Posted By Optiondragon for myhappytrading.com
From Briefing.com
Periodicals Wrap-Up for Wednesday, October 15th
WALL STREET JOURNAL: The Wall Street Journal reported that banks will not emerge unscarred when JP Morgan (JPM), Wells Fargo (WFC) and Citigroup (C) report earnings this week, despite low expectations. While they are cheap on average and their size and government backing will make it easier for them to attract capital and deposits, analysts believe the banks may not make money quickly enough to give investors “reasons to rush back” to them…FINANCIAL TIMES: Samsung Electronics reported yesterday that it had reduced its flat screen TV production by about 5% since August because of lower demand for the televisions. The electronics giant added that it may cut back its investment in the business in 2009, the Financial Times reported…Chinese demand for commodities has dropped significantly since last year, Rio Tinto (RTP) CEO Tom Albanese said. Albanese added that he does not expect the country’s demand for commodities to increase until 2009, the Financial Times reported…BARRONS: Barron’s Online explored the impact that an Obama or a McCain presidency could have on stock values. An Obama win could cause confusion in the markets largely because the he will seek to increase both taxes on capital gains and stock dividends. The bottom-line is that certain sectors — including infrastructure and alternative energy stocks — would likely get a boost under an Obama administration, and others — including nuclear energy — would gain under McCain, analysts said…
Asian Markets Wrap-Up for Wednesday, October 15
Asian stocks retreated on concerns of lower corporate earnings. Only markets in Japan and Vietnam gained…JAPAN: The Nikkei 225 increased 99.90, or 1.1%, to 9,547.47, while the broader Topix index lost 0.79, or 0.1%, to 955.51. Takeda was up 6.2% to Y4,950. Towa Pharmaceutical Co. jumped 10% to Y3,090. Japan Tobacco increased 8.5% to Y357,000. Mizuho Financial Group (MFG) added 3.4% to Y393,000. Mitsubishi UFJ Financial Group (MTU) was up 1.4 percent to 821 yen. Tokyo Gas Co. leapt 8% to Y391. Tohoku Electric Power Co. gained 6.7% to Y2,150…CHINA: The CSI 300 Index fell 20.26, or 1.1%, to 1,914.36. Cnooc (CEO), slid 6.3% to HK$6.72. Jiangxi Copper was down 5.9% to 11.59 yuan. Tongling Nonferrous Metals Group Co. declined 2.2% to 6.36 yuan. Datong Coal Industry Co. slumped 3.3% to 10.97 yuan. China Vanke Co. was up 0.22 yuan, or 3.4%, to 6.71. Aluminum Corp. of China (ACH) tumbled 0.22 yuan, or 3%, to 7.19. China Citic Bank Corp. climbed 0.12 yuan, or 2.7 percent, to 4.54…AUSTRALIA: The S&P/ASX 200 Index dropped 35.20, or 0.8%, to 4,300. Mincor Resources NL jumped 13 cents, or 13%, to A$1.17. Panoramic Resources gained 10 cents, or 8.8%, to A$1.24. BHP Billiton (BHP) lost 4.2% to A$29.70. Felix Resources slid 31 cents, or 2.7%, to A$11.09. Stockland increased 19 cents, or 4%, to A$4.90…AROUND ASIA: In Hong Kong, the Hang Seng Index retreated -834.58, or -4.96%, to 15, 998.30.
China’s appetite for commodities has declined, Rio Tinto’s CEO says-FT
Chinese demand for commodities has dropped significantly since last year, Rio Tinto (RTP) CEO Tom Albanese said. Albanese added that he does not expect the country’s demand for commodities to increase until 2009.
Which Presidential candidate will help the markets more? - Barron’s Online
Barron’s Online published the first installment of a four-part series of articles exploring the impact that an Obama or a McCain presidency could have on stock values. A sweeping Democratic victory does raise a red flag for some stock watchers. An Obama win, particularly coupled with a big enough victory by Democrats to give them a filibuster-beating 60-member army in the Senate, could cause confusion in the markets. That’s largely because the Obama will seek to increase both taxes on capital gains and stock dividends. That being said, Obama’s tax proposals would arguably take a bite out of stock values because, unlike McCain, he is seeking to raise taxes on capital gains and dividends on any investor earning more than $250,000 a year. Though the market tends to rise on the possibility of a Republican president in the run-up to the election, stocks tend to do about as well under Democrats as Republicans, said Tom Gallagher, head of policy research at The International Strategy and Investment Group. Bottom-line: certain sectors — including infrastructure and alternative energy stocks — would likely get a boost under an Obama administration, and others — including nuclear energy — would gain under McCain, analysts said.
U.S. equity futures near the morning’s lows
U.S. equity futures are lower and are now approaching their lowest levels of the morning. Better than expected earnings from Intel (INTC), Coca Cola (KO), J.P. Morgan (JPM) and Wells Fargo (WFC) are being attributed to helping the futures, but poor economic reports are causing a resistance and keeping them lower. With all of the recent moves by government officials to shore up the U.S. financial system, the fact that earnings are the life blood of a company’s stock has been pushed to the side. The positive earnings reports this morning proves that earnings still matter, but that overall economic numbers can trump earnings if they don’t show underlying strength for the economy going forward.
United Therapeutics-UTHR oral Remodulin data should be positive says Leerink
Leerink Swann reports that they have heard anecdotes suggesting that oral Remodulin will achieve its primary endpoint, and the firm reiterated their Outperform rating.
Genentech-DNA upgraded to Buy from Neutral at Piper Jaffray
Piper upgraded shares following the company’s Q3 results as they find the valuation attractive with or without a Roche acquisition. Target $96.
Apple-AAPL presentation likely disappointed investors, says JMP Securities
After Apple launched new portable computers, JMP Securities believes investors will be disappointed that the company did not launch a new laptop that cost under $1,000. The firm maintained their Market Perform rating.
Markets still faced with long term problems-WSJ
Considering that the government’s recent bailout moves are positive, there remain issues that existed well before the market caved, according to the Wall Street Journal’s “Heard on the Street”. Next year, Citigroup expects U.S. GDP after inflation to contract by 0.8% and unemployment to pass 8.5%. HSBC says corporate earnings next year will be 30% to 40% below consensus expectations. And banks are still sitting with bad mortgages, and credit card and auto loan problems. Business as usual is not now in the cards.
Rio Tinto-RTP CEO says “Chinese economy pausing for breath”
“In the near term, the Chinese economy is pausing for breath. China is not completely insulated from an OECD recession and we will see an impact on Chinese exports. However, the near term slowdown of growth is substantially due to tightening of monetary policy introduced by the Chinese government last year in order to tackle inflation. Furthermore, we expect third quarter economic data to show an exaggerated slowdown, reflecting the postponement of projects during the Olympics. Looking further out, Chinese GDP will remain largely driven by the domestic economy and we expect industrialisation and urbanisation to continue apace with strengthening demand across a range of Rio Tinto products.
Apple-AAPL upgraded to Overweight from Neutral at JP Morgan
JP Morgan believes AAPL is far more diverse than what existed a decade ago and that its staying power is underappreciated.
State Street-STT sees FY08 EPS growth ‘approaching’ high end of 10%-15% view
The company sees FY08 operating revenue above the high end of its 14%-17% view and operating return on equity approaching the high end of its 14%-17% view.
Jim Cramer’s “Mad Money”
Cramer said that the Treasury Department’s new protection plan finally puts an end to this devastating, but legal, practice — bear raids. He said that the government’s plan to take taxpayer money and invest it directly in banks has finally broken the cycle that has plagued the sector. Cramer said short-sellers now have to once and for all cover their positions and leave the financial stocks. Cramer spoke with Ultra Petroleum (UPL) president and CEO Mike Watford to find out how his company is holding up after its stock declined from $102 a share to $46 a share from a wave of short-selling. Watford said even at $6 natural gas, Ultra Petroleum makes a tremendous amount of money for its shareholders. He said Ultra has yet to set up production on 92% of its pinedale field in Wyoming, which has an estimated 14 trillion cubic feet of natural gas. Cramer called Ultra a buy, as it is one of the lowest cost producers of natural gas, well below the industry average. Cramer he said Ultra is a solid play that doesn’t require the credit markets for some years to come. Next, pawnbroker Cash America (CSH) is one stock that will prosper as Americans get poorer in the tough times ahead, Cramer said. The barriers to enter the pawn shop market are high. With gold prices still up 24.8% since last year, the price the company can sell unclaimed items for should rise substantially over time. Cramer said its recent acquisition of a Mexican-based pawnshop company will be immediately accretive to earnings, further bolstering the company’s bottom line. Cramer would be a buyer, especially now with its stock price tumbling. MAD MAIL: Cramer told a viewer that John Deere (DE) should be bought now that the credit crisis is coming to a resolution. He told another viewer that he’s not a fan of HEICO (HEI) amidst a strike at Boeing (BA) and a possible Obama administration. LIGHTNING ROUND: (Bullish) MO; IBM; TOL; ED; DUK. (Bearish) F; MET; EZPW; NVR; FE.
Fast Money position recap: Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (BNI), (WMT); Seymour Owns (AAPL), (F), (MER); Najarian Owns (AAPL) And (AAPL) Puts; Najarian Owns (GS) And Is Short (GS) Calls; Najarian Owns (INTC) Call Spread; Najarian Owns (MS), Owns (MS) Puts, Is Short (MS) Calls; Najarian Owns (NCC) Calls; Najarian Owns (RF) And Is Short (RF) Calls; Najarian Owns (UNG) And Is Short (UNG) Calls; Finerman Owns (GS); Finerman’s Firm Owns (DNA) Call Spreads; Finerman’s Firm Owns (MSFT); Finerman’s Firm Is Short (SPG), (IJR), (MDY), (SPY), (IWM), (USO), (BBT), (COF) ; Finerman’s Firm Owns (JNJ); Finerman’s Firm Owns (MRK)
Market cycling down as it retraces the big move up on Monday. Keeping mostly cash and staying nimble. Keeping an eye on the bond market and the VIX to gleam short term movements. See you in the trading room.
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