Posted By Optiondragon for myhappytrading.com
From Briefing.com
Periodicals Wrap-Up for Monday, October 20th
WALL STREET JOURNAL: Yahoo (YHOO) has planned a number of internal cost cutting measures of about 15% that are expected to be announced tomorrow when it reports its quarterly earnings, according to the Wall Street Journal. The number of jobs to be eliminated are expected to be more than 1,000…The Wall Street Journal also reported that Circuit City (CC), facing bankruptcy, is first considering closing about 150 stores and cutting thousands of jobs…UK TIMES: CVC, a private equity firm, and Swiss Re (SWCEY) will team up in a bid for the insurance division of The Royal Bank of Scotland (RBS), the UK Times reported…BLOOMBERG: The credit and housing crisis, along with declining stock prices, may cause American consumers to radically curtail their spending, Bloomberg said. Many companies would be badly hurt in the process, the news company added…VARIETY: Variety reported that General Electric’s (GE) NBC Universal intends to reduce its 2009 budget by $500M. NBC President Jeff Zucker announced the move in a memo to employees on Friday…
Asian Markets Wrap-Up for Monday, October 20
Stocks in Asia were higher because of rising oil prices and as South Korean announced a $30B rescue plan. Most markets there gained…JAPAN: The Nikkei 225 Stock Average rose 311.77, or 3.6%, to 9,005.59, while the broader Topix index was up 33.08, or 3.7%, to 927.37. Panasonic (PC) surged 8.9% to Y1,633. Sony Corp. (SNE) advanced 7.6% to Y2,625. Nissan (NSANY) added 8.9% to Y527. Bridgestone Corp. (BRDCY) leapt 9.5% to Y1,874…CHINA: The CSI 300 Index advanced 63.47, or 3.5%, to 1,896.73. Poly Real Estate was up 6.2% to 15.53 yuan. Gemdale increased 6.7% to 6.65 yuan. Financial Street Holding Co. rose 1.3% to 8.12 yuan. China Construction added 1.4% to 4.25 yuan. China Citic Bank Corp. gained 3.9% to 4.54 yuan…AUSTRALIA: The S&P/ASX 200 Index was up 89.80, or 2.3%, to 4,060.60. Westpac Banking Corp. (WBK) jumped 80 cents, or 3.7%, to A$22.28. Rio Tinto Group (RTP) leapt A$4.3, or 6.9%, to A$66.92. BHP Billiton (BHP) surged 7.7% to A$26.49. Woodside Petroleum (WOPEY) was up A$1.60, or 4.4%, to A$37.60. Santos rose 38 cents, or 3.6%, to A$10.81…AROUND ASIA: In Hong Kong, the Hang Seng Index advanced 768.80, or 5.3%, to 15,323.01. China Overseas Land, jumped 12% to HK$9.07. Hang Lung Properties gained 7% to HK$16.80. Lenovo Group (LNVGY) fell 9 cents, or 3.4%, to HK$2.56.
Gold: one bull thinks it could hit $7,000 an ounce eventually - Barron’s
Gold, which breached $1,000 an ounce in March during the Bear Stearns (BSC) debacle, could well return to that level and head toward $2,500 as investors scramble for safety, according to many fans. Investors can participate in the gold market in a variety of ways, such as purchasing mining stocks or mutual funds that hold them. But right now, those shares are vulnerable to heavy selling by hedge funds and others trying to raise cash. That’s why many pros recommend that investors acquire the metal itself. You can amass physical gold by purchasing coins from various governments; buying shares in the StreetTracks Gold Trust exchange-traded fund (GLD), which is backed by the metal; or buying gold on the Website goldmoney.com. James Turk, founder of Goldmoney.com, sees gold at $1,100 or $1,200 an ounce by year-end. A longtime gold bug, Turk sees gold eventually hitting a dizzying $7,000 an ounce. Charles Oliver, manager of the Sprott Gold and Precious Minerals Fund in Toronto, has a more restrained target of $2,000 within four years. But even that is nearly triple the current price. Oliver is partial to companies like Goldcorp (GG) and Iamgold (IAG). For those with a bit more of an appetite for risk, Oliver suggests Kinross (KGC). Then there is Steve Lehman, senior portfolio manager of the $1.8B Federated Market Opportunity Fund, who counts names like Yamana (AUY), Barrick (ABX) and Newmont Mining (NEM) among its largest holdings. Lastly, the technical signals, too, favor a rise. The ratio of an ounce of gold’s price to the Dow has been falling, a bullish sign for the metal.
Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of October 17: Emergent Biosolutions (EBS), Integral Systems (ISYS), Hudson City Bancorp (HCBK), Axsys Technologies (AXYS), United Therapeutics (UTHR), Mantech International (MANT), Ensign Group(ENSG), NCI Inc. (NCIT), FPIC Insurance (FPIC), Synaptics (SYNA), Psychiatric Solutions (PSYS), Express Scripts (ESRX), Microsemi Corp (MSCC), Iris International (IRIS), (SNDA), Strayer Education (STRA), Westwood Holdings Group (WHG), Grainger (GWW), Techne Corp(TECH), Stericycle Inc (SRCL), Netease.com (NTES), Steris Corp (STE), UMB financial (UMBF), Gilead Sciences (GILD), MWI Veterinary (MWIV), ProAssurance Corp (PRA), Standard Parking Corp. (STAN), Merit Medical Systems (MMSI), SWS Group (SWS), Nike (NKE), El Paso Electric (EE), Standex Intl. Corp (SXI), Pioneeer Southwest energy (PSE), Hain celestial Group (HAIN), Shenandoah Telecommunications (SHEN), General Mills (GIS), Alexion Pharmaceuticals(ALXN), Nuvasive (NUVA), Medicines Company (MDCO), Oneok Partners (OKS), Telecom de Sao Paulo (TSP), NTT Docomo (DCM), Calgon Carbon (CCC), flushing financial corp. (FFIC), Computer Programs & Sys. (CPSI), USA Truck (USAK), Novo Nordisk (NVO), Astrazeneca (AZN).
Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of October 17: The Buckle (BKE), Gmarket Inc. (GMKT), NetLogic Micros (NETL), Green Mtn Coffee (GMCR), Jos A. Bank (JOSB), Childrens Place (PLCE), Rock Tenn Co (RKT), Cellcom Israel (CEL), C.R. Bard (BCR), Heartland Payment (HPY), BJ’s Wholesale (BJ), Potlatch Corp (PCH), Oriental Financial Group (OFG), Tractor Supply Co.(TSCO), IPC The Hospitalist (IPCM), Partner Communications (PTNR), Applied Industrial Tech (AIT), Navigant Consulting (NCI), Bio Rad Labs Inc (BIO), Green Hill & Co (GHL), NBT Bancorp (NBTB), Ecolab Inc (ECL), AmSurg Corp (AMSG), Matthews Int. Corp. (MATW), Comtech Telecom Corp (CMTL), Duff & Phelps (DUF), Suffolk Bancorp (SUBK), Hancock Hldg (HBHC), Ralcorp Holdings (RAH), AptarGroup (ATR), Peet’s Coffee (PEET), Waste Connections (WCN), Northwest Bancorp (NWSB), City Holding Co. (CHCO), Commerce Bancshares (CBSH), First Financial Bancshares (FFIN), CVS Caremark (CVS), Nicor (GAS), Nash Finch (NAFC), Tompkins Financial Corp (TMP), Dime Community Bancshares (DCOM), SVB Financial (SIVB), Landauer (LDR), Heartland Financial (HTLF), Prosperity Bancshares (PRSP), First Financial Corp.(THFF), Phase Forward (PFWD).
Pru may go to sovereign wealth fund for parts of Asian AIG business-UK Times
Mark Rucker, CEO of Prudential (PRU) is believed to want parts of the Asian AIG (AIG) business and that he is considering handing a 20% stake to a sovereign wealth fund to bankroll part of the bid. Sources say that Pru’s balance sheet is under no pressure and that a stake sale is soley for the purpose to finance the deal.
U.S. equity futures still point to a higher open
U.S. equity futures continue to point to a higher open as European and Asian markets trade higher. Investors will receive data this week on employment, consumer confidence, new home sales and manufacturing. In addition, company earnings reports will start to ramp up this week. Investors will be paying particular attention to the guidance companies from CEOs to see what they’re feeling about their businesses going forward.
S&P 500-SPX: Pivot Points
The following are the pivot points for the SPX. Pivot High: 962.595, Pivot Low: 896.695. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
E&P estimates and targets lowered at Morgan Stanley
Morgan Stanley expects lower commodity prices and tighter credit to impact earnings. The firm expects 2009 production to be flat and has lowered estimates across the industry. The analyst’s top picks are XTO, UPL, and TOG. The E&P industry is rated Attractive.
Mosaic-MOS holder Cargill could increase stake and buy company, says Soleil
Soilel notes that on Wednesday, Cargill’s four-year standstill expires which sets up the possibility the company could accretively incase its ownership stake in Mosaic. The firm estimates that if Cargill buys out the 35% of Mosiac it does not own, earnings could be boosted by more than 20%. The firm maintains a Buy rating and $127 target on Mosaic.
RIG upgraded to Overweight from Underweight at Morgan Stanley
Morgan Stanley expects RIG to benefit from a shortage of rigs in Brazil.
Refining stocks upgraded on potential upside over next 12 months at Oppenheimer
Oppenheimer believes Oil, Gas and Refining stocks have upside potential over the next 12 months that significantly exceeds downside risk from a further decline in oil and gas prices by a ratio between 2 to 1 and 3 to 1. As such, the firm upgraded Apache (APA), Anadarko Petroleum (APC), BP PLC (BP), Cabot Oil & Gas (COG), ConocoPhillips (COP), Comstock Resources (CRK), Chevron (CVX), Devon Energy (DVN), EOG Resources (EOG), Frontier Oil (FTO), Hess Corp (HES), Murphy Oil (MUR), Noble Energy (NBL), Exxon Mobil (XOM), Pioneer Natural (PXD), Royal Dutch Shell (RDS.A), XTO Energy (XTO), Sunoco (SUN), Tesoro (TSO), and Valero Energy (VLO) to Outperform.
Overnight Commercial Paper 1.34% down 0.67%
Commercial Paper was at 2.3% in June, spiked to 4% in late September. Commercial Paper is short-term debt issued primarily by banks and large businesses, often for just a few days. The rate shown here is for “top-tier” companies, or those with the best credit ratings. Higher rates have made it more difficult for businesses to obtain the money they need for everyday expenses. Sources; The New York Times, Bloomberg, Federal Reserve.
PRU downgraded to Sell from Neutral at Goldman
Goldman downgraded PRU to Sell due to the company’s exposure to residential and commercial mortgage backed securities and commercial real estate loans. The firm believes PRU could take impairment charges of $1B-$4B and notes the company’s excess capital position is approximately $1B. Target to $40 from $58.
Deutsche Bank makes bearish call on oil
After their economists predicated a worldwide recession in 2009, Deutsche Bank cut their oil price forecast for 2009 to $60/bbl, and 2010 to $58/bbl. The firm believes this view implies marginal oil companies will make zero profit for the next two years and that leveraged oil companies may go bankrupt. Deutsche Bank downgraded Hess Corp (HES) and Marathon Oil (MRO) to Hold from Buy, and lowered Murphy Oil (MUR), Suncor (SU) and ConocoPhillips (COP) to Sell from Hold. Along with the rating changes, the firm lowered targets as follows: Hess to $50 from $125, Marathon Oil to $30 from $63, Murphy Oil to $43 from $84, Suncor Energy to $22 from $35, ConocoPhillips (COP) to $42 from $81, Chevron (CVX) to $64 from $105, Occidental Petroleum (OXY) to $56 from $96, and Exxon Mobil (XOM) to $64 from $63. The only Buy rated names in the sector are Occidental Petroleum and Canadian Natural (CNQ).
Ted Spread 3.63% down 0.45
Ted Spread was at 2.90% in June. The difference between Treasury bills and a three-month Libor is a measure of stress in the credit markets. By historical standards, the spread has been higher all year; it averaged about 25 basis points (0.25%) from 2002 to 2006. Higher spreads indicate anxiety. Sources; The New York Times, Bloomberg, Federal Reserve.
3-Month Libor 4.42% down 0.08
The Libor was at 2.90% in June. Libor, the London Interbank Offered Rate, is what banks charge one another for short-term loans. It is the basis for many financial contracts- including home mortgages and student loans, and it is a sign of whether banks trust each other. High rates mean banks are less willing to lend money to one another. Sources; The New York Times, Bloomberg, Federal Reserve.
3-Month Treasury 0.80% up 0.37
3-Month Treasury’s were at 2% in June. Investors have taken money out of stocks, bonds and money market funds to buy safe assets, forcing the yield on short-term Treasury bills down. A lower yield indicates greater concern about the financial system. Sources; The New York Times, Bloomberg, Federal Reserve.
AMAG Pharmaceuticals-AMAG receives complete response letter from FDA
AMAG Pharmaceuticals, Inc. announced that it has received a complete response letter from the U.S. Food and Drug Administration for ferumoxytol for the treatment of iron deficiency anemia in chronic kidney disease patients.The Company submitted its New Drug Application for marketing approval of ferumoxytol in December 2007. The Company believes that it can address the issues raised by the FDA in its complete response letter in a timely manner without conducting any additional clinical trials prior to approval. In addition, the Company continues preparations for the intended commercial launch of ferumoxytol during the first quarter of 2009.
Jim Cramer’s “Mad Money”
Jim Cramer, after Friday’s market volatility, told viewers to look for companies with recession-proof businesses that have a good dividend, and a long history of raising that dividend. One example of this is Merck (MRK) which yileds 5.3% with its dividend, which is lower than that of Eli Lily’s (LLY) 5.8%, and Pfizer’s (PFE) 7.6% — but Merck is in the best cash position among the three, with a history of boosting its dividend, even during the bad times. There have been many questions about the company’s cholesterol drugs Vytorin and Zetia, its HPV and cervical cancer drug Guardasil has seen softer sales due to safety concerns, and it has tussled with the FDA over product labeling. Still, Cramer said that even at a stripped down valuation, Merck is worth at least $29.90 a share, which is higher than its current value. According to Cramer, Merck has the ability to grow and boost its dividend, even in a weakening economy. Cramer said scale in around Merck’s upcoming earnings announcement, and ahead of its analysts conference in December. Next, Cramer welcomed United Technologies (UTX) chairman George David to discuss his company’s stellar quarterly results under very tough market conditions. David said UTX hasn’t seen much evidence of a recession and up until now has not had any issues gaining access to commercial paper markets. Even internationally, David said the company has seen strength in orders, with elevator sales in China. Cramer called UTX is an example of what can go right in the market. Then, Cramer said Watsco (WSO) is another high dividend yielding stock that should do well during the looming recession, and a perfect way to play the coming bottom in the housing market. Watsco currently yields a 3.8% dividend. Cramer would scale into Watsco, at an entry price of $32. Cramer talked with Glen Tullman, Allscripts Healthcare (MDRX) chair/CEO. Tullman explained that the recent share price decline was due to a $5 special dividend and not due to poor earnings. Tullman said Allscripts is performing well, with one third of all physicians now using the company’s products and services. Cramer again recommended Allscripts as a great healthcare cost reduction story, especially if Barrack Obama wins the White House. LIGHTNING ROUND: (Bullish) XIDE; FUN;TNH; KMP; DD. (Bearish) PPG.
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