobbyists and connections left behind like landmines inside Washington's new administration, the power of the "Goldman Conspiracy" may now be absolute, as in Lord Acton's historic warning that "power corrupts and absolute power corrupts absolutely." No wonder many investors, citizens and taxpayers feel helpless, worried that nobody, not even, as we wrote last week, "Jack Bauer can stop the 'Goldman Conspiracy.'" Still, Americans want blood. You can feel the public's pulse. Sense a rebellion, beyond teabags, beyond a torture debate -- a revolution's brewing, and not a weak-tea-bag one. How would you vote? A RICO indictment? Or a Medal of Freedom for service to country? True, Goldman Sachs played a major role in creating the credit meltdown that's destroying the portfolios of an entire generation. And yet, many of those in the "Goldman Conspiracy" have served honorably in government, in spite of (or because of) their money, biases, errors in judgment and political ideologies. So before "voting," read on, learn more about who's in the global "Goldman Conspiracy:"
CNBC.com: After 5 years at underweight, a widely followed analyst upgraded the entire US banking space. We're talking Foxx–Pitt Kelton analyst David Trone who rather suddenly changed his outlook on the sector. Clearly he could have waited until after May 4th, when the stress test results came out, but he didn't. Should you be reading into that?
- Acknowledging that government has gotten bigger since the financial crisis began, White House Chief of Staff Rahm Emanuel told CNBC Tuesday that it isn't the desire of President Obama to make that larger role permanent.
Washington Post:
- A national flight attendants union wants the Federal Aviation Administration to require U.S. airlines to develop and implement passenger-screening standards because of the swine flu scare. The request, if granted, could be costly to an industry already reeling from a drop-off in demand due to the weak economy.
- Google(GOOG) today launched a new search tool designed to help Web users more easily find public data that is often buried in hard-to-navigate government Web sites. The tool, called Google Public Data, is the latest in the company's efforts to make information from federal, state and local governments accessible to citizens.
CNNMoney:
- 20 most profitable tech companies
AllThingsDigital:
- Remember all the way back when, a couple weeks ago, when everyone was talking about Twitter and Oprah and Ashton Kutcher and the millions of people who were joining Twitter every week? Turns out the majority of those new Twitterers won’t be back in May. So says Nielsen Online, which estimates that 60% of Twitter’s users leave after a month.
Politico:
- April's cable ratings are out, and it looks like Fox News isn't slowing down in the Obama era. TVNewser notes that Murdoch's network has just beaten CNN and MSNBC combined in every hour from 6pm to midnight -- that's in both total viewers and the key demo (age 25-54). Glenn Beck's ratings continues to soar, too, now up 212 percent in the demo.
Rasmussen:
- For just the second time in more than five years of daily or weekly tracking, Republicans now lead Democrats in the latest edition of the Generic Congressional Ballot. A new Rasmussen Reports national telephone survey found that 41% would vote for their district’s Republican candidate while 38% would choose the Democrat. Thirty-one percent (31%) of conservative Democrats said they would vote for their district’s Republican candidate.
Forbes.com:
- Apple’s(AAPL) New Era. Apple is working on something big. But it's too soon to know what, exactly, Steve Jobs & Co. are doing. But it is not too early to know who is doing it. And that, ultimately, may be more important. That's because it was the software people Jobs brought with him to Apple from his start-up, Next, who have helped make Apple's turnaround into a lasting renaissance.
Reuters:
- U.S.-hosted climate talks with the world's biggest greenhouse gas polluters concluded on Tuesday with signs of progress but sizable differences as nations work toward a deal this year to fight global warming. U.S. President Barack Obama called the Major Economies Forum to relaunch a process that began under his predecessor, George W. Bush, whose initiative drew skepticism from countries who feared it would circumvent wider U.N. negotiations. German Environment Minister Sigmar Gabriel said a lot had changed since the Bush process but he said greater commitments from industrialized nations, including the United States, would be necessary to seal a global deal. "It was very clear that the Americans are moving a lot," he told reporters during a break from the meeting. "Measured by what Europeans believe needs to be done to fight climate change, we're still very far apart from each other."
- The chief executives of Bank of America Corp and Citigroup Inc may be shown the door if the U.S. government decides the $90 billion of capital it has already injected isn't enough to restore the banks' health.
- Mexico's economy nosedived in February at its fastest pace in at least 15 years, slammed by a collapse in demand for exports and a severe fall in the service sector, the national statistics agency said on Tuesday. The country's economy shrank 10.8 percent in February -- the worst year-on-year performance in a monthly data series that goes back to 1994. The data supports the argument that Mexico's current recession is even worse than the mid-1990s financial meltdown known as the Tequila Crisis.
Financial Times: Citigroup (C)has told US regulators it wants to fill the capital shortfall identified in the government’s “stress test” by selling large businesses, asking more investors to convert their preferred shares into common stock and shrinking its balance sheet. With a few days to go before the results of the tests are announced, the troubled financial group, which has been bailed out three times by the authorities, is scrambling to find ways to raise capital without relying on more government funds. Bank of America (BAC), another lender whose test has highlighted the need for funds, is also in talks with regulators over its capital needs and the possibility of converting government’s preferred shares into common stock, bankers said.
- Higher taxes to push the price of petrol up by more than 70 per cent are needed to change Americans’ car-buying habits and usher in a new generation of fuel-efficient vehicles, according to Bill Ford, chairman of Ford Motor (F). His comments, made during an interview with the Financial Times, come as the Obama administration faces mounting political and business-group resistance to its own, less radical plan to tackle greenhouse gas emissions using a cap-and-trade system. While backing the White House’s aims, Mr Ford said a more effective approach would be to raise petrol prices directly, a move that could dent purchases of the SUVs and light trucks that have been Ford’s most profitable vehicles. “We clearly need – whether it’s a gasoline tax or cap and trade, it’s something we do need because with gasoline at $2 [a gallon], customer behavior is not driving in the direction that the government would like,” he said.
United Daily News:
- Taiwan Semiconductor Manufacturing Co. Vice Chairman Fan-chen Tseng said global semiconductor revenue will probably fall less than previously expected. Industry sales will drop about 20 this year compared with a previous estimate for a 30% decline, according to the latest information from Taiwan Semi’s customers.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (VFC), target $73.
- Reiterated Buy on (CVH), target $20.
Wachovia:
- Upgraded (DNDN) to Outperform.
Fox-Pitt:
- Raised US banking sector to ‘Marketweight’ from ‘Underweight.’ Stress results to be ‘more benign than expected.’ Had rated Banks ‘Underweight’ since April 2004.
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
Conference Calendar
Who’s Speaking? Upgrades/Downgrades Rasmussen Business/Economy Polling
Earnings of Note
Company/EPS Estimate
- (BKC)/.33
- (BHI)/.75
- (MHS)/.62
- (TWX)/.40
- (AET)/.92
- (AMT)/.15
- (WYE)/.88
- (SO)/.41
- (CVD)/.61
- (CLF)/-.14
- (RYL)/-1.12
- (FLS)/1.59
- (SBUX)/.15
- (AFL)/1.15
- (FSLR)/1.50
- (DRIV)/.50
- (OI)/.36
- (ESRX)/.82
- (CBG)/.02
- (GMR)/.32
- (V)/.65
- (BXP)/1.26
- (AMG)/.92
- (JNY)/.11
- (SEE)/.28
- (AKAM)/.40
- (HES)/-.23
- (GD)/1.46
- (SPW)/.75
- (RAI)/.96
Economic Releases
8:30 am EST
- Advance 1Q GDP is estimated to fall 4.7% versus a 6.3% decline in 4Q.
- Advance 1Q Personal Consumption is estimated to rise .9% versus a 4.3% decline in 4Q.
- Advance 1Q GDP Price Index is estimated to rise 1.8% versus a .5% gain in 4Q.
- Advance 1Q Core PCE is estimated to rise 1.0% versus a .9% increase in 4Q.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,800,000 barrels versus a +3,857,000 barrel increase the prior week. Gasoline supplies are expected to rise by +200,000 barrels versus a +802,000 barrel increase the prior week. Distillate inventories are expected to rise by +1,000,000 barrels versus a +2,682,000 barrel increase the prior week. Finally, Refinery Utilization is estimated to rise by +.15% versus a gain of +3.07% the prior week.
Upcoming Splits
Other Potential Market Movers
BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial stocks in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
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