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Wednesday, April 30, 2008
Links of Interest
Wednesday Watch
Late-Night Headlines
Bloomberg:
- Government of Singapore Investment Corp. may add more bank assets to its $18 billion of investments in UBS AG(UBS) and Citigroup(C) as it chases stable returns over periods as long as 30 years, Minister Mentor Lee Kuan Yew said.
- Matsushita Electric Industrial Co., the world’s largest maker of consumer electronics, rose 11%, the most in more than eight years in Tokyo trading after the company’s profit and earnings forecast beat analysts’ estimates.
- Merrill Lynch(MER), Goldman Sachs(GS) and UBS AG(UB S) are among seven securities firms that helped design an index for investors to make creditworthiness bets in the $2.5 trillion municipal bond market.
- Gold fell to the lowest in more than three months as the US dollar climbed against the euro, eroding the appeal of precious metals and commodities as alternative investments.
- Japan Factory Output Falls More-Than-Expected 3.1%.
- Citigroup Inc.(C) is selling $3 billion of stock two weeks after reporting its second straight quarterly loss.
- The Bank of England need to take “aggressive action” and cut interest rates soon to avert a recession, policy maker David Blanchflower said.
- Argentine bonds show growing speculation that the country will default for the second time this decade as inflation and anti-government protests swell. The nation’s $10.8 billion of floating-rate dollar bonds due in 2012 yield 7.52 percentage points more than Treasuries of similar maturity. That implies an almost 20% chance of
Wall Street Journal:
- Barack Obama angrily broke with his longtime former pastor Tuesday and, more broadly, with the minister’s discordant views of race in America, as the persistent controversy threatened to derail his bid for the presidency.
- Bush Prods Lawmakers on Economy, Energy Prices.
CNBC.com:
- Smart Money Leaving Commodities for Tech?
BusinessWeek.com:
- McCain’s Health-Care Proposal. The idea: More competition among insurers, spurred by a tax credit that helps consumers buy their own insurance, would lead to universal coverage.
Forbes.com:
- Hedge Fund Women.
CNNMoney.com:
- Fed could burst oil’s bubble. “If the dollar appreciates, then that will give crude leeway to move downward and drive a stick into this bubble,” said Stephen Schork, publisher of the Schork Report. OPEC president said on Monday that if the US dollar begins to gain back some significant group, crude prices may fall off a cliff. “If the dollar strengthens 10%, there is a good bet that oil prices will fall by $40,” said Khelil.
- When the 3G iPhone is introduced this summer, AT&T(T), the exclusive US iPhone sales partner with Apple(AAPL), will cut the price by as much as $200. AT&T is preparing to subsidize $200 of the cost of a new iPhone, bringing the price down to $199 for customers who sign two-year contracts.
- 20 most profitable tech companies.
- Paying for gasoline easily tops the list of economic woes facing families in the US, according to a survey on how changes in the economy have affected people’s lives. In a distant fourth place was difficulty paying rent or mortgages.
SmartMoney:
- Shifting Gears at Ford(F). CEO Alan Mulally is ushering in big changes – which could bring long-term growth.
Portfolio.com:
- Masters of the Universe, Ranked. Private Equity International releases its annual ranking of the 50 top firms, according to capital raised over the last five years. Here is the list, followed by each firm’s rank last year in parentheses.
- This is entirely anecdotal, but there’s no doubt what the single most popular laptop is at the Milken Global Conference: the MacBook Air.
Reuters:
- The Weather Channel may get bids of $3.5 billion to $4 billion from CBS Corp.(CBS) and NBC Universal.
Financial Times:
- US retailers are waging a promotional battle to win a share of the billions of dollars in tax rebates destined for US households as part of the $170 billion federal stimulus package.
- In more than 2,000 meters of water off the coast of Brazil, Petrobras(PBR), the Brazilian national oil company, is drilling what could become one of the most important oil wells of recent years.
- A $683 million fund headed by Al Gore to invest in young environmental companies is now closed to investors. The Climate Solutions Fund is one of the biggest in the environmental investing field and may grow to $5 billion in two years. The fund will invest in small companies in four industries: renewable energy; energy efficient technologies; energy from biofuels and biomass; and carbon trading.
Xinhua:
-
- China needs to strengthen and improve macroeconomic controls and stabilize prices, citing President Hu Jintao.
Late Buy/Sell Recommendations
Citigroup:
- Commodity strength driven by global infrastructure growth theme. The demands of developing economies primarily in Asia, Latin America and the
- Reiterated Buy on (MHP), target $51.
Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 futures +.23%.
NASDAQ 100 futures +.28%.
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Earnings of Note
Company/EPS Estimate
- (SPW)/.99
- (OMX)/.69
- (ADVNA)/.10
- (TWX)/.23
- (JNY)/.36
- (STRA)/1.58
- (IACI)/.31
- (IP)/.51
- (GRMN)/.74
- (FPL)/.80
- (BEC)/.686
- (DF)/.18
- (
- (HES)/2.01
- (CL)/.88
- (CMI)/.89
- (IR)/.73
- (PG)/.82
- (TRW)/.61
- (KFT)/.41
- (GM)/-1.52
- (SO)/.42
- (K)/.77
- (FSLR)/.49
- (ITRI)/.69
- (MCRS)/.33
- (AVB)/.60
- (CTX)/-2.78
- (JDSU)/.13
- (PRU)/1.82
- (OI)/.79
- (OMTR)/.08
- (SBUX)/.16
- (PSYS)/.43
- (LVS)/.34
- (EQR)/.08
- (
- (BCO)/.79
- (SEE)/.39
- (SYMC)/.34
- (AKAM)/./39
- (WCG)/1.61
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- ADP Employment Change for April is estimated at -60K versus +8K in March.
- Advance 1Q GDP is estimated to rise .5% versus a .6% gain in 4Q.
- Advance 1Q Personal Consumption is estimated to rise .7% versus a 2.3% increase in 4Q.
- Advance 1Q GDP Price Index is estimated to rise 3.0% versus a 2.4% gain in 4Q.
- Advance 1Q Core PCE is estimated to rise 2.2% versus a 2.5% gain in 4Q.
- The 1Q Employment Cost Index is estimated to rise .8% versus a .8% gain in 4Q.
9:45 am EST
- Chicago Purchasing Manager for April is estimated to fall to 47.5 from 48.2 in March.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of 950,000 barrels versus a 2,421,000 barrel build the prior week. Gasoline supplies are expected to fall by -1,000,000 barrels versus a -3,179,000 barrel decline the prior week. Distillate inventories are estimated to fall by -400,000 barrels versus a -1,377,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise .25% versus a 4.22% increase the prior week.
2:15 pm EST
- The FOMC is expected to reduce the benchmark fed funds rate 25 basis points to 2.0% from 2.25%.
Other Potential Market Movers
- The weekly MBA Mortgage Applications report, NAPM-Milwaukee report, Morgan Stanley Global Healthcare Conference and Lehman Brothers Retail Conference could also impact trading today.
Tuesday, April 29, 2008
Stocks Finish Mixed as Strength in Airline, HMO and Technology Shares Offets Weakness in Commodity and Construction Stocks
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In Play
Stocks Mixed into Final Hour as Profit-taking Offsets Lower Energy Prices Ahead of Tomorrow's Fed Announcement
Today's Headlines
Bloomberg:
- The US dollar strengthened to a three-week high against the euro on speculation the Fed will signal that it’s done lowering interest rates.
- Crude oil fell more than $3 a barrel, the biggest decline in four weeks, after BP Plc restarted a
- President Bush blamed Congress for blocking his initiatives to mitigate rising energy costs by expanding domestic production and said lawmakers also are delaying action on other measures to address higher food costs and the mortgage crisis.
- Bonds, Stocks Show Bernanke Fixing Financial System.
- MasterCard Inc.(MA), the world’s second-biggest credit-card network, said profit more than doubled, earning more than rival Visa Inc.(V). The shares surged as much as14%.
- Apollo Management LP founder Leon Black said investment banks have pared their backlog of debt committed to leveraged buyouts and will resume funding deals this year. “We’re well on our way” to a credit-market recovery, Black said.
- Current credit prices reflect “unprecedented default levels” that can only happen in a deep recession, Man Group Plc, the world’s largest publicly listed hedge fund manager, said. The price levels represent an attractive opportunity for credit managers who are able to buy credit products at deep discounts, it said. “It is advantageous for distressed hedge funds to invest early, as spreads usually tighten quicker than they widen, especially for fundamentally sound companies,” said Man analysts led by Thomas Della Casa in the report. Banks have slashed their backlog of unsold leveraged loans, or lending to finance leveraged buyouts, to $95 billion, from $245 billion in July 2007, S&P said. Distressed assets hedge funds that invested at the November 2002 bottom of the 2001 to 2002 recession could have generated an annualized return of 21.9% over two years, Man said.
- Brazilian output of sugar-cane used to make sweeteners and ethanol will rise as much as 22% from last year’s record because of increased planting and as rains and new technologies boost crop yields, the government said.
- Wheat fell to the lowest price in five months after a US government report showed winter-crop conditions unexpectedly improved, easing concern that global inventories will dwindle.
- Soybeans fell for the fifth consecutive session on speculation a rebound in the US dollar will reduce the appeal of commodities as an inflation hedge.
- President Bush called the farm bill being put together by congressional negotiators a “massive, bloated” piece of legislation that would pay subsidies to “multimillionaire farmers.”
- India’s central bank unexpectedly ordered lenders to set aside more reserves for the second time in less than two weeks to tame runaway inflation.
- Wachovia Corp.(WB) was raised to “buy” for the first time in seven years by Deutsche Bank AG, which said the company may be finished raising capital to offset mortgage losses.
- Rice fell the most in six weeks after a government report showed US planting accelerated last week and grain sales slowed, easing concern of a global food crisis.
Treasury & Risk:
- The Hedge Fund Sleight of Hand. Not only do funds sometimes control more than a company can see, they often have hedged away risk.
PIMCO:
- Pimco’s Bill Gross plans to invest in low-quality bonds, banks.
TimesOnline:
- UK House Prices Could Fall 25% Over Next Two Years.
Cinco Dias:
- Apple Inc.(AAPL), which plans to start selling its iPhone in
Der Standard:
- European Central Bank President Jean-Claude Trichet said current interest rates will help to curb inflation, citing an interview. “We believe that our current monetary stance will guarantee price stability over the medium term,” Trichet said. Trichet also said that “strong foreign exchange volatility is of course cause for concern.”
Bear Radar
Style Underperformer:
Small-cap Growth -.97%
Sector Underperformers:
Coal (-3.54%), Gold (-3.32%) and Oil Service (-2.81%)
Stocks Falling on Unusual Volume:
MRK, NGS, MDR, ARJ, JRJC, PBR, INDM, LDSH, IVAC, GKSR, LCAV, HSII, UCTT, TITN, GFIG, GIL, RBA, ENR, FDP, FIC, DHT, DNA and OLN
Stocks With Unusual Put Option Activity:
1) SINA 2) TXT 3) CMCSK 4) DNA 5) WFMI